Equitable Group Reports Record Third Quarter 2016 Earnings and Increases Dividend

TORONTO, Nov. 10, 2016 /CNW/ - Equitable Group Inc. (TSX: EQB and EQB.PR.C) ("Equitable" or the "Company") today reported record financial and operating performance for it s wholly owned subsidiary, Equitable Bank (the "Bank") during the three months ended September 30, 2016 and increased its common share dividend.

THIRD QUARTER HIGHLIGHTS

  • Net income of $35.2 million and diluted earnings per share of $2.16 were both up 12% from Q3 2015 and up 5% from Q2 2016
  • Return on Shareholders' Equity ("ROE") was 17.2% compared to 17.1% in Q2 2016 and 17.5% in Q3 2015

 

FIRST NINE MONTHS HIGHLIGHTS

  • Net income of $96.7 million and diluted earnings per share of $5.93 were both up 2% compared to the first nine months of 2015, reflecting strong growth of our franchise, offset in part by incremental costs associated with strategic investments made to support the launch of the Company's digital banking platform
  • ROE was 16.3% compared to 18.4% in the same period of 2015
  • Book value per common share was $51.72 at September 30, 2016, up 16% from $44.72 at September 30, 2015

 

DIVIDEND INCREASE AND DECLARATIONS

The Board of Directors today increased Equitable's common share dividend by 5% with a dividend declaration of $0.22 per common share, payable January 5, 2017, to common shareholders of record at the close of business on December 15, 2016.  This represents the 9th increase in the past five years and is reflective of the Bank's positive performance and confidence in the future. Even with this increase, the Bank has maintained a low payout ratio, consistent with its strategy of building capital organically to support future earnings growth opportunities. The Board also declared a quarterly dividend of $0.396875 per preferred share, payable December 30, 2016, to preferred shareholders of record at the close of business on December 15, 2016.

CEO's COMMENTARY          

"Equitable delivered its best-ever financial results this quarter including record EPS, book value and mortgage originations while once again surpassing the ROE, efficiency ratios and credit performances of Canada's biggest banks," said Andrew Moor, President and Chief Executive Officer. "This continued outperformance reflected strong execution of our growth and risk mitigation strategies, the advantages of our branchless business model and the focus of our nearly 600 team members on service excellence. Driven by higher levels of customer affinity and market share, Equitable grew Mortgages Under management by 25% over the past year to almost $20 billion and attracted an extra $1.2 billion in deposits, including over $1 billion through our new EQ Bank digital banking platform. Clearly, Equitable is on course for another year of outstanding progress for our shareholders."

OPERATING HIGHLIGHTS

  • Single Family Lending mortgage principal at September 30, 2016 was $7.5 billion, up 21% from $6.2 billion a year ago on record quarterly originations of $1.1 billion (up from $744 million in the third quarter of 2015) as the Bank's focus on service attracted more volume and share in a growing market.
  • Commercial Lending mortgage principal at September 30, 2016 was $2.7 billion, up 19% from $2.2 billion a year ago while quarterly originations grew 56% year over year to $367 million (up from $236 million in the third quarter of 2015).
  • Securitization Financing Mortgages under Management (MUM) increased 31% to $9.7 billion at September 30, 2016 from $7.5 billion a year ago. Securitization Financing originations were $739 million compared to $790 million a year ago.
  • Deposit principal outstanding amounted to $9.2 billion at September 30, 2016, up 15% from $8.0 billion a year ago.

 

Equitable's credit metrics continue to reflect the high quality of the mortgage portfolio. Net impaired mortgage assets were just 0.19% of total mortgage assets compared to 0.21% a year ago.  The allowance for credit losses represented 0.20% of total mortgage assets at quarter end, in excess of the Bank's average annual loss rate of 0.04% over the past 10 years.  This allowance represents the amount that the Bank has reserved on its balance sheet to absorb potential future losses.  The provision for credit losses – which represents the net additions to that allowance in the current period – was $1.2 million or 0.03% of the average mortgage portfolio in the third quarter, up from a year ago and from the second quarter of 2016 but in line with the Bank's long-term norms.

CAPITAL

Equitable Bank's capital ratios continue to exceed minimum regulatory standards and were above the levels of all of the other eight publicly listed Schedule I Canadian banks.  At September 30, 2016:

  • Common Equity Tier 1 Capital Ratio was 13.4%, surpassing the Basel III minimum of 7.0%, and unchanged from last year's level
  • Total Capital Ratio was 16.2%, well above the regulatory requirement of 10.5% on an all-in basis
  • Leverage Ratio was 4.9% and as such the Bank was fully compliant with the target that OSFI sets on a confidential, institution-by-institution basis

 

STRATEGIC UPDATE

Equitable's strategic objectives are to: grow by providing superior service, competitive products and cost-effective operations; build its capabilities and brand; consistently create shareholder value; and, maintain a low-risk profile. It delivered on these priorities in several ways to date this year:

  • To complement its leading position in Alternative mortgage lending, the Bank continued to win over mortgage brokers and borrowers in Canada's Prime Single Family Lending market such that Prime MUM reached $3.4 billion, more than twice the level of a year ago. Prime originations in Q3 were $496 million (Q3 2015 - $523 million), with $228 million (2015 - $99 million) originated through the Bank's internal teams.
  • Third quarter Commercial mortgage originations were at their highest level in 18 quarters as the Bank continued to deepen and expand its customer/partner relationships as part of its recently enhanced commercial market strategy.
  • In just nine months, Equitable's new EQ Bank digital banking platform has attracted over $1 billion of balances.
  • Equitable Bank's High Interest Savings Account (HISA), a brokered product, has expanded its balances by 51% year over year to $1.2 billion.
  • In recognition of Equitable's leadership, performance culture, employment brand, and strong employee engagement, the Bank has been selected as a Platinum level Aon Best Employer in Canada.
  • On October 18, 2016, the Bank became the successor issuer on $3.1 billion of NHA MBS pools in a transaction that is expected to be accretive to EPS through 2020. The transaction was financed through Equitable's existing sources of liquidity and did not require any capital issuance.
  • Once again, Equitable outperformed Canada's eight other publicly traded banks on the basis of cost effectiveness with an Efficiency Ratio of 37.0% in the third quarter. As expected, this ratio improved from 38.2% in the second quarter and 43.2% in the first quarter when extra expenses were incurred to support the January 2016 public launch of the EQ Bank platform.

 

APPOINTMENT TO THE BOARD OF DIRECTORS

Effective November 10th, 2016, Equitable has appointed Kishore (Kish) Kapoor to its Board of Directors. "This appointment reflects our ongoing commitment to ensuring that the Board has the right mix of relevant skills at the table.  Kish's financial and industry experience will make him a valuable addition to our Board" said David LeGresley, Chair of Equitable's Board of Directors.  Mr. Kapoor is a Corporate Director and until 2011 was President of Wellington West Holdings Inc.  From November 2003 to June 2005, he was Executive Vice-President Corporate Development of Loring Ward International Ltd., a public company formed to hold the U.S. operations of Assante Corporation, a company which provides wealth and asset management services.  As one of the founders of Assante Corporation, Mr. Kapoor was its Executive Vice President Corporate Development from March 1994 to November 2003.  He currently serves on the Board of Manitoba Telecom Services Inc. and Chairs its Audit Committee.  He also sits on the Board of Richardson Financial Group Limited.  Mr. Kapoor has a Bachelor of Science from the University of Manitoba and is a CPA and former tax partner with KPMG LLP.

BUSINESS OUTLOOK

Equitable expects that its strategies, non-branch business model advantage and commitment to providing superior customer service will lead to EPS growth and returns on shareholders' equity for the remainder of 2016 and throughout 2017 that are consistent with the Bank's long-term averages.

The assumptions used in formulating these expectations can be found in Management's Discussion and Analysis available on the Company's website and on SEDAR.

"As we look ahead, we are confident in our strategy and believe that our increasingly diversified business model can continue to deliver solid growth," said Mr. Moor.  "At the same time, we are cognizant of the potential impact of recent government interventions on Canada's housing and mortgage markets. Based on our initial analysis and in consultations with other industry partners, our current view is that in aggregate, these interventions will reduce mortgage originations and house prices and increase competition for certain segments of high-quality borrowers.

"These interventions do not call for a change in our core strategies, although aspects of our approach will likely evolve as we assimilate expected changes and respond to competitive developments. We have taken these uncertainties into account in formulating our outlook for 2017.  Although some of the Bank's business lines will be affected differently than others, the changes will likely be net neutral to Equitable's overall earnings prospects through 2017." 

Despite a shifting market landscape, Equitable believes that there is significant growth and value creation potential in all of its businesses and that over the long term, government interventions will create more market stability, which is good for all players, Equitable included.

"We believe Equitable's positioning as a diversified, non-branch, Schedule I bank with a variety of funding sources is a definitive advantage at all times, but particularly now as some of the ground rules change," said Tim Wilson, Vice President and Chief Financial Officer. "Our funding options and flexible cost structure should allow us to effectively adapt to the changing market conditions."

To remain well positioned, Equitable will continue to focus on building the value of the Bank's franchise by making ongoing investments in customer service and in the EQ Bank digital platform, as well as providing superior support to our broker partners.

CONFERENCE CALL AND WEBCAST

The Company will hold its third quarter conference call and webcast at 10:00 a.m. ET Friday, November 11, 2016. To access the call live, please dial 416-260-0113 five minutes prior.  The listen-only webcast with accompanying slides will be available at www.equitablebank.ca under Investor Relations. The call will be hosted by Andrew Moor, President and Chief Executive Officer.

A replay of the call will be available until Friday, November 18, 2016 and it can be accessed by dialing 647-436-0148 and entering passcode 3575538 followed by the number sign. Alternatively, the call will be archived on the Company's website for three months.

INTERIM CONSOLIDATED FINANCIAL STATEMENTS
















CONSOLIDATED BALANCE SHEETS (unaudited)


AS AT SEPTEMBER 30, 2016












With comparative figures as at December 31, 2015 and September 30, 2015


($ THOUSANDS)




























September 30, 2016



December 31, 2015



September 30, 2015












Assets:











Cash and cash equivalents



$

383,788


$

423,366


$

413,518

Restricted cash




238,945



107,988



116,894

Securities purchased under reverse repurchase agreements




102,760



19,918



63,598

Investments




124,485



153,714



149,734

Mortgages receivable – Core Lending




10,199,787



8,674,599



8,458,087

Mortgages receivable – Securitization Financing




6,849,957



6,026,207



5,501,345

Securitization retained interests




87,262



61,650



61,524

Other assets




75,862



60,142



62,910




$

18,062,846


$

15,527,584


$

14,827,610












Liabilities and Shareholders' Equity











Liabilities:












Deposits



$

9,268,606


$

8,211,265


$

8,055,591


Securitization liabilities




7,258,672



6,109,436



5,485,344


Obligations under repurchase agreements




69,290



-



163,189


Deferred tax liabilities




37,763



28,698



25,713


Other liabilities




85,239



81,290



58,094


Bank facilities




398,909



235,779



190,000


Debentures




65,000



65,000



85,000





17,183,479



14,731,468



14,062,931

Shareholders' equity:












Preferred shares




72,557



72,557



72,557


Common shares




145,694



143,690



141,971


Contributed surplus




5,114



4,706



4,808


Retained earnings




688,867



605,436



578,295


Accumulated other comprehensive loss




(32,865)



(30,273)



(32,952)





879,367



796,116



764,679




$

18,062,846


$

15,527,584


$

14,827,610

 

 

 

CONSOLIDATED STATEMENTS OF INCOME (unaudited)





FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2016





With comparative figures for the three and nine month periods ended September 30, 2015





($THOUSANDS, EXCEPT PER SHARE AMOUNTS)
























Three months ended

Nine months ended



September 30, 2016

September 30, 2015

September 30, 2016

September 30, 2015











Interest income:











Mortgages – Core Lending


$

114,416

$

99,135

$

323,379

$

290,614


Mortgages – Securitization Financing



44,776


40,907


133,679


117,269


Investments



2,142


1,599


6,390


5,279


Other



1,087


1,821


3,366


4,812




162,421


143,462


466,814


417,974

Interest expense:











Deposits



47,204


43,560


136,947


128,614


Securitization liabilities



41,489


35,466


122,028


102,588


Bank facilities



1,926


1,407


3,532


2,906


Debentures



950


1,274


2,850


3,820


Other



25


318


26


1,277




91,594


82,025


265,383


239,205

Net interest income



70,827


61,437


201,431


178,769

Provision for credit losses



1,243


930


1,575


2,574

Net interest income after provision for credit losses



69,584


60,507


199,856


176,195

Other income:











Fees and other income



3,873


3,117


10,831


7,959


Net (loss) gain on investments



(44)


-


703


(450)


Gains on securitization activities and income from
securitization retained interests



3,182


1,046


5,636


5,016




7,011


4,163


17,170


12,525

Net interest and other income



76,595


64,670


217,026


188,720

Non-interest expenses:











Compensation and benefits



15,574


12,015


45,417


35,201


Other



13,465


10,108


41,372


28,332




29,039


22,123


86,789


63,533

Income before income taxes



47,556


42,547


130,237


125,187

Income taxes:











Current



8,227


6,133


24,521


19,992


Deferred



4,099


4,966


9,064


10,766




12,326


11,099


33,585


30,758

Net income


$

35,230

$

31,448

$

96,652

$

94,429











Earnings per share:











Basic


$

2.19

$

1.96

$

5.98

$

5.88


Diluted


$

2.16

$

1.93

$

5.93

$

5.80

 

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)





FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2016





With comparative figures for the three and nine month periods ended September 30, 2015





($ THOUSANDS)
























Three months ended

Nine months ended



September 30, 2016

September 30, 2015

September 30, 2016

September 30, 2015











Net income


$

35,230

$

31,448

$

96,652

$

94,429











Other comprehensive income – items that
may be reclassified subsequently to income:




















Available for sale investments:










Net unrealized gains (losses) from change in
fair value



3,249


(17,178)


(1,206)


(29,931)

Reclassification of net (gains) losses to
income



(174)


(130)


(1,075)


229




3,075


(17,308)


(2,281)


(29,702)

Income tax (expense) recovery



(816)


4,569


606


7,841




2,259


(12,739)


(1,675)


(21,861)











Cash flow hedges:










Net unrealized gains (losses) from change in
fair value



1,096


(1,636)


(3,734)


(4,310)

Reclassification of net losses to income



703


1,103


2,486


2,560




1,799


(533)


(1,248)


(1,750)

Income tax (expense) recovery



(478)


141


331


462




1,321


(392)


(917)


(1,288)

Total other comprehensive income (loss)



3,580


(13,131)


(2,592)


(23,149)

Total comprehensive income


$

38,810

$

18,317

$

94,060

$

71,280

 

 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)

FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2016











With comparative figures for the three month period ended September 30, 2015











($ THOUSANDS)














































Accumulated other
comprehensive
income (loss)



September 30, 2016


Preferred
shares

Common
shares

Contributed
surplus

Retained
earnings

Cash flow
hedges

Available
for sale
investments


Total


Total



















Balance, beginning of period


$

72,557

$

144,615

$

5,099

$

658,098

$

(10,053)

$

(26,392)

$

(36,445)

$

843,924

Net income



-


-


-


35,230


-


-


-


35,230

Other comprehensive income, net of tax



-


-


-


-


1,321


2,259


3,580


3,580

Exercise of stock options



-


871


-


-


-


-


-


871

Dividends:



















Preferred shares



-


-


-


(1,191)


-


-


-


(1,191)


Common shares



-


-


-


(3,270)


-


-


-


(3,270)

Stock-based compensation



-


-


223


-


-


-


-


223

Transfer relating to the exercise of stock options



-


208


(208)


-


-


-


-


-

Balance, end of period


$

72,557

$

145,694

$

5,114

$

688,867

$

(8,732)

$

(24,133)

$

(32,865)

$

879,367















































Accumulated other
comprehensive
income (loss)



September 30, 2015


Preferred
shares

Common
shares

Contributed
surplus

Retained
earnings

Cash flow
hedges

Available
for sale
investments


Total


Total



















Balance, beginning of period


$

72,557

$

141,794

$

4,640

$

550,979

$

(6,798)

$

(13,023)

$

(19,821)

$

750,149

Net income



-


-


-


31,448


-


-


-


31,448

Other comprehensive loss, net of tax



-


-


-


-


(392)


(12,739)


(13,131)


(13,131)

Exercise of stock options



-


143


-


-


-


-


-


143

Dividends:



















Preferred shares



-


-


-


(1,191)


-


-


-


(1,191)


Common shares



-


-


-


(2,941)


-


-


-


(2,941)

Stock-based compensation



-


-


202


-


-


-


-


202

Transfer relating to the exercise of stock options



-


34


(34)


-


-


-


-


-

Balance, end of period


$

72,557

$

141,971

$

4,808

$

578,295

$

(7,190)

$

(25,762)

$

(32,952)

$

764,679

 

 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)

FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2016











With comparative figures for the nine month period ended September 30, 2015











($ THOUSANDS)














































Accumulated other
comprehensive
income (loss)



September 30, 2016


Preferred
shares

Common
shares

Contributed
surplus

Retained
earnings

Cash flow
hedges

Available
for sale
investments


Total


Total



















Balance, beginning of period


$

72,557

$

143,690

$

4,706

$

605,436

$

(7,815)

$

(22,458)

$

(30,273)

$

796,116

Net income



-


-


-


96,652


-


-


-


96,652

Other comprehensive loss, net of tax



-


-


-


-


(917)


(1,675)


(2,592)


(2,592)

Exercise of stock options



-


1,615


-


-


-


-


-


1,615

Dividends:



















Preferred shares



-


-


-


(3,573)


-


-


-


(3,573)


Common shares



-


-




(9,648)


-


-


-


(9,648)

Stock-based compensation



-


-


797


-


-


-


-


797

Transfer relating to the exercise of stock options



-


389


(389)


-


-


-


-


-

Balance, end of period


$

72,557

$

145,694

$

5,114

$

688,867

$

(8,732)

$

(24,133)

$

(32,865)

$

879,367















































Accumulated other
comprehensive
income (loss)



September 30, 2015


Preferred
shares

Common
shares

Contributed
surplus

Retained
earnings

Cash flow
hedges

Available
for sale
investments


Total


Total



















Balance, beginning of period


$

72,412

$

140,657

$

4,331

$

496,097

$

(5,902)

$

(3,901)

$

(9,803)

$

703,694

Net income



-


-


-


94,429


-


-


-


94,429

Other comprehensive loss, net of tax



-


-


-


-


(1,288)


(21,861)


(23,149)


(23,149)

Issuance cost



145


-


-


-


-


-


-


145

Exercise of stock options



-


1,082


-


-


-


-


-


1,082

Dividends:



















Preferred shares



-


-


-


(3,572)


-


-


-


(3,572)


Common shares



-


-


-


(8,659)


-


-


-


(8,659)

Stock-based compensation



-


-


709


-


-


-


-


709

Transfer relating to the exercise of stock options



-


232


(232)


-


-


-


-


-

Balance, end of period


$

72,557

$

141,971

$

4,808

$

578,295

$

(7,190)

$

(25,762)

$

(32,952)

$

764,679

 

 


CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2016

With comparative figures for the three and nine month periods ended September 30, 2015

($ THOUSANDS)






















Three months ended

Nine months ended



September 30, 2016

September 30, 2015

September 30, 2016

September 30, 2015

CASH FLOWS FROM OPERATING ACTIVITIES










Net income for the period


$

35,230

$

31,448

$

96,652

$

94,429

Adjustments for non-cash items in net income:











Financial instruments at fair value through income



(2,479)


(981)


(3,488)


3,661


Amortization of premiums/discount on investments



114


183


393


582


Amortization of capital assets and intangible costs



1,963


859


5,758


2,516


Provision for credit losses



1,243


930


1,575


2,574


Securitization gains



(2,505)


(1,259)


(6,018)


(4,492)


Net loss (gain) on sale or redemption of investments



44


-


(703)


450


Stock-based compensation



223


202


797


709


Income taxes



12,326


11,099


33,585


30,758

Changes in operating assets and liabilities:











Restricted cash



(88,254)


(9,556)


(130,957)


(49,204)


Securities purchased under reverse repurchase agreements



48,146


38,427


(82,843)


(45,481)


Mortgages receivable, net of securitizations



(821,327)


(750,250)


(2,381,080)


(1,711,914)


Other assets



(14,713)


(404)


(14,346)


1,544


Deposits



120,927


(180,902)


1,058,964


563,116


Securitization liabilities



450,708


614,357


1,149,236


1,130,016


Obligations under repurchase agreements



69,290


(4,578)


69,290


110,776


Bank facilities



228,909


48,198


163,130


97,764


Other liabilities



4,198


1,158


(13)


(4,177)

Income taxes paid



(2,885)


(7,477)


(14,339)


(26,418)

Securitization retained interests



4,339


2,868


11,342


7,735

Cash flows from (used in) operating activities



45,497


(205,678)


(43,065)


204,944

CASH FLOWS FROM FINANCING ACTIVITIES










Dividends paid on preferred shares



(1,191)


(1,191)


(3,573)


(3,572)

Dividends paid on common shares



(3,270)


(2,938)


(9,485)


(5,718)

Issue of preferred shares, net of issuance cost



-


-


-


145

Proceeds from issuance of common shares



871


143


1,614


1,082

Cash flows used in financing activities



(3,590)


(3,986)


(11,444)


(8,063)

CASH FLOWS FROM INVESTING ACTIVITIES










Purchase of investments



-


(9,653)


(6,783)


(25,089)

Proceeds on sale or redemption of investments



8,997


5,846


32,605


14,651

Net change in Canada Housing Trust re-investment accounts



15


16


64


11,811

Purchase of capital assets and system development costs



(3,368)


(4,944)


(10,955)


(14,799)

Cash flows from (used in) investing activities



5,644


(8,735)


14,931


(13,426)

Net increase (decrease) in cash and cash equivalents



47,551


(218,399)


(39,578)


183,455

Cash and cash equivalents, beginning of period



336,237


631,917


423,366


230,063

Cash and cash equivalents, end of period


$

383,788

$

413,518

$

383,788

$

413,518











Cash flows from operating activities include:










Interest received


$

162,889

$

142,938

$

463,336

$

416,449

Interest paid



(89,638)


(82,410)


(246,382)


(230,378)

Dividends received



1,604


1,670


5,705


11,035

 

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 is Canada's ninth largest independent Schedule I bank and offers a diverse suite of residential lending, commercial lending and savings solutions to Canadians.  Through its proven branchless approach and customer service focus, Equitable Bank has grown to over $21 billion of Assets Under Management.  Most recently, Equitable Bank launched a digital banking operation, EQ Bank, along with its flagship product the EQ Bank Savings Plus Account.  Equitable Bank currently employs nearly 600 employees across the country, and was named one of Canada's best employers for 2017 by Aon.  For more information about Equitable Bank and its products, please visit equitablebank.ca.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements made by the Company in the sections of this news release including those entitled "CEO's Commentary", "Operating Highlights", "Capital", "Strategic Update", "Business Outlook", 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 result 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". 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, the nature of our customers and rates of default, and competition as well as those factors discussed under the heading "Risk Management" in the Management's Discussion and Analysis 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 at current levels, 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 ROE, provision for credit loss rate, Capital Ratios, book value per share, Efficiency Ratio, Assets Under Management, and Mortgages 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 2016 Management's Discussion and Analysis provides a detailed description of each non-GAAP measure and should be read in conjunction with this report. The Management's Discussion and Analysis 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 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; Tim Wilson, Vice President and Chief Financial Officer, 416-515-7000

RELATED LINKS
www.equitablebank.ca

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