Home Capital Reports Another Strong Quarter and Dividend Increase:

• Diluted Earnings per Share up 14.9% year over year to $1.77;
• Dividend Increase of 7.7%, or 2 Cents per Share to $0.28 Quarterly;
• Quarterly Net Income increases 15.7% year over year.

TORONTO, July 31, 2013 /CNW/ - Home Capital today reported another quarter of solid results and strong origination volumes.

The Company's Second Quarter Report, including Management's Discussion and Analysis, is available on Home Capital's website at www.homecapital.com and the Canadian Securities Administrators' website at www.sedar.com.

FINANCIAL HIGHLIGHTS
(Unaudited)	For the three months ended						For the six months ended
(000s, except Per Share and Percentage Amounts)	June 30		March 31		June 30		June 30		June 30
		2013		2013		2012		2013		2012
OPERATING RESULTS
Net Income	$	61,573	$	59,725	$	53,230	$	121,298	$	105,764
Total Revenue		232,555		231,194		218,751		463,749		433,433
Diluted Earnings per Share	$	1.77	$	1.72	$	1.54	$	3.48	$	3.07
Return on Shareholders' Equity		23.6%		24.0%		25.1%		23.8%		25.7%
Return on Average Assets		1.3%		1.3%		1.2%		1.3%		1.2%
Net Interest Margin (TEB)^1		2.14%		2.17%		2.09%		2.15%		2.05%
Provision as a Percentage of Gross Loans (annualized)		0.10%		0.11%		0.05%		0.10%		0.08%
Efficiency Ratio (TEB)^1		28.6%		28.3%		27.8%		28.4%		27.8%
								As at
		June 30		March 31		December 31		June 30
		2013		2013		2012		2012
BALANCE SHEET HIGHLIGHTS
Total Assets	$	19,532,958	$	19,358,563	$	18,800,079	$	18,526,458
Total Assets Under Administration ^2		20,577,505		20,377,074		19,681,750		18,599,224
Total Loans ^3,4		17,794,420		17,429,982		17,159,913		17,049,785
Securitized Loans On-Balance Sheet ^3		6,570,837		6,710,556		6,706,160		7,664,978
Total Loans Under Administration ^3,4,5		18,838,967		18,448,493		18,041,584		17,122,551
Liquid Assets		884,908		823,973		771,772		677,908
Deposits		11,168,639		10,642,280		10,136,599		9,007,464
Shareholders' Equity		1,068,017		1,021,813		968,213		869,439
FINANCIAL STRENGTH
Capital Measures ^6
Risk-Weighted Assets	$	5,984,644	$	5,738,257	$	5,491,513	$	5,003,579
Common Equity Tier 1 Capital Ratio		16.63%		16.57%		N/A		N/A
Tier 1 Capital Ratio		16.63%		16.57%		17.01%		17.09%
Total Capital Ratio		19.74%		19.82%		20.68%		21.09%
Assets to Regulatory Capital Multiple		13.86		13.98		13.98		13.78
Credit Quality
Net Non-Performing Loans as a Percentage of Gross Loans		0.31%		0.32%		0.33%		0.31%
Allowance as a Percentage of Gross Non-Performing Loans		58.3%		59.9%		57.0%		58.7%
Share Information
Book Value per Common Share	$	30.83	$	29.53	$	27.96	$	25.05
Common Share Price - Close	$	55.53	$	58.74	$	59.07	$	45.18
Market Capitalization	$	1,923,948	$	2,032,404	$	2,045,594	$	1,568,243
Number of Common Shares Outstanding		34,647		34,600		34,630		34,711

¹See definition of Taxable Equivalent Basis (TEB) under Non-GAAP Measures of the unaudited interim consolidated financial report.
²Total assets under administration include total on-balance sheet assets and off-balance sheet loans.
³In 2013 the Company classified Home Trust mortgages used as CMB replacement assets as securitized mortgages.  In 2012 these were classified as pledged securities.  Prior periods in 2012 have been restated to reflect the current classification.
⁴Total loans include loans held for sale.
⁵Loans under administration includes total loans and off-balance sheet loans.
⁶These figures relate to the Company's operating subsidiary, Home Trust Company and are calculated under Basel III for 2013 and Basel II for 2012.

SECOND QUARTER 2013 HIGHLIGHTS

Key results for the second quarter and the first six months of 2013 included:

• Net income increased to $61.6 million for the second quarter and to $121.3 million for the first six months of 2013, up 15.7% and 14.7% over the comparable periods in 2012. Net income was reduced by $2.3 million in after tax charges related to IFRS implementation (see the Non-Interest Income section of the MD&A) offset by an increase from $2.0 million in investment tax credit benefits, after tax, related to a portion of the Company's development of a new banking platform (see the Income Taxes section of the MD&A). Without these items, adjusted net income, as defined in Table 2, was $61.9 million for Q2 2013 and $124.9 million for the first six months of 2013, representing increases of 16.3% and 18.1% over the comparable periods of 2012. This was a marginal decline from adjusted net income of $63.0 million in Q1 2013, primarily due to lower income from gains on securitization.
• Diluted earnings per share were $1.77 for the quarter and $3.48 year to date representing increases of 14.9% and 13.4% over the $1.54 and $3.07 earned in the comparable periods of 2012 and an increase of 2.9% over the $1.72 last quarter.  Adjusted diluted earnings per share¹ were $1.78 for the quarter and $3.59 year to date, 15.6% and 16.9% higher than the same periods of 2012 and 1.7% below adjusted diluted earnings per share of $1.81 last quarter.
• Net interest income, before provisions, continued in an upward trend, reaching $102.5 million in the second quarter and $204.4 million year to date, increasing from $93.9 million and $182.1 million recorded in the same periods of 2012 and from $101.9 million earned in Q1 2013. The growth in net interest income reflects strong net on-balance sheet loan growth in the traditional loan portfolio, offset by continued reduction of the securitized portfolio, combined with strong total net interest margin.
• Net interest margin (TEB) was 2.14% in the quarter and 2.15% on a year to date basis. This is up from 2.09% and 2.05% in the same periods of 2012 and slightly below the 2.17% recorded last quarter. The increase year over year reflects the combination of the shift to higher yielding traditional mortgages relative to securitized mortgages and improved spreads earned on non-securitized lending.
• Return on equity at 23.6% for the quarter remains solid and continues to be in excess of the Company's minimum performance objective of 20%.
• The credit quality of the loan portfolio remains strong with continued low non-performing loans and credit losses that are well within expected levels. Net non-performing loans as a percentage of gross loans (NPL ratio) ended the quarter at 0.31% compared to 0.32% at the end of last quarter and 0.31% one year ago. The annualized credit provision as a percentage of gross loans (PCL ratio) ratio remains within expectations at 0.10%, compared to 0.11% in last quarter and 0.05% one year ago.
• Capital ratios under Basel III remain robust with Home Trust's Common Equity Tier 1 ratio (CET 1 ratio) ending the quarter at 16.63%, while Tier 1 and Total Capital Ratios were 16.63% and 19.74%, respectively.  Home Trust's assets to capital multiple was 13.86 at the end of the quarter compared to 13.98 at March 31, 2013 and 13.78 one year ago.
• Total loans under administration, which includes securitized mortgages that qualify for off-balance sheet accounting, increased to $18.84 billion, reflecting increases of $1.72 billion or 10.0% from $17.12 billion one year ago, and $0.80 billion or 4.4% from $18.04 billion at the end of 2012 (8.8% on an annualized basis).
• The Company continued to experience strong loan demand in the quarter, with growth over Q1 2013 and last year in residential lending. Total mortgage originations were $1.63 billion compared to $1.38 billion last quarter.  This was down marginally from $1.67 billion in Q2 2012 reflecting lower multi-unit and non-residential originations offset by higher originations in residential lending. Year-to-date loan originations were $3.01 billion, up from $2.85 billion in 2012.
• Traditional mortgage originations increased to $1.24 billion in the quarter, up from $1.19 billion in Q2 2012 and $0.99 billion in Q1 2013. Year-to-date traditional mortgage originations were $2.23 billion, up from $2.10 billion last year. The Company continues to experience strong demand for its traditional product offerings, which continue to be of high credit quality. This continues to enhance profitability and asset quality.
• Accelerator (insured) residential mortgage originations increased to $260.3 million in the quarter, up from $121.6 million last quarter and $221.1 million in Q2 2012. Year-to-date originations of $381.9 million are slightly below the $393.8 million originated in the same period last year as current year Q1 originations were lower given the slower start to the spring market in 2013. The Company continues to pursue strategies for transactions that will qualify lower margin, insured single-family residential mortgages for off-balance sheet treatment and lead to increased growth in this loan portfolio. The dialogue with regulators and other interested parties regarding these strategies has continued and management remains cautiously optimistic that a solution can be attained.
• Multi-unit residential mortgage originations were $54.3 million in the quarter and $257.0 million year to date compared to $87.8 million and $115.4 million in the same periods last year and $202.6 million last quarter. The Company securitized and sold $47.8 million in Q2 2013 resulting in $0.4 million in securitization gains. The insured multi-unit residential market is relatively limited and the Company participates as appropriate opportunities are available through various origination channels. Consequently, origination volumes can vary significantly from quarter to quarter.
• Commercial mortgage advances were $44.0 million for the quarter and $74.7 million year to date compared to $106.0 million and $133.7 million in the comparable periods of 2012 and $30.7 million last quarter. Store and apartment mortgage advances were $27.5 million in the quarter and $51.1 million year to date compared to $37.8 million and $75.7 million in the comparable periods of 2012 and $23.6 million last quarter.  The Company continues to be selective and focuses on opportunities that present strong credit and low risk profiles.
• The consumer retail credit portfolio, which includes durable household goods, such as water heaters and larger-ticket home improvement items, reached $310.9 million in Q2 2013, up 55.3% from $200.2 million one year ago. The Company has been successful at expanding relationships with its business partners to increase this portfolio which offers attractive returns for the risk profile.

¹ Table 2 provides a reconciliation of net income to adjusted net income and adjusted diluted earnings per share.

Although real estate market activity was relatively weak in the early part of the current year, resulting in reduced levels of loan growth, the Company experienced increased demand for its mortgage lending products in the second quarter. The real estate market now appears to have adjusted to the changes in the Canada Mortgage and Housing Corporation ("CMHC") rules and the Office of the Superintendent of Financial Institutions Canada ("OSFI)" lending guideline which were introduced in 2012.  Recent information indicates that modest increases in sales volumes and prices occurred in the quarter, suggesting that the objectives of the policy changes have been accomplished. This is consistent with the Company's expectations and indicates a healthy market with listings and sales in balance. The Company has not observed evidence of a "housing bubble" and expects that it will be able to continue to expand its share of the market through its network of brokers and its business development staff.

Late in the quarter, major flooding occurred in the province of Alberta.  This event caused property damage and hardship for many Albertans and the Company has been responding to requests from borrowers.  In order to assess the risk of losses arising from the flooding, the Company dispatched a team of evaluators from its Calgary, Vancouver and Toronto offices.  While a number of borrowers were directly affected by this difficult situation, the preliminary indications are that the Company will not face significant losses as a result of the flooding.  No additional provisions were recorded in this connection.  Following the end of the quarter, the town of Lac-Mégantic, Quebec experienced a terrible accident and losses of lives and property.  Although it did not have any direct association or losses as a result of this tragic situation, the Company recognizes the severe impact that this tragedy has had on the residents and their friends and relatives.  Also following the quarter end, the Greater Toronto Area experienced a record amount of rainfall and consequent flooding, which disrupted the lives and businesses of many people.  The Company does not expect that this unusual event will result in significant credit losses.

Senior Management and the Board of Directors are pleased to announce that the Company further strengthened its risk management group during the quarter with the appointment of David J. Novak to the position of Senior Vice President and Chief Risk Officer. Mr. Novak brings with him significant experience in quantitative analysis, risk management and asset liability management, having served in senior roles in the private sector and more recently with OSFI.

Subsequent to the end of the quarter, and in light of the Company's solid performance, profitability and strong financial position, the Board of Directors declared an increased quarterly dividend of $0.28 per common share, payable on September 1, 2013 to shareholders of record at the close of business on August 12, 2013.

The Company continues to deliver solid results in terms of growth, high returns and increased dividends. Despite the persistent international economic instability and modest economic improvement in Canada, the Company's performance continues to reflect the strength and the successful execution of its core strategy.

With solid performance in all aspects of Home Capital's business, management continues to expect the positive performance the Company experienced during the first half of 2013 to continue for the remainder of year.

(signed)	(signed)
GERALD M. SOLOWAY	KEVIN P.D. SMITH
Chief Executive Officer	Chair of the Board
July 31, 2013

Additional information concerning the Company's targets and related expectations for 2013, including the risks and assumptions underlying these expectations, may be found in Management's Discussion and Analysis (MD&A) of the quarterly report.

Second Quarter Results Conference Call
The conference call will take place on Thursday, August 1, 2013 at 10:30 a.m. Participants are asked to call 5 to 15 minutes in advance, 647-427-7450 in Toronto or toll-free 1-888-231-8191 throughout North America. The call will also be accessible in listen-only mode via the Internet at www.homecapital.com.

Conference Call Archive
A telephone replay of the call will be available between 1:30 p.m. Thursday, August 1, 2013 and midnight Thursday, August 8, 2013 by calling 416-849-0833 or 1-855-859-2056 (enter passcode 16265448). The archived audio web cast will be available for 90 days on CNW Group's website at www.newswire.ca and Home Capital's website at www.homecapital.com.

Consolidated Statements of Income
		For the three months ended						For the six months ended
thousands of Canadian dollars, except per share amounts		June 30		March 31		June 30		June 30		June 30
(Unaudited)			2013		2013		2012		2013		2012
Net Interest Income Non-Securitized Assets
Interest from loans (note 5(F))		$	153,598	$	148,031	$	125,576	$	301,629	$	243,141
Dividends from securities			2,795		3,193		3,533		5,988		7,497
Other interest			1,778		1,456		930		3,234		1,977
			158,171		152,680		130,039		310,851		252,615
Interest on deposits			65,640		62,938		56,043		128,578		109,171
Interest on senior debt			1,601		1,583		1,705		3,184		3,358
Net interest income non-securitized assets			90,930		88,159		72,291		179,089		140,086
Net Interest Income Securitized Loans and Assets
Interest income from securitized loans and assets (note 5(F))			57,953		61,337		76,286		119,290		152,902
Interest expense on securitization liabilities			46,351		47,610		54,723		93,961		110,915
Net interest income securitized loans and assets			11,602		13,727		21,563		25,329		41,987
Total Net Interest Income			102,532		101,886		93,854		204,418		182,073
Provision for credit losses (note 5(E))			4,429		4,667		2,298		9,096		6,796
			98,103		97,219		91,556		195,322		175,277
Non-Interest Income
Fees and other income			15,406		14,972		10,757		30,378		21,654
Securitization income			608		1,587		1,268		2,195		1,268
Net realized and unrealized (losses) gains on securities and mortgages			(215)		2,274		1,676		2,059		1,984
Net realized and unrealized gain (loss) on derivatives (note 13)			632		(1,656)		(1,275)		(1,024)		3,010
			16,431		17,177		12,426		33,608		27,916
			114,534		114,396		103,982		228,930		203,193
Non-Interest Expenses
Salaries and benefits			16,673		16,950		14,501		33,623		28,500
Premises			2,439		2,445		1,977		4,884		3,975
Other operating expenses			15,160		14,574		13,404		29,734		26,575
			34,272		33,969		29,882		68,241		59,050
Income Before Income Taxes			80,262		80,427		74,100		160,689		144,143
Income taxes (note 11(A))
	Current		16,077		23,456		20,568		39,533		39,623
	Deferred		2,612		(2,754)		302		(142)		(1,244)
			18,689		20,702		20,870		39,391		38,379
NET INCOME		$	61,573	$	59,725	$	53,230	$	121,298	$	105,764
NET INCOME PER COMMON SHARE
Basic		$	1.78	$	1.72	$	1.54	$	3.50	$	3.07
Diluted		$	1.77	$	1.72	$	1.54	$	3.48	$	3.07
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic			34,612		34,630		34,476		34,615		34,486
Diluted			34,850		34,825		34,509		34,828		34,491
Total number of outstanding common shares (note 9(A))			34,647		34,600		34,711		34,647		34,711
Book value per common share		$	30.83	$	29.53	$	25.05	$	30.83	$	25.05

Consolidated Statements of Comprehensive Income
	For the three months ended						For the six months ended
	June 30		March 31		June 30		June 30		June 30
thousands of Canadian dollars (Unaudited)		2013		2013		2012		2013		2012
NET INCOME	$	61,573	$	59,725	$	53,230	$	121,298	$	105,764
OTHER COMPREHENSIVE (LOSS) INCOME
Available for Sale Securities
Net unrealized (losses) gains on securities available for sale		(10,737)		7,165		(1,069)		(3,572)		3,324
Net gains reclassified to net income		(1,162)		(1,946)		(1,348)		(3,108)		(1,712)
		(11,899)		5,219		(2,417)		(6,680)		1,612
Income tax (recovery) expense		(3,151)		1,381		(643)		(1,770)		524
		(8,748)		3,838		(1,774)		(4,910)		1,088
Cash Flow Hedges (note 13)
Net unrealized losses on cash flow hedges		-		-		(396)		-		(370)
Net losses reclassified to net income		372		367		357		739		710
		372		367		(39)		739		340
Income tax expense (recovery)		97		95		(89)		192		21
		275		272		50		547		319
Total other comprehensive (loss) income		(8,473)		4,110		(1,724)		(4,363)		1,407
COMPREHENSIVE INCOME	$	53,100	$	63,835	$	51,506	$	116,935	$	107,171

Consolidated Balance Sheets
		June 30		March 31		December 31
thousands of Canadian dollars (Unaudited)			2013		2013		2012
ASSETS
Cash and Cash Equivalents (note 4(A))		$	707,240	$	631,080	$	301,863
Available for Sale Securities (note 4(B))			396,557		404,254		414,344
Loans Held for Sale			25,508		43,434		21,921
Loans (note 5)
Securitized mortgages (note 6)			6,570,837		6,710,556		6,706,160
Non-securitized mortgages and loans			11,198,075		10,675,992		10,431,832
			17,768,912		17,386,548		17,137,992
Collective allowance for credit losses (note 5(E))			(30,500)		(30,300)		(30,000)
			17,738,412		17,356,248		17,107,992
Other
Restricted cash  (note 4(A))			136,165		130,083		137,424
Pledged securities  (notes 4(B) and 6(C))			304,269		551,008		588,069
Derivative assets  (note 13)			28,739		44,643		45,388
Other assets  (note 7)			110,958		114,528		100,983
Goodwill and intangible assets			85,110		83,285		82,095
			665,241		923,547		953,959
		$	19,532,958	$	19,358,563	$	18,800,079
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Deposits payable on demand		$	172,370	$	96,513	$	105,923
Deposits payable on a fixed date			10,996,269		10,545,767		10,030,676
			11,168,639		10,642,280		10,136,599
Senior Debt (note 12)			148,300		152,092		150,684
Securitization Liabilities (note 6(A))
Mortgage-backed security liabilities			1,103,266		1,271,879		1,301,693
Canada Mortgage Bond liabilities			5,820,394		6,036,475		6,034,202
			6,923,660		7,308,354		7,335,895
Other
Derivative liabilities  (note 13)			1,704		2,941		2,386
Other liabilities  (note 8)			186,744		198,037		170,502
Deferred tax liabilities  (note 11(C))			35,894		33,046		35,800
			224,342		234,024		208,688
			18,464,941		18,336,750		17,831,866
Shareholders' Equity
Capital stock  (note 9)			64,662		61,850		61,903
Contributed surplus			6,419		6,729		6,224
Retained earnings			1,005,044		952,869		903,831
Accumulated other comprehensive (loss) income  (note 10)			(8,108)		365		(3,745)
			1,068,017		1,021,813		968,213
		$	19,532,958	$	19,358,563	$	18,800,079

Consolidated Statements of Changes in Shareholders' Equity
							Net Unrealized		Net Unrealized		Total
							Gains (Losses)		Losses on		Accumulated
							on Securities		Cash Flow		Other		Total
thousands of Canadian dollars,	Capital		Contributed		Retained		Available for		Hedges,		Comprehensive		Shareholders'
except per share amounts (Unaudited)	Stock		Surplus		Earnings		Sale, after Tax		after Tax		Loss		Equity
Balance at December 31, 2012	$	61,903	$	6,224	$	903,831	$	432	$	(4,177)	$	(3,745)	$	968,213
Comprehensive income		-		-		121,298		(4,910)		547		(4,363)		116,935
Stock options settled (note 9(A))		2,825		(746)		-		-		-		-		2,079
Amortization of fair value of
employee stock options (note 9(B))		-		941		-		-		-		-		941
Repurchase of shares (note 9(A))		(66)		-		(2,077)		-		-		-		(2,143)
Dividends
($0.52 per share)		-		-		(18,008)		-		-		-		(18,008)
Balance at June 30, 2013	$	64,662	$	6,419	$	1,005,044	$	(4,478)	$	(3,630)	$	(8,108)	$	1,068,017
Balance at December 31, 2011	$	55,104	$	5,873	$	722,999	$	(4,141)	$	(5,050)	$	(9,191)	$	774,785
Comprehensive income		-		-		105,764		1,088		319		1,407		107,171
Stock options settled (note 9(A))		6,692		(1,302)		-		-		-		-		5,390
Amortization of fair value of
employee stock options (note 9(B))		-		972		-		-		-		-		972
Repurchase of shares (note 9(A))		(134)		-		(3,436)		-		-		-		(3,570)
Dividends
($0.42 per share)		-		-		(15,309)		-		-		-		(15,309)
Balance at June 30, 2012	$	61,662	$	5,543	$	810,018	$	(3,053)	$	(4,731)	$	(7,784)	$	869,439

Consolidated Statements of Cash Flows
			For the six months ended
			June 30		June 30
thousands of Canadian dollars (Unaudited)				2013		2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net income for the period			$	121,298	$	105,764
Adjustments to determine cash flows relating to operating activities:
	Deferred income taxes			(142)		(1,244)
	Amortization of capital assets			1,444		1,569
	Amortization of intangible assets			3,875		3,218
	Amortization of net premium on securities			1,210		1,461
	Amortization of securitization and senior debt transaction costs			6,185		6,604
	Provision for credit losses			9,096		6,796
	Change in accrued interest payable			23,608		20,108
	Change in accrued interest receivable			(1,184)		(3,104)
	Net realized and unrealized gains on securities and mortgages			(2,059)		(1,984)
	Realized gain on securitization			(2,195)		(1,268)
	Settlement of derivatives			3,115		(370)
	Loss (gain) on derivatives			1,224		(3,010)
	Net increase in mortgages			(1,085,637)		(947,215)
	Net decrease (increase) in pledged assets			539,277		(287,247)
	Net increase in credit card loans and other consumer retail loans			(18,301)		(7,904)
	Net increase in deposits			1,032,040		1,085,340
	Proceeds from obligations under repurchase agreement			-		43,418
	Activity in securitization liabilities
		Proceeds from sale of mortgage-backed securities derecognized		198,522		72,733
		Proceeds from sale of mortgage-backed securities		536,149		125,886
		Settlement and repayment of securitization liabilities		(943,608)		(527,249)
	Amortization of fair value of employee stock options			941		972
	Changes in taxes payable and other			(3,231)		(12,814)
Cash flows provided by operating activities				421,627		(319,540)
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase of shares				(2,143)		(3,570)
Exercise of employee stock options				2,079		5,390
Dividends paid to shareholders				(18,004)		(14,598)
Cash flows used in financing activities				(18,068)		(12,778)
CASH FLOWS FROM INVESTING ACTIVITIES
Activity in securities
	Purchases			(117,246)		(217,469)
	Proceeds from sales			129,223		185,453
Purchases of capital assets				(3,269)		(3,475)
Purchases of intangible assets				(6,890)		(5,450)
Cash flows provided by (used in) investing activities				1,818		(40,941)
Net increase (decrease) in cash and cash equivalents during the period				405,377		(373,259)
Cash and cash equivalents at beginning of the period			$	301,863	$	534,394
Cash and Cash Equivalents at End of the Period (note 4(A))				707,240		161,135
Supplementary Disclosure of Cash Flow Information
Dividends received on investments			$	3,985	$	6,227
Interest received				301,013		240,433
Interest paid				108,153		91,087
Income taxes paid				54,965		43,874

Home Capital published its financial objectives for 2013 on page 18 of the Company's 2012 Annual Report. The following table compares actual performance to date against each of these objectives.

Table 1: 2013 Targets and Performance
			For the six months ended June 30, 2013
		2013 Targets	Actual Results		Amount	Increase over 2012
Growth in net income		13%-18%	14.7%	$	121,298	$	15,534
Growth in diluted earnings per share		13%-18%	13.4%		3.48		0.41
Growth in total loans under administration^1		10%-15%	8.8%		18,838,967		797,383
Return on shareholders' equity		20.0%	23.8%
Efficiency ratio (TEB)^2		28.0% - 34.0%	28.4%
Provision as a percentage of gross loans (annualized)		0.10% - 0.18%	0.10%

¹ Change represents growth over December 31, 2012 on an annualized basis and includes loans held for sale.
² See definition of TEB under Non-GAAP Measures in the unaudited interim consolidated financial report.

Table 2: Reconciliation of Net Income to Adjusted Net Income
		Quarter								Year to date
(000s, except % and per share amounts)		Q2		Q1		%	Q2		%					%
			2013		2013	Change		2012	Change		2013		2012	Change
Reconciliation of Net Income to Adjusted Net Income
Net income per above		$	61,573	$	59,725	3.1%	$	53,230	15.7%	$	121,298	$	105,764	14.7%
Adjustment for derivative restructuring - IFRS conversion (net of tax)			2,309		1,783	29.5%		-	-		4,092	$	-	-
Adjustment for disputed loans to condominium corporations (net of tax)			-		1,508	(100.0)%		-	-		1,508		-	-
Adjustment for investment tax credit benefits (net of tax)			(1,985)		-	-		-	-		(1,985)		-	-
Adjusted Net Income^1		$	61,897	$	63,016	(1.8)%	$	53,230	16.3%	$	124,913	$	105,764	18.1%
Adjusted Basic Earnings per Share^1		$	1.79	$	1.82	(1.6)%	$	1.54	16.2%	$	3.61	$	3.07	17.6%
Adjusted Diluted Earnings per Share^1		$	1.78	$	1.81	(1.7)%	$	1.54	15.6%	$	3.59	$	3.07	16.9%
^1 Adjusted net income and Adjusted earnings per share are defined in the Non-GAAP section of the MD&A.

Caution Regarding Forward-Looking Statements

From time to time Home Capital Group Inc. makes written and verbal forward-looking statements. These are included in the Annual Report, periodic reports to shareholders, regulatory filings, press releases, Company presentations and other Company communications. Forward-looking statements are made in connection with business objectives and targets, Company strategies, operations, anticipated financial results and the outlook for the Company, its industry, and the Canadian economy. These statements regarding expected future performance are "financial outlooks" within the meaning of National Instrument 51-102.  Please see the risk factors, which are set forth in detail on pages 55 through 68 of the Company's 2012 Annual Report, as well as its other publicly filed information, which are available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com, for the material factors that could cause the Company's actual results to differ materially from these statements.  These risk factors are material risk factors a reader should consider, and include credit risk, funding and liquidity risk, structural interest rate risk, operational risk, investment risk, strategic and business risk, reputational risk and regulatory and legal risk along with additional risk factors that may affect future results.  Forward-looking statements can be found in the Report to the Shareholders and the Outlook Section in the quarterly report.   Forward-looking statements are typically identified by words such as "will,"  "believe," "expect," "anticipate," "estimate," "plan," "forecast," "may," and "could" or other similar expressions.

By their very nature, these statements require the Company to make assumptions and are subject to inherent risks and uncertainties, general and specific, which may cause actual results to differ materially from the expectations expressed in the forward-looking statements.  These risks and uncertainties include, but are not limited to, global capital market activity, changes in government monetary and economic policies, changes in interest rates, inflation levels and general economic conditions, legislative and regulatory developments, competition and technological change. The preceding list is not exhaustive of possible factors.

These and other factors should be considered carefully and readers are cautioned not to place undue reliance on these forward-looking statements. The Company does not undertake to update any forward-looking statements, whether written or verbal, that may be made from time to time by it or on its behalf, except as required by securities laws.

Assumptions about the performance of the Canadian economy in 2013 and its effect on Home Capital's business are material factors the Company considers when setting its objectives, targets and outlook.  In determining expectations for economic growth, both broadly and in the financial services sector, the Company primarily considers historical and forecasted economic data provided by the Canadian government and its agencies.  In setting and reviewing its targets, objectives and outlook for the remainder of 2013, management's expectations continue to assume:

• The Canadian economy will produce modest growth in 2013 with relatively stable to modestly improving employment conditions in most regions and inflation will generally be within the Bank of Canada's target of 1% to 3%, leading to stable credit losses and continued strong demand for the Company's lending products.
• The Canadian economy will continue to be heavily influenced by the economic conditions in the United States and global markets and, as such, the Company is prepared for the variability to plan that this may lead to.
• The Bank of Canada continues to indicate that increases to its target overnight interest rate are not imminent and, as such, the Company is assuming the rate will remain at its current level for the balance of 2013 and then begin a slow and measured increase. This is expected to continue to support relatively low mortgage interest rates for the foreseeable future.
• The housing market will remain relatively stable with balanced supply and demand conditions in most regions supported by continued low interest rates, relatively stable to modestly improving employment, and immigration.  There will be declines in housing starts and resale activity compared to prior years with stable to modestly declining prices throughout most of Canada. This supports continued stable credit quality and strong demand for the Company's products.
• Consumer debt levels will remain serviceable by Canadian households.

Non-GAAP Measures

The Company uses a number of financial measures to assess its performance.  Some of these measures are not calculated in accordance with GAAP, are not defined by GAAP, and do not have standardized meanings that would ensure consistency and comparability between companies using these measures.  Definitions of non-GAAP measures can be found under Non-GAAP Measures in the Management's Discussion and Analysis included in the Company's Second Quarter 2013 Report.

Regulatory Filings

The Company's continuous disclosure materials, including interim filings, annual Management's Discussion and Analysis and audited consolidated financial statements, Annual Information Form, Notice of Annual Meeting of Shareholders and Proxy Circular are available on the Company's website at www.homecapital.com, and on the Canadian Securities Administrators' website at www.sedar.com.

About Home Capital

Home Capital Group Inc. is a public company, traded on the Toronto Stock Exchange (HCG), operating through its principal subsidiary, Home Trust Company. Home Trust is a federally regulated trust company offering deposits, residential and non-residential mortgage lending, securitization of insured residential first mortgage products, consumer lending and credit card services. Licensed to conduct business across Canada, Home Trust has branch offices in Ontario, Alberta, British Columbia, Nova Scotia, Quebec and Manitoba.

SOURCE: Home Capital Group Inc.

Gerald M. Soloway, CEO, or
Martin Reid, President
416-360-4663
www.homecapital.com