Quarterly Results

Third Quarter 2020
Equitable Group Reports Record Quarterly Earnings, Diluted EPS $4.30, ROE of 19.8%

TORONTO, Nov. 3, 2020 /CNW/ - Equitable Group Inc. (TSX: EQB) (TSX: EQB.PR.C) ("Equitable,"  "Company" or "Bank") today announced that it set an all-time record for quarterly earnings during the three months ended September 30, 2020 while maintaining a strong capital position, credit reserves and liquidity and delivering on its purpose of driving change in banking to enrich people's lives.

"Canadians need their banks more than ever right now and I'm proud to say Equitable is answering the call to serve in ways that are making a difference to them, to liquidity in the economy and to our shareholders," said Andrew Moor, President and Chief Executive Officer.  "During the quarter, our customers substantially increased their use of EQ Bank's digital banking services and drove deposits for our digital platform to $4.3 billion.  Monthly average of account openings for the third quarter was over three times the average of 12 months before the COVID-19 pandemic.  These very positive results illustrate that Canadians are rethinking their banking habits and choosing Canada's Challenger Bank for a better experience. As a result of strong operating performance and lower funding costs, quarterly earnings were our best-ever, and we exceeded our traditionally high band for ROE.  We expect these results to continue through the fourth quarter."

THIRD QUARTER HIGHLIGHTS

  • Diluted earnings per share ("EPS") grew 35% to $4.30 from $3.18 in Q3 2019.
  • Adjusted EPS1 grew 30% to $4.13 from $3.17 in Q3 2019.
  • Return on Shareholders' Equity ("ROE") was 19.8%, up from 16.2% in Q3 2019.
  • Adjusted ROE1 was 19.0%, up from 16.2% in Q3 2019.
  • Book value per common share of $89.25 at September 30, 2020 grew 12% or $9.28 per share from a year ago and 5% or $4.36 since June 30, 2020. 
  • The Bank's CET1 Capital Ratio of 14.3% at September 30, 2020 was 0.83% or $84 million above the mid-point of management's target range and compared favourably with 14.0% at June 30, 2020 and 13.3% at September 30, 2019.
  • Liquid assets were $2.8 billion or 9.1% of total assets at September 30, 2020 compared to $1.4 billion or 5.2% of assets at September 30, 2019.
  • Deposits at September 30, 2020 were $16.4 billion, up 10% from $14.9 billion a year ago.
  • EQ Bank, Equitable's digital platform, experienced 72% year-over-year growth in deposits on a 68% increase in its customer base which stood at approximately 149,000 at quarter end.
  • Loans Under Management at September, 2020 were $32.6 billion, up 6% from $30.6 billion a year ago on growth in most retail and commercial lending businesses led by a $1.1 billion increase in Prime mortgages.
  • Decumulation business increased by more than three-fold since last year, with balances now amounting to $67 million.
  • Provision for Credit Losses ("PCL") was a net benefit of $2.4 million, driven by reserve releases resulting from an improvement in independent macroeconomic forecasts used for loss modelling.
  • Successfully raised $200 million through issuance of a 3-year fixed rate deposit note in September on favourable terms and with participation by 37 investors.
  • Chosen as one of Canada's Best Workplaces™ in Financial Services and Insurance subsequent to quarter end.
  • Announced the appointment of Chadwick Westlake as the Bank's new Senior Vice-President and Chief Financial Officer, Mahima Poddar as Group Head, Personal Banking and Darren Lorimer as Group Head, Commercial Banking as part of a new streamlined organizational structure to better reflect the scope, scale, and customer service ambitions of Canada's Challenger BankTM.

 

1)

Excludes $4.1 million of net mark-to-market gains on certain security investments, loans, and derivative positions.

DIVIDEND DECLARATIONS

The Board of Directors ("Board") today declared a dividend of $0.37 per common share, payable on December 31, 2020 to common shareholders of record at the close of business December 15, 2020, unchanged from the dividend paid in September 2020 but a 6% increase over the dividend declared in November 2019.  The Board's previously announced plan to increase the dividend remains on hold as a result of regulatory guidance from OSFI to all federally regulated banks. 

The Board declared a quarterly dividend in the amount of $0.373063 per preferred share, payable on December 31, 2020 to preferred shareholders of record at the close of business on December 15, 2020.

COMMENTARY ON PERFORMANCE

One of the ways Equitable strives to enrich the lives of customers is through EQ Bank.  As evidenced by strong growth in deposits and EQ Bank account openings this year, there is notable shift in consumer preference for all-digital banking.  EQ Bank's recent developments including the July launch of the EQ Bank Joint Savings Plus account and the February introduction of an international money service, as well as planned future service introductions are intended to make EQ Bank even more valuable for Canadians as they make their preferences known.  These additional services sit alongside features such as no everyday banking fees, great rates and easy transfers.  Equitable's cloud-based systems enable the Bank to develop and launch new features quickly and cost effectively and position the Bank well for the introduction of open banking which the federal government is contemplating.

"Over the past seven months, Equitable has continued to advance its position in the marketplace while also making a number of pandemic-related adjustments, including a successful pivot in our lending businesses," said Mr. Moor.  "This spring, we chose to take a constructive role in providing liquidity to the Canadian economy by increasing the Bank's focus on insured mortgage lending by redeploying resources to our insured single-family business and increasing the origination of multi-family insured mortgages.  Since May, our internally-generated Prime single-family business has set new origination records each month and now sits as a meaningful complement to our Alternative single family book and our emerging Decumulation businesses.  This tells us that customers appreciate having a challenger bank choice in the market.  Gains in securitization activities have also increased markedly. As we've grown and adapted to new realities, I'm pleased to say the core pillars of our challenger bank approach including service excellence and passion for enriching people's lives have kept our incredibly dedicated and responsive team firmly grounded and focused."

Equitable Bank's selection as one of Canada's Best Workplaces™ in Financial Services and Insurance by Great Place to Work® reflects "the challenger bank culture we're building here at Equitable," said Mr. Moor. "The collective spirit of bettering ourselves so we can better serve our customers and partners shines through in this important and most appreciated award."

MORTGAGE PAYMENT DEFERRALS AND CREDIT

As a result of the pandemic, Equitable deferred loan payments for customers.  As at October 23rd, active deferrals were down to only 0.3% of our loan portfolio. 

In its commercial business, the Bank recovered the full amount of a $39 million impaired commercial loan and two commercial loans totalling $26 million returned to performing status.

"These are excellent outcomes that reflect the constructive approach we take in working with customers and working out problem loans when necessary," said Mr. Moor.  "Despite these successes, the Bank remains conservative in reserving for losses as shown by the high level of provisioning in the past two quarters.  Even with the small release of provisions in the third quarter, we are well positioned for economic turbulence."

Actual realized losses and write-offs in Q3 2020 amounted to $2.0 million or just 3 bps of total loan assets annualized.

OUTLOOK 

As the duration of COVID-19 is not known, the timetable for an economic recovery is also uncertain. Management therefore did not provide a quantitative outlook.  Qualitatively, earnings in Q4 2020 are expected to continue to trend positively year over year.  The Bank's CET1 ratio is expected to remain stable as compared to Q3 as the benefit of additional earnings added to Bank's capital base will be used to support increases in risk weighted assets.  If economic projections unfold along with consensus forecasts, there may be additional releases of reserves.  The duration and depth of the economic contraction, as well as the impact of government support initiatives, will be the key determinants of the defaults and loan losses that are ultimately realized.  The Bank's liquidity position is solid.

Management's updated business outlook can be found in Management's Discussion and Analysis ("MD&A") for the three and nine months ended September 30, 2020 which is available on SEDAR and on Equitable's website.

CONFERENCE CALL AND WEBCAST

Equitable will hold its third quarter conference call and webcast at 8:30 a.m. ET Wednesday, November 4, 2020. To access the call live, please dial (647) 427-7450 five minutes prior to the start time.  The listen-only webcast with accompanying slides will be available on the Investor Relations section of the Equitable Bank website at http://eqbank.investorroom.com/events-webcasts.  The call will be hosted by Andrew Moor, President and Chief Executive Officer.

A replay of the call will be available until November 11, 2020 at midnight and it can be accessed by dialing (416) 849-0833 and entering passcode 2647803 followed by the number sign. Alternatively, the call will be archived on the Company's website for three months.

OPEN BANKING FORUM

On November 5, 2020 at 2:30 pm ET, Mr. Moor will deliver the keynote address to Canada's Open Banking Expo, a three-day virtual conference featuring thought leaders from banking, insurance and fintech. To join the Expo live, register at www.openbankingexpo.com/canada. Following the conference, Mr. Moor's remarks will be posted to www.eqbank.ca.

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

         
               

CONSOLIDATED BALANCE SHEETS (unaudited)

             

AS AT SEPTEMBER 30, 2020

             

With comparative figures as at December 31, 2019 and September 30, 2019

($ THOUSANDS)

             
               
     

September 30, 2020

 

December 31, 2019

 

September 30, 2019

               

Assets:

             

Cash and cash equivalents

 

$

1,148,004

$

508,853

$

373,904

Restricted cash

   

567,994

 

462,992

 

408,635

Securities purchased under reverse repurchase agreements

   

200,008

 

150,069

 

250,079

Investments

   

554,975

 

362,611

 

250,927

Loans – Retail

   

18,963,470

 

18,359,805

 

18,059,496

Loans – Commercial

   

8,628,451

 

8,248,025

 

7,900,558

Securitization retained interests

   

171,736

 

139,009

 

132,683

Other assets

   

212,448

 

161,088

 

168,694

   

$

30,447,086

$

28,392,452

$

27,544,976

               

Liabilities and Shareholders' Equity

             

Liabilities:

             

   Deposits

 

$

16,603,178

$

15,442,207

$

15,111,948

   Securitization liabilities

   

11,691,653

 

10,706,956

 

10,294,459

   Obligations under repurchase agreements

   

154,364

 

507,044

 

463,071

   Deferred tax liabilities

   

55,691

 

54,689

 

63,284

   Other liabilities

   

218,038

 

213,842

 

200,692

   Bank facilities

   

150,261

 

-

 

-

     

28,873,185

 

26,924,738

 

26,133,454

               

Shareholders' equity:

             

   Preferred shares

   

72,557

 

72,557

 

72,557

   Common shares

   

214,657

 

213,277

 

210,794

   Contributed surplus

   

8,245

 

6,973

 

6,898

   Retained earnings

   

1,323,855

 

1,193,493

 

1,144,628

   Accumulated other comprehensive loss

   

(45,413)

 

(18,586)

 

(23,355)

     

1,573,901

 

1,467,714

 

1,411,522

   

$

30,447,086

$

28,392,452

$

27,544,976

 

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

       

FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2020

       

With comparative figures for the three and nine month periods ended September 30, 2019

       

($THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                 
                   
   

Three months ended

Nine months ended

   

September 30, 2020

September 30, 2019

September 30, 2020

September 30, 2019

                   

Interest income:

                 

     Loans – Retail

 

$

169,447

$

176,082

$

523,023

$

503,440

     Loans – Commercial

   

101,859

 

98,477

 

301,039

 

294,314

     Investments

   

3,569

 

2,304

 

9,372

 

6,209

     Other

   

3,872

 

6,720

 

13,039

 

19,378

     

278,747

 

283,583

 

846,473

 

823,341

Interest expense:

                 

     Deposits

   

89,658

 

98,872

 

285,500

 

288,848

     Securitization liabilities

   

59,932

 

64,858

 

190,255

 

190,414

     Bank facilities

   

1,726

 

1,706

 

4,429

 

6,258

     

151,316

 

165,436

 

480,184

 

485,520

Net interest income

   

127,431

 

118,147

 

366,289

 

337,821

Provision for credit losses

   

(2,357)

 

3,463

 

42,177

 

14,477

Net interest income after provision for credit losses

   

129,788

 

114,684

 

324,112

 

323,344

Other income:

                 

     Fees and other income

   

5,025

 

6,110

 

16,878

 

17,654

     Net gain (loss) on investments

   

4,367

 

(327)

 

4,489

 

(1,072)

     Gains on securitization activities and income from

        securitization retained interests

   

11,885

 

3,919

 

17,227

 

8,481

     

21,277

 

9,702

 

38,594

 

25,063

Net interest and other income

   

151,065

 

124,386

 

362,706

 

348,407

Non-interest expenses:

                 

     Compensation and benefits

   

26,589

 

25,696

 

79,737

 

75,731

     Other

   

26,476

 

24,793

 

78,975

 

69,365

     

53,065

 

50,489

 

158,712

 

145,096

Income before income taxes

   

98,000

 

73,897

 

203,994

 

203,311

Income taxes:

                 

     Current

   

18,927

 

14,524

 

50,613

 

45,961

     Deferred

   

5,145

 

4,431

 

1,001

 

6,725

     

24,072

 

18,955

 

51,614

 

52,686

Net income

 

$

73,928

$

54,942

$

152,380

$

150,625

Dividends on preferred shares

   

1,119

 

1,191

 

3,357

 

3,573

Net income available to common shareholders

 

$

72,809

$

53,751

$

149,023

$

147,052

                   

Earnings per share:

                 

     Basic

 

$

4.33

$

3.22

$

8.87

$

8.84

     Diluted

 

$

4.30

$

3.18

$

8.81

$

8.75

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

       

FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2020

With comparative figures for the three and nine month periods ended September 30, 2019

       

($ THOUSANDS)

                 
                   
   

Three months ended

Nine months ended

   

September 30, 2020

September 30, 2019

September 30, 2020

September 30, 2019

                   

Net income

 

$

73,928

$

54,942

$

152,380

$

150,625

                   

Other comprehensive income – items that will be

   reclassified subsequently to income:

                 

Debt instruments at Fair Value through Other

    Comprehensive Income:

                 

Net unrealized gains (losses) from change in fair value

   

1,091

 

(71)

 

4,165

 

474

Reclassification of net gains to income

   

(281)

 

-

 

(1,300)

 

(162)

                   

Other comprehensive income – items that will not be

  reclassified subsequently to income:

                 

Equity instruments designated at Fair Value through

    Other Comprehensive Income:

                 

Net unrealized gains (losses) from change in fair value

   

5,901

 

(425)

 

(10,768)

 

(3,924)

Reclassification of net gains to retained earnings

   

-

 

-

 

-

 

(638)

     

6,711

 

(496)

 

(7,903)

 

(4,250)

Income tax (expense) recovery

   

(1,773)

 

128

 

2,088

 

1,127

     

4,938

 

(368)

 

(5,815)

 

(3,123)

                   

Cash flow hedges:

                 

Net unrealized gains (losses) from change in fair value

   

1,770

 

582

 

(31,584)

 

(5,863)

Reclassification of net losses (gains) to income

   

418

 

(1,496)

 

3,028

 

(1,373)

     

2,188

 

(914)

 

(28,556)

 

(7,236)

Income tax (expense) recovery

   

(578)

 

240

 

7,544

 

1,920

     

1,610

 

(674)

 

(21,012)

 

(5,316)

Total other comprehensive income (loss)

   

6,548

 

(1,042)

 

(26,827)

 

(8,439)

Total comprehensive income

 

$

80,476

$

53,900

$

125,553

$

142,186

 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)

FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2020

With comparative figures for the three month period ended September 30, 2019

($ THOUSANDS)

             
           

September 30, 2020

           

Accumulated other

comprehensive

income (loss)

 
   

Preferred shares

Common shares

Contributed surplus

Retained earnings

Cash flow hedges

Financial instruments at FVOCI

Total

Total

                                   

Balance, beginning of period

 

$

72,557

$

213,701

$

7,818

$

1,257,268

$

(22,381)

$

(29,580)

$

(51,961)

$

1,499,383

Net income

   

-

 

-

 

-

 

73,928

 

-

 

-

 

-

 

73,928

Other comprehensive loss, net of tax

   

-

 

-

 

-

 

-

 

1,610

 

4,938

 

6,548

 

6,548

Exercise of stock options

   

-

 

812

 

-

 

-

 

-

 

-

 

-

 

812

Dividends:

                                 

     Preferred shares

   

-

 

-

 

-

 

(1,119)

 

-

 

-

 

-

 

(1,119)

     Common shares

   

-

 

-

 

-

 

(6,222)

 

-

 

-

 

-

 

(6,222)

Stock-based compensation

   

-

 

-

 

571

 

-

 

-

 

-

 

-

 

571

Transfer relating to the exercise of stock options

   

-

 

144

 

(144)

 

-

 

-

 

-

 

-

 

-

Balance, end of period

 

$

72,557

$

214,657

$

8,245

$

1,323,855

$

(20,771)

$

(24,642)

$

(45,413)

$

1,573,901

                                   
             
           

September 30, 2019

           

Accumulated other

comprehensive

income (loss)

 
   

Preferred shares

Common shares

Contributed surplus

Retained earnings

Cash flow

hedges

Financial

instruments at FVOCI

Total

Total

                                   

Balance, beginning of period

 

$

72,557

$

206,039

$

7,132

$

1,096,231

$

(1,993)

$

(20,320)

$

(22,313)

$

1,359,646

Net income

   

-

 

-

 

-

 

54,942

 

-

 

-

 

-

 

54,942

Transfer of losses on sale of equity instruments

   

-

 

-

 

-

 

169

 

-

 

(169)

 

(169)

 

-

Other comprehensive loss, net of tax

   

-

 

-

 

-

 

-

 

(674)

 

(199)

 

(873)

 

(873)

Exercise of stock options

   

-

 

4,132

 

-

 

-

 

-

 

-

 

-

 

4,132

Dividends:

                                 

     Preferred shares

   

-

 

-

 

-

 

(1,191)

 

-

 

-

 

-

 

(1,191)

     Common shares

   

-

 

-

 

-

 

(5,523)

 

-

 

-

 

-

 

(5,523)

Stock-based compensation

   

-

 

-

 

389

 

-

 

-

 

-

 

-

 

389

Transfer relating to the exercise of stock options

   

-

 

623

 

(623)

 

-

 

-

 

-

 

-

 

-

Balance, end of period

 

$

72,557

$

210,794

$

6,898

$

1,144,628

$

(2,667)

$

(20,688)

$

(23,355)

$

1,411,522

 

 

 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)

FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2020

                   

With comparative figures for the nine month period ended September 30, 2019

                   

($ THOUSANDS)

                                 
                                   
                   

September 30, 2020

                   

Accumulated other

comprehensive

income (loss)

   
   

Preferred shares

Common shares

Contributed surplus

Retained earnings

Cash flow hedges

Financial instruments at FVOCI

 

Total

 

Total

                                   

Balance, beginning of period

 

$

72,557

$

213,277

$

6,973

$

1,193,493

$

241

$

(18,827)

$

(18,586)

$

1,467,714

Net income

   

-

 

-

 

-

 

152,380

 

-

 

-

 

-

 

152,380

Other comprehensive loss, net of tax

   

-

 

-

 

-

 

-

 

(21,012)

 

(5,815)

 

(26,827)

 

(26,827)

Exercise of stock options

   

-

 

1,169

 

-

 

-

 

-

 

-

 

-

 

1,169

Dividends:

                                 

     Preferred shares

   

-

 

-

 

-

 

(3,357)

 

-

 

-

 

-

 

(3,357)

     Common shares

   

-

 

-

 

-

 

(18,661)

 

-

 

-

 

-

 

(18,661)

Stock-based compensation

   

-

 

-

 

1,483

 

-

 

-

 

-

 

-

 

1,483

Transfer relating to the exercise of stock options

   

-

 

211

 

(211)

 

-

 

-

 

-

 

-

 

-

Balance, end of period

 

$

72,557

$

214,657

$

8,245

$

1,323,855

$

(20,771)

$

(24,642)

$

(45,413)

$

1,573,901

                                   
                                   
                   

September 30, 2019

                   

Accumulated other

comprehensive

income (loss)

   
   

Preferred shares

Common shares

Contributed surplus

Retained earnings

Cash flow

hedges

Financial

instruments at FVOCI

 

Total

 

Total

                                   

Balance, beginning of period

 

$

72,557

$

200,792

$

7,035

$

1,014,559

$

2,649

$

(17,565)

$

(14,916)

$

1,280,027

Cumulative effect of adopting IFRS 16(1)

   

-

 

-

 

-

 

(840)

 

-

 

-

 

-

 

(840)

Restated balance as at January 1, 2019

   

72,557

 

200,792

 

7,035

 

1,013,719

 

2,649

 

(17,565)

 

(14,916)

 

1,279,187

Net income

   

-

 

-

 

-

 

150,625

 

-

 

-

 

-

 

150,625

Transfer of losses on sale of equity instruments

   

-

 

-

 

-

 

(469)

 

-

 

469

 

469

 

-

Other comprehensive loss, net of tax

   

-

 

-

 

-

 

-

 

(5,316)

 

(3,592)

 

(8,908)

 

(8,908)

Exercise of stock options

   

-

 

8,664

 

-

 

-

 

-

 

-

 

-

 

8,664

Dividends:

                                 

     Preferred shares

   

-

 

-

 

-

 

(3,573)

 

-

 

-

 

-

 

(3,573)

     Common shares

   

-

 

-

 

-

 

(15,674)

 

-

 

-

 

-

 

(15,674)

Stock-based compensation

   

-

 

-

 

1,201

 

-

 

-

 

-

 

-

 

1,201

Transfer relating to the exercise of stock options

   

-

 

1,338

 

(1,338)

 

-

 

-

 

-

 

-

 

-

Balance, end of period

 

$

72,557

$

210,794

$

6,898

$

1,144,628

$

(2,667)

$

(20,688)

$

(23,355)

$

1,411,522

 

(1)

The Company adopted IFRS 16 effective January 1, 2019 using the modified retrospective approach, with the cumulative effect of initially applying the standard recognized in opening retained earnings at the date of initial application.  The adjustment of $840 is net of tax.

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2020

With comparative figures for the three and nine month periods ended September 30, 2019

($ THOUSANDS)

                 
                   
   

Three months ended

Nine months ended

   

September 30, 2020

September 30, 2019

September 30, 2020

September 30, 2019

CASH FLOWS FROM OPERATING ACTIVITIES

                 

Net income for the period

 

$

73,928

$

54,942

$

152,380

$

150,625

Adjustments for non-cash items in net income:

                 

    Financial instruments at fair value through income

   

(6,191)

 

4,715

 

8,153

 

9,938

    Amortization of premiums/discount on investments

   

301

 

483

 

1,758

 

2,075

    Amortization of capital assets and intangible costs

   

5,806

 

4,454

 

16,541

 

12,538

    Provision for credit losses

   

(2,357)

 

3,463

 

42,177

 

14,477

    Securitization gains

   

(11,693)

 

(2,861)

 

(16,976)

 

(7,221)

    Stock-based compensation

   

571

 

389

 

1,483

 

1,201

    Income taxes

   

24,072

 

18,955

 

51,614

 

52,686

    Securitization retained interests

   

18,011

 

7,930

 

27,009

 

22,969

Changes in operating assets and liabilities:

                 

    Restricted cash

   

21,052

 

53,802

 

(105,002)

 

(38,961)

    Securities purchased under reverse repurchase agreements

   

364

 

(125,011)

 

(49,939)

 

(79)

    Loans, net of securitizations

   

91,169

 

(1,107,255)

 

(1,054,112)

 

(2,046,715)

    Other assets

   

(22,910)

 

(6,234)

 

(26,900)

 

38,095

    Deposits

   

744,324

 

393,648

 

1,148,638

 

1,427,120

    Securitization liabilities

   

500,952

 

270,452

 

979,191

 

668,621

    Obligations under repurchase agreements

   

(444,592)

 

463,071

 

(352,680)

 

121,061

    Bank facilities

   

(350,113)

 

-

 

150,261

 

(320,421)

    Other liabilities

   

(31,400)

 

(4,769)

 

(17,597)

 

(25,080)

Income taxes paid

   

(38,991)

 

(11,328)

 

(76,910)

 

(37,019)

Cash flows from operating activities

   

572,303

 

18,846

 

879,089

 

45,910

CASH FLOWS FROM FINANCING ACTIVITIES

                 

Proceeds from issuance of common shares

   

812

 

4,132

 

1,169

 

8,664

Dividends paid on preferred shares

   

(1,119)

 

(1,191)

 

(3,357)

 

(3,573)

Dividends paid on common shares

   

(6,222)

 

(5,523)

 

(18,661)

 

(20,309)

Cash flows used in financing activities

   

(6,529)

 

(2,582)

 

(20,849)

 

(15,218)

CASH FLOWS FROM INVESTING ACTIVITIES

                 

Purchase of investments

   

(27,563)

 

(37,325)

 

(297,340)

 

(70,708)

Acquisition of subsidiary

   

-

 

-

 

-

 

(46,772)

Proceeds on sale or redemption of investments

   

36,372

 

43

 

148,598

 

22,591

Net change in Canada Housing Trust re-investment Accounts

   

10,796

 

(24,363)

 

(49,871)

 

(24,208)

Purchase of capital assets and system development costs

   

(7,063)

 

(5,137)

 

(20,476)

 

(14,301)

Cash flows from (used in) investing activities

   

12,542

 

(66,782)

 

(219,089)

 

(133,398)

Net increase (decrease) in cash and cash equivalents

   

578,316

 

(50,518)

 

639,151

 

(102,706)

Cash and cash equivalents, beginning of period

   

569,688

 

424,422

 

508,853

 

476,610

Cash and cash equivalents, end of period

 

$

1,148,004

$

373,904

$

1,148,004

$

373,904

                   

Cash flows from operating activities include:

                 

Interest received

 

$

278,199

$

276,761

$

833,558

$

791,791

Interest paid

   

(125,440)

 

(173,966)

 

(419,163)

 

(379,096)

Dividends received

   

4,867

 

1,505

 

7,943

 

5,119

ABOUT EQUITABLE GROUP INC.

Equitable Group Inc. is a growing Canadian financial services business that operates through its wholly-owned subsidiary, Equitable Bank. Equitable Bank, Canada's Challenger BankTM, has grown to become the country's ninth largest independent Schedule I bank through its proven branchless approach and customer service focus in providing residential lending, commercial lending and savings solutions to Canadians.

EQ Bank, the digital banking platform launched in 2016 by Equitable Bank provides state-of-the-art digital banking services.  The Savings Plus Account reimagines banking by offering an everyday high interest rate, plus the flexibility of a chequing account, with free transactions, no everyday banking fees, no minimum balances, fast, cheap, and fully transparent international money transfers, and more — all from one account.  Its Guaranteed Investment Certificates (GICs) also offer Canadians a wide range of options with competitive rates.  EQ Bank continually challenges the status quo to bring better banking solutions to Canadians.  To learn more, please visit www.eqbank.ca.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements made by the Company in the sections of this news release, in other filings with Canadian securities regulators and in other communications include forward-looking statements within the meaning of applicable securities laws ("forward-looking statements").  These statements include, but are not limited to, statements about the Company's objectives, strategies and initiatives, financial performance expectations and other statements made herein, whether with respect to the Company's businesses or the Canadian economy.  Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "planned", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases which state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved", or other similar expressions of future or conditional verbs.  Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, closing of transactions, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to capital markets and additional funding requirements, fluctuating interest rates and general economic conditions, legislative and regulatory developments, changes in accounting standards, the nature of our customers and rates of default, and competition as well as those factors discussed under the heading "Risk Management" in the MD&A and in the Company's documents filed on SEDAR at www.sedar.com.  All material assumptions used in making forward-looking statements are based on management's knowledge of current business conditions and expectations of future business conditions and trends, including their knowledge of the current credit, interest rate and liquidity conditions affecting the Company and the Canadian economy.  Although the Company believes the assumptions used to make such statements are reasonable at this time and has attempted to identify in its continuous disclosure documents important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.  Certain material assumptions are applied by the Company in making forward-looking statements, including without limitation, assumptions regarding its continued ability to fund its mortgage business, a continuation of the current level of economic uncertainty that affects real estate market conditions, continued acceptance of its products in the marketplace, as well as no material changes in its operating cost structure and the current tax regime.  There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.  Accordingly, readers should not place undue reliance on forward-looking statements.  The Company does not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws.

NON-GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") FINANCIAL MEASURES

This news release references certain non-GAAP measures such as Adjusted EPS, Return on Shareholders' Equity, Adjusted ROE, Book value per common share, CET1 Capital Ratio, Liquid Assets, and Loans under Management that management believes provide useful information to investors regarding the Company's financial condition and results of operations.  The "NON-GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") FINANCIAL MEASURES" section of the Company's third quarter 2020 MD&A provides a detailed description of each non-GAAP measure and should be read in conjunction with this release.  The MD&A also provides a reconciliation between all non-GAAP measures and the most directly comparable GAAP measure, where applicable.  Readers are cautioned that non-GAAP measures often do not have any standardized meaning, and therefore, may not be comparable to similar measures presented by other companies.

 

SOURCE Equitable Group Inc.

For further information: Andrew Moor, President and Chief Executive Officer, 416-515-7000