Home Capital Reports Q3 Earnings

• Diluted Earnings per Share of $1.03
• Quarterly dividend of $0.22 per common share

TORONTO, Nov. 4, 2015 /CNW/ - Home Capital today reported results for the third quarter ended September 30, 2015.

This press release should be read in conjunction with the Company's Third Quarter Report, including Financial Statements and Management's Discussion and Analysis, which are 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 nine months ended
(000s, except Percentage, Multiples and Per Share Amounts)	September 30		June 30		September 30		September 30		September 30
		2015		2015		2014		2015		2014
OPERATING RESULTS
Net Income	$	72,443	$	72,317	$	73,755	$	217,046	$	217,236
Net Interest Income		121,698		117,210		117,583		354,432		343,113
Total Revenue	$	247,194	$	250,879	$	255,046	$	747,305	$	758,394
Diluted Earnings per Share		1.03		1.03		1.05		3.09		3.09
Return on Shareholders' Equity		18.7%		19.1%		22.0%		19.2%		22.7%
Return on Average Assets		1.4%		1.4%		1.4%		1.4%		1.4%
Net Interest Margin (TEB)^1		2.38%		2.29%		2.29%		2.32%		2.25%
Provision as a Percentage of Gross Uninsured Loans (annualized)		0.08%		0.07%		0.11%		0.07%		0.10%
Provision as a Percentage of Gross Loans (annualized)		0.06%		0.05%		0.08%		0.06%		0.07%
Efficiency Ratio (TEB)^1		30.8%		32.2%		29.9%		31.1%		28.9%
								As at
	September 30			June 30		December 31		September 30
		2015		2015		2014		2014
BALANCE SHEET HIGHLIGHTS
Total Assets	$	20,314,220	$	20,516,247	$	20,082,744	$	20,561,608
Total Assets Under Administration^2		25,404,219		25,456,212		24,281,366		24,226,114
Total Loans^3		18,336,736		17,982,475		18,364,910		18,488,902
Total Loans Under Administration^2,3		23,426,735		22,922,440		22,563,532		22,153,408
Liquid Assets		1,477,493		1,815,817		1,058,297		1,298,938
Deposits		14,949,842		14,966,544		13,939,971		14,022,132
Shareholders' Equity		1,569,230		1,536,099		1,448,633		1,371,985
FINANCIAL STRENGTH
Capital Measures^4
Risk-Weighted Assets	$	7,797,987	$	7,634,392	$	7,186,132	$	7,115,046
Common Equity Tier 1 Capital Ratio		18.06%		18.03%		18.30%		17.58%
Tier 1 Capital Ratio		18.06%		18.03%		18.30%		17.58%
Total Capital Ratio		20.51%		20.53%		20.94%		20.24%
Leverage Ratio^5		7.17		6.94		N/A		N/A
Credit Quality
Net Non-Performing Loans as a Percentage of Gross Loans		0.30%		0.33%		0.30%		0.27%
Allowance as a Percentage of Gross Non-Performing Loans		69.4%		62.9%		64.4%		69.9%
Share Information
Book Value per Common Share	$	22.37	$	21.87	$	20.67	$	19.57
Common Share Price – Close	$	32.03	$	43.28	$	47.99	$	50.39
Dividend paid during the quarter ended	$	0.22	$	0.22	$	0.20	$	0.18
Market Capitalization	$	2,247,225	$	3,040,290	$	3,363,907	$	3,532,591
Number of Common Shares Outstanding		70,160		70,247		70,096		70,105

^1	See definition of Taxable Equivalent Basis (TEB) under Non-GAAP Measures in the unaudited interim consolidated financial report.
^2	Total assets and loans under administration include both on and off-balance sheet amounts.
^3	Total loans include loans held for sale.
^4	These figures relate to the Company's operating subsidiary, Home Trust Company.
^5	Effective Q1 2015, the Assets to Regulatory Capital Multiple has been replaced with the Basel III leverage ratio.  See definition of the leverage ratio under Non-GAAP Measures in the unaudited interim consolidated financial report.

THIRD QUARTER 2015 HIGHLIGHTS

Home Capital today reported financial results for the third quarter ended September 30, 2015. The Company delivered solid results across its business, including an increased net interest margin, a healthy loan portfolio evidenced by low non-performing loans and credit losses, a further improvement in single-family mortgage originations, growth in commercial and consumer lending and a strong capital position. 

Home Capital continues to demonstrate positive results, reflecting the continued strength of the overall business, its diverse sources of growth and the Company's expectation of further progress towards improving origination volumes for the remainder of the year. 

Q3 Financial Highlights:

• Q3 2015 net income of $72.4 million and $217.0 million for the first nine months of 2015, down 1.8% compared to $73.8 million in Q3 2014 and flat compared to $217.2 million in the first nine months of 2014.  Q3 2015 net income was 0.2% higher than Q2 2015.
  
  
• Q3 2015 diluted earnings per share (EPS) of $1.03 and $3.09 for the first nine months of 2015, compared to $1.05 and $3.09 earned in the comparable periods of 2014.  Q3 2015 diluted EPS was flat compared to Q2 2015.
  
  
• Return on common shareholders' equity was 18.7% for Q3 2015 and 19.2% for the first nine months of 2015.
  
  
• Net non-performing loans as a percentage of gross loans (NPL ratio) was 0.30% at the end of Q3 2015, compared to 0.33% at the end of Q2 2015, and 0.30% at the end of Q4 2014.
  
  
• Q3 2015 Common Equity Tier 1 and Tier 1 ratios of 18.06% and Total capital ratio 20.51%. 

Growing Our Core Business

Home Capital, through its principal subsidiary Home Trust Company, continued in Q3 2015 to build on its presence as Canada's leading alternative financial institution serving an established, but underserved and growing, market niche.

The Company's results reflect its continued profitability as measured by an increased net interest margin (TEB) in the quarter of 2.38%, a healthy loan portfolio as evidenced by continued low non-performing loans and credit losses, and a strong capital position. In addition, the Company is making solid progress on efforts to increase originations of single-family residential mortgages, and seeing strong growth in other lines of business.

Total mortgage advances in the quarter were $2.50 billion, an increase of 23.5% from $2.02 billion in Q2 2015, driven by a marked improvement in single-family residential mortgage originations and increases in residential and non-residential commercial mortgage originations.

Home Capital reported traditional (uninsured single-family) residential mortgages originations of $1.51 billion, as compared to $1.29 billion in Q2 2015, an increase of 17.0%.  Accelerator originations for Q3 2015 were $416.3 million, as compared to $279.5 million in Q2 2015, a 48.9% increase.  Originations from all other sources increased 26.3% to $567.3 million.

Total mortgage advances were 2.2% lower than Q3 2014, when they totaled $2.55 billion, as strength in non-residential and residential commercial mortgage originations offset a decrease in single-family residential mortgages. 

On a year-over-year basis, traditional residential originations declined 14.7% from $1.78 billion in Q3 2014, while Accelerator originations declined 20.4% from $522.9 million in Q3 2014. 

In Q2 2015, the Company disclosed that its mortgage origination volumes were impacted directly by, among other things, the Company suspending, during the period of September 2014 to March 2015, its relationship with 18 independent mortgage brokers and 2 brokerages, for a total of approximately 45 individual mortgage brokers. 

The total value of outstanding loans at September 30, 2015 that were originated by the suspended brokers was $1.72 billion.  This compares to $1.93 billion as at June 30, 2015.  The Company expects this balance to decline as customers pay down loans.  The Company continues to actively monitor the subject mortgages and notes that there have been no unusual credit issues. 

The Company is reviewing and re-validating, where appropriate, the income documentation related to the identified group of mortgages and taking corrective action accordingly.  The Company is approaching a quarter of the way through its review process, with plans to complete these efforts by the end of 2016.  Of the accounts reviewed, the Company has determined that over 90% of the mortgages reviewed to date could be eligible for renewal.

Home Capital has taken several steps to improve origination volumes through the remainder of 2015, including sales measures to strengthen the Company's pipeline for residential mortgage originations and to leverage the solid demand for its traditional mortgages within its established regions. In addition, the Company has renewed focus on expanding its commercial lending products, seeking to expand its footprint, as appropriate opportunities arise.  The Company expects to see further progress from these efforts to improve origination volumes in the fourth quarter.

The Company is also pursuing other growth initiatives.

Other lending, comprising credit cards, and other consumer retail loans, continue to be an important source of loan assets with attractive returns.  While representing 3.3% of the total on-balance sheet loan portfolio, these assets generated 6.4% of the interest income for the quarter.

On October 5, 2015, the Company announced that it launched two new Visa credit card programs.  The Union Plus Canada Visa card and Optimax Visa card are issued by Home Trust on behalf of Union Plus Canada and Optimax Credit Inc., respectively.  These credit card programs leverage the brand, customer affinity and distribution channels of these organizations.

Subsequent to the end of the quarter, on October 1, 2015, the Company, through its subsidiary Home Trust Company finalized the acquisition of all outstanding common shares of CFF Bank for a purchase price of $17.8 million, subject to final adjustments.  On the date of acquisition, Home Trust injected $35.0 million in capital in order to stabilize CFF Bank.  The acquisition of CFF Bank, a Schedule 1 chartered bank, achieves the Company's strategic priority of obtaining a bank license and supports the Company's long-term strategy to continue to develop its deposit diversification initiatives and potentially its product suite.  In addition, the Company has a distribution agreement in place with certain owner-managed Canadian First Financial Centres, which had a prior relationship with CFF Bank, located across Canada, helping the Company to expand its distribution networks.

Building on Operational Excellence

Home Capital continues to experience strong credit performance, with net non-performing loans as a percentage of gross loans (NPL ratio) at 0.30% at the end of Q3 2015, compared to 0.33% at the end of Q2 2015 and 0.27% at the end of Q3 2014. These results reflect the high credit quality of the Company's loan portfolio and were supported by the Company's continued investments in its risk oversight and control functions.

Home Capital also continued in the third quarter to make disciplined and measured investments in other areas related to the longer-term growth of the business. These investments include, among other things, ongoing investments in technology related to operating as a digital enterprise, as well as continuing to update the Company's loans-origination platform, which is designed for more efficient processing of loan applications.  In addition, the Company incurred certain expenses in the quarter related to closing the acquisition of CFF Bank.

While most of the increase in expenses incurred by the Company in 2015 continue to be associated with ongoing efforts to build on Home Capital's operational excellence and dedication to providing service to clients and business partners, the Company has incurred additional expenses of approximately $1.4 million cumulatively from Q4 2014 related to its efforts to realign some of its business partnerships following the suspension of the small number of brokers.

Strong Shareholder Returns, Strong and Conservative Financial Position

Home Capital continued to focus on maintaining its strong and conservative financial position while delivering returns to shareholders in Q3 2015, and our success in doing so is evident in our return on average shareholders' equity of 18.7%.

Subsequent to the end of the quarter, and in light of the Company's performance, profitability and strong financial position, the Board of Directors approved a quarterly dividend of $0.22 per common share, payable on December 1, 2015 to shareholders of record at the close of business on November 13, 2015. 

The Company is pleased to announce the appointment of William J. Walker to the Board of Directors, on November 4, 2015. Mr. Walker is a partner at Gowling Lafleur Henderson LLP, one of Canada's largest law firms. He has over 30 years of experience practicing in the area of banking law with an emphasis on the rights and remedies of mortgage lenders, and has had dealings with OSFI and CDIC over the years. We are confident that his broad experience in the mortgage industry, depth of knowledge of financial institutions, and legal expertise will be valuable assets to the Board, the Company and its stakeholders.   

In summary, the Company has maintained its solid fundamentals, and seen improvements in originations quarter over quarter. Home Capital's focus remains on providing the best service and support to our customers and valued partners, generating future growth that is sustainable and prudent, and making the investments in our business that help us to achieve those goals.

Looking ahead, the Board of Directors and management expect that Home Capital will continue generating solid shareholder for the remainder of 2015 and beyond. 

(signed)					(signed)
GERALD M. SOLOWAY					KEVIN P.D. SMITH
Chief Executive Officer					Chair of the Board
November 4, 2015

Additional information concerning the Company's targets and related expectations for 2015, including the risks and assumptions underlying these expectations, may be found in the MD&A of the quarterly report.

Third Quarter Results Conference Call
The conference call will take place on Thursday, November 5, 2015 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, November 5, 2015 and midnight Thursday, November 12, 2015 by calling 416-849-0833 or 1-855-859-2056 (enter passcode 52432581). 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.

Supplemental Financial Information
Home Capital has provided a Supplemental Financial Information package available at the Company's website at www.homecapital.com to improve readers' understanding of the financial position and performance of the Company.  This information should be used in conjunction with the Company's third quarter unaudited interim consolidated financial report, as well as the Company's 2014 Annual Report.

Consolidated Statements of Income
		For the three months ended						For the nine months ended
thousands of Canadian dollars, except per share amounts		September 30		June 30		September 30		September 30		September 30
(Unaudited)			2015		2015		2014		2015		2014
Net Interest Income Non-Securitized Assets
Interest from loans		$	195,051	$	190,559	$	183,101	$	572,510	$	530,526
Dividends from securities			2,597		2,677		2,955		8,012		8,584
Other interest			1,846		2,303		3,855		6,257		11,430
			199,494		195,539		189,911		586,779		550,540
Interest on deposits and other			80,771		80,669		80,428		240,835		230,168
Interest on senior debt			1,512		1,516		1,610		4,572		4,732
Net interest income non-securitized assets			117,211		113,354		107,873		341,372		315,640
Net Interest Income Securitized Loans and Assets
Interest income from securitized loans and assets			24,315		26,279		40,163		80,988		130,932
Interest expense on securitization liabilities			19,828		22,423		30,453		67,928		103,459
Net interest income securitized loans and assets			4,487		3,856		9,710		13,060		27,473
Total Net Interest Income			121,698		117,210		117,583		354,432		343,113
Provision for credit losses			2,849		2,266		3,511		7,518		9,948
			118,849		114,944		114,072		346,914		333,165
Non-Interest Income
Fees and other income			20,096		21,390		17,736		62,705		52,969
Securitization income			5,788		9,251		5,665		20,448		21,889
Net realized and unrealized (losses) gains on securities			(542)		-		521		902		2,460
Net realized and unrealized (losses) gains on derivatives			(1,957)		(1,580)		1,050		(4,517)		(396)
			23,385		29,061		24,972		79,538		76,922
			142,234		144,005		139,044		426,452		410,087
Non-Interest Expenses
Salaries and benefits			19,382		21,603		20,533		62,999		60,613
Premises			3,149		3,260		2,884		9,543		8,653
Other operating expenses			22,424		22,511		19,484		63,450		53,097
			44,955		47,374		42,901		135,992		122,363
Income Before Income Taxes			97,279		96,631		96,143		290,460		287,724
Income taxes
	Current		23,189		25,193		20,144		72,933		69,662
	Deferred		1,647		(879)		2,244		481		826
			24,836		24,314		22,388		73,414		70,488
NET INCOME		$	72,443	$	72,317	$	73,755	$	217,046	$	217,236
NET INCOME PER COMMON SHARE
Basic		$	1.03	$	1.03	$	1.05	$	3.09	$	3.11
Diluted		$	1.03	$	1.03	$	1.05	$	3.09	$	3.09
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic			70,218		70,230		70,089		70,195		69,776
Diluted			70,380		70,488		70,480		70,337		70,355
Total number of outstanding common shares			70,160		70,247		70,105		70,160		70,105
Book value per common share		$	22.37	$	21.87	$	19.57	$	22.37	$	19.57

Consolidated Statements of Comprehensive Income
	For the three months ended						For the nine months ended
	September 30		June 30		September 30		September 30		September 30
thousands of Canadian dollars (Unaudited)		2015		2015		2014		2015		2014
NET INCOME	$	72,443	$	72,317	$	73,755	$	217,046	$	217,236
OTHER COMPREHENSIVE (LOSS) INCOME
Available for Sale Securities and Retained Interest
Net unrealized (losses) gains	$	(29,730)	$	(12,860)	$	(2,552)	$	(68,162)	$	6,716
Net losses (gains) reclassified to net income		460		-		(521)		(983)		(2,460)
		(29,270)		(12,860)		(3,073)		(69,145)		4,256
Income tax (recovery) expense		(7,760)		(3,422)		(813)		(18,338)		1,127
		(21,510)		(9,438)		(2,260)		(50,807)		3,129
Cash Flow Hedges
Net unrealized gains (losses)		130		345		217		(339)		(453)
Net losses reclassified to net income		369		370		370		1,105		1,096
		499		715		587		766		643
Income tax expense		133		188		156		202		171
		366		527		431		564		472
Total other comprehensive (loss) income	$	(21,144)	$	(8,911)	$	(1,829)	$	(50,243)	$	3,601
COMPREHENSIVE INCOME	$	51,299	$	63,406	$	71,926	$	166,803	$	220,837

Consolidated Balance Sheets
							As at
		September 30		June 30		December 31
thousands of Canadian dollars (Unaudited)			2015		2015		2014
ASSETS
Cash and Cash Equivalents		$	612,218	$	915,674	$	360,746
Available for Sale Securities			413,381		449,216		582,819
Loans Held for Sale			162,432		21,304		102,094
Loans
Securitized mortgages			2,900,586		2,814,301		3,945,654
Non-securitized mortgages and loans			15,273,718		15,146,870		14,317,162
			18,174,304		17,961,171		18,262,816
Collective allowance for credit losses			(35,900)		(35,300)		(34,100)
			18,138,404		17,925,871		18,228,716
Other
Restricted assets			494,133		733,185		421,083
Derivative assets			77,875		63,123		38,534
Other assets			292,331		287,598		235,616
Goodwill and intangible assets			123,446		120,276		113,136
			987,785		1,204,182		808,369
		$	20,314,220	$	20,516,247	$	20,082,744
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Deposits payable on demand		$	1,562,081	$	1,435,924	$	1,064,152
Deposits payable on a fixed date			13,387,761		13,530,620		12,875,819
			14,949,842		14,966,544		13,939,971
Senior Debt			153,652		151,930		152,026
Securitization Liabilities
Mortgage-backed security liabilities			327,837		365,884		471,551
Canada Mortgage Bond liabilities			2,990,281		3,144,960		3,831,912
			3,318,118		3,510,844		4,303,463
Other
Derivative liabilities			2,922		3,059		2,266
Other liabilities			283,421		312,383		199,831
Deferred tax liabilities			37,035		35,388		36,554
			323,378		350,830		238,651
			18,744,990		18,980,148		18,634,111
Shareholders' Equity
Capital stock			89,683		89,603		84,687
Contributed surplus			3,775		3,474		3,989
Retained earnings			1,544,620		1,490,726		1,378,562
Accumulated other comprehensive loss			(68,848)		(47,704)		(18,605)
			1,569,230		1,536,099		1,448,633
		$	20,314,220	$	20,516,247	$	20,082,744

Consolidated Statements of Changes in Shareholders' Equity
								Net Unrealized
								Losses		Net Unrealized		Total
								on Securities and		Losses on		Accumulated
								Retained Interest		Cash Flow		Other		Total
thousands of Canadian dollars,		Capital		Contributed		Retained		Available		Hedges,		Comprehensive		Shareholders'
except per share amounts (Unaudited)		Stock		Surplus		Earnings		for Sale, after Tax		after Tax		Loss		Equity
Balance at December 31, 2014		$	84,687	$	3,989	$	1,378,562	$	(16,242)	$	(2,363)	$	(18,605)	$	1,448,633
Comprehensive income			-		-		217,046		(50,807)		564		(50,243)		166,803
Stock options settled			5,136		(1,377)		-		-		-		-		3,759
Amortization of fair value of
employee stock options			-		1,163		-		-		-		-		1,163
Repurchase of shares			(140)		-		(3,238)		-		-		-		(3,378)
Dividends
($0.66 per share)			-		-		(47,750)		-		-		-		(47,750)
Balance at September 30, 2015		$	89,683	$	3,775	$	1,544,620	$	(67,049)	$	(1,799)	$	(68,848)	$	1,569,230
Balance at December 31, 2013		$	70,233	$	5,984	$	1,119,959	$	(15,823)	$	(2,656)	$	(18,479)	$	1,177,697
Comprehensive income			-		-		217,236		3,129		472		3,601		220,837
Stock options settled			14,350		(3,858)		-		-		-		-		10,492
Amortization of fair value of
employee stock options			-		1,524		-		-		-		-		1,524
Repurchase of shares			(18)		-		(754)		-		-		-		(772)
Dividends
($0.50 per share)			-		-		(37,793)		-		-		-		(37,793)
Balance at September 30, 2014		$	84,565	$	3,650	$	1,298,648	$	(12,694)	$	(2,184)	$	(14,878)	$	1,371,985

Consolidated Statements of Cash Flows
		For the three months ended				For the nine months ended
		September 30		September 30		September 30		September 30
thousands of Canadian dollars (Unaudited)			2015		2014		2015		2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income for the period		$	72,443	$	73,755	$	217,046	$	217,236
Adjustments to determine cash flows relating to operating activities:
	Amortization of net premium on securities		29		321		52		1,515
	Provision for credit losses		2,849		3,511		7,518		9,948
	Gain on sale of mortgages or residual interest		(4,453)		(4,448)		(16,684)		(19,349)
	Net realized and unrealized losses (gains) on securities		542		(521)		(902)		(2,460)
	Amortization of capital and intangible assets		3,657		3,323		10,004		9,519
	Amortization of fair value of employee stock options		355		436		1,163		1,524
	Deferred income taxes		1,647		2,244		481		826
Changes in operating assets and liabilities
	Loans, net of securitization and sales		(351,858)		(465,168)		39,651		(457,645)
	Restricted assets		239,052		(56,830)		(73,050)		(18,357)
	Derivative assets and liabilities		(14,390)		(1,961)		(37,919)		(4,516)
	Accrued interest receivable		(496)		(2,071)		824		(1,446)
	Accrued interest payable		(6,235)		(1,634)		14,545		23,595
	Deposits		(16,702)		274,507		1,009,871		1,256,178
	Securitization liabilities		(192,726)		(264,443)		(985,345)		(1,046,903)
	Taxes receivable or payable and other		(15,737)		(31,348)		31,430		1,202
Cash flows (used in) provided by operating activities			(282,023)		(470,327)		218,685		(29,133)
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase of shares			(3,250)		(772)		(3,378)		(772)
Exercise of employee stock options			162		1,265		3,759		10,492
Dividends paid to shareholders			(15,454)		(12,619)		(46,334)		(34,902)
Cash flows used in financing activities			(18,542)		(12,126)		(45,953)		(25,182)
CASH FLOWS FROM INVESTING ACTIVITIES
Activity in securities
	Purchases		-		(76,166)		-		(500,076)
	Proceeds from sales		-		18,555		76,924		173,403
	Proceeds from maturities		4,139		73,075		23,732		158,637
Purchases of capital assets			(981)		(1,164)		(3,674)		(2,017)
Capitalized intangible development costs			(6,048)		(8,134)		(18,241)		(20,703)
Cash flows (used in) provided by investing activities			(2,890)		6,166		78,741		(190,756)
Net (decrease) increase in cash and cash equivalents during the period			(303,455)		(476,287)		251,473		(245,071)
Cash and cash equivalents at beginning of the period			915,674		964,388		360,746		733,172
Cash and Cash Equivalents at End of the Period		$	612,219	$	488,101	$	612,219	$	488,101
Supplementary Disclosure of Cash Flow Information
Dividends received on investments		$	2,366	$	2,630	$	7,314	$	7,143
Interest received			220,343		225,074		660,962		671,323
Interest paid			106,381		112,159		296,857		312,830
Income taxes paid			26,883		21,770		102,389		60,499

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 in the Risk Management section of the quarterly 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 legislative 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 2015 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 2015, management's expectations continue to assume:

• The Canadian economy is expected to produce modest growth on balance in 2015; however, there continues to be adverse effects related to the drop and fluctuations in oil prices and other commodities.  While the Company has limited exposure in energy producing regions, it has plans for geographic expansion in Canada. There is some uncertainty as to the timing and extent of expansion given the economic conditions.
  
  
• Generally the Company expects stable employment conditions in its established regions.  Unemployment rates in energy producing regions are expected to continue to increase through 2015.  Also, the Company expects inflation will generally be within the Bank of Canada's target of 1% to 3%, leading to stable credit losses and consistent demand for the Company's lending products in its established regions. Credit losses and delinquencies in the energy producing regions may see an increase, but given the Company's limited exposure and lending practices, this is not expected to be significant.
  
  
• The Canadian economy will continue to be influenced by the economic conditions in the United States and global markets and further adjustments in commodity prices; as such, the Company is prepared for the variability to plan that may result.
  
  
• The Company is assuming that overnight interest rates will remain at the current very low rate for 2015. This is expected to continue to support relatively low mortgage interest rates for the foreseeable future.
  
  
• In the Company's established regions the expectation is the housing market will remain stable with balanced supply supported by continued low interest rates, relatively stable employment, and immigration.  There will be stable housing starts and resale activity with relatively stable prices, with regional disparities, throughout most of Canada. This supports continued stable credit losses and stable demand for the Company's lending products in its established regions.
  
  
• Consumer debt levels, while elevated, will remain serviceable by Canadian households.
  
  
• The Company will have access to the mortgage and deposit markets through broker networks.

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 Third Quarter 2015 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. In addition, Home Trust offers deposits via brokers and financial planners, and through its direct to consumer deposit brand, Oaken Financial. 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