- Originations grew by 222% to $47 million;
- Net income of $0.01 per share fell from net income of $0.22 per
- Adjusted net income remained constant at $0.11 per share.
TORONTO, May 5 /CNW/ - HOMEQ Corporation (TSX: HEQ ("HOMEQ")), today announced its financial results for the quarter ended March 31, 2010.
During the quarter origination volume of $47 million exceeded Q1, 2009 by over 200%, and also exceeded the previous record by 9%.
HOMEQ is experiencing sustained demand throughout the country, and the volume of inquiries and applications continues to grow. As an indication of the motivation of prospective customers, the sales cycle has become noticeably shorter, thus improving efficiency and enabling HOMEQ to provide funds to new customers faster than previously experienced.
"We believe that volumes of this magnitude affirm the transition of a formerly niche product into one of more widespread acceptance", said President and Chief Executive Officer, Mr. Steven Ranson. "At the core of HOMEQ is a trusted brand, a valued product line, and effective customer and partner relationships".
The increased origination volume is having a corresponding positive effect on the value of the portfolio which grew by 10% over Q1 2009. The larger portfolio, together with an improvement in spread percentage, resulted in growth of net interest income of 16%.
Net income for the quarter was $0.1 million ($0.01 per share) compared to net income of $3.1 million ($0.22 per share) in Q1, 2009. Adjusted net income of $1.5 million ($0.11 per share) was similar to that of Q1, 2009. HOMEQ's ability to maintain its adjusted net income at the current level was achieved despite a 5.2% increase in non-interest expenditure relating primarily to additional overhead incurred in operating a bank. Adjusted return on equity (annualized) was 7.0% in comparison to 6.8% in 2009.
"The future looks bright", continued Mr. Steven Ranson. "It is based on an intersection of demographics, product alternatives and expertise. It is estimated that the number of Canadian seniors will grow by 20% in the next six years and increasingly they will rely on HOMEQ for flexible and innovative solutions to meet their retirement needs".
Financial Statements and Conference Call
The Q1 2010 financial statements 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 May 6, 2010, at 9:00 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.
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 938742).
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 March 31, 2010, the mortgage portfolio comprised approximately 7,400 reverse mortgages with an accrued value of $905 million, secured by residential properties across Canada worth approximately $2.5 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.
SOURCE HOMEQ Corporation
For further information: For further information: Steven K. Ranson, President and Chief Executive Officer, (416) 413-4663 or Gary Krikler, Senior Vice President and Chief Financial Officer, (416) 413-4679