EQB reports fourth quarter and fiscal 2025 results

TORONTO, Dec. 3, 2025 /CNW/ - EQB Inc. (TSX: EQB) today reported financial results for the fourth quarter and the fiscal year ended October 31, 2025.

"Fiscal 2025 was a difficult year for EQB. We responded by announcing a one-time restructuring program in the fourth quarter which drove a charge of $92 million pre-tax. This significantly improves our cost structure and creates a foundation for better efficiency, operating leverage and ROE," said Chadwick Westlake, President and CEO. "Our new leadership team is focused on growing our core franchise, rapidly accelerating our Challenger Bank products and expanding our capabilities for the benefit of all Canadians. The transformative announcement of the acquisition of PC Financial and strategic partnership with Loblaw adds further strength to our outlook and complements the many great organic opportunities we have as a diversified Canadian lender and owner of EQ Bank, the top banking brand in Canada now nearing $10 billion in deposits. With our strong talent, capital and technology, combined with prudent and disciplined risk and cost management, our goal is to deliver lasting value for our stakeholders as a customer-first disruptor."    

• Adjusted diluted EPS¹: Q4 $1.53 (-39% y/y) and FY25 $8.90 (-19% y/y) (reported Q4 ($0.25) and FY25 $6.65)
• Adjusted net income¹: Q4 $63.5 million (-37% y/y) and FY25 $354.2 million (-19% y/y) (reported Q4 ($4.8 million) and FY25 $266.6 million)
• Adjusted PPPT²: Q4 $143.1 million (-17% y/y) and FY25 $617.7 million (-11% y/y) (reported Q4 $55.6 million and FY25 $508.9 million)
• Adjusted ROE¹: Q4 7.5% and FY25 11.3% (reported Q4 (1.2%) and FY25 8.5%)
• Adjusted revenue¹: Q4 $308.1 million (-4% y/y) and FY25 $1.26 billion (-1% y/y) (reported Q4 $317.1 million and FY25 $1.26 billion)
• Adjusted net interest margin (NIM)^1,3: Q4 2.01% and FY25 2.07%, (-8 bps y/y) (reported Q4 2.17% and FY25 2.11%)
• Book value per share: $81.31, +5% y/y
• Total AUM + AUA³: $138 billion, +1% q/q +9% y/y
• EQ Bank customers: 607,000, +4% q/q and +18% y/y
• Common share dividends declared: $0.57 per share, +4% q/q and +16% y/y
• Capital: CET1 ratio of 13.3% and total capital ratio of 15.8%

Strong lending growth with loans under management (LUM) up 10% y/y   

• In Commercial Banking, total LUM grew +20% y/y, reflecting and highlighting strength in the insured multi-unit residential portfolio, resilience of the insured lending platform and market leading position. The strong risk profile of this portfolio was retained with more than 80% of total LUM being insured under CMHC programs
• In Personal Banking, the single-family uninsured portfolio grew +4% y/y as healthy customer retention and renewal rates offset the impact of steady, but subdued, origination levels in a less active housing market. The decumulation lending portfolio (reverse mortgages and insurance lending) grew +36% y/y to $2.9 billion, with market share gains supported by demographic trends including the movement to age in place

EQ Bank: deposits increased to nearly $10 billion and welcomed 21,000 new retail and business customers in Q4, +18% y/y

• EQ Bank deposits accelerated in FY25, closing the year at nearly $10 billion ($9.9 billion, +10% y/y) now with 607,000 total customers, +18% y/y. Deposit growth was generated by continued demand for EQ Bank's innovative products such as its Notice Savings Account, payroll deposit program and new Business Banking platform that fundamentally improves competitive choice in banking
• Business Banking platform was launched in Q4 with a healthy product release pipeline. The platform was enthusiastically received by small business customers drawn to a differentiated, all-digital offering that provides greater value
• EQ Bank named top banking brand in Canada and North American by Financial Times' leading magazine on international finance, The Banker, for its compelling brand story, momentum and likelihood of growing market share

Prudent provisioning accounts for current macroeconomic headwinds 

• EQB's adjusted provision for credit losses (PCL) was $132 million in FY25 (reported $137 million) as higher impairments and performing allowances in the personal and commercial portfolios were driven by weaker housing market and uncertainty associated with GDP and unemployment versus a year ago. This was partly offset by lower equipment financing PCL
• The Bank is appropriately reserved for credit losses with net allowances as a percentage of total loan assets of 41 bps, compared to 32 bps at Q4 2024. The increase was across all segments and driven by prudent provisioning against the performing loan book considering elevated macroeconomic uncertainty

Expense growth and operating leverage proactively addressed by decisive Q4 restructuring program

• Executed strategic restructuring and streamlining program to enhance flexibility, improve efficiency and align costs to high-impact initiatives where EQB can generate strong ROE and growth
• Final restructuring, severance and impairment charges totalled $92 million pre-tax, composed of $22.7 million in severance costs and $69.3 million in non-operating asset impairment charges
• EQB's adjusted efficiency ratio for 2025 was 50.9%, +5.7% y/y (reported 59.7%, +12.4% y/y)

Dividend increase, share buybacks reflect disciplined approach to returning capital to shareholders

• EQB declared a dividend of $0.57 per common share payable on December 31, 2025, to shareholders of record as of December 15, 2025, representing a 16% increase from the dividend paid in December 2024 and a 4% increase from the dividend paid in September 2025
• EQB purchased and cancelled 1,023,748 common shares through its active Normal Course Issue Bid (NCIB) and intends to renew its NCIB in FY26 to support attractive return of capital for shareholders⁴

"EQB has three financial priorities for fiscal 2026: drive growth, thoughtfully manage expenses and maintain strong risk management practices," said Anilisa Sainani, CFO. "Recent targeted actions to manage expense growth along with prudent credit provisioning create the foundation to deliver on these priorities. Core business growth will come from disciplined organic initiatives to expand our lending market share positions and serve our EQB customers, both retail and business, with differentiated digital products. We expect to significantly bolster these organic growth opportunities with the announcement to acquire PC Financial and strategic partnership with Loblaw. In all our actions, we are committed to creating shareholder value."

Analyst conference call and webcast: 10:30 a.m. ET on December 4, 2025

EQB's Chadwick Westlake, President and CEO, Anilisa Sainani, CFO, and Marlene Lenarduzzi, CRO, will host EQB's annual earnings call and webcast. The listen-only webcast with accompanying slides will be available at eqb.investorroom.com. To access the conference call with operator assistance, dial 416-945-7677 five minutes prior to the start time.

¹ Adjusted measures and ratios are Non-Generally Accepted Accounting Principles (GAAP) measures and ratios. Adjusted measures and ratios are calculated in the same manner as reported measures and ratios, except that financial information included in the calculation of adjusted measures and ratios is adjusted to exclude the impact of one-time acquisition and integration related costs, and certain items which management determines would have a significant impact on a reader's assessment of business performance. For additional information and a reconciliation of reported results to adjusted results, see the "Non-GAAP financial measures and ratios" section.

² PPPT represents pre-provision-pre-tax income, a non-GAAP measure of financial performance.

³ These are non-GAAP measures, see the "Non-GAAP financial measures and ratios" section.

⁴ Subject to regulatory approvals.

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated balance sheets

($000s) As at	October 31, 2025	October 31, 2024
Assets:
Cash and cash equivalents	717,253	591,641
Restricted cash	1,326,684	971,987
Securities purchased under reverse repurchase agreements	1,604,165	1,260,118
Investments	1,645,864	1,627,314
Loans
Loans – Personal	31,857,508	32,325,379
Loans – Commercial	14,581,966	14,872,960
Allowance for credit losses	(206,801)	(164,421)
	46,232,673	47,033,918
Securitization retained interests	1,028,623	813,719
Deferred tax assets	36,429	36,104
Other assets
Derivative financial instruments	242,799	260,678
Intangible assets	148,623	198,640
Goodwill	92,545	110,580
Investment in associate	49,884	50,046
Other	368,179	279,176
	902,030	899,120
Total assets	53,493,721	53,233,921
Liabilities and Equity
Liabilities:
Deposits	36,616,511	33,739,612
Securitization liabilities	11,197,477	14,594,304
Obligations under repurchase agreements	104,568	-
Deferred tax liabilities	199,151	177,933
Funding facilities	1,454,087	946,956
Other liabilities
Derivative financial instruments	94,742	121,727
Other	615,386	515,204
	710,128	636,931
Total liabilities	50,281,922	50,095,736
Equity:
Common shares	503,060	505,876
Other equity instruments	147,360	147,440
Contributed deficit	(15,014)	(17,374)
Retained earnings	2,566,475	2,483,309
Accumulated other comprehensive income	1,684	8,555
Total shareholders' equity	3,203,565	3,127,806
Non-controlling interests	8,234	10,379
Total equity	3,211,799	3,138,185
Total liabilities and equity	53,493,721	53,233,921

Consolidated statements of income

($000s, except per share amounts) Year ended	2025	2024
Interest income:
Loans – Personal	1,858,271	1,945,011
Loans – Commercial	881,675	1,019,682
Investments^(1)	85,550	89,834
Other	98,804	108,082
	2,924,300	3,162,609
Interest expense:
Deposits	1,320,094	1,490,075
Securitization liabilities^(1)	476,955	523,069
Funding facilities	31,023	50,940
Other	2,537	25,364
	1,830,609	2,089,448
Net interest income^(1)	1,093,691	1,073,161
Non-interest revenue:
Fees and other income	79,241	81,087
Net gains on loans and investments	14,616	20,279
Gain on sale from securitization activities^(1)	62,161	66,348
Net gains on hedging and derivatives	12,092	14,567
	168,110	182,281
Revenue	1,261,801	1,255,442
Provision for credit losses	137,431	107,013
Revenue after provision for credit losses	1,124,370	1,148,429
Non-interest expenses:
Compensation and benefits	326,776	272,346
Product costs	146,506	89,046
Technology and system costs	97,729	82,374
Marketing and corporate expenses	90,895	77,849
Regulatory, legal and professional fees	62,312	55,631
Premises	28,653	16,853
	752,871	594,099
Income before income taxes	371,499	554,330
Income taxes	104,891	152,658
Net income	266,608	401,672
Dividends on preferred shares	-	8,140
Distribution to LRCN holders	8,820	2,586
Net income available to common shareholders and non-controlling interests	257,788	390,946
Net income attributable to:
Common shareholders	256,475	389,836
Non-controlling interests	1,313	1,110
	257,788	390,946
Earnings per share:
Basic	6.70	10.19
Diluted	6.56	10.11

(1)

Effective November 1, 2024, interest income earned on securitized retained interests is reported in Interest income – Investments and interest expense incurred on servicing liabilities is reported in Interest expense – Securitization liabilities. Previously, these amounts were included in Non-interest revenue. Prior period comparative figures have been updated to conform to current period presentation.

Consolidated statements of comprehensive income

($000s) Year ended	2025	2024
Net income	266,608	401,672
Other comprehensive income – items that will be reclassified subsequently to income
Debt instruments at Fair Value through Other Comprehensive Income:
Net change in gains on fair value	18,385	68,127
Provision for credit losses recognized to income	400	-
Reclassification of net gains to income	(10,532)	(54,147)
Other comprehensive income – items that will not be reclassified subsequently to income:
Equity instruments designated at Fair Value through Other Comprehensive Income:
Net change in gains on fair value	868	1,176
Reclassification of net (gains) losses to retained earnings	(868)	248
	8,253	15,404
Income tax expense	(2,197)	(4,063)
	6,056	11,341
Cash flow hedges:
Net change in unrealized gains (losses) on fair value	5,546	(22,798)
Reclassification of net gains to income	(31,952)	(7,377)
	(26,406)	(30,175)
Income tax recovery	6,486	8,174
	(19,920)	(22,001)
Total other comprehensive loss	(13,864)	(10,660)
Total comprehensive income	252,744	391,012
Total comprehensive income attributable to:
Common shareholders	242,611	379,176
Other equity holders	8,820	10,726
Non-controlling interests	1,313	1,110
	252,744	391,012

Consolidated statements of changes in equity

2025
	Common Shares		Contributed Deficit	Retained Earnings	Accumulated other comprehensive income (loss)
		Other equity instruments			Cash Flow Hedges	Financial Instruments at FVOCI	Total	Attributable to equity holders	Non- controlling interests	Total
Balance, beginning of year	505,876	147,440	(17,374)	2,483,309	21,617	(13,062)	8,555	3,127,806	10,379	3,138,185
Net Income	-	-	-	265,295	-	-	-	265,295	1,313	266,608
Realized losses on sale of shares, net of tax	-	-	-	(6,377)	-	-	-	(6,377)	-	(6,377)
Transfer of AOCI losses to retained earnings, net of tax	-	-	-	-	-	6,859	6,859	6,859	-	6,859
Transfer of AOCI losses to income, net of tax	-	-	-	-	-	134	134	134	-	134
Other comprehensive loss, net of tax	-	-	-	-	(19,920)	6,056	(13,864)	(13,864)	-	(13,864)
Exercise of stock options	8,419	-	-	-	-	-	-	8,419	-	8,419
Common shares repurchased and cancelled, net of tax	(13,204)	-	-	(84,121)	-	-	-	(97,325)	-	(97,325)
Issuance cost, net of tax	-	(80)	-	-	-	-	-	(80)	-	(80)
Limited recourse capital note distributions, net of tax	-	-	-	(8,820)	-	-	-	(8,820)	-	(8,820)
Common share dividends	-	-	-	(79,728)	-	-	-	(79,728)	(2,299)	(82,027)
Put option – non-controlling interests	-	-	(4,552)	-	-	-	-	(4,552)	-	(4,552)
Acquisition of non-controlling interests	-	-	4,242	(3,083)	-	-	-	1,159	(1,159)	-
Stock-based compensation	-	-	4,639	-	-	-	-	4,639	-	4,639
Transfer relating to the exercise of stock options	1,969	-	(1,969)	-	-	-	-	-	-	-
Balance, end of year	503,060	147,360	(15,014)	2,566,475	1,697	(13)	1,684	3,203,565	8,234	3,211,799

 

($000s)			2024
	Preferred Shares	Common Shares			Contributed Deficit	Retained Earnings	Accumulated other comprehensive income (loss)
				Other equity instruments			Cash Flow Hedges	Financial Instruments at FVOCI	Total		Attributable to equity holders	Non- controlling interests	Total
Balance, beginning of year	181,411	471,014		-	12,795	2,185,480	43,618	(48,775)	(5,157)		2,845,543	-	2,845,543
Non-controlling interest on acquisition	-	-		-	-	-	-	-	-		-	10,770	10,770
Net Income	-	-		-	-	400,562	-	-	-		400,562	1,110	401,672
Realized losses on sale of shares, net of tax	-	-		-	-	(23,056)	-	-	-		(23,056)	-	(23,056)
Transfer of AOCI losses to retained earnings, net of tax	-	-		-	-	-	-	22,875	22,875		22,875	-	22,875
Transfer of AOCI losses to income, net of tax	-	-		-	-	-	-	1,497	1,497		1,497	-	1,497
Other comprehensive loss, net of tax	-	-		-	-	-	(22,001)	11,341	(10,660)		(10,660)	-	(10,660)
Common shares issued	-	11,000		-	-	-	-	-	-		11,000	-	11,000
Exercise of stock options	-	20,290		-	-	-	-	-	-		20,290	-	20,290
Redemption of preferred shares	(181,411)	-		-	-	(2,371)	-	-	-		(183,782)	-	(183,782)
Limited recourse capital notes issued	-	-		150,000	-	-	-	-	-		150,000	-	150,000
Issuance cost, net of tax	-	-		(2,560)	-	-	-	-	-		(2,560)	-	(2,560)
Limited recourse capital note distributions, net of tax	-	-		-	-	(2,586)	-	-	-		(2,586)	-	(2,586)
Dividends:
Preferred shares	-	-		-	-	(8,140)	-	-	-		(8,140)	-	(8,140)
Common shares	-	-		-	-	(66,580)	-	-	-		(66,580)	(1,501)	(68,081)
Put option – non-controlling interests	-	-		-	(30,613)	-	-	-	-		(30,613)	-	(30,613)
Stock-based compensation	-	-		-	4,016	-	-	-	-		4,016	-	4,016
Transfer relating to the exercise of stock options	-	3,572		-	(3,572)	-	-	-	-		-	-	-
Balance, end of year	-	505,876		147,440	(17,374)	2,483,309	21,617	(13,062)	8,555		3,127,806	10,379	3,138,185

Consolidated statements of cash flows

($000s) Year ended	2025	2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	266,608	401,672
Adjustments for non-cash items in net income:
Financial instruments at fair value through income	(62,388)	13,152
Amortization of premiums/discount	(9,055)	(14,908)
Amortization of capital and intangible assets	67,948	60,036
Provision for credit losses	137,431	107,013
Impairment on intangible assets and goodwill	56,544	-
Securitization gains	(62,161)	(66,348)
Stock-based compensation	4,639	4,016
Income taxes	104,891	152,658
Securitization retained interests	174,863	129,719
Changes in operating assets and liabilities:
Restricted cash	(354,696)	(204,792)
Securities purchased under reverse repurchase agreements	(344,046)	(351,285)
Loans receivable, net of securitizations	435,065	(58,571)
Other assets	(13,106)	(53,917)
Deposits	2,822,487	1,597,115
Securitization liabilities	(3,438,557)	25,422
Obligations under repurchase agreements	104,568	(1,128,238)
Funding facilities	507,132	(784,631)
Other liabilities	81,907	(8,314)
Income taxes paid	(108,134)	(98,042)
Cash flows from (used in) from operating activities	371,940	(278,243)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common shares	8,419	31,290
Common shares repurchased	(97,325)	-
Redemption of preferred shares	-	(183,782)
Net proceeds from issuance of limited recourse notes	-	147,440
Distributions to other equity holders	(8,820)	(2,586)
Dividends paid on preferred shares	-	(8,140)
Dividends paid on common shares	(82,027)	(66,580)
Cash flows used in financing activities	(179,753)	(82,358)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments	(405,136)	(351,650)
Proceeds from sale or redemption of investments	374,662	871,021
Acquisition of subsidiary	(4,242)	(75,483)
Investment in associate	-	(50,000)
Net change in Canada Housing Trust re-investment accounts	53,032	76,243
Purchase of capital assets and system development costs	(84,891)	(67,363)
Cash flows (used in) from investing activities	(66,575)	402,768
Net increase in cash and cash equivalents	125,612	42,167
Cash and cash equivalents, beginning of year	591,641	549,474
Cash and cash equivalents, end of year	717,253	591,641
Supplemental statement of cash flows disclosures
Cash flows from operating activities include:
Interest received	2,803,950	2,922,693
Interest paid	(1,740,308)	(1,747,235)
Dividends received	350	1,944

About EQB Inc.  

EQB Inc. (TSX: EQB) is a leading digital financial services company with $138 billion in combined assets under management and administration (as at October 31, 2025). It offers banking services through Equitable Bank, a wholly owned subsidiary and Canada's seventh largest bank by assets, and wealth management through ACM Advisors, a majority owned subsidiary specializing in alternative assets. As Canada's Challenger Bank™, Equitable Bank has a clear mission to drive change in Canadian banking to enrich people's lives. It leverages technology to deliver exceptional personal and commercial banking experiences and services to nearly 780,000 customers and more than six million credit union members through its businesses. Through its digital EQ Bank platform (eqbank.ca) its customers have named it one of Canada's top banks on the Forbes World's Best Banks list since 2021. 

Please visit eqb.investorroom.com for more details or connect with us on LinkedIn.

Investor contact: 
Lemar Persaud
VP and Head of IR
[email protected] 

Media contact: 
Maggie Hall 
Director, PR & Communications
[email protected]

Cautionary Note Regarding Forward-Looking Statements

Statements made by EQB 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 EQB's objectives, strategies and initiatives, financial performance expectation, statements with respect to EQB's intention to renew and/or make share repurchases under its NCIB, and other statements made herein, whether with respect to EQB'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", "intends", "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. These statements include, but are not limited to, statements relating to the expected impact of the Acquisition (as defined herein), the anticipated benefits of the Acquisition, including the expected impact on EQB's size, operations, capabilities, growth drivers and opportunities, activities, attributes, profile, business services portfolio and loans, revenue and assets mix, market position, profitability, performance, and strategy; the expected impact of the Acquisition on EQB's financial performance; expectations regarding EQB's business model, plans and strategy, the maintenance of CET1 ratio and changes in adjusted EPS; retention of PC Financial management and employees and the strategic fit and complementarity of PC Financial and Equitable Bank; anticipated synergies and estimated transaction and integration costs and the timing of incurrence thereof, as well as EQB's financial performance objectives, vision and strategic goals, the economic and market review and outlook, the regulatory environment in which we operate, the outlook and priorities for each of its business lines, the risk environment including liquidity and funding risk, and statements by EQB representatives.

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 EQB 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 including, without limitation global geopolitical risk, uncertainty arising from ongoing United States/Canada tariff concerns and related impacts, business acquisition, legislative and regulatory developments, changes in accounting standards, the nature of our customers and rates of default, the successful and timely approval of the Acquisition, the integration of PC Financial and the realization of the anticipated benefits and synergies of the Acquisition in the timeframe anticipated, including impact and accretion in various financial metrics; the ability to retain management and key employees of PC Financial; and competition as well as those factors discussed under the heading "Risk Management" in EQB's Q4 Management's Discussion and Analysis (MD&A) and in EQB's documents filed on SEDAR+ at www.sedarplus.ca.

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 EQB and the Canadian economy. Although EQB 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 EQB 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. EQB 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 and Ratios

To enable readers to better assess trends in underlying business performance and increase consistency with the reporting regimens used by other leading Canadian financial institutions, EQB provides adjusted results in parallel with reported measures. Adjusted results are non-GAAP financial measures that enable readers to assess underlying business results and trends. Adjustments listed below are presented on a pre-tax basis:

2025

• $17.7 million decrease in net interest income due to non-recurring fair value adjustments on covered bonds and interest on securitizations;
• $92.0 million final restructuring, severance and impairment charges as outlined in the Key corporate events section of this report, of which $12.8 million reflects impairments on non-operating assets related to the Equipment financing business and $79.2 million of restructuring charges including goodwill and intangible asset impairments and severance provisions;
• $8.7 million non-recurring transaction fees;
• $7.9 million Concentra Bank and ACM acquisition related intangible asset amortization;
• $7.0 million new office lease related costs prior to occupancy;
• $6.5 million professional fees related to the Acquisition;
• $2.6 million accelerated long-term incentive expense following the former CEO's passing;
• $1.8 million non-recurring operational effectiveness expenses and acquisition and integration-related costs; and
• $5.0 million provision for credit losses associated with an equipment financing purchase facility.

2024

• $8.8 million covered bond fair value adjustments;
• $9.3 million Concentra Bank and ACM acquisition related intangible asset amortization;
• $2.2 million new office lease related costs prior to occupancy;
• $11.2 million non-recurring operational effectiveness expenses and acquisition and integration-related costs associated with Concentra and ACM; and
• $16.1 million provision for credit losses associated with an equipment financing purchase facility; and
• $1.7 million provision for credit losses due to a one-time change in ECL methodology from five to four economic scenarios and adjusting associated weights.

The following table presents a reconciliation of GAAP reported financial results to non-GAAP adjusted financial results.

Reconciliation of reported and adjusted financial results	For the three months ended				For the year ended
($000, except share and per share amounts)	31-Oct-25	31-Jul-25	31-Oct-24		31-Oct-25	31-Oct-24
Reported results
Net interest income^(1)	286,427	258,483	261,762		1,093,691	1,073,161
Non-interest revenue^(1)	30,660	47,646	51,010		168,110	182,281
Revenue	317,087	306,129	312,772		1,261,801	1,255,442
Non-interest expense	261,472	170,954	153,625		752,871	594,099
Pre-provision pre-tax income^(2)	55,615	135,175	159,147		508,930	661,343
Provision for credit loss	54,551	33,968	47,987		137,431	107,013
Income taxes	5,822	27,843	31,740		104,891	152,658
Net income	(4,758)	73,364	79,420		266,608	401,672
Net income available to common shareholders	(9,474)	73,014	75,382		256,475	389,836
Adjustments
Net interest income – interests and covered bond fair value adjustments	(21,784)	4,035	8,804		(17,749)	8,804
Non-interest revenue – non-operating asset impairments	(12,809)	-	-		(12,809)	-
Non-interest expenses – restructuring, severance, and impairments	(79,236)	-	-		(79,236)	-
Non-interest expenses – non-recurring transaction fees	(8,706)	-	-		(8,706)	-
Non-interest expenses – intangible asset amortization	(1,969)	(1,969)	(2,115)		(7,876)	(9,334)
Non-interest expenses – new office lease related costs	(15)	(857)	(2,208)		(7,024)	(2,208)
Non-interest expenses – related to professional fees described above	(6,505)	-	-		(6,505)	-
Non-interest expenses – accelerated incentive expense	-	(2,594)	-		(2,594)	-
Non-interest expenses – non-recurring operational effectiveness and acquisition-related costs^(3)	-	-	(755)		(1,782)	(11,171)
Provision for credit loss – equipment financing	-	-	(16,085)		(5,018)	(16,085)
Provision for credit loss – ECL methodology change and weights	-	-	-		-	(1,698)
Pre-tax adjustments	87,456	9,455	29,967		113,801	49,300
Income taxes – tax impact on above adjustments^(4)	19,215	2,561	7,988		26,229	12,997
Post-tax adjustments – net income	68,241	6,894	21,979		87,572	36,303
Adjustments attributed to minority interests	(228)	(230)	(288)		(978)	(912)
Post-tax adjustments – net income to common shareholders	68,013	6,664	21,691		86,594	35,391
Adjusted results
Net interest income^(1)	264,643	262,518	270,566		1,075,942	1,081,965
Non-interest revenue^(1)	43,469	47,646	51,010		180,919	182,281
Revenue	308,112	310,164	321,576		1,256,861	1,264,246
Non-interest expense	165,041	165,534	148,547		639,148	571,386
Pre-provision pre-tax income^(2)	143,071	144,630	173,029		617,713	692,860
Provision for credit loss	54,551	33,968	31,902		132,413	89,230
Income taxes	25,037	30,404	39,728		131,120	165,655
Net income	63,483	80,258	101,399		354,181	437,975
Net income available to common shareholders	58,539	79,678	97,073		343,069	425,227
Diluted earnings per share
Weighted average diluted common shares outstanding	38,269,352	38,519,991	38,723,974		38,557,364	38,549,300
Diluted earnings per share – reported	(0.25)	1.90	1.95		6.65	10.11
Diluted earnings per share – adjusted	1.53	2.07	2.51		8.90	11.03
Diluted earnings per share – adjustment impact	1.78	0.17	0.56		2.25	0.92

(1) Effective November 1, 2024, interest income earned from retained interests and interest expense incurred on servicing liabilities are reclassed from Non-interest revenue to Net interest income. Prior period comparative figures have been updated to conform to current period presentation. 

(2) This is a non-GAAP measure, see Non-GAAP financial measures and ratios section.

(3) Includes non-recurring operational effectiveness and acquisition and integration-related costs associated with Concentra Bank and ACM.

(4) Income tax expense associated with non-GAAP adjustment was calculated based on the statutory tax rate applicable for that period.

Other non-GAAP financial measures and ratios:

• Adjusted efficiency ratio: it is derived by dividing adjusted non-interest expenses by adjusted revenue. A lower adjusted efficiency ratio reflects a more efficient cost structure
• Adjusted return on equity (ROE) is calculated on an annualized basis and is defined as adjusted net income available to common shareholders as a percentage of weighted average common shareholders' equity (reported) outstanding during the period.
• Assets under administration (AUA): is sum of (1) assets over which EQB's subsidiaries have been named as trustee, custodian, executor, administrator, or other similar role; (2) loans held by credit unions for which EQB's subsidiaries act as servicer.
• Assets under management (AUM): is the sum of total balance sheet assets, loan principal derecognized but still managed by EQB, and assets managed on behalf on investors.
• Loans under management (LUM): is the sum of loan principal reported on the consolidated balance sheet and loan principal derecognized but still managed by EQB.
• Net interest margin (NIM): this profitability measure is calculated on an annualized basis by dividing net interest income by the average total interest earning assets for the period.
• Pre-provision pre-tax income (PPPT): this is the difference between revenue and non-interest expenses.
• Total loan assets: this is calculated on a gross basis (prior to allowance for credit losses) as the sum of both Loans – Personal and Loans – Commercial on the balance sheet.

SOURCE EQB Inc.