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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Home Capital Group Inc | TSX:HCG | Toronto | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 44.26 | 44.26 | 44.28 | 0 | 01:00:00 |
Full year earnings per share growth of 38%, adjusted earnings per share growth of 50%
Home Capital Group Inc. (“Home Capital” or “the Company”) (TSX: HCG) today reported financial results for the three months and twelve months ended December 31, 2019. This press release should be read in conjunction with the Company’s 2019 Annual and Fourth Quarter Consolidated Financial Report including Financial Statements and Management’s Discussion and Analysis which are available on Home Capital’s website at www.homecapital.com and on SEDAR at www.sedar.com.
“Home Capital delivered a strong finish in the fourth quarter,” said Yousry Bissada, Chief Executive Officer. “2019 was a productive year across all our core businesses. Our continued commitment to providing excellent service to our partners and our customers, while investing in our Home Trust Ignite Program, has made Home Capital a stronger and more responsive company. We look forward to continuing our progress in 2020.”
Net Income: $2.29 per share in 2019 up 38.0% from $1.66 in 2018
Asset Growth: Positive year-over-year growth in 2019 mortgage originations of 4.0% and total loan portfolio of 5.5%
Funding: Deposits through our Oaken channel of $3.37 billion
Credit Quality: Credit provisions of 0.12% of gross loans in 2019 compared with 0.13% in 2018
Return of Capital to Shareholders
On January 17, 2020, The Toronto Stock Exchange approved the renewal of our Normal Course Issuer Bid (“NCIB”). Under the terms of the NCIB, Home Capital may purchase for cancellation up to 5,266,187 of its common shares, commencing on January 22, 2020. Purchases under the NCIB will terminate on January 21, 2021 or once the full purchase allotment has been completed.
The Company continues to be well capitalized and believes there are still significant opportunities to repurchase shares below their intrinsic value and will focus on returning capital to shareholders through our NCIB or another Substantial Issuer Bid.
Outlook
Home Capital expects that the stable conditions that characterized the Canadian housing market for 2019 will persist through the beginning of 2020. “We made a lot of progress in 2019 through the consistent execution of our strategy,” said Mr. Bissada. “In 2020 we believe we have an opportunity to build on that progress by continuing to invest in service and innovation with the goal of creating long-term sustainable value.”
Fourth Quarter 2019 Results Conference Call and Slide Presentation Webcast
The conference call will take place on Friday, February 21, 2020, at 8:00 a.m. ET. Participants are asked to call approximately 10 minutes in advance at toll-free 1-844-899-4831 throughout North America. Participants calling from outside of North America may dial 1-647-689-5401 The call will also be accessible in listen-only mode on Home Capital’s website at www.homecapital.com in the Investor Relations section of the website.
Conference Call Archive
A telephone replay of the call will be available between 11:00 a.m. ET Friday, February 21, 2020 and midnight ET Friday, February 28, 2020 by calling 1-800-585-8367 (enter passcode 5606508). The archived audio webcast will be available for 90 days on Home Capital’s website at www.homecapital.com.
Financial Highlights
For the three months ended
For the year ended
(000s, except Percentage and Per Share Amounts)
December 31
September 30
December 31
December 31
December 31
2019
2019
2018
2019
2018
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
$
109,887
$
103,048
$
90,324
$
402,247
$
352,400
Net Interest Margin (TEB1)
2.31
%
2.22
%
1.99
%
2.16
%
1.99
%
Efficiency Ratio (TEB1)
55.6
%
51.3
%
51.3
%
54.9
%
52.0
%
Adjusted Efficiency Ratio (TEB1)2
51.3
%
47.8
%
51.3
%
51.3
%
52.0
%
Provision as a Percentage of Gross Loans (annualized)
0.09
%
0.09
%
0.10
%
0.12
%
0.13
%
Net Write-Offs as a Percentage of Gross Loans (annualized)
0.04
%
0.06
%
0.13
%
0.05
%
0.06
%
Net Income
$
37,236
$
39,020
$
35,811
$
135,986
$
132,603
Adjusted Net Income2
41,153
41,953
35,811
147,979
132,603
Diluted Earnings per Share
$
0.65
$
0.67
$
0.46
$
2.29
$
1.66
Adjusted Diluted Earnings per Share2
0.72
0.72
0.46
2.49
1.66
Return on Shareholders' Equity (annualized)
9.0
%
9.5
%
8.1
%
8.2
%
7.7
%
Adjusted Return on Shareholders' Equity (annualized)2
9.9
%
10.2
%
8.1
%
8.9
%
7.7
%
ORIGINATIONS
Total Mortgage Originations
$
1,619,890
$
1,545,364
$
1,614,164
$
5,657,975
$
5,439,393
Single-Family Residential Mortgage Originations
1,206,791
1,186,968
1,160,051
4,377,349
3,995,078
As at
December 31
September 30
December 31
2019
2019
2018
BALANCE SHEET HIGHLIGHTS
Total Assets
$
19,157,597
$
18,934,256
$
18,141,689
Total Assets Under Administration3
24,792,643
24,776,872
24,680,225
Total Loan Portfolio4
17,153,810
16,994,631
16,264,387
Total Loans Under Administration3
22,955,512
22,968,969
22,933,274
Deposits
13,716,306
13,520,776
12,977,090
FINANCIAL STRENGTH
Capital Measures5
Common Equity Tier 1 Capital Ratio
17.64
%
19.67
%
18.94
%
Leverage Ratio
7.07
%
7.80
%
7.54
%
Credit Quality
Net Non-Performing Loans as a Percentage of Gross Loans
0.44
%
0.49
%
0.47
%
NPL Allowance as a Percentage of Gross NPL6
25.2
%
23.6
%
19.9
%
Share Information
Book Value per Common Share
$
29.33
$
28.64
$
26.43
Number of Common Shares Outstanding
57,346
57,331
62,065
1
See definition of Taxable Equivalent Basis (TEB) under Non-GAAP Measures in the Company’s 2019 Annual and Fourth Quarter Consolidated Financial Report.
2
See definition of Adjusted Efficiency Ratio, Adjusted Net Income, Adjusted Diluted Earnings per Share, and Adjusted Return on Shareholders’ Equity under Non-GAAP Measures in the Company’s 2019 Annual and Fourth Quarter Consolidated Financial Report and the Reconciliation of Net Income to Adjusted Net Income in Tables 2 and 24 of the Company’s 2019 Annual and Fourth Quarter Consolidated Financial Report.
3
Total assets and loans under administration include both on- and off-balance sheet amounts. Total on-balance sheet loans include loans held for sale and are presented gross of allowance for credit losses.
4
Total loan portfolio is presented gross of allowance for credit losses and excludes loans held for sale.
5
These figures relate to the Company’s operating subsidiary, Home Trust Company.
6
NPL indicates non-performing loans, defined as Stage 3 loans under IFRS 9 Financial Instruments. See definition of impaired or non-performing loans under Glossary of Terms in the Company’s 2019 Annual and Fourth Quarter Consolidated Financial Report.
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 2019 Annual and Fourth Quarter Consolidated Financial Report, as well as the Company’s other publicly filed information, which is 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, liquidity and funding risk, structural interest rate risk, operational risk, investment risk, strategic risk, reputational risk, compliance risk and capital adequacy 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 2019 Annual and Fourth Quarter Consolidated Financial Report. Forward-looking statements are typically identified by words such as “will,” “believe,” “expect,” “anticipate,” “intend,” “should,” “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 uncertainty, 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 presents forward-looking statements to assist shareholders in understanding the Company’s assumptions and expectations about the future that are relevant in management’s setting of performance goals, strategic priorities and outlook. The Company presents its outlook to assist shareholders in understanding management’s expectations on how the future will impact the financial performance of the Company. These forward-looking statements may not be appropriate for other purposes. 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 2020 and its effect on Home Capital’s business are material factors the Company considers when setting strategic priorities 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 and other third-party providers. In setting and reviewing its strategic priorities and outlook for 2020, management continues to assume:
Non-GAAP Measures
The Company has adopted IFRS as its accounting framework. IFRS are the generally accepted accounting principles (GAAP) for Canadian publicly accountable enterprises for years beginning on or after January 1, 2011. 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 2019 Annual and Fourth Quarter Consolidated Financial 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 residential and non-residential mortgage lending, securitization of residential mortgage products, consumer lending and credit card services. In addition, Home Trust offers deposits via brokers and financial planners, and through a direct-to-consumer brand, Oaken Financial. Home Trust also conducts business through its wholly owned subsidiary, Home Bank. Licensed to conduct business across Canada, we have offices in Ontario, Alberta, British Columbia, Nova Scotia, Quebec and Manitoba.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200221005098/en/
FOR FURTHER INFORMATION: Jill MacRae Director, Investor Relations (416) 933-4991 Jill.MacRae@hometrust.ca
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