EQB Inc. (TSX: EQB) today reported earnings for the three and nine months ended July 31, 2025. Earnings reflected continued growth in loans under management2, expanding originations and strong customer engagement in EQ Bank, however an unfavourable macroeconomic landscape and pressure in real estate markets continued to impact EQB earnings in Q3. This manifested in higher credit provisions and corresponding lower expectations for earnings for the remainder of fiscal 2025.
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Q3 2025 highlights compared to Q3 2024:
— Adjusted net income1: $80.3 million, -32% y/y, -15% q/q (reported $73.4 million, -35% y/y, -19% q/q)
— Adjusted revenue1: $310 million, -5% y/y, -2% q/q (reported $306.1 million, -6% y/y, -3% q/q) with non-interest revenue contributing 18% of total
— Adjusted net interest income (NII)1: $254 million, -6% y/y & q/q (reported $250 million, -8% y/y & q/q)
— Adjusted net interest margin (NIM)1,2: 1.95%, -14 bps y/y, -25 bps q/q (reported 1.92%, -17 bps y/y, -28 bps q/q)
— Total AUM + AUA2 : $137 billion, +9% y/y, +2% q/q
— EQ Bank customers: +21% y/y, +5% q/q to 586,000
— Book value per share: $82.37, +9% y/y, +2% q/q
— Common share dividends declared: $0.55 per share, +17% y/y, +4% q/q
YTD 2025 (nine months) highlights compared to YTD 2024:
— Adjusted ROE1: 12.4% (reported 11.6%)
— Adjusted diluted EPS1: $7.36, -14% y/y (reported $6.88, -16% y/y)
— Adjusted net income1: $290.7 million, -14% y/y (reported $271.4 million, -16% y/y)
— Total capital ratio: 15.7% and CET1 ratio of 13.3%
“This was a difficult quarter for EQB as we mourned the loss of Andrew Moor. Turning to performance, while not unique to EQB, macroeconomic uncertainty and housing market conditions in Canada continued to weigh on credit performance and interest income,” said Marlene Lenarduzzi, who acted as interim President and CEO during the quarter. “However, the resilience of our business model was underscored by clear loan book growth and expanding EQ Bank customer engagement. Our balance sheet is strong, and we are positioned for growth with Chadwick Westlake's appointment as our next chapter begins.”
“It is an incredible privilege to join EQB this week as CEO, and my thanks to Marlene for her exceptional leadership. My focus over the coming months will include listening closely to stakeholders across Canada, sharpening our strategy and moving quickly where Canada's Challenger Bank will win to our full potential,” said Chadwick Westlake, President and CEO. “We have charted our own course for over 50 years by focusing on the long-term, innovating with purpose and delivering for Canadians in ways that matter. That commitment remains unchanged. I am confident in our ability to build momentum and seize the opportunities ahead that will create better competition and options for Canadians, with earnings growth and leading returns for our shareholders.”
New executive leadership team appointments set stage for clear growth agenda
— Effective August 25, 2025, accomplished bank industry executive Chadwick Westlake became President and CEO and joined the Company's board of directors
— As planned, Marlene Lenarduzzi returned to her role as Chief Risk Officer, having previously served as interim CEO following the death of Andrew Moor in June 2025
— Anilisa Sainani appointed SVP and Chief Financial Officer, effective August 28, 2025; Ms. Sainani brings over two decades of diverse banking experience, most recently with RBC as Chief Operating Officer, CFO Group, and VP Finance, Chief Accountant, and is a nationally recognized financial leader as a CPA Fellow and Canada's Top 40 Under 40 recipient
— David Wilkes appointed to the new role of SVP and Chief Strategy & Growth Officer, effective August 28, 2025; uniquely equipped to deliver on EQB's bold growth agenda, Mr. Wilkes draws on 20 years of experience in banking and strategic leadership, joining EQB in 2022 from McKinsey & Company, where he was a Partner, and has since been a leader in the Bank's finance, strategy, corporate development and M&A, regulatory reporting and productivity functions
EQ Bank welcomes 26,000 new customers, bringing total to 586,000 +21% y/y, 5% q/q
— EQ Bank continued to attract significant new customer interest with signups increasing 13% from Q1 and 7% from Q2; demand deposit growth accelerated, driven by the Notice Savings Account and payroll customer deposits, and overall deposits marked among the strongest q/q growth in the last three years to $9.7 billion
— Continued increase in payroll customers further cements EQ Bank's position as bank of choice and go-to source for innovative banking options
— EQ Bank Card reached a milestone of $1 billion in funds loaded as Canadians continue to embrace the domestic and international convenience of this no-fee, no added FX and interest-bearing prepaid card
Personal Lending portfolio benefits from strong uninsured single-family origination growth, driving uninsured loans under management2 to $24.4 billion +8% y/y, 2% q/q
— Single-family uninsured originations increased +30% y/y with strong retention rates despite a complex macroeconomic environment as the Bank maintains its disciplined approach to underwriting, deepens its relationships with broker partners and continues to capture market share
— Decumulation lending (reverse mortgages and insurance lending) grew to $2.7 billion +41% y/y, +8% q/q, representing continued consumer demand and appreciation for differentiated, flexible solutions that support older Canadians including homeowners who wish to live in place on their terms
Commercial Banking portfolio enjoys continued leadership in insured multi-unit residential lending
— The Bank reinforced its focus on multi-unit residential lending in major Canadian cities, maintaining a strong risk profile with more than 80% of commercial loans under management (LUM)2 insured under CMHC programs
— CMHC-insured multi-unit residential LUM2 grew +30% y/y, +8% q/q to $31.4 billion supported by ongoing demand for rental apartment construction and strong originations
— EQB's insured commercial construction lending portfolio grew +28% y/y, +6% q/q to $3.5 billion with new originations and draws related to construction financing
Provisions align with macroeconomic uncertainty as new formation rates show continued moderation
— EQB's provision for credit losses (PCL) was $34.0 million in Q3, attributable to macroeconomic uncertainty, alongside delayed resolutions and weaker market values of secured assets
— Net impaired loans increased by $33.3 million in Q3 to $775 million, or 164 bps of total loan assets compared to 156 bps at Q2, 109 bps at Q3 2024; increase was driven by housing market pressure and delayed resolution times, while impaired formations slowed in Q3
— The Bank is appropriately reserved for credit losses with net allowances as a percentage of total loan assets of 33 bps, compared to 29 bps at Q2 2025 and 26 bps at Q3 2024; the increase in net allowance rate was across all segments and driven by ongoing macroeconomic uncertainty
EQB increases common share dividend by 17% y/y, supported by diligent capital generation and allocation structure
— EQB's Board of Directors declared a dividend of $0.55 per common share payable on September 30, 2025, to shareholders of record as of September 15, 2025, representing 17% increase from the dividend paid in September 2024
“While earnings and ROE did not meet our expectations in Q3, we were pleased with performance in our core lending markets and the continued momentum in EQ Bank customers and deposit growth,” said David Wilkes, Chief Strategy & Growth Officer. “We have strong capital and liquidity, and we have continued to deploy capital where risk-adjusted returns are most favourable, delivering growth in both our uninsured and insured portfolios. With year-to-date financial results in mind, including the elevated PCLs and higher business investment, we are correspondingly reducing our expectations for the remainder of this fiscal year, however our medium-term targets remain consistent.”
Analyst conference call and webcast: 10:30 a.m. ET August 28, 2025 Vincenza Sera, EQB Board Chair; Chadwick Westlake, President and CEO; Marlene Lenarduzzi, CRO; and David Wilkes, Chief Strategy & Growth Officer, will host EQB's third quarter earnings call and webcast. The listen-only webcast with accompanying slides will be available at eqb.investorroom.com. To access the conference call with operator assistance, dial 416-945-7677 five minutes prior to the start time.
1 Adjusted measures and ratios are Non-Generally Accepted Accounting Principles (GAAP) measures and ratios. Adjusted measures and ratios are calculated in the same manner as reported measures and ratios, except that financial information included in the calculation of adjusted measures and ratios is adjusted to exclude the impact of one-time acquisition and integration related costs, and certain items which management determines would have a significant impact on a reader's assessment of business performance. For additional information and a reconciliation of reported results to adjusted results, see the “Non-GAAP financial measures and ratios” section.2 These are non-GAAP measures, see the “Non-GAAP financial measures and ratios” section.3 PPPT represents pre-provision-pre-tax income, a non-GAAP measure of financial performance.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Consolidated balancesheet (unaudited)
($000s) As at July 31 2025 October 31, 2024 July 31, 2024Assets:Cash and cash equivalents 485,757 591,641 509,608Restricted cash 1,218,685 971,987 904,196Securities purchased under reverse repurchase agreements 1,949,171 1,260,118 1,339,578Investments 1,731,462 1,627,314 1,806,413Loans – Personal 32,297,598 32,273,551 32,584,931Loans – Commercial 14,890,241 14,760,367 15,372,643Securitization retained interests 999,729 813,719 738,986Deferred tax assets 19,967 36,104 30,481Other assets 969,034 899,120 782,900Total assets 54,561,644 53,233,921 54,069,736Liabilities and Shareholders' EquityLiabilities:Deposits 36,360,714 33,739,612 33,258,969Securitization liabilities 12,498,948 14,594,304 14,919,830Obligations under repurchase agreements 148,623 – -Deferred tax liabilities 204,296 177,933 161,025Funding facilities 1,385,306 946,956 1,803,221Other liabilities 652,199 636,931 681,213Total liabilities 51,250,086 50,095,736 50,824,258Shareholders' Equity:Preferred shares – – 181,411Common shares 512,172 505,876 501,594Other equity instruments 147,360 147,440 147,808Contributed deficit (15,034) (17,374) (25,801)Retained earnings 2,656,635 2,483,309 2,432,426Accumulated other comprehensive income (loss) 2,035 8,555 (3,964)Total equity attributable to equity holders of EQB 3,303,168 3,127,806 3,233,474Non-controlling interests 8,390 10,379 12,004Total equity 3,311,558 3,138,185 3,245,478Total liabilities and shareholders' equity 54,561,644 53,233,921 54,069,736
Consolidated statement of income (unaudited)
Three months ended Nine months ended($000s, except per share amounts) July 31, 2025 July 31, 2024 July 31, 2025 July 31, 2024Interest income:Loans – Personal 463,555 501,420 1,406,262 1,452,673Loans – Commercial 217,209 256,788 651,317 777,511Investments 12,899 16,432 38,557 51,187Other 24,727 32,210 70,009 81,518 718,390 806,850 2,166,145 2,362,889Interest expense:Deposits 334,109 387,208 999,309 1,111,772Securitization liabilities 122,502 132,810 360,147 391,839Funding facilities 11,703 12,773 22,015 41,577Other 34 2,692 187 22,986 468,348 535,483 1,381,658 1,568,174Net interest income 250,042 271,367 784,487 794,715Non-interest revenue:Fees and other income 24,747 22,561 70,380 59,740Net gains on loans and investments 521 6,145 3,854 18,267Gain on sale and income from retained interests 26,468 22,755 71,430 65,341Net gains on securitization activities and derivatives 4,351 4,410 14,563 4,607 56,087 55,871 160,227 147,955Revenue 306,129 327,238 944,714 942,670Provision for credit losses 33,968 21,274 82,880 59,026Revenue after provision for credit losses 272,161 305,964 861,834 883,644Non-interest expenses:Compensation and benefits 79,791 69,912 230,005 202,242Other 91,163 80,657 261,394 238,232 170,954 150,569 491,399 440,474Income before income taxes 101,207 155,395 370,435 443,170Income taxes:Current 13,455 44,083 56,412 115,351Deferred 14,388 (842) 42,657 5,567 27,843 43,241 99,069 120,918Net income 73,364 112,154 271,366 322,252Dividends on preferred shares – 2,351 – 7,054Distribution to LRCN holders – – 4,410 -Net income available to common shareholders and non-controlling interests 73,364 109,803 266,956 315,198Net income attributable to common shareholders and non-controlling interest:Common shareholders 73,014 109,538 265,949 314,454Non-controlling interests 350 265 1,007 744 73,364 109,803 266,956 315,198Earnings per share:Basic 1.91 2.86 6.93 8.24Diluted 1.90 2.84 6.88 8.17
Consolidated statement of comprehensive income (unaudited)
Three months ended Nine months ended($000s) July 31, 2025 July 31, 2024 July 31, 2025 July 31, 2024Netincome 73,364 112,154 271,366 322,252Other comprehensive income – items that will be reclassified subsequently to income:Debt instruments at Fair Value through Other Comprehensive Income:Net change in (losses) gains on fair value (11,334) 34,658 4,693 59,979Reclassification of net losses (gains) to income 13,075 (31,278) 1,486 (49,918)Other comprehensive income – items that will not be reclassified subsequently to income:Equity instruments designated at Fair Value through Other Comprehensive Income:Net change in gains on fair value – 534 868 2,086Reclassification of net losses (gains) to retained earnings – 490 (868) 490 1,741 4,404 6,179 12,637Income tax expense (639) (1,194) (1,928) (3,427) 1,102 3,210 4,251 9,210Cash flow hedges:Net change in unrealized gains (losses) on fair value 5,501 (23,284) (7,688) (23,553)Reclassification of net gains to income (6,954) (2,844) (16,315) (14,608) (1,453) (26,128) (24,003) (38,161)Income tax recovery 3 7,084 6,083 10,366 (1,450) (19,044) (17,920) (27,795)Total other comprehensive loss (348) (15,834) (13,669) (18,585)Total comprehensive income 73,016 96,320 257,697 303,667Total comprehensive income attributable to:Common shareholders 72,666 93,704 252,280 295,869Other equity and preferred shareholders – 2,351 4,410 7,054Non-controlling interests 350 265 1,007 744 73,016 96,320 257,697 303,667
Consolidated statement of changes in shareholders' equity (unaudited)
($000s) Three-month period ended July 31, 2025 Common Other equity Contributed Retained Accumulated other Shares instruments Deficit Earnings comprehensive income (loss) CashFlowFinancial Total Attributable to Non- Total Hedges Instruments at equity holders controlling FVOCI interestsBalance, beginning of period 510,973 147,360 (19,177) 2,607,001 5,147 (2,803) 2,344 3,248,501 9,661 3,258,162Net Income – – – 73,014 – – – 73,014 350 73,364Transfer of AOCI losses to net income, net of tax – – – – – 39 39 39 – 39Other comprehensive loss, – – – – (1,450) 1,102 (348) (348) – (348)net of taxExercise of stock options 952 – – – – – – 952 – 952Common share dividends – – – (20,297) – – – (20,297) (462) (20,759)Put option – non-controlling interests – – (1,442) – – – – (1,442) – (1,442)Acquisition of non-controlling interests – – 4,242 (3,083) – – – 1,159 (1,159) -Stock-based compensation – – 1,590 – – – – 1,590 – 1,590Transfer relating to the exercise of stock options 247 – (247) – – – – – – -Balance, end of period 512,172 147,360 (15,034) 2,656,635 3,697 (1,662) 2,035 3,303,168 8,390 3,311,558
($000s) Three-month period ended July 31, 2024 Preferred Common Contributed Retained Accumulated other Shares Shares deficit Earnings comprehensive income (loss) Other equity Cash Financial Total Attributable Non-controlling Total instruments Flow Instruments to equity interests Hedges at FVOCI holdersBalance, beginning of period 181,411 495,707 – (24,811) 2,359,116 34,867 (42,671) (7,804) 3,003,619 12,189 3,015,808Net Income – – – – 111,889 – – – 111,889 265 112,154Realized loss on sale of shares, net of tax – – – – (18,975) – – – (18,975) – (18,975)Transfer of AOCI losses to retained earnings, net of tax – – – – – – 18,618 18,618 18,618 – 18,618Transfer of AOCI losses to net income, net of tax – – – – – – 1,056 1,056 1,056 – 1,056Other comprehensive loss, – – – – – (19,044) 3,210 (15,834) (15,834) – (15,834)net of taxExercise of stock options – 5,005 – – – – – – 5,005 – 5,005Limited recourse capital notes issued – – 150,000 – – – – – 150,000 – 150,000Issuance cost, net of tax – – (2,192) – – – – – (2,192) – (2,192)Dividends:Preferred shares – – – – (2,351) – – – (2,351) – (2,351)Common shares – – – – (17,253) – – – (17,253) (450) (17,703)Put option – non-controlling interests – – – (1,032) – – – – (1,032) – (1,032)Stock-based compensation – – – 924 – – – – 924 – 924Transfer relating to the exercise of stock options – 882 – (882) – – – – – – -Balance, end of period 181,411 501,594 147,808 (25,801) 2,432,426 15,823 (19,787) (3,964) 3,233,474 12,004 3,245,478
($000s) Nine-month period ended July 31, 2025 Common Other equity Contributed Retained Accumulated other Shares instruments Deficit Earnings comprehensive income (loss) Cash Flow Hedges Financial Total Attributable Non- Total Instruments at to equity controlling FVOCI FVOCI holders interestsBalance, beginning of period 505,876 147,440 (17,374) 2,483,309 21,617 (13,062) 8,555 3,127,806 10,379 3,138,185Net Income – – – 270,359 – – – 270,359 1,007 271,366Realized loss on sale of shares, – – – (6,377) – – – (6,377) – (6,377)net of taxTransfer of AOCI losses to retained earnings, net of tax – – – – – 7,016 7,016 7,016 – 7,016Transfer of AOCI losses to net income, net of tax – – – – – 133 133 133 – 133Other comprehensive loss, net of tax – – – – (17,920) 4,251 (13,669) (13,669) – (13,669)Exercise of stock options 8,089 – – – – – – 8,089 – 8,089Common shares repurchased and cancelled (3,740) – – (24,432) – – – (28,172) – (28,172)Issuance cost, net of tax – (80) – – – – – (80) – (80)Limited recourse capital notes distributions, net of tax – – – (4,410) – – – (4,410) – (4,410)Common share dividends – – – (58,731) – – – (58,731) (1,837) (60,568)Put option – non-controlling interests – – (3,776) – – – – (3,776) – (3,776)Acquisition of non-controlling interests – – 4,242 (3,083) – – – 1,159 (1,159) -Stock-based compensation – – 3,821 – – – – 3,821 – 3,821Transfer relating to the exercise of stock options 1,947 – (1,947) – – – – – – -Balance, end of period 512,172 147,360 (15,034) 2,656,635 3,697 (1,662) 2,035 3,303,168 8,390 3,311,558
($000s) Nine-month period ended July 31, 2024 Preferred Common Other equity Contributed Retained Accumulated other Shares Shares instruments Surplus Earnings comprehensive income (loss) (Deficit) Cash Flow Financial Total Attributable Non- Total Hedges Instruments to equity controlling at FVOCI at FVOCI at FVOCI holders interestsBalance, beginning of period 181,411 471,014 – 12,795 2,185,480 43,618 (48,775) (5,157) 2,845,543 – 2,845,543NCI on acquisition – – – – – – – – – 12,310 12,310Net Income – – – – 321,508 – – – 321,508 744 322,252Realized loss on sale of shares, – – – – (18,975) – – – (18,975) – (18,975)net of taxTransfer of AOCI losses to retained earnings, net of tax – – – – – – 18,618 18,618 18,618 – 18,618Transfer of AOCI losses to net income, net of tax – – – – – – 1,160 1,160 1,160 – 1,160Other comprehensive loss, net of tax – – – – – (27,795) 9,210 (18,585) (18,585) – (18,585)Common shares issued 11,000 – – – – – – 11,000 – 11,000Exercise of stock options – 16,844 – – – – – – 16,844 – 16,844Limited recourse capital notes issued – – 150,000 – – – – – 150,000 – 150,000Issuance cost, net of tax – – (2,192) – – – – – (2,192) – (2,192)Dividends:Preferred shares – – – – (7,054) – – – (7,054) – (7,054)Common shares – – – – (48,533) – – – (48,533) (1,050) (49,583)Put option – non-controlling interests – – – (38,897) – – – – (38,897) – (38,897)Stock-based compensation – – – 3,037 – – – – 3,037 – 3,037Transfer relating to the exercise of stock options – 2,736 – (2,736) – – – – – – -Balance, end of period 181,411 501,594 147,808 (25,801) 2,432,426 15,823 (19,787) (3,964) 3,233,474 12,004 3,245,478
Consolidated statementofcashflows (unaudited)
Three months ended Nine months ended($000s) July 31, 2025 July 31, 2024 July 31, 2025 July 31, 2024CASHFLOWSFROMOPERATINGACTIVITIESNetincome 73,364 112,154 271,366 322,252Adjustmentsfornon-cash itemsinnetincome:Financialinstrumentsatfairvaluethroughincome 110,533 (14,453) (67,817) (3,093)Amortizationofpremiums/discountoninvestments (692) (13,393) (6,275) (44,422)Amortizationofcapital assetsandintangiblecosts 16,844 13,253 49,238 36,373Provisionforcreditlosses 33,968 21,274 82,880 59,026Securitizationgains (18,027) (16,656) (48,653) (48,658)Stock-basedcompensation 1,590 924 3,821 3,037Incometaxes 27,843 43,241 99,069 120,918Securitizationretainedinterests 44,691 33,670 126,389 92,304Changesinoperatingassetsandliabilities:Restrictedcash (222,094) (121,048) (246,698) (137,001)Securitiespurchasedunderreverserepurchaseagreements 150,866 60,377 (689,053) (430,745)Loansreceivable,netofsecuritizations (176,355) (132,856) (442,501) (847,878)Otherassets (9,003) (97,507) (8,922) (106,038)Deposits 1,349,617 (924,138) 2,605,032 1,165,004Securitizationliabilities (1,060,539) (269,988) (2,128,524) 407,423Obligationsunderrepurchaseagreements 64,531 – 148,623 (1,128,238)Fundingfacilities (25,064) 963,380 438,350 71,634Otherliabilities (27,275) (53,946) 38,124 (12,310)Incometaxespaid (20,287) (21,742) (88,046) (71,816)Cashflowsfrom (used in) operatingactivities 314,511 (417,454) 136,403 (552,228)CASHFLOWSFROMFINANCINGACTIVITIESProceedsfromissuance ofcommonshares 952 5,005 8,089 27,844Net proceeds from issuance of limited recourse notes – 147,808 (80) 147,808Common share repurchased and cancelled – – (28,172) -Dividendspaidonpreferredshares – (2,351) – (7,054)Dividendspaidoncommonshares (20,759) (17,253) (60,568) (48,533)Distribution to other equity holders – – (4,410) -Cashflows(usedin) fromfinancingactivities (19,807) 133,209 (85,141) 120,065CASHFLOWSFROMINVESTINGACTIVITIESPurchaseofinvestments (370,789) (7,896) (387,208) (352,319)Acquisition of subsidiary – – – (75,483)Proceedsonsaleorredemptionofinvestments 82,864 132,370 242,337 789,016Netchange inCanadaHousing Trustre-investmentaccounts – 22,050 53,032 69,009Purchaseofcapital assetsandsystemdevelopmentcosts (21,769) (9,890) (65,307) (37,926)Cashflows(usedin) frominvestingactivities (309,694) 136,634 (157,146) 392,297Netdecreaseincashandcashequivalents (14,990) (147,611) (105,884) (39,866)Cashandcashequivalents,beginningofperiod 500,747 657,219 591,641 549,474Cashandcashequivalents,endofperiod 485,757 509,608 485,757 509,608Supplemental statement of cash flows disclosure:Interestreceived 683,755 975,954 2,062,196 2,510,358Interestpaid (498,078) (646,530) (1,325,193) (1,461,202)Dividendsreceived – 521 350 1,634
About EQB Inc.
EQB Inc. (TSX: EQB) is a leading digital financial services company with $137 billion in combined assets under management and administration (as at July 31, 2025). It offers banking services through Equitable Bank, a wholly owned subsidiary and Canada's seventh largest bank by assets, and wealth management through ACM Advisors, a majority owned subsidiary specializing in alternative assets. As Canada's Challenger Bank™, Equitable Bank has a clear mission to drive change in Canadian banking to enrich people's lives. It leverages technology to deliver exceptional personal and commercial banking experiences and services to over 761,000 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: Lemar Persaud VP and Head of IR investor_enquiry@eqb.com
Media contact: Maggie Hall Director, PR & Communications Maggie.hall@eqb.com
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:
Q3 2025
— $4.0 million fair value adjustment on a covered bond maturity;
— $2.6 million accelerated long-term incentive expense following the former CEO's passing;
— $0.9 million new office lease related expenses; and
— $2.0 million intangible asset amortization.
Q2 2025
— $3.4 million new office lease related expenses prior to occupancy, and
— $2.0 million intangible asset amortization.
Q3 2024
— $2.7 million non-recurring operational effectiveness expenses and acquisition and integration-related costs associated with Concentra and ACM;
— $2.2 million intangible asset amortization; and
— $1.7 million provision for credit losses due to change in ECL methodology from five to four economic scenarios and associated weights.
The following table presents a reconciliation of GAAP reported financial results to non-GAAP adjusted financial results. For additional adjusted measures and information regarding non-GAAP financial measures, please refer to the Non-GAAP financial measures and ratios section of this MD&A.
Reconciliation of reported and adjusted financial results For the three months ended For the nine months ended($000s, except share and per share amounts) 31-Jul-25 30-Apr-25 31-Jul-24 31-Jul -2531-Jul-24Reported resultsNet interest income 250,042 271,059 271,367 784,487 794,715Non-interest revenue 56,087 44,891 55,871 160,227 147,955Revenue 306,129 315,950 327,238 944,714 942,670Non-interest expense 170,954 161,190 150,569 491,399 440,474Pre-provision pre-tax income(1) 135,175 154,760 176,669 453,315 502,196Provision for credit loss 33,968 30,234 21,274 82,880 59,026Income tax expense 27,843 34,234 43,241 99,069 120,918Net income 73,364 90,292 112,154 271,366 322,252Net income available to common shareholders 73,014 85,533 109,538 265,949 314,454AdjustmentsNet interest income – covered bond fair value adjustment 4,035 – – 4,035 -Non-interest expenses – accelerated incentive expense (2,594) – – (2,594) -Non-interest expenses – new office lease related expenses (857) (3,363) – (7,009) -Non-interest expenses – non-recurring operational effectiveness and acquisition-related costs(2) – – (2,652) (1,782) (10,416)Non-interest expenses – intangible asset amortization (1,969) (1,969) (2,223) (5,907) (7,219)Provision for credit loss – equipment financing – – (5,018) -Provision for credit loss – ECL methodology change and weights – (1,698) – (1,698)Pre-tax adjustments 9,455 5,332 6,573 26,345 19,333Income tax expense – tax impact on above adjustments(3) 2,561 1,414 1,543 7,014 5,009Post-tax adjustments – net income 6,894 3,918 5,030 19,331 14,324Adjustments attributed to minority interests (230) (259) (310) (750) (624)Post-tax adjustments – net income to common shareholders 6,664 3,659 4,720 18,581 13,700Adjusted resultsNet interest income 254,077 271,059 271,367 788,522 794,715Non-interest revenue 56,087 44,891 55,871 160,227 147,955Revenue 310,164 315,950 327,238 948,749 942,670Non-interest expense 165,534 155,858 145,694 474,107 422,839Pre-provision pre-tax income(1) 144,630 160,092 181,544 474,642 519,831Provision for credit loss 33,968 30,234 19,576 77,862 57,328Income tax expenses(3) 30,404 35,649 44,784 106,083 125,927Net income 80,258 94,209 117,184 290,697 336,576Net income available to common shareholders 79,678 89,190 114,258 284,530 328,154Diluted earnings per shareWeighted average diluted common shares outstanding 38,519,991 38,662,002 38,606,268 38,654,42338,490,651Diluted earnings per share – reported 1.90 2.21 2.84 6.88 8.17Diluted earnings per share – adjusted 2.07 2.31 2.96 7.36 8.53Diluted earnings per share – adjustment impact 0.17 0.10 0.12 0.48 0.36
(1) This is a non-GAAP measure, see Non-GAAP financial measures and ratios section.(2) Includes non-recurring operational effectiveness and acquisition and integration-related costs associated with Concentra Bank and ACM.(3) Income tax expense associated with non-GAAP adjustment was calculated based on the statutory tax rate applicable for that period.
Other non-GAAP financial measures and ratios:
— Adjusted 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.
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