Equitable Group Reports Record First Quarter 2013 Earnings

Equitable Group Inc. (Equitable) reported record first quarter earnings for the three months ended March 31, 2013.

HIGHLIGHTS
  • Net income increased 17% to a first quarter record of $20.9 million from $17.9 million in 2012
  • Diluted earnings per share ("EPS") increased 15% to $1.30 from $1.13 in 2012
  • Return on Equity ("ROE") was 17.5% compared to 17.3% in the fourth quarter of 2012 and 17.7% a year ago
  • Book value per share increased 18% to $31.07 from $26.26 at March 31, 2012 and was up 4% from December 31, 2012
  • The Board of Directors announced a common share dividend increase of 7.1% to $0.15 cents per quarter from$0.14 cents effective with the next payment in July

"Equitable delivered outstanding results in the first quarter, even in the context of what appears to be a softer  Canadian housing market and despite adjusting our business to accommodate the new B-20 mortgage lending guidelines," said Andrew Moor, President and CEO. "Through a combination of solid Core Lending production and strong mortgage renewal rates, we were able to grow mortgage assets by $1.0 billion or 11% year over year and register an ROE performance that was above our five-year average of 17.2%. This performance provides yet another example of the value-creation capabilities of our business across different market cycles and illustrates the benefits of our diversified mortgage portfolio."

FIRST QUARTER OPERATING HIGHLIGHTS

  • Core Lending mortgage principal (comprised of Single Family and Commercial Lending) amounted to $5.4 billion, up 20% or $0.9 billion year over year- while first quarter Core Lending production increased 13% year over year to $458 million
  • Single Family Lending Services mortgage principal grew 39% or $892 million to a record $3.2 billion on production of $285 million and strong mortgage renewal rates
  • Commercial Lending Services mortgage principal was $2.2 billion, the same as a year ago, while production increased 46% year over year to $173 million
  • Securitization Financing mortgage principal increased 3% or $149 million to $5.4 billion on production of $166 million compared to $111 million a year ago.  Also in the quarter, the Company securitized and derecognized $118 million of mortgages on which it earned $1.1 million of gains on sale.

Equitable's strategies of employing best in class underwriting and collection efforts allowed the Company to maintain its low-risk profile. For the first quarter:

  • Realized net loan losses were just $0.02 million compared to $0.5 million a year ago
  • Early-stage delinquencies were 0.27% of total principal, an improvement from 0.39% at March 31, 2012 and 0.31% in the fourth quarter of 2012
  • Mortgages in arrears 90 days or more were 0.36% of total principal outstanding at quarter end, in line with historical norms but above 0.25% a year ago and 0.32% in the fourth quarter of 2012.

 

on May 9, 2013