HOMEQ Corporation Announces Strong Performance in the Third Quarter

2010 Third Quarter Results Compared to 2009:

    
    -  Originations grew by 77% to $52 million;
    -  Mortgage portfolio balance grew by 18% to $985 million;
    -  Net income of $0.06 per share increased from net loss of $0.01 per
       share; and
    -  Adjusted net income was $0.13 per share compared to $0.15.
    

TORONTO, Nov. 3 /CNW/ - HOMEQ Corporation (TSX: HEQ ("HOMEQ")), today announced its financial results for the quarter ended September 30, 2010.

Since receiving its bank charter late last year, our subsidiary HomEquity Bank has experienced solid growth. During the current quarter, origination volume of $52 million exceeded Q3 2009 by 77% and the mortgage balance grew to $985 million, 18% higher than Q3 2009. This success continues to affirm the ongoing transition of a formerly niche product into a mainstream solution.

During the quarter encouraging demand was experienced throughout the country and all sales regions performed at levels significantly higher than in prior years. The volume of inquiries and applications continues to grow and the sales cycle is shortening, indicating the strong motivation of new customers to acquire a reverse mortgage. The increase in volume is stemming from growing demand and need amongst Canadian seniors, improved awareness of HomEquity Bank, and competitive pricing of the product.

Net income for the quarter was $0.8 million ($0.06 per share) compared to net loss of $0.2 million ($0.01 per share) in Q3, 2009. Adjusted net income of $0.13 per share was lower than $0.15 per share earned in Q3, 2009 primarily due to the increase in non-interest expenditure incurred in operating a bank. Adjusted return on equity (annualized) was 8.1% in comparison to 9.7% in 2009.

"We are in the midst of an exciting business evolution based on an intersection of growing demographics, enhanced product alternatives and our 25 years of business expertise", said President and Chief Executive Officer, Mr. Steven Ranson. "It is estimated that the number of Canadian seniors will grow by 20% in the next six years and increasingly they will rely on HomEquity Bank for flexible and innovative solutions to meet their retirement needs. While the rapid origination growth currently experienced and the incremental cost of being a bank, has had the effect of suppressing net income growth this year, HOMEQ is effectively positioning itself for attractive profit growth in 2011".

Financial Statements and Conference Call

The Q3 2010 financial statements and management discussion and analysis, including an updated outlook, are available on HOMEQ's website at www.homeq.ca and www.sedar.com.

HOMEQ will hold a conference call to discuss these financial results on November 4, 2010, at 09:00 am (Eastern).

Available on the call to answer questions will be Steven Ranson, President and Chief Executive Officer, and Gary Krikler, Senior Vice President and Chief Financial Officer. Slides relating to the conference call will be available on HOMEQ's Website.

To participate in the conference call, please dial 1-888-892-3255.

A live audio webcast (listen-only mode) of the conference call will be available at www.homeq.ca.

An archived recording of the call will be available at 1-800-937-6305 (conference ID 109631).

Forward Looking Statements

HOMEQ Corporation from time to time makes written and verbal forward-looking statements about business objectives, operations, performance, and financial condition, including the likelihood of HOMEQ's success in developing and expanding its business. These may be included in HOMEQ's and its predecessor's annual reports, regulatory filings, reports to shareholders, press releases, presentations and other communications. These forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of HOMEQ. Actual results may differ materially from those expressed or implied by such forward-looking statements. HOMEQ does not undertake to update any forward-looking statement, whether written or verbal, that may be made from time to time.

About HOMEQ Corporation

HOMEQ's wholly owned subsidiary HomEquity Bank is Canada's only national provider of reverse mortgages to homeowners aged 60 and over, Canada's fastest growing demographic segment. HomEquity Bank originates and administers Canada's largest portfolio of reverse mortgages under the CHIP Home Income Plan brand. As of September 30, 2010, the mortgage portfolio comprised approximately 7,800 reverse mortgages with an accrued value of $985 million, secured by residential properties across Canada worth approximately $2.7 billion. HomEquity Bank has been the main underwriter of reverse mortgages in Canada since its predecessor, Canadian Home Income Plan, pioneered the concept in 1986.

HOMEQ's shares trade on the Toronto Stock Exchange under the symbol HEQ. Additional information on HOMEQ, including annual and quarterly reports can be viewed at www.homeq.ca.

%SEDAR: 00028672E

For further information: Steven K. Ranson, President and Chief Executive Officer, [phone] or Gary Krikler, Senior Vice President and Chief Financial Officer, [phone].