EQB releases Q2 results marked by continued loan growth as dividend increases 18% y/y and total AUM and AUA climb to $134 billion

Cision Canada

28-05-2025

TORONTO, May 28, 2025 /CNW/ - EQB Inc. (TSX: EQB) today reported earnings for the three and six months ended April 30, 2025, that reflected diversified, high-quality growth in loans under management, higher net interest income and core non-revenue from fees and multi-unit securitization, offset by credit provisions driven by the macroeconomic environment.
Q2 2025 highlights compared to Q2 2024:
Adjusted ROE 1 11.9% (reported 11.4%)
Adjusted diluted EPS 1 $2.31, -18% y/y, -22% q/q (reported $2.21, -17% y/y, -20% q/q)
Book value per share $80.99, +10% y/y, +2% q/q
Revenue $316.0 million, -0.2% y/y, -2% q/q with non-interest revenue contributing 14% of total
Adjusted PPPT 1,3 $160.1 million, -8% y/y, -6% q/q (reported $154.8 million, -7% y/y, -5% q/q)
Adjusted net income 1 $94.2 million, -15% y/y, -19% q/q (reported $90.3 million, -15% y/y, -16% q/q)
Net interest margin (NIM) 2: 2.20%, +9 bps y/y, +13 bps q/q
Net interest income (NII): $271.1 million, +1% y/y, +3% q/q
Total AUM + AUA 2 $134 billion, +8% y/y, +2% q/q
EQ Bank customers, +23% y/y, +4% q/q to 560,000
Common share dividends declared $0.53 per share, +4% q/q, +18% y/y
YTD 2025 (six months) highlights compared to YTD 2024:
Adjusted ROE 1 13.6% (reported 12.8%)
Adjusted diluted EPS 1 $5.29, -5% y/y (reported $4.98, -7% y/y)
Adjusted net income 1 $ 210.4 million, -4% y/y (reported $198.0 million, -6% y/y)
Total capital ratio 15.6% and CET1 ratio of 13.2%
"Amid economic uncertainty globally and in Canada, EQB experienced one of our strongest quarters for uninsured single family loan originations, and we are pleased with notable increases in EQ Bank customers and deposits as we continued to flex our Challenger Bank muscles," said Andrew Moor, president and CEO. "Our fundamentals remain resilient despite credit provisions made necessary by tariff-driven changes in the economy and the residual impact of higher interest rates on certain borrowers. Our uncompromising focus on customer service and innovation that enriches people's lives, disciplined capital allocation to diversified market segments, dynamic risk management approach and proven loan resolution capabilities support our expectations of continued shareholder value creation in the second half of 2025 and positive outlook for 2026."
EQ Bank welcomes 24,000 new customers, bringing total to 560,000 +23% y/y, 4% q/q
The EQ Bank Notice Savings Account, an innovative and powerful alternative to GICs and traditional savings vehicles, continued to drive customer and deposit growth as it nears one year in market, bolstered by its Québécois debut as Banque EQ meets new demand for Challenger Bank offerings
Increase in payroll customers continued to confirm EQ Bank's position as bank of choice and go-to source for innovative and valuable savings and spending options
Strong customer response to recently refreshed CAD/USD foreign exchange rates within the no-fee, high interest US Dollar Account and the broader suite of international banking solutions including cost-effective global transfers with Wise and on-the-go spending with the EQ Bank Card
Experienced Equitable Bank executive, Dan Broten, recently named to lead strategy, product, marketing and digital delivery in the new role of SVP and Head of EQ Bank, while Janet Lin, SVP and Chief Information Officer, will advance culture of innovation and technological excellence at Equitable Bank
Residential Lending portfolio benefits from one of the strongest periods of originations and retention
Consistent with Q1 momentum, single-family uninsured originations grew +28% y/y as application volumes translated into high-quality asset growth, supported by renewed market activity compared to a year ago and gains in share in the mortgage broker channel; Equitable Bank's approach to credit and risk management is rigorous, demonstrated by conservative average LTV for single-family uninsured loans of 63% and credit scores consistent at 711
Portfolio balances grew +4% y/y, +2% q/q to $20.6 billion on new originations and exceptional renewal rates on responsive customer service
Decumulation lending (including reverse mortgages and insurance lending) reached $2.5 billion +45% y/y, +8% q/q; momentum reflected broker support, value to borrowers of choosing Equitable Bank's differentiated solutions and continued expansion of the available market as Canadians retire and realize the advantages of converting real asset-based equity into funds to live in place
Commercial Banking portfolio driven by insured lending for multi-unit residential properties
EQB continued to prioritize insured lending for multi-unit residential properties in major cities across the country with over 80% of total commercial LUM insured through various CMHC programs
CMHC-insured multi-unit residential LUM grew +29% y/y, +6% q/q to $29.1 billion, while the commercial portfolio's uninsured businesses also delivered healthy growth despite subdued market conditions
EQB's insured commercial construction lending grew +31% y/y, +10% q/q to $3.3 billion, driven by both new originations and construction draws on existing commitments
Provisions reflect change in macroeconomic environment, new formation rate slowing
EQB's provision for credit losses (PCL) of $30.2 million was split almost equally across each of its business lines and reflects the impacts of evolving macroeconomic forecasts, expected credit loss modelling and Stage 3 provisions of $24.5 million, 1% y/y, 77% q/q
Net impaired loans increased by $58.5 million in Q2 to $741.5 million, or 156 bps of total loan assets compared to 147 bps at Q1, 132 bps at Q4 2024 and 92 bps at Q2 2024; the increase, despite slowing formations, was driven by two newly impaired commercial loans and a decelerating pace of resolution
The Bank is appropriately reserved for credit losses with net allowances as a percentage of total loan assets of 29 bps, compared to 28 bps at Q1 2025 and 23 bps at Q2 2024; the increase in net allowance rate was across all segments and driven by a deterioration in forecasts for GDP and employment as a result of economic uncertainty related to tariffs and their potential impact
Focus remains on de-risking the equipment financing portfolio in light of challenges in the long-haul transportation market; reflecting EQB's risk appetite and a new management approach, exposure to long-haul transportation is down to 33% from Q1 while higher-quality prime leases now account for 51% of the portfolio
EQB increases common share dividend, buys back shares and reaffirms capital management guidance
EQB's Board of Directors declared a dividend of $0.53 per common share payable on June 30, 2025, to shareholders of record as of June 13, 2025, representing a 4% increase from the dividend paid in March 2025 and 18% above the payment made in June 2024
As part of management's plan to continually optimize its capital structure to support strategic objectives and maintain strong overall capital levels, the Bank also completed a $200 million subordinated debt issuance to EQB, bringing Equitable Bank's Total Capital Ratio to 15.6%; this is consistent with the Bank's intention to operate above 15% Total Capital with expectations that up to 300 bps of Total Capital could be contributed by Alternative Tier 1 and Tier 2 capital in 2027 onward and CET1 guidance for 2025 reaffirmed at 13%+
Equitable Bank's consistent organic capital generation and strength in CET1 enabled it to make a $200 million dividend to parent EQB in Q2; inclusive of dividends and the semi-annual $4.4 million payment to holders of the Bank's Limited Recourse Capital Notes, the Bank's CET1 ratio was 13.2%
In Q2, EQB repurchased 271,117 common shares through its NCIB, which allows for the repurchase and cancellation of up to 2,300,000 common shares or 8.4% of the public float of common shares outstanding at January 2, 2025
EQ Bank Tower unveiled, marking new chapter for Canada's Challenger Bank
New Toronto-based national headquarters opened subsequent to quarter end, bringing talented employees together for more effective collaboration supported by sustainable design and intentional use of Canadian furniture and fittings
"In the second quarter, we responded to an increasingly volatile environment by focusing on unique, high-quality market opportunities that are available to Canada's Challenger Bank by growing our uninsured and insured loan portfolios in a risk-managed way and adding strength and depth to our cost-effective funding sources," said David Wilkes, VP and head of finance. "Recent strength in loan originations will benefit future revenue while gains from insured multi-unit securitizations are expected to contribute to performance in the second half of fiscal 2025. By focusing on our fundamentals, which are strong, and investing through the business cycle, we are well-positioned to navigate uncertain economic conditions, target growth opportunities and sustain EQB's long track record as an industry performance leader."
Analyst conference call and webcast: 10:30 a.m. ET May 29, 2025
EQB's Andrew Moor, president and CEO, Marlene Lenarduzzi, CRO, and David Wilkes, VP and head of finance, will host EQB's second quarter earnings call and webcast. The listen-only webcast with accompanying slides will be available at eqb.investorrom.com. To access the conference call with operator assistance, dial 416-945-7677 five minutes prior to the start time.
Consolidated balance sheet (unaudited)
($000s) As at
April 30, 2025
October 31, 2024
April 30, 2024
Assets:
Cash and cash equivalents
500,747
591,641
657,219
Restricted cash
996,591
971,987
783,148
Securities purchased under reverse repurchase agreements
2,100,037
1,260,118
1,399,955
Investments
1,450,879
1,627,314
1,817,916
Loans – Personal
32,524,324
32,273,551
32,823,421
Loans – Commercial
14,703,818
14,760,367
15,085,481
Securitization retained interests
919,910
813,719
663,593
Deferred tax assets
20,874
36,104
14,921
Other assets
1,088,160
899,120
694,542
Total assets
54,305,340
53,233,921
53,940,196
Liabilities and Shareholders' Equity
Liabilities:
Deposits
35,036,491
33,739,612
34,123,703
Securitization liabilities
13,548,609
14,594,304
15,181,341
Obligations under repurchase agreements
84,092
-
-
Deferred tax liabilities
190,905
177,933
148,549
Funding facilities
1,410,370
946,956
839,841
Other liabilities
776,711
636,931
630,954
Total liabilities
51,047,178
50,095,736
50,924,388
Shareholders' Equity:
Preferred shares
-
-
181,411
Common shares
510,973
505,876
495,707
Other equity instruments
147,360
147,440
-
Contributed deficit
(19,177)
(17,374)
(24,811)
Retained earnings
2,607,001
2,483,309
2,359,116
Accumulated other comprehensive income (loss)
2,344
8,555
(7,804)
Total equity attributable to equity holders of EQB
3,248,501
3,127,806
3,003,619
Non-controlling interests
9,661
10,379
12,189
Total equity
3,258,162
3,138,185
3,015,808
Total liabilities and shareholders' equity
54,305,340
53,233,921
53,940,196
Consolidated statement of income (unaudited)
Three months ended
Six months ended
($000s, except per share amounts)
April 30, 2025
April 30, 2024
April 30, 2025
April 30, 2024
Interest income:
Loans – Personal
461,337
482,299
942,707
951,253
Loans – Commercial
211,991
257,842
434,108
520,723
Investments
12,258
16,879
25,658
34,755
Other
19,912
27,209
45,282
49,308
705,498
784,229
1,447,755
1,556,039
Interest expense:
Deposits
317,391
366,002
665,200
724,564
Securitization liabilities
112,213
131,776
237,645
259,029
Funding facilities
4,765
13,521
10,312
28,804
Other
70
5,592
153
20,294
434,439
516,891
913,310
1,032,691
Net interest income
271,059
267,338
534,445
523,348
Non-interest revenue:
Fees and other income
22,713
20,564
45,633
37,179
Net gains on loans and investments
1,029
7,129
3,333
12,122
Gain on sale and income from retained interests
20,090
23,177
44,962
42,586
Net gains (losses) on securitization activities and
derivatives
1,059
(1,548)
10,212
197
44,891
49,322
104,140
92,084
Revenue
315,950
316,660
638,585
615,432
Provision for credit losses
30,234
22,217
48,912
37,752
Revenue after provision for credit losses
285,716
294,443
589,673
577,680
Non-interest expenses:
Compensation and benefits
74,280
66,961
150,214
132,330
Other
86,910
83,459
170,231
157,575
161,190
150,420
320,445
289,905
Income before income taxes
124,526
144,023
269,228
287,775
Income taxes:
Current
26,218
32,734
42,957
71,268
Deferred
8,016
5,573
28,269
6,409
34,234
38,307
71,226
77,677
Net income
90,292
105,716
198,002
210,098
Dividends on preferred shares
-
2,346
-
4,703
Distribution to LRCN holders
4,410
-
4,410
-
Net income available to common shareholders and non-
controlling interests
85,882
103,370
193,592
205,395
Net income attributable to:
Common shareholders
85,533
103,041
192,935
204,916
Non-controlling interests
349
329
657
479
85,882
103,370
193,592
205,395
Earnings per share:
Basic
2.23
2.70
5.02
5.38
Diluted
2.21
2.67
4.98
5.33
Consolidated statement of comprehensive income (unaudited)
Three months ended
Six months ended
($000s)
April 30, 2025
April 30, 2024
April 30, 2025
April 30, 2024
Net income
90,292
105,716
198,002
210,098
Other comprehensive income – items that will be
reclassified subsequently to income:
Debt instruments at Fair Value through Other
Comprehensive Income:
Net change in gains (losses) on fair value
3,587
(16,240)
16,027
25,321
Reclassification of net (gains) losses to income
(1,523)
17,187
(11,589)
(18,640)
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 (losses) gains on fair value
(203)
3,132
868
1,552
Reclassification of net gains to retained earnings
(490)
-
(868)
-
1,371
4,079
4,438
8,233
Income tax expense
(372)
(1,090)
(1,289)
(2,233)
999
2,989
3,149
6,000
Cash flow hedges:
Net change in unrealized (losses) gains on fair value
(8,979)
11,961
(13,189)
(269)
Reclassification of net gains to income
(5,937)
(5,070)
(9,361)
(11,764)
(14,916)
6,891
(22,550)
(12,033)
Income tax recovery (expense)
4,049
(1,879)
6,080
3,282
(10,867)
5,012
(16,470)
(8,751)
Total other comprehensive (loss) income
(9,868)
8,001
(13,321)
(2,751)
Total comprehensive income
80,424
113,717
184,681
207,347
Total comprehensive income attributable to:
Common shareholders
75,665
111,042
179,614
202,165
Other equity and preferred shareholders
4,410
2,346
4,410
4,703
Non-controlling interests
349
329
657
479
80,424
113,717
184,681
207,347
Consolidated statement of changes in shareholders' equity (unaudited)
($000s) Three-month period ended
April 30, 2025
Common
Shares
Other equity
instruments
Contributed
Deficit
Retained
Earnings
Accumulated other
comprehensive income (loss)
Cash Flow
Hedges
Financial
Instruments
at FVOCI
Total
Attributable
to equity
holders
Non-
controlling
interests
Total
Balance, beginning of period
506,160
147,360
(17,437)
2,564,315
16,014
(4,814)
11,200
3,211,598
9,838
3,221,436
Net Income
-
-
-
89,943
-
-
-
89,943
349
90,292
Realized loss on sale of shares,
net of tax
-
-
-
(659)
-
-
-
(659)
-
(659)
Transfer of AOCI losses to
retained earnings, net of tax
-
-
-
-
-
1,012
1,012
1,012
-
1,012
Other comprehensive loss, net
of tax
-
-
-
-
(10,867)
999
(9,868)
(9,868)
-
(9,868)
Exercise of stock options
6,677
-
-
-
-
-
-
6,677
-
6,677
Common shares repurchased
and cancelled
(3,465)
-
-
(22,600)
-
-
-
(26,065)
-
(26,065)
Limited recourse capital note
distributions, net of tax
-
-
-
(4,410)
-
-
-
(4,410)
-
(4,410)
Dividends:
Common shares
-
-
-
(19,588)
-
-
-
(19,588)
(526)
(20,114)
Put option – non-controlling
interest
-
-
(1,203)
-
-
-
-
(1,203)
-
(1,203)
Stock-based compensation
-
-
1,064
-
-
-
-
1,064
-
1,064
Transfer relating to the
exercise of stock options
1,601
-
(1,601)
-
-
-
-
-
-
-
Balance, end of period
510,973
147,360
(19,177)
2,607,001
5,147
(2,803)
2,344
3,248,501
9,661
3,258,162
($000s) Three-month period ended
April 30, 2024
Preferred
Shares
Common
Shares
Contributed
deficit
Retained
Earnings
Accumulated other
comprehensive income (loss)
Cash
Flow
Hedges
Financial
Instruments
at FVOCI
Total
Attributable
to equity
holders
Non-
controlling
interests
Total
Balance, beginning of period
181,411
489,944
(23,055)
2,272,116
29,855
(45,681)
(15,826)
2,904,590
12,460
2,917,050
Net Income
-
-
-
105,387
-
-
-
105,387
329
105,716
Transfer of AOCI losses to
income, net of tax
-
-
-
-
-
21
21
21
-
21
Other comprehensive income,
net of tax
-
-
-
-
5,012
2,989
8,001
8,001
-
8,001
Exercise of stock options
-
4,881
-
-
-
-
-
4,881
-
4,881
Dividends:
Preferred shares
-
-
-
(2,346)
-
-
-
(2,346)
-
(2,346)
Common shares
-
-
-
(16,041)
-
-
-
(16,041)
(600)
(16,641)
Put option – non-controlling
interest
-
-
(1,974)
-
-
-
-
(1,974)
-
(1,974)
Stock-based compensation
-
-
1,100
-
-
-
-
1,100
-
1,100
Transfer relating to the exercise of
stock options
-
882
(882)
-
-
-
-
-
-
-
Balance, end of period
181,411
495,707
(24,811)
2,359,116
34,867
(42,671)
(7,804)
3,003,619
12,189
3,015,808
($000s) Six month period ended
April 30, 2025
Common Shares
Other equity
instruments
Contributed
Deficit
Retained
Earnings
Accumulated other
comprehensive income (loss)
Cash Flow
Hedges
Financial
Instruments
at FVOCI
Total
Attributable
to equity
holders
Non
controlling
interests
Total
Balance, beginning of period
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
-
-
-
197,345
-
-
-
197,345
657
198,002
Realized loss on sale of shares,
net of tax
-
-
-
(6,377)
-
-
-
(6,377)
-
(6,377)
Transfer of AOCI losses to
retained earnings, net of tax
-
-
-
-
-
7,016
7,016
7,016
-
7,016
Transfer of AOCI losses to
income, net of tax
-
-
-
-
-
94
94
94
-
94
Other comprehensive loss, net
of tax
-
-
-
-
(16,470)
3,149
(13,321)
(13,321)
-
(13,321)
Exercise of stock options
7,137
-
-
-
-
-
-
7,137
-
7,137
Common shares repurchased
and cancelled
(3,740)
-
-
(24,432)
-
-
-
(28,172)
-
(28,172)
Issuance costs, net of tax
-
(80)
-
-
-
-
-
(80)
(80)
Limited recourse capital note
distributions, net of tax
-
-
-
(4,410)
-
-
-
(4,410)
-
(4,410)
Dividends:
Common shares
-
-
-
(38,434)
-
-
-
(38,434)
(1,375)
(39,809)
Put option – non-controlling
interest
-
-
(2,334)
-
-
-
-
(2,334)
-
(2,334)
Stock-based compensation
-
-
2,231
-
-
-
-
2,231
-
2,231
Transfer relating to the exercise
of stock options
1,700
-
-
-
-
-
-
-
-
Balance, end of period
510,973
147,360
(19,177)
2,607,001
5,147
(2,803)
2,344
3,248,501
9,661
3,258,162
($000s) Six-month period ended
April 30, 2024
Preferred
Shares
Common
Shares
Contributed
Surplus/
(deficit)
Retained
Earnings
Accumulated other
comprehensive income (loss)
Cash
Flow
Hedges
Financial
Instruments
at FVOCI
Total
Attributable
to equity
holders
Non-
controlling
interests
Total
Balance, beginning of period
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
-
-
-
-
-
-
-
-
12,310
12,310
Net Income
-
-
-
209,619
-
-
-
209,619
479
210,098
Transfer of AOCI losses to
income, net of tax
-
-
-
-
-
104
104
104
-
104
Other comprehensive income,
net of tax
-
-
-
-
(8,751)
6,000
(2,751)
(2,751)
-
(2,751)
Common share issued
-
11,000
-
-
-
-
-
11,000
-
11,000
Exercise of stock options
-
11,839
-
-
-
-
-
11,839
-
11,839
Dividends:
Preferred shares
-
-
-
(4,703)
-
-
-
(4,703)
-
(4,703)
Common shares
-
-
-
(31,280)
-
-
-
(31,280)
(600)
(31,880)
Put option – non-controlling
interest
-
-
(37,865)
-
-
-
-
(37,865)
-
(37,865)
Stock-based compensation
-
-
2,113
-
-
-
-
2,113
-
2,113
Transfer relating to the exercise
of stock options
-
1,854
-
-
-
-
-
-
-
Balance, end of period
181,411
495,707
(24,811)
2,359,116
34,867
(42,671)
(7,804)
3,003,619
12,189
3,015,808
Consolidated statement of cash flows (unaudited)
Three months ended
Six months ended
($000s)
April 30, 2025
April 30, 2024
April 30, 2025
April 30, 2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
90,292
105,716
198,002
210,098
Adjustments for non-cash items in net income:
Financial instruments at fair value through income
(157,852)
(5,177)
(178,350)
11,360
Amortization of premiums/discount
(2,753)
(34,159)
(5,583)
(31,029)
Amortization of capital and intangible costs
17,571
11,679
32,394
23,120
Provision for credit losses
30,234
22,217
48,912
37,752
Securitization gains
(13,010)
(17,486)
(30,626)
(32,002)
Stock-based compensation
1,064
1,100
2,231
2,113
Income taxes
34,234
38,307
71,226
77,677
Securitization retained interests
41,741
30,701
81,698
58,634
Changes in operating assets and liabilities:
Restricted cash
(179,566)
(120,389)
(24,604)
(15,953)
Securities purchased under reverse repurchase agreements
(300,023)
(594,342)
(839,919)
(491,122)
Loans receivable, net of securitizations
(891,443)
(222,907)
(266,146)
(715,022)
Other assets
21,821
(7,205)
81
(8,531)
Deposits
406,679
1,887,780
1,255,415
2,089,142
Securitization liabilities
(174,739)
(205,820)
(1,067,985)
677,411
Obligations under repurchase agreements
84,092
(482,574)
84,092
(1,128,238)
Funding facilities
641,557
(493,062)
463,414
(891,746)
Other liabilities
13,726
47,598
65,399
41,636
Income taxes paid
(28,528)
(23,962)
(67,759)
(50,074)
Cash flows used in operating activities
(364,903)
(61,985)
(178,108)
(134,774)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common shares
6,677
4,881
7,137
22,839
Common share repurchased and cancelled
(26,065)
(28,172)
Limited recourse capital notes
-
-
(80)
-
Distribution to other equity holders
(4,410)
-
(4,410)
-
Dividends paid on preferred shares
-
(2,346)
-
(4,703)
Dividends paid on common shares
(20,114)
(16,041)
(39,809)
(31,280)
Cash flows used in financing activities
(43,912)
(13,506)
(65,334)
(13,144)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments
(12,689)
(8,004)
(16,419)
(344,423)
Acquisition of subsidiary
-
45
-
(75,483)
Proceeds on sale or redemption of investments
128,107
191,245
159,473
656,646
Net change in Canada Housing Trust re-investment accounts
11,623
28,954
53,032
46,959
Purchase of capital assets and system development costs
(27,495)
(23,289)
(43,538)
(28,036)
Cash flows from investing activities
99,546
188,951
152,548
255,663
Net (decrease) increase in cash and cash equivalents
(309,269)
113,460
(90,894)
107,745
Cash and cash equivalents, beginning of period
810,016
543,759
591,641
549,474
Cash and cash equivalents, end of period
500,747
657,219
500,747
657,219
Supplemental statement of cash flows disclosures:
Interest received
668,744
846,075
1,378,441
1,534,404
Interest paid
(410,679)
(443,052)
(827,115)
(814,672)
Dividends received
132
564
350
1,113
About EQB Inc.
EQB Inc. (TSX: EQB) is a leading digital financial services company with $134 billion in combined assets under management and administration (as at April 30, 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 over 742,000 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.
Investor contact:
David Wilkes
VP and Head of Finance
[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. 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, and competition as well as those factors discussed under the heading "Risk Management" in EQB's Q2 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
In addition to GAAP prescribed measures, this news release references certain non-GAAP measures, including adjusted financial results, that we believe provide useful information to investors regarding EQB's financial condition and results of operations. Readers are cautioned that non-GAAP measures often do not have any standardized meaning, and therefore, are unlikely to be comparable to similar measures presented by other companies.
Adjustments listed below are presented on a pre-tax basis:
Q2 2025
$3.4 million new office lease related expenses prior to occupancy, and
$2.0 million intangible asset amortization.
Q1 2025
$2.8 million new office lease related expenses prior to occupancy,
$1.8 million non-recurring operational effectiveness expenses and acquisition and integration-related costs,
$2.0 million intangible asset amortization, and
$5.0 million provision for credit losses associated with an equipment financing purchase facility.
Q2 2024
$5.7 million non-recurring operational effectiveness expenses and acquisition and integration-related costs; and
$1.6 million intangible asset amortization.
The following table presents a reconciliation of GAAP reported financial results to non-GAAP adjusted financial results (unaudited).
R econciliation of reported and adjusted financial results
For the three months ended
For the six months ended
($000, except share and per share amounts)
30-Apr-25
31-Jan-25
30-Apr-24
30-Apr-25
30-Apr-24
Reported results
Net interest income
271,059
263,386
267,338
534,445
523,348
Non-interest revenue
44,891
59,249
49,322
104,140
92,084
Revenue
315,950
322,635
316,660
638,585
615,432
Non-interest expense
161,190
159,255
150,420
320,445
289,905
Pre-provision pre-tax income (3)
154,760
163,380
166,240
318,140
325,527
Provision for credit loss
30,234
18,678
22,217
48,912
37,752
Income tax expense
34,234
36,992
38,307
71,226
77,677
Net income
90,292
107,710
105,716
198,002
210,098
Net income available to common shareholders
85,533
107,402
103,041
192,935
204,916
Adjustments
Non-interest expenses – new office lease related expenses
(3,363)
(2,789)
-
(6,152)
-
Non-interest expenses – non-recurring operational
effectiveness and acquisition-related costs (1)
-
(1,782)
(5,710)
(1,782)
(7,763)
Non-interest expenses – intangible asset amortization
(1,969)
(1,969)
(1,599)
(3,938)
(4,997)
Provision for credit loss – equipment financing
-
(5,018)
-
(5,018)
-
Pre-tax adjustments
5,332
11,558
7,309
16,890
12,760
Income tax expense – tax impact on above adjustments (2)
1,414
3,039
1,983
4,453
3,466
Post-tax adjustments – net income
3,918
8,519
5,326
12,437
9,294
Adjustments attributed to minority interests
(259)
(261)
(190)
(520)
(314)
Post-tax adjustments – net income to common shareholders
3,659
8,258
5,136
11,917
8,980
Adjusted results
Net interest income
271,059
263,386
267,338
534,445
523,348
Non-interest revenue
44,891
59,249
49,322
104,140
92,084
Revenue
315,950
322,635
316,660
638,585
615,432
Non-interest expense
155,858
152,715
143,111
308,573
277,145
Pre-provision pre-tax income (3)
160,092
169,920
173,549
330,012
338,287
Provision for credit loss
30,234
13,660
22,217
43,894
37,752
Income tax expenses
35,649
40,030
40,290
75,679
81,143
Net income
94,209
116,230
111,042
210,439
219,392
Net income available to common shareholders
89,190
115,662
108,177
204,852
213,896
Diluted earnings p er share
Weighted average diluted common shares outstanding
38,662,002
38,781,523
38,522,025
38,725,808
38,434,002
Diluted earnings per share – reported
2.21
2.77
2.67
4.98
5.33
Diluted earnings per share – adjusted
2.31
2.98
2.81
5.29
5.57
Diluted earnings per share – adjustment impact
0.10
0.21
0.14
0.31
0.24
(1)
Includes non-recurring operational effectiveness and acquisition and integration-related costs associated with Concentra Bank and ACM.
(2)
Income tax expense associated with non-GAAP adjustment was calculated based on the statutory tax rate applicable for that period.
(3)
This is a non-GAAP measure, see Non-GAAP financial measures and ratios section.
Other non-GAAP financial measures and ratios:
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 and adding their associated allowance for credit losses.