In the news release, Home Capital Reports fourth quarter and
full year 2017 Results, issued 14-Feb-2018 by Home Capital Group Inc. over
Cision, we are advised that Home Capital is adjusting for errors in
the comparative figures on the Consolidated Balance Sheets for
September 30, 2017 and balances for
the three months ended December 31,
2017 and 2016 in the Consolidated Statements of Cash Flows.
The complete, corrected release follows:
Home Capital Reports fourth quarter and full year 2017 Results
TORONTO, Feb. 14, 2018 /CNW/ - Home Capital Group ("Home
Capital" or "the Company") (TSX: HCG) today reported financial
results for the three and twelve months ended December 31, 2017. This press release should be
read in conjunction with the Company's 2017 Annual and Fourth
Quarter Consolidated Financial Report including Financial
Statements and Management's Discussion and Analysis (MD&A),
which are available on Home Capital's website at
www.homecapital.com and on SEDAR at www.sedar.com.
"Our improved fourth quarter performance capped an important
year for Home Capital employees, customers, brokers and
shareholders," said Yousry Bissada,
President and Chief Executive Officer, Home Capital Group. "We have
demonstrated progress towards growing our residential and
commercial business lines to more normal and sustainable levels and
our employees delivered improved service. The steps we have taken
to ensure we provide efficient and effective service to brokers and
customers will help us to drive profitable growth going
forward."
"We are entering 2018 with positive momentum in our business. We
have turned the corner and expect to grow from here, responsibly,
with sustainable risk management practices embedded in our
culture," Mr. Bissada continued. "We have a strong capital position
and balance sheet. We will use our position of strength to seize
opportunities to invest in, and grow, our business to create
value."
Fourth Quarter 2017, compared with the Third Quarter
2017:
- Net income of $30.6 million, an
increase of 2.1% or $0.6 million from
$30.0 million.
- Diluted earnings per share of $0.38, an increase of 2.7% from $0.37.
- Non-interest expense of $65.5
million, an increase of 9.3% or $5.6
million from $59.9
million.
- Non-securitized single-family residential mortgages of
$10.04 billion, a decrease of 3.5% or
$0.36 billion from
$10.40 billion.
- Total mortgage originations of $872.1
million, an increase of 126% or $487.0 million from $385.1
million.
- Provision for credit losses as a percentage of gross uninsured
loans of 0.12%, compared to (0.14)% where Q3 2017 included a
reduction of $6.5 million in the
collective allowance (0.07% in the absence of this reduction).
Fourth Quarter 2017, compared with the Fourth Quarter
2016:
- Net income of $30.6 million, a
decrease of 39.6% or $20.1 million
from $50.7 million.
- Net income in Q4 2017 includes the impact of reduced loan
balances and lower securitization income, partially offset by lower
non-interest expenses.
- Diluted earnings per share of $0.38, a decrease of 51.9% from $0.79.
- Non-interest expenses were $65.5
million, a $5.5 million
decline and 7.8% improvement from $71.0
million.
- Total mortgage originations of $872.1
million, a decrease of 64.1% or $1.56
billion from $2.43
billion.
- Provision for credit losses as a percentage of gross uninsured
loans was 0.12% compared to 0.07%.
Year Ended December 31, 2017,
compared with the Year Ended December 31,
2016:
- Net income of $7.5 million,
compared with $247.4 million.
- Net income includes $223.6
million of expenses directly associated with the Q2 2017
liquidity event.
- Diluted earnings per share of $0.10 compared to diluted earnings per share of
$3.71.
- Total loans under administration of $22.51 billion, a decrease of 14.8% or
$3.91 billion from $26.42 billion.
- Provision for credit losses as a percentage of gross uninsured
loans was 0.07%, compared to 0.05%.
Corporate Update
Home Capital ended 2017 with a strong capital position, poised
for sustainable growth and with a clear goal of regaining its
leading market share position in Canada's Alt-A mortgage market.
Management and the Board of Directors are focused on completing
a strategy that will take advantage of the Company's capital
position and balance sheet to invest in the business, drive
profitable growth and create long-term shareholder value.
In the near term, management's key areas of focus are:
|
1.
|
Profitably growing
residential and commercial business lines to more sustainable
levels and increasing market share.
|
|
2.
|
Improving service
levels through training initiatives that will empower employees to
deliver best-in-class service.
|
|
3.
|
Increasing renewal
and retention rates.
|
|
4.
|
Increasing broker
outreach to advance higher-quality applications.
|
|
5.
|
Maintaining
competitive product offerings.
|
|
6.
|
Innovating and
applying technology in the mortgage business to enhance customer
and broker
experiences.
|
In addition, the Company is operating in the context of an
evolving regulatory landscape that will affect its primary
residential mortgage market, although the extent of any impact is
not yet clear. Management and the Board of Directors will continue
to assess opportunities for the business as it relates to the
current environment during the first and second quarters of
2018.
Fourth Quarter 2017 Financial Position
- Total loans under administration of $22.51 billion, which includes securitized
mortgages that qualify for off-balance sheet accounting, decreased
by 14.8% or $3.91 billion from
$26.42 billion at the end of 2016,
and 3.1% or $719.2 million from
$23.23 billion at the end of Q3
2017.
- Total loans of $15.06
billion declined 16.5% from $18.04
billion at the end of 2016, and 2.4% from $15.43 billion at the end of Q3 2017.
-
- Total mortgages originated of $872.1
million, compared to $2.43
billion in Q4 2016 and $385.1
million in Q3 2017.
- Single-family residential mortgage originations of $566.0 million in Q4 2017, compared with
$1.78 billion in Q4 2016 and
$224.0 million in Q3 2017.
- Multi-unit residential mortgage originations of $194.8 million, compared to $371.5 million in Q4 2016 and $99.1 million in Q3 2017. Multi-unit residential
mortgage originations are mostly insured and subsequently
securitized through programs that qualify for off-balance sheet
accounting.
- Non-residential commercial mortgage originations, which include
store and apartment mortgages, of $111.2
million, compared to $277.3
million in Q4 2016 and $62.0
million in Q3 2017.
- Liquid assets were $1.65
billion, compared to $2.07
billion at the end of 2016 and $2.66
billion at September 30,
2017. The Company maintains a prudent level of liquidity,
given the current level of operations, loan balances and the
Company's obligations.
- Total deposits were $12.17
billion, compared to $15.89
billion at the end of 2016 and $13.36
billion at the end of Q3 2017.
-
- The decrease in deposits from the end of last year reflects the
elevated level of redemptions of the Company's High-Interest
Savings Accounts during the Q2 2017 liquidity event and lower
funding requirements due to lower loan balances.
- The decrease in deposits from the end of last quarter reflects
the Company's intentional actions to slow the inflow of deposits to
match expected mortgage originations. During the third
quarter, the Company decided to offer premium rates on deposits to
increase inflows following the Q2 2017 liquidity event. The
growth of deposits outpaced loan growth and created a drag on
earnings. Consequently, by the end of the third quarter, the
Company reduced interest rates on new deposits to intentionally
lower deposits until mortgage balances began to grow.
- The Company created net deposits inflows mid-way through the
fourth quarter by increasing interest rates paid on new and renewed
deposits to meet expected mortgage funding requirements. It
is expected that the Company may be required to offer higher
interest rates on new deposits in future periods. It is
assumed that any such increases could be offset by increased
interest rates charged on mortgages originated or renewed in future
periods. Any inability to pass on any increased funding costs would
negatively impact net interest margins.
Credit Quality
The loan portfolio remained strong with the level of credit
losses and non-performing loans remaining low. Provision for credit
losses (PCL) for the quarter was $3.4
million, compared to $2.4
million in Q4 2016 and a $4.3
million release in Q3 2017.
- The annualized credit provision as a percentage of gross
uninsured loans was 0.12%, compared to 0.07% in Q4 2016 and (0.14)%
in Q3 2017.
-
- The increase in the PCL ratio over last year resulted from a
specific provision of $2.2 million
against one non-residential commercial mortgage. The negative
PCL ratio in the third quarter resulted from the reduction of
$6.5 million in the collective
allowance for the non-residential commercial portfolio related to
asset sales (see Note 5(H) of the consolidated financial statements
for more information). In the absence of this reduction, the
PCL ratio in Q3 2017 would have been 0.07%.
- Net non-performing loans as a percentage of gross loans ended
2017 at 0.30%, compared to 0.28% at the end of Q3 2017 and
unchanged from the end of 2016.
-
- Although the percentage of net non-performing loans over gross
loans was consistent year over year and sequentially, there was a
significant change in the mix of net non-performing residential and
commercial mortgages.
- The net amount of non-performing non-residential commercial
mortgages increased to $13.7 million
at Q4 2017 from $4.5 million at Q4
2016 and $6.2 million at Q3 2017, and
the net amount of non-performing single-family residential
mortgages decreased to $30.1 million
from $47.9 million at Q4 2016 and
$36.1 million at Q3 2017.
- Total net non-performing loan balances decreased to
$45.4 million at Q4 2017 from
$53.7 million at Q4 2016 and
increased from $43.6 million at Q3
2017.
- The Company adopted IFRS 9 beginning January 1, 2018. The impact of the adoption of
IFRS 9 is not expected to be significant. Additional information on
the impacts of IFRS 9 will be made available in the Company's
Report to Shareholders for the first quarter of 2018.
Capital Position
The Company maintained strong capital ratios well above Company
targets and regulatory minimums at the end of 2017. Management
continues to review opportunities to deploy capital in the most
efficient manner to maximize shareholder value.
- Home Trust's Common Equity Tier 1 and Total capital ratios
remained very strong at 23.17% and 23.68%, respectively, at
December 31, 2017. The comparative
balances were 16.55% and 16.97%, respectively, at December 31, 2016.
- Home Trust's Leverage ratio was 8.70% at December 31, 2017 and 7.20% at December 31, 2016.
Looking Forward
Looking to 2018, the Company's strong capital position and
balance sheet, stable deposit funding base and ample liquidity
provide a solid foundation for future investment in the business
and to be competitive in the Canadian market.
Management is confident it is well-positioned to deliver
sustainable loan growth as well as improved execution and service
levels to increase market share. As the business grows, management
and the Board are committed to the ongoing enhancement of risk
management and corporate governance practices to grow the business
responsibly. Creating long-term shareholder value and resuming Home
Capital's nearly 30-year track record of profitable growth are
priorities for the Company.
|
(signed)
|
(signed)
|
|
YOUSRY
BISSADA
|
BRENDA
EPRILE
|
|
President & Chief
Executive Officer
|
Chair of the
Board
|
|
February 14,
2018
|
|
The Company's 2017 Annual and Fourth Quarter Consolidated
Financial Report, including Management's Discussion and Analysis,
for the three and twelve months ended December 31, 2017 is available at
www.homecapital.com and on the Canadian Securities Administrators'
website at www.sedar.com.
Fourth Quarter and Year-End 2017 Results Conference Call and
Webcast
The conference call will take place on Thursday, February 15, 2018, at 8:00 a.m. ET. Participants are asked to call
approximately 10 minutes in advance at 647-427-7450 in Toronto or toll-free 1-888-231-8191 throughout
North America. A webcast slide presentation 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 Thursday, February 15, 2018
and 12:00 a.m. ET Thursday, February 22,
2018 by calling 416-849-0833 or 1-855-859-2056 (enter
passcode 8574149). The archived audio webcast will be available for
90 days on CNW Group's website at www.newswire.ca and 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
|
|
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
OPERATING
RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
$
|
30,619
|
$
|
29,983
|
$
|
50,706
|
$
|
7,527
|
$
|
247,396
|
|
Net Interest
Income
|
|
91,718
|
|
88,762
|
|
120,620
|
|
302,930
|
|
485,164
|
|
Total
Revenue1
|
|
109,455
|
|
95,407
|
|
144,597
|
|
291,311
|
|
581,959
|
|
Diluted Earnings per
Share
|
$
|
0.38
|
$
|
0.37
|
$
|
0.79
|
$
|
0.10
|
$
|
3.71
|
|
Return on
Shareholders' Equity
|
|
6.8%
|
|
6.8%
|
|
12.6%
|
|
0.4%
|
|
15.1%
|
|
Return on Average
Assets
|
|
0.7%
|
|
0.6%
|
|
1.0%
|
|
0.0%
|
|
1.2%
|
|
Net Interest Margin
(TEB)2
|
|
2.02%
|
|
1.85%
|
|
2.38%
|
|
1.55%
|
|
2.37%
|
|
Provision as a
Percentage of Gross Uninsured Loans
(annualized)3
|
|
0.12%
|
|
(0.14)%
|
|
0.07%
|
|
0.07%
|
|
0.05%
|
|
Provision as a
Percentage of Gross Loans (annualized)3
|
|
0.09%
|
|
(0.11)%
|
|
0.05%
|
|
0.05%
|
|
0.04%
|
|
Efficiency Ratio
(TEB)2
|
|
59.8%
|
|
62.7%
|
|
48.8%
|
|
94.0%
|
|
40.8%
|
|
|
|
|
|
|
As at
|
|
|
|
|
|
December
31
|
September
30
|
December
31
|
|
|
|
|
|
|
2017
|
|
2017
|
|
2016
|
|
|
|
|
|
BALANCE SHEET
HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
$
|
17,591,143
|
$
|
18,856,294
|
$
|
20,528,777
|
|
|
|
|
|
Total Assets Under
Administration4
|
|
25,040,182
|
|
26,659,330
|
|
28,917,534
|
|
|
|
|
|
Total
Loans5
|
|
15,064,424
|
|
15,429,650
|
|
18,035,317
|
|
|
|
|
|
Total Loans Under
Administration4,5
|
|
22,513,463
|
|
23,232,686
|
|
26,424,074
|
|
|
|
|
|
Liquid
Assets
|
|
1,654,718
|
|
2,657,055
|
|
2,067,981
|
|
|
|
|
|
Deposits
|
|
12,170,454
|
|
13,358,618
|
|
15,886,030
|
|
|
|
|
|
Shareholders'
Equity
|
|
1,813,505
|
|
1,781,741
|
|
1,632,587
|
|
|
|
|
|
FINANCIAL
STRENGTH
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Measures6
|
|
|
|
|
|
|
|
|
|
|
|
Risk-Weighted
Assets
|
$
|
6,532,130
|
$
|
6,890,938
|
$
|
8,643,267
|
|
|
|
|
|
Common Equity Tier 1
Capital Ratio
|
|
23.17%
|
|
21.25%
|
|
16.55%
|
|
|
|
|
|
Tier 1 Capital
Ratio
|
|
23.17%
|
|
21.25%
|
|
16.54%
|
|
|
|
|
|
Total Capital
Ratio
|
|
23.68%
|
|
21.74%
|
|
16.97%
|
|
|
|
|
|
Leverage
Ratio
|
|
8.70%
|
|
7.89%
|
|
7.20%
|
|
|
|
|
|
Credit
Quality
|
|
|
|
|
|
|
|
|
|
|
|
Net Non-Performing
Loans as a Percentage of Gross Loans
|
|
0.30%
|
|
0.28%
|
|
0.30%
|
|
|
|
|
|
Allowance as a
Percentage of Gross Non-Performing Loans
|
|
79.5%
|
|
82.6%
|
|
73.4%
|
|
|
|
|
|
Share
Information
|
|
|
|
|
|
|
|
|
|
|
|
Book Value per Common
Share
|
$
|
22.60
|
$
|
22.20
|
$
|
25.36
|
|
|
|
|
|
Common Share Price –
Close
|
$
|
17.31
|
$
|
13.89
|
$
|
31.34
|
|
|
|
|
|
Dividend paid during
the period ended
|
$
|
-
|
$
|
-
|
$
|
0.26
|
|
|
|
|
|
Dividend Payout
Ratio
|
|
-
|
|
-
|
|
32.9%
|
|
|
|
|
|
Market
Capitalization
|
$
|
1,389,058
|
$
|
1,114,617
|
$
|
2,017,920
|
|
|
|
|
|
Number of Common
Shares Outstanding
|
|
80,246
|
|
80,246
|
|
64,388
|
|
|
|
|
|
|
1The
Company has revised its definition of Total Revenue and restated
amounts in prior periods accordingly. Please see the definition
under Non-GAAP Measures in the Company's 2017 Annual and Fourth
Quarter Consolidated Financial Report.
|
|
2See
definition of Taxable Equivalent Basis (TEB) under Non-GAAP
Measures in the Company's 2017 Annual and Fourth Quarter
Consolidated Financial Report.
|
|
3Provision
as a percentage of both gross uninsured loans and gross loans for
the three months ended September 30, 2017 include a release of $6.5
million in the collective allowance (please see Note 5(H) to the
audited consolidated financial statements included in the Company's
2017 Annual and Fourth Quarter Consolidated Financial
Report). In the absence of this release, annualized provision
for credit losses was 0.07% of gross uninsured loans and 0.06% of
gross loans for the three months ended September 30,
2017.
|
|
4Total
assets and loans under administration include both on- and
off-balance sheet amounts.
|
|
5Total
loans include loans held for sale.
|
|
6These
figures relate to the Company's operating subsidiary, Home Trust
Company.
|
|
Consolidated
Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
As at
|
|
|
|
December
31
|
|
September
30
|
|
December
31
|
|
thousands of
Canadian dollars
|
|
2017
|
|
2017
|
|
2016
|
|
ASSETS
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
$
|
1,336,138
|
$
|
2,337,760
|
$
|
1,205,394
|
|
Available for Sale
Securities
|
|
332,468
|
|
331,544
|
|
534,924
|
|
Loans Held for
Sale
|
|
165,947
|
|
40,320
|
|
77,918
|
|
Loans
|
|
|
|
|
|
|
|
Securitized
mortgages
|
|
2,993,250
|
|
3,133,906
|
|
2,526,804
|
|
Non-securitized
mortgages and loans
|
|
11,905,227
|
|
12,255,424
|
|
15,430,595
|
|
|
14,898,477
|
|
15,389,330
|
|
17,957,399
|
|
Collective allowance
for credit losses
|
|
(33,563)
|
|
(33,563)
|
|
(37,063)
|
|
|
14,864,914
|
|
15,355,767
|
|
17,920,336
|
|
Other
|
|
|
|
|
|
|
|
Restricted
assets
|
|
437,011
|
|
289,870
|
|
265,374
|
|
Derivative
assets
|
|
7,325
|
|
10,177
|
|
37,524
|
|
Other
assets
|
|
336,770
|
|
365,685
|
|
348,638
|
|
Deferred tax
assets
|
|
9,577
|
|
15,873
|
|
16,914
|
|
Goodwill and
intangible assets
|
|
100,993
|
|
109,298
|
|
121,755
|
|
|
891,676
|
|
790,903
|
|
790,205
|
|
$
|
17,591,143
|
$
|
18,856,294
|
$
|
20,528,777
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
Deposits payable on
demand
|
$
|
539,364
|
$
|
441,008
|
$
|
2,531,803
|
|
Deposits payable on a
fixed date
|
|
11,631,090
|
|
12,917,610
|
|
13,354,227
|
|
|
12,170,454
|
|
13,358,618
|
|
15,886,030
|
|
Securitization
Liabilities
|
|
|
|
|
|
|
|
CMHC-sponsored
mortgage-backed security liabilities
|
|
1,562,152
|
|
1,606,818
|
|
898,386
|
|
CMHC-sponsored Canada
Mortgage Bond liabilities
|
|
1,473,318
|
|
1,473,350
|
|
1,637,117
|
|
Bank-sponsored
securitization conduit liabilities
|
|
142,279
|
|
174,511
|
|
114,146
|
|
|
3,177,749
|
|
3,254,679
|
|
2,649,649
|
|
Other
|
|
|
|
|
|
|
|
Derivative
liabilities
|
|
38,728
|
|
31,192
|
|
3,490
|
|
Other
liabilities
|
|
360,477
|
|
395,291
|
|
320,737
|
|
Deferred tax
liabilities
|
|
30,230
|
|
34,773
|
|
36,284
|
|
|
429,435
|
|
461,256
|
|
360,511
|
|
|
15,777,638
|
|
17,074,553
|
|
18,896,190
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
|
Capital
stock
|
|
231,156
|
|
231,156
|
|
84,910
|
|
Contributed
surplus
|
|
4,978
|
|
5,096
|
|
4,562
|
|
Retained
earnings
|
|
1,583,265
|
|
1,552,646
|
|
1,598,180
|
|
Accumulated other
comprehensive loss
|
|
(5,894)
|
|
(7,157)
|
|
(55,065)
|
|
|
1,813,505
|
|
1,781,741
|
|
1,632,587
|
|
$
|
17,591,143
|
$
|
18,856,294
|
$
|
20,528,777
|
|
Consolidated
Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
For the year
ended
|
|
|
|
December
31
|
|
September
30
|
|
December
31
|
|
December
31
|
|
December
31
|
|
thousands of
Canadian dollars, except per share amounts
|
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Net Interest
Income Non-Securitized Assets
|
|
|
|
|
|
|
|
|
|
|
|
Interest from
loans
|
$
|
158,938
|
$
|
167,159
|
$
|
190,389
|
$
|
710,926
|
$
|
768,034
|
|
Dividends from
securities
|
|
278
|
|
253
|
|
2,614
|
|
3,117
|
|
10,112
|
|
Other
interest
|
|
6,417
|
|
4,303
|
|
2,514
|
|
15,267
|
|
11,073
|
|
|
|
165,633
|
|
171,715
|
|
195,517
|
|
729,310
|
|
789,219
|
|
Interest on deposits
and other
|
|
70,330
|
|
75,430
|
|
78,868
|
|
294,685
|
|
318,162
|
|
Interest and fees on
line of credit facility
|
|
6,215
|
|
11,368
|
|
-
|
|
148,213
|
|
-
|
|
Net interest income
non-securitized assets
|
|
89,088
|
|
84,917
|
|
116,649
|
|
286,412
|
|
471,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest
Income Securitized Loans and Assets
|
|
|
|
|
|
|
|
|
|
|
|
Interest income from
securitized loans and assets
|
|
22,563
|
|
23,130
|
|
19,923
|
|
89,929
|
|
81,705
|
|
Interest expense on
securitization liabilities
|
|
19,933
|
|
19,285
|
|
15,952
|
|
73,411
|
|
67,598
|
|
Net interest income
securitized loans and assets
|
|
2,630
|
|
3,845
|
|
3,971
|
|
16,518
|
|
14,107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Net Interest
Income
|
|
91,718
|
|
88,762
|
|
120,620
|
|
302,930
|
|
485,164
|
|
Provision for credit
losses
|
|
3,434
|
|
(4,257)
|
|
2,400
|
|
7,516
|
|
7,890
|
|
|
|
88,284
|
|
93,019
|
|
118,220
|
|
295,414
|
|
477,274
|
|
Non-Interest
Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
Fees and other
income
|
|
16,346
|
|
18,087
|
|
17,613
|
|
67,932
|
|
71,329
|
|
Securitization
income
|
|
1,695
|
|
2,525
|
|
9,064
|
|
12,529
|
|
33,797
|
|
Gain on acquisition
of CFF Bank
|
|
-
|
|
-
|
|
-
|
|
-
|
|
651
|
|
Net realized and
unrealized losses on securities
|
|
-
|
|
(13,155)
|
|
-
|
|
(90,070)
|
|
(175)
|
|
Net realized and
unrealized losses on derivatives
|
|
(304)
|
|
(812)
|
|
(2,700)
|
|
(2,010)
|
|
(8,807)
|
|
|
17,737
|
|
6,645
|
|
23,977
|
|
(11,619)
|
|
96,795
|
|
|
106,021
|
|
99,664
|
|
142,197
|
|
283,795
|
|
574,069
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and
benefits
|
|
17,063
|
|
22,610
|
|
24,134
|
|
98,595
|
|
101,880
|
|
Premises
|
|
3,478
|
|
3,283
|
|
3,607
|
|
13,878
|
|
14,505
|
|
Other operating
expenses
|
|
44,949
|
|
34,031
|
|
43,287
|
|
162,407
|
|
122,554
|
|
|
65,490
|
|
59,924
|
|
71,028
|
|
274,880
|
|
238,939
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before
Income Taxes
|
|
40,531
|
|
39,740
|
|
71,169
|
|
8,915
|
|
335,130
|
|
Income
taxes
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
8,160
|
|
5,839
|
|
22,941
|
|
(2,475)
|
|
90,895
|
|
Deferred
|
|
1,752
|
|
3,918
|
|
(2,478)
|
|
3,863
|
|
(3,161)
|
|
|
9,912
|
|
9,757
|
|
20,463
|
|
1,388
|
-
|
87,734
|
|
NET
INCOME
|
$
|
30,619
|
$
|
29,983
|
$
|
50,706
|
$
|
7,527
|
$
|
247,396
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME PER
COMMON SHARE
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.38
|
$
|
0.37
|
$
|
0.79
|
$
|
0.10
|
$
|
3.71
|
|
Diluted
|
$
|
0.38
|
$
|
0.37
|
$
|
0.79
|
$
|
0.10
|
$
|
3.71
|
|
AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
80,246
|
|
80,246
|
|
64,479
|
|
72,349
|
|
66,601
|
|
Diluted
|
|
80,286
|
|
80,246
|
|
64,519
|
|
72,358
|
|
66,668
|
|
|
|
|
|
|
|
|
|
|
|
|
Total number of
outstanding common shares
|
|
80,246
|
|
80,246
|
|
64,388
|
|
80,246
|
|
64,388
|
|
Book value per common
share
|
$
|
22.60
|
$
|
22.20
|
$
|
25.36
|
$
|
22.60
|
$
|
25.36
|
|
Consolidated
Statements of Comprehensive Income
|
|
|
|
|
|
|
For the three months
ended
|
|
For the year
ended
|
|
December
31
|
September
30
|
December
31
|
December
31
|
December
31
|
|
thousands of
Canadian dollars
|
2017
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
$
|
30,619
|
$
|
29,983
|
$
|
50,706
|
$
|
7,527
|
$
|
247,396
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for Sale
Securities and Retained Interests
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized
gains
|
|
1,431
|
|
1,483
|
|
12,774
|
|
19,878
|
|
11,852
|
|
Net losses
reclassified to net income
|
|
-
|
|
-
|
|
-
|
|
46,650
|
|
204
|
|
|
1,431
|
|
1,483
|
|
12,774
|
|
66,528
|
|
12,056
|
|
Income tax
expense
|
|
378
|
|
394
|
|
3,391
|
|
17,644
|
|
3,179
|
|
|
1,053
|
|
1,089
|
|
9,383
|
|
48,884
|
|
8,877
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow
Hedges
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains
(losses)
|
|
356
|
|
(467)
|
|
(1,677)
|
|
(721)
|
|
1,035
|
|
Net (gains) losses
reclassified to net income
|
|
(68)
|
|
287
|
|
174
|
|
1,120
|
|
1,147
|
|
|
288
|
|
(180)
|
|
(1,503)
|
|
399
|
|
2,182
|
|
Income tax expense
(recovery)
|
|
78
|
|
(50)
|
|
(398)
|
|
112
|
|
580
|
|
|
210
|
|
(130)
|
|
(1,105)
|
|
287
|
|
1,602
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other
comprehensive income
|
|
1,263
|
|
959
|
|
8,278
|
|
49,171
|
|
10,479
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME
|
$
|
31,882
|
$
|
30,942
|
$
|
58,984
|
$
|
56,698
|
$
|
257,875
|
|
Consolidated
Statements of Changes in Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Unrealized
|
|
|
|
|
|
|
|
Losses
|
Net
Unrealized
|
Total
|
|
|
|
|
|
on Securities
and
|
Losses on
|
Accumulated
|
|
|
|
|
|
Retained
|
Cash Flow
|
Other
|
Total
|
|
thousands of
Canadian dollars,
|
Capital
|
Contributed
|
Retained
|
Interests
Available
|
Hedges,
|
Comprehensive
|
Shareholders'
|
|
except per share
amounts
|
Stock
|
Surplus
|
Earnings
|
for Sale, After
Tax
|
After Tax
|
Loss
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
December 31, 2016
|
$
|
84,910
|
$
|
4,562
|
$
|
1,598,180
|
$
|
(53,589)
|
$
|
(1,476)
|
$
|
(55,065)
|
$
|
1,632,587
|
|
Comprehensive
income
|
|
-
|
|
-
|
|
7,527
|
|
48,884
|
|
287
|
|
49,171
|
|
56,698
|
|
Stock options
settled
|
|
548
|
|
(141)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
407
|
|
Amortization of
fair value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
employee stock
options
|
|
-
|
|
557
|
|
-
|
|
-
|
|
-
|
|
-
|
|
557
|
|
Repurchase of
shares
|
|
(267)
|
|
-
|
|
(5,732)
|
|
-
|
|
-
|
|
-
|
|
(5,999)
|
|
Issuance of
shares
|
|
145,965
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
145,965
|
|
Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($0.26 per
share)
|
|
-
|
|
-
|
|
(16,710)
|
|
-
|
|
-
|
|
-
|
|
(16,710)
|
|
Balance at
December 31, 2017
|
$
|
231,156
|
$
|
4,978
|
$
|
1,583,265
|
$
|
(4,705)
|
$
|
(1,189)
|
$
|
(5,894)
|
$
|
1,813,505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December
31, 2015
|
$
|
90,247
|
$
|
3,965
|
$
|
1,607,833
|
$
|
(62,466)
|
$
|
(3,078)
|
$
|
(65,544)
|
$
|
1,636,501
|
|
Comprehensive
income
|
|
-
|
|
-
|
|
247,396
|
|
8,877
|
|
1,602
|
|
10,479
|
|
257,875
|
|
Stock options
settled
|
|
1,984
|
|
(530)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1,454
|
|
Amortization of fair
value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
employee stock
options
|
|
-
|
|
1,127
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1,127
|
|
Repurchase of
shares
|
|
(7,321)
|
|
-
|
|
(191,875)
|
|
-
|
|
-
|
|
-
|
|
(199,196)
|
|
Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($0.98 per
share)
|
|
-
|
|
-
|
|
(65,174)
|
|
-
|
|
-
|
|
-
|
|
(65,174)
|
|
Balance at December
31, 2016
|
$
|
84,910
|
$
|
4,562
|
$
|
1,598,180
|
$
|
(53,589)
|
$
|
(1,476)
|
$
|
(55,065)
|
$
|
1,632,587
|
|
Consolidated
Statements of Cash Flows
|
|
|
|
For the three months
ended
|
For the year
ended
|
|
|
|
|
December
31
|
|
December
31
|
|
December
31
|
|
December
31
|
|
thousands of
Canadian dollars
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Net income for the
period
|
$
|
30,619
|
$
|
50,706
|
$
|
7,527
|
$
|
247,396
|
|
Adjustments to
determine cash flows relating to operating activities:
|
|
|
|
|
|
|
|
|
|
Amortization of net
discount on securities
|
|
-
|
|
(79)
|
|
(330)
|
|
(458)
|
|
Provision for credit
losses
|
|
3,434
|
|
2,400
|
|
7,516
|
|
7,890
|
|
Loss on sale of loan
portfolio
|
|
-
|
|
-
|
|
18,160
|
|
-
|
|
Gain on sale of
mortgages or residual interest
|
|
(163)
|
|
(7,006)
|
|
(5,695)
|
|
(26,972)
|
|
Net realized and
unrealized losses on securities
|
|
-
|
|
-
|
|
71,910
|
|
175
|
|
Amortization and
impairment losses¹
|
|
12,035
|
|
18,104
|
|
34,345
|
|
29,686
|
|
Amortization of fair
value of employee stock options
|
|
(118)
|
|
322
|
|
557
|
|
1,127
|
|
Deferred income
taxes
|
|
1,752
|
|
(2,478)
|
|
3,863
|
|
(3,161)
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
|
|
Loans, net of gains
or losses on securitization and sales
|
|
361,955
|
|
(28,184)
|
|
2,947,462
|
|
253,837
|
|
Restricted
assets
|
|
(147,141)
|
|
(34,139)
|
|
(171,637)
|
|
(69,453)
|
|
Derivative assets and
liabilities
|
|
10,676
|
|
15,682
|
|
65,836
|
|
27,497
|
|
Accrued interest
receivable
|
|
1,385
|
|
(506)
|
|
10,613
|
|
2,668
|
|
Accrued interest
payable
|
|
5,435
|
|
(1,855)
|
|
3,666
|
|
(1,312)
|
|
Deposits
|
|
(1,188,164)
|
|
191,928
|
|
(3,715,576)
|
|
220,072
|
|
Securitization
liabilities
|
|
(76,930)
|
|
(30,562)
|
|
528,100
|
|
(130,907)
|
|
Taxes receivable or
payable and other
|
|
(13,923)
|
|
(1,489)
|
|
13,086
|
|
2,757
|
|
Cash flows (used in)
provided by operating activities
|
|
(999,148)
|
|
172,844
|
|
(180,597)
|
|
560,842
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Issuance of
shares
|
|
-
|
|
-
|
|
145,965
|
|
-
|
|
Repurchase of
shares
|
|
-
|
|
(5,678)
|
|
(5,999)
|
|
(199,196)
|
|
Exercise of employee
stock options
|
|
-
|
|
856
|
|
407
|
|
1,454
|
|
Repayment of senior
debt
|
|
-
|
|
-
|
|
-
|
|
(150,000)
|
|
Dividends paid to
shareholders
|
|
-
|
|
(16,770)
|
|
(16,710)
|
|
(65,174)
|
|
Cash flows (used in)
provided by financing activities
|
|
-
|
|
(21,592)
|
|
123,663
|
|
(412,916)
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Activity in
securities
|
|
|
|
|
|
|
|
|
|
Purchases
|
|
(73,168)
|
|
(2,978)
|
|
(378,123)
|
|
(203,674)
|
|
Proceeds from
sales
|
|
-
|
|
-
|
|
491,883
|
|
-
|
|
Proceeds from
maturities
|
|
73,701
|
|
3,992
|
|
84,919
|
|
132,932
|
|
Purchases of capital
assets
|
|
(314)
|
|
(460)
|
|
(1,715)
|
|
(2,550)
|
|
Capitalized
intangible development costs and acquisition of intangible
assets
|
|
(2,693)
|
|
(5,352)
|
|
(9,286)
|
|
(19,089)
|
|
Cash flows (used in)
provided by investing activities
|
|
(2,474)
|
|
(4,798)
|
|
187,678
|
|
(92,381)
|
|
Net
(decrease) increase in cash and cash equivalents during the
period
|
|
(1,001,622)
|
|
146,454
|
|
130,744
|
|
55,545
|
|
Cash and cash
equivalents at beginning of the period
|
|
2,337,760
|
|
1,058,940
|
|
1,205,394
|
|
1,149,849
|
|
Cash and Cash
Equivalents at End of the Period
|
$
|
1,336,138
|
$
|
1,205,394
|
$
|
1,336,138
|
$
|
1,205,394
|
|
Supplementary
Disclosure of Cash Flow Information
|
|
|
|
|
|
|
|
|
|
Dividends received on
investments
|
$
|
274
|
$
|
1,898
|
$
|
4,542
|
$
|
10,037
|
|
Interest
received
|
|
189,307
|
|
212,920
|
|
825,030
|
|
863,321
|
|
Interest
paid
|
|
95,413
|
|
96,675
|
|
512,643
|
|
388,440
|
|
Income taxes
paid
|
|
6,988
|
|
16,314
|
|
3,002
|
|
84,559
|
|
1
Amortization and impairment losses include amortization on capital
and intangible assets and impairment losses on intangible assets
and goodwill.
|
|
|
Net Interest
Margin
|
|
|
|
For the three months
ended
|
For the year
ended
|
|
December
31
|
September
30
|
December
31
|
December
31
|
December
31
|
|
2017
|
2017
|
2016
|
2017
|
2016
|
|
Net interest margin
non-securitized interest-earning assets (non-TEB)
|
2.46%
|
2.21%
|
2.71%
|
1.79%
|
2.71%
|
|
Net interest margin
non-securitized interest-earning assets (TEB)
|
2.46%
|
2.21%
|
2.73%
|
1.80%
|
2.73%
|
|
Net interest margin
CMHC-sponsored securitized assets
|
0.30%
|
0.43%
|
0.53%
|
0.48%
|
0.47%
|
|
Net interest margin
bank-sponsored securitization conduit assets
|
0.99%
|
1.17%
|
1.90%
|
1.37%
|
1.90%
|
|
Total net interest
margin (non-TEB)
|
2.02%
|
1.85%
|
2.36%
|
1.54%
|
2.35%
|
|
Total net interest
margin (TEB)
|
2.02%
|
1.85%
|
2.38%
|
1.55%
|
2.37%
|
|
Spread of
non-securitized loans over deposits and credit
facilities
|
2.84%
|
2.62%
|
2.86%
|
1.96%
|
2.91%
|
|
Net Interest
Income
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
December 31,
2017
|
September 30,
2017
|
December 31,
2016
|
|
(000s, except
%)
|
|
Income/
|
Average
|
|
Income/
|
Average
|
|
Income/
|
Average
|
|
|
Expense
|
Rate1
|
|
Expense
|
Rate1
|
|
Expense
|
Rate1
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Cash resources and
securities
|
$
|
6,695
|
1.12%
|
$
|
4,556
|
0.75%
|
$
|
5,128
|
1.31%
|
|
Traditional
single-family residential mortgages
|
|
115,118
|
4.88%
|
|
122,489
|
4.82%
|
|
131,029
|
4.75%
|
|
ACE Plus
single-family residential mortgages
|
|
3,732
|
3.94%
|
|
3,612
|
3.62%
|
|
3,344
|
3.38%
|
|
Accelerator
single-family residential mortgages2
|
|
3,442
|
3.72%
|
|
2,763
|
3.98%
|
|
6,505
|
2.24%
|
|
Residential
commercial mortgages
|
|
1,881
|
4.98%
|
|
2,063
|
5.98%
|
|
4,291
|
3.99%
|
|
Non-residential
commercial mortgages
|
|
16,257
|
6.25%
|
|
18,777
|
6.12%
|
|
28,233
|
5.93%
|
|
Credit card loans and
lines of credit
|
|
8,021
|
9.03%
|
|
8,327
|
8.99%
|
|
8,389
|
9.02%
|
|
Other consumer retail
loans
|
|
10,487
|
11.39%
|
|
9,128
|
10.11%
|
|
8,598
|
9.32%
|
|
Total non-securitized
loans
|
|
158,938
|
5.25%
|
|
167,159
|
5.16%
|
|
190,389
|
4.86%
|
|
Taxable equivalent
adjustment
|
|
100
|
-
|
|
91
|
-
|
|
944
|
-
|
|
Total non-securitized
assets
|
|
165,733
|
4.57%
|
|
171,806
|
4.47%
|
|
196,461
|
4.56%
|
|
CMHC-sponsored
securitized single-family residential mortgages
|
|
13,891
|
2.40%
|
|
13,718
|
2.27%
|
|
11,115
|
2.50%
|
|
CMHC-sponsored
securitized multi-unit residential mortgages
|
|
7,115
|
5.04%
|
|
7,718
|
5.31%
|
|
7,197
|
4.63%
|
|
Assets pledged as
collateral for CMHC-sponsored securitization
|
|
343
|
1.20%
|
|
122
|
0.68%
|
|
495
|
1.35%
|
|
Total CMHC-sponsored
securitized residential mortgages
|
|
21,349
|
2.85%
|
|
21,558
|
2.81%
|
|
18,807
|
2.96%
|
|
Bank-sponsored
securitization conduit assets
|
|
1,214
|
2.98%
|
$
|
1,572
|
3.26%
|
$
|
1,116
|
3.53%
|
|
Total
assets
|
$
|
188,296
|
4.15%
|
|
194,936
|
4.06%
|
|
216,384
|
4.24%
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
Deposits and credit
facilities
|
$
|
76,545
|
2.41%
|
$
|
86,798
|
2.54%
|
$
|
78,868
|
2.00%
|
|
CMHC-sponsored
securitization liabilities
|
|
19,121
|
2.51%
|
|
18,277
|
2.37%
|
|
15,438
|
2.41%
|
|
Bank-sponsored
securitization conduit liabilities
|
|
812
|
2.04%
|
|
1,008
|
2.16%
|
|
514
|
1.61%
|
|
Other liabilities and
shareholders' equity
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
Total liabilities
and shareholders' equity
|
$
|
96,478
|
2.13%
|
$
|
106,083
|
2.21%
|
$
|
94,820
|
1.86%
|
|
Net Interest
Income (TEB)
|
$
|
91,818
|
|
$
|
88,853
|
|
$
|
121,564
|
|
|
Taxable Equivalent
Adjustment
|
|
(100)
|
|
|
(91)
|
|
|
(944)
|
|
|
Net Interest
Income per Financial Statements
|
$
|
91,718
|
|
$
|
88,762
|
|
$
|
120,620
|
|
|
|
|
2017
|
|
|
2016
|
|
(000s, except
%)
|
|
Income/
|
Average
|
|
Income/
|
Average
|
|
|
Expense
|
Rate1
|
|
Expense
|
Rate1
|
|
Assets
|
|
|
|
|
|
|
|
Cash resources and
securities
|
$
|
18,384
|
0.94%
|
$
|
21,185
|
1.25%
|
|
Traditional
single-family residential mortgages
|
|
500,278
|
4.75%
|
|
540,522
|
4.84%
|
|
ACE Plus
single-family residential mortgages
|
|
14,284
|
3.61%
|
|
11,490
|
3.31%
|
|
Accelerator
single-family residential mortgages2
|
|
13,974
|
2.81%
|
|
30,935
|
2.38%
|
|
Residential
commercial mortgages
|
|
13,173
|
4.84%
|
|
17,614
|
4.12%
|
|
Non-residential
commercial mortgages
|
|
97,421
|
6.03%
|
|
102,465
|
6.01%
|
|
Credit card loans and
lines of credit
|
|
33,328
|
8.93%
|
|
33,536
|
8.99%
|
|
Other consumer retail
loans
|
|
38,468
|
10.11%
|
|
31,472
|
9.22%
|
|
Total non-securitized
loans
|
|
710,926
|
5.05%
|
|
768,034
|
4.90%
|
|
Taxable equivalent
adjustment
|
|
1,125
|
-
|
|
3,654
|
-
|
|
Total non-securitized
assets
|
|
730,435
|
4.56%
|
|
792,873
|
4.56%
|
|
CMHC-sponsored
securitized single-family residential mortgages
|
|
52,053
|
2.35%
|
|
46,642
|
2.60%
|
|
CMHC-sponsored
securitized multi-unit residential mortgages
|
|
30,782
|
5.25%
|
|
29,866
|
4.58%
|
|
Assets pledged as
collateral for CMHC-sponsored securitization
|
|
943
|
1.17%
|
|
2,246
|
0.96%
|
|
Total CMHC-sponsored
securitized residential mortgages
|
|
83,778
|
2.91%
|
|
78,754
|
2.94%
|
|
Bank-sponsored
securitization conduit assets
|
|
6,151
|
3.22%
|
|
2,951
|
3.43%
|
|
Total
assets
|
$
|
820,364
|
4.19%
|
$
|
874,578
|
4.24%
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
Deposits and credit
facilities
|
$
|
442,898
|
3.09%
|
$
|
315,919
|
1.99%
|
|
Senior
debt
|
|
-
|
-
|
|
2,243
|
3.91%
|
|
CMHC-sponsored
securitization liabilities
|
|
69,872
|
2.41%
|
|
66,278
|
2.44%
|
|
Bank-sponsored
securitization conduit liabilities
|
|
3,539
|
1.88%
|
|
1,320
|
1.58%
|
|
Other liabilities and
shareholders' equity
|
|
-
|
-
|
|
-
|
-
|
|
Total liabilities
and shareholders' equity
|
$
|
516,309
|
2.64%
|
$
|
385,760
|
1.87%
|
|
Net Interest
Income (TEB)
|
$
|
304,055
|
|
$
|
488,818
|
|
|
Taxable Equivalent
Adjustment
|
|
(1,125)
|
|
|
(3,654)
|
|
|
Net Interest
Income per Financial Statements
|
$
|
302,930
|
|
$
|
485,164
|
|
|
1 The
average is calculated with reference to opening and closing monthly
asset and liability and shareholders' equity balances.
|
|
2
Residential commercial mortgages include non-securitized multi-unit
residential mortgages and commercial mortgages secured by
residential property types.
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage
Advances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
For the year
ended
|
|
|
|
December
31
|
|
September
30
|
|
December
31
|
|
December
31
|
|
December
31
|
|
(000s)
|
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Single-family
residential mortgages
|
|
|
|
|
|
|
|
|
|
|
|
Traditional
|
$
|
515,699
|
$
|
201,131
|
$
|
1,325,896
|
$
|
2,875,535
|
$
|
4,991,051
|
|
ACE Plus
|
|
21,713
|
|
1,541
|
|
106,477
|
|
185,283
|
|
407,767
|
|
Accelerator
|
|
28,635
|
|
21,292
|
|
346,690
|
|
281,773
|
|
1,622,003
|
|
Residential
commercial mortgages
|
|
|
|
|
|
|
|
|
|
|
|
Multi-unit uninsured
residential mortgages
|
|
17,568
|
|
-
|
|
53,999
|
|
71,854
|
|
142,026
|
|
Multi-unit insured
residential mortgages
|
|
177,224
|
|
99,054
|
|
293,306
|
|
599,843
|
|
956,406
|
|
Other1
|
|
-
|
|
-
|
|
24,179
|
|
6,815
|
|
50,772
|
|
Non-residential
commercial mortgages
|
|
|
|
|
|
|
|
|
|
|
|
Stores and
apartments
|
|
1,870
|
|
-
|
|
14,878
|
|
45,499
|
|
80,888
|
|
Commercial
|
|
109,343
|
|
62,047
|
|
262,423
|
|
654,247
|
|
974,864
|
|
Total mortgage
advances
|
$
|
872,052
|
$
|
385,065
|
$
|
2,427,848
|
$
|
4,720,849
|
$
|
9,225,777
|
|
1 Other
residential commercial mortgages include mortgages such as
builders' inventory.
|
|
Provision for
Credit Losses and Net Write-offs as a Percentage of Gross Loans on
an Annualized Basis
|
|
|
For the three months
ended
|
|
(000s, except
%)
|
December 31,
2017
|
September 30,
2017
|
December 31,
2016
|
|
|
% of
Gross
|
|
% of Gross
|
|
% of Gross
|
|
Amount
|
Loans
1
|
Amount
|
Loans1
|
Amount
|
Loans1
|
|
Provision2
|
|
|
|
|
|
|
|
|
|
|
Single-family
residential mortgages
|
$
|
266
|
0.01%
|
$
|
1,165
|
0.04%
|
$
|
1,029
|
0.03%
|
|
Residential
commercial mortgages
|
|
(9)
|
(0.03)%
|
|
6
|
0.02%
|
|
2
|
0.00%
|
|
Non-residential
commercial mortgages3
|
|
2,584
|
0.99%
|
|
202
|
0.08%
|
|
45
|
0.01%
|
|
Credit card loans and
lines of credit
|
|
485
|
0.55%
|
|
756
|
0.83%
|
|
1,164
|
1.26%
|
|
Other consumer retail
loans
|
|
108
|
0.12%
|
|
114
|
0.12%
|
|
160
|
0.17%
|
|
Securitized
single-family residential mortgages
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
Securitized
multi-unit residential mortgages
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
Total individual
provision
|
|
3,434
|
0.09%
|
|
2,243
|
0.06%
|
|
2,400
|
0.05%
|
|
Total collective
provision
|
|
-
|
-
|
|
(6,500)
|
(0.17)%
|
|
-
|
-
|
|
Total
provision
|
$
|
3,434
|
0.09%
|
$
|
(4,257)
|
(0.11)%
|
$
|
2,400
|
0.05%
|
|
Net
Write-Offs2
|
|
|
|
|
|
|
|
|
|
|
Single-family
residential mortgages
|
$
|
489
|
0.02%
|
$
|
506
|
0.02%
|
$
|
440
|
0.01%
|
|
Residential
commercial mortgages
|
|
17
|
0.06%
|
|
4
|
0.02%
|
|
2
|
0.00%
|
|
Non-residential
commercial mortgages
|
|
14
|
0.01%
|
|
33
|
0.01%
|
|
(5)
|
(0.00)%
|
|
Credit card loans and
lines of credit4
|
|
3,288
|
3.74%
|
|
637
|
0.70%
|
|
469
|
0.51%
|
|
Other consumer retail
loans
|
|
138
|
0.15%
|
|
73
|
0.08%
|
|
48
|
0.05%
|
|
Securitized
single-family residential mortgages
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
Securitized
multi-unit residential mortgages
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
Net
write-offs
|
$
|
3,946
|
0.11%
|
$
|
1,253
|
0.03%
|
$
|
954
|
0.02%
|
|
|
|
|
|
(000s, except
%)
|
|
2017
|
2016
|
|
|
|
|
|
% of
Gross
|
|
% of Gross
|
|
|
|
|
Amount
|
Loans1
|
Amount
|
Loans1
|
|
Provision2
|
|
|
|
|
|
|
|
|
|
|
Single-family
residential mortgages
|
|
|
|
$
|
1,891
|
0.02%
|
$
|
3,917
|
0.03%
|
|
Residential
commercial mortgages
|
|
|
|
|
16
|
0.01%
|
|
2
|
0.00%
|
|
Non-residential
commercial mortgages3
|
|
|
|
|
3,196
|
0.31%
|
|
246
|
0.01%
|
|
Credit card loans and
lines of credit
|
|
|
|
|
5,387
|
1.53%
|
|
2,379
|
0.64%
|
|
Other consumer retail
loans
|
|
|
|
|
526
|
0.15%
|
|
532
|
0.14%
|
|
Securitized
single-family residential mortgages
|
|
|
|
|
-
|
-
|
|
-
|
-
|
|
Securitized
multi-unit residential mortgages
|
|
|
|
|
-
|
-
|
|
-
|
-
|
|
Total individual
provision
|
|
|
|
|
11,016
|
0.07%
|
|
7,076
|
0.04%
|
|
Total collective
provision
|
|
|
|
|
(3,500)
|
(0.02)%
|
|
814
|
0.00%
|
|
Total
provision
|
|
|
|
$
|
7,516
|
0.05%
|
$
|
7,890
|
0.04%
|
|
Net
Write-Offs2
|
|
|
|
|
|
|
|
|
|
|
Single-family
residential mortgages
|
|
|
|
$
|
2,467
|
0.02%
|
$
|
3,087
|
0.02%
|
|
Residential
commercial mortgages
|
|
|
|
|
16
|
0.01%
|
|
2
|
0.00%
|
|
Non-residential
commercial mortgages
|
|
|
|
|
96
|
0.01%
|
|
515
|
0.03%
|
|
Credit card loans and
lines of credit4
|
|
|
|
|
5,710
|
1.62%
|
|
1,928
|
0.52%
|
|
Other consumer retail
loans
|
|
|
|
|
666
|
0.18%
|
|
275
|
0.07%
|
|
Securitized
single-family residential mortgages
|
|
|
|
|
-
|
-
|
|
-
|
-
|
|
Securitized
multi-unit residential mortgages
|
|
|
|
|
-
|
-
|
|
-
|
-
|
|
Net
write-offs
|
|
|
|
$
|
8,955
|
0.06%
|
$
|
5,807
|
0.03%
|
|
1 Gross
loans used in the calculation of total Company ratio include
securitized on-balance sheet loans.
|
|
2 There
were no individual provisions, allowances or net write-offs on
securitized mortgages.
|
|
3
Provision for credit losses includes an individual provision of
$2.2 million in Q4 2017 and $2.5 million for the year resulting
from a non-residential commercial property that is not considered
to be indicative of increased credit exposure in the remainder of
the portfolio.
|
|
4
Write-offs for credit card loans for the three months ended
December 31, 2017 includes $2.3 million related to the non-core
prepaid card business which was recognized in provision for credit
losses in the first quarter of 2017.
|
|
Loans by
Geographic Region and Type (net of individual allowances for credit
losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(000s, except
%)
|
|
|
|
As at December 31,
2017
|
|
British
|
|
|
|
|
|
|
|
Columbia
|
Alberta
|
Ontario
|
Quebec
|
|
Other
|
|
Total
|
|
Securitized
single-family residential mortgages1
|
$
|
228,024
|
$
|
278,110
|
$
|
1,666,337
|
$
|
84,977
|
$
|
177,760
|
$
|
2,435,208
|
|
Securitized
multi-unit residential mortgages
|
|
84,860
|
|
44,728
|
|
227,686
|
|
45,664
|
|
155,104
|
|
558,042
|
|
Total securitized
mortgages
|
|
312,884
|
|
322,838
|
|
1,894,023
|
|
130,641
|
|
332,864
|
|
2,993,250
|
|
Single-family
residential mortgages
|
|
525,998
|
|
366,537
|
|
8,687,274
|
|
251,240
|
|
204,473
|
|
10,035,522
|
|
Residential
commercial mortgages2
|
|
9,819
|
|
1,924
|
|
96,817
|
|
3,037
|
|
2,760
|
|
114,357
|
|
Non-residential
commercial mortgages
|
|
18,853
|
|
10,638
|
|
986,723
|
|
24,190
|
|
2,449
|
|
1,042,853
|
|
Credit card loans and
lines of credit
|
|
6,193
|
|
17,183
|
|
321,114
|
|
1,473
|
|
5,642
|
|
351,605
|
|
Other consumer retail
loans
|
|
1,948
|
|
11,476
|
|
330,119
|
|
195
|
|
17,152
|
|
360,890
|
|
Total non-securitized
mortgages and loans3
|
|
562,811
|
|
407,758
|
|
10,422,047
|
|
280,135
|
|
232,476
|
|
11,905,227
|
|
$
|
875,695
|
$
|
730,596
|
$
|
12,316,070
|
$
|
410,776
|
$
|
565,340
|
$
|
14,898,477
|
|
As a % of
portfolio
|
|
5.9%
|
|
4.9%
|
|
82.6%
|
|
2.8%
|
|
3.8%
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(000s, except
%)
|
|
|
|
|
|
|
|
|
|
As at September 30,
2017
|
|
|
British
|
|
|
|
|
|
|
|
|
|
|
|
|
Columbia
|
|
Alberta
|
|
Ontario
|
|
Quebec
|
|
Other
|
|
Total
|
|
Securitized
single-family residential mortgages1
|
$
|
243,686
|
$
|
278,181
|
$
|
1,776,505
|
$
|
89,518
|
$
|
175,379
|
$
|
2,563,269
|
|
Securitized
multi-unit residential mortgages
|
|
85,277
|
|
45,009
|
|
238,250
|
|
46,168
|
|
155,933
|
|
570,637
|
|
Total securitized
mortgages
|
|
328,963
|
|
323,190
|
|
2,014,755
|
|
135,686
|
|
331,312
|
|
3,133,906
|
|
Single-family
residential mortgages
|
|
554,951
|
|
359,120
|
|
9,044,266
|
|
261,728
|
|
179,204
|
|
10,399,269
|
|
Residential
commercial mortgages2
|
|
9,751
|
|
3,789
|
|
83,033
|
|
3,039
|
|
75
|
|
99,687
|
|
Non-residential
commercial mortgages
|
|
3,783
|
|
13,631
|
|
997,287
|
|
15,738
|
|
2,510
|
|
1,032,949
|
|
Credit card loans and
lines of credit
|
|
6,515
|
|
17,674
|
|
330,256
|
|
1,549
|
|
5,793
|
|
361,787
|
|
Other consumer retail
loans
|
|
2,088
|
|
16,963
|
|
330,142
|
|
218
|
|
12,321
|
|
361,732
|
|
Total non-securitized
mortgages and loans3
|
|
577,088
|
|
411,177
|
|
10,784,984
|
|
282,272
|
|
199,903
|
|
12,255,424
|
|
$
|
906,051
|
$
|
734,367
|
$
|
12,799,739
|
$
|
417,958
|
$
|
531,215
|
$
|
15,389,330
|
|
As a % of
portfolio
|
|
5.9%
|
|
4.8%
|
|
83.2%
|
|
2.7%
|
|
3.5%
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(000s, except
%)
|
|
|
|
|
|
|
|
|
|
As at December 31,
2016
|
|
|
British
|
|
|
|
|
|
|
|
|
|
|
|
|
Columbia
|
|
Alberta
|
|
Ontario
|
|
Quebec
|
|
Other
|
|
Total
|
|
Securitized
single-family residential mortgages1
|
$
|
200,882
|
$
|
211,131
|
$
|
1,298,919
|
$
|
68,229
|
$
|
127,450
|
$
|
1,906,611
|
|
Securitized
multi-unit residential mortgages
|
|
86,479
|
|
45,819
|
|
281,923
|
|
47,638
|
|
158,334
|
|
620,193
|
|
Total securitized
mortgages
|
|
287,361
|
|
256,950
|
|
1,580,842
|
|
115,867
|
|
285,784
|
|
2,526,804
|
|
Single-family
residential mortgages
|
|
688,939
|
|
401,820
|
|
10,796,570
|
|
326,253
|
|
208,426
|
|
12,422,008
|
|
Residential
commercial mortgages2
|
|
15,387
|
|
21,271
|
|
232,819
|
|
24,058
|
|
11,653
|
|
305,188
|
|
Non-residential
commercial mortgages
|
|
48,335
|
|
58,688
|
|
1,795,461
|
|
35,820
|
|
16,516
|
|
1,954,820
|
|
Credit card loans and
lines of credit
|
|
7,548
|
|
20,265
|
|
333,903
|
|
1,253
|
|
6,709
|
|
369,678
|
|
Other consumer retail
loans
|
|
950
|
|
20,492
|
|
354,356
|
|
-
|
|
3,103
|
|
378,901
|
|
Total non-securitized
mortgages and loans3
|
|
761,159
|
|
522,536
|
|
13,513,109
|
|
387,384
|
|
246,407
|
|
15,430,595
|
|
$
|
1,048,520
|
$
|
779,486
|
$
|
15,093,951
|
$
|
503,251
|
$
|
532,191
|
$
|
17,957,399
|
|
As a % of
portfolio
|
|
5.8%
|
|
4.3%
|
|
84.1%
|
|
2.8%
|
|
3.0%
|
|
100.0%
|
|
1
Securitized single-family residential mortgages include both
CMHC-sponsored securitized insured mortgages and bank-sponsored
securitization conduit uninsured mortgages.
|
|
2
Residential commercial mortgages include non-securitized multi-unit
residential mortgages and commercial mortgages secured by
residential property types.
|
|
3 Loans
exclude mortgages held for sale.
|
|
Impaired Loans and
Individual Allowances for Credit Losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(000s, except
%)
|
|
|
|
|
|
As at December 31,
2017
|
|
Single-family
|
|
Residential
|
Non-residential
|
|
Credit
Card
|
|
Other
|
|
|
|
|
Residential
|
|
Commercial
|
|
Commercial
|
|
Loans and
|
|
Consumer
|
|
|
|
|
Mortgages
|
|
Mortgages
|
|
Mortgages
|
Lines of
Credit
|
Retail
Loans
|
|
Total
|
|
Gross amount of
impaired loans
|
$
|
31,836
|
$
|
-
|
$
|
16,489
|
$
|
2,038
|
$
|
276
|
$
|
50,639
|
|
Individual allowances
on principal
|
|
(1,729)
|
|
-
|
|
(2,750)
|
|
(457)
|
|
(276)
|
|
(5,212)
|
|
Net amount of
impaired loans
|
$
|
30,107
|
$
|
-
|
$
|
13,739
|
$
|
1,581
|
$
|
-
|
$
|
45,427
|
|
Net impaired loans as
a % of gross loans
|
|
0.30%
|
|
-
|
|
1.31%
|
|
0.45%
|
|
-
|
|
0.30%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(000s, except
%)
|
|
|
|
|
|
|
|
|
As at September 30,
2017
|
|
|
Single-family
|
|
Residential
|
Non-residential
|
|
Credit
Card
|
|
Other
|
|
|
|
|
Residential
|
|
Commercial
|
|
Commercial
|
|
Loans and
|
|
Consumer
|
|
|
|
|
Mortgages
|
|
Mortgages
|
|
Mortgages
|
Lines of
Credit
|
Retail
Loans
|
|
Total
|
|
Gross amount of
impaired loans
|
$
|
37,978
|
$
|
337
|
$
|
6,521
|
$
|
4,230
|
$
|
304
|
$
|
49,370
|
|
Individual allowances
on principal
|
|
(1,860)
|
|
-
|
|
(300)
|
|
(3,260)
|
|
(304)
|
|
(5,724)
|
|
Net amount of
impaired loans
|
$
|
36,118
|
$
|
337
|
$
|
6,221
|
$
|
970
|
$
|
-
|
$
|
43,646
|
|
Net impaired loans as
a % of gross loans
|
|
0.35%
|
|
-
|
|
0.60%
|
|
0.27%
|
|
-
|
|
0.28%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(000s, except
%)
|
|
|
|
|
|
|
|
|
As at December 31,
2016
|
|
|
Single-Family
|
|
Residential
|
Non-Residential
|
|
Credit
Card
|
|
Other
|
|
|
|
|
Residential
|
|
Commercial
|
|
Commercial
|
|
Loans and
|
|
Consumer
|
|
|
|
|
Mortgages
|
|
Mortgages
|
|
Mortgages
|
Lines of
Credit
|
Retail
Loans
|
|
Total
|
|
Gross amount of
impaired loans
|
$
|
49,834
|
$
|
-
|
$
|
4,577
|
$
|
2,049
|
$
|
411
|
$
|
56,871
|
|
Individual allowances
on principal
|
|
(1,980)
|
|
-
|
|
(30)
|
|
(780)
|
|
(411)
|
|
(3,201)
|
|
Net amount of
impaired loans
|
$
|
47,854
|
$
|
-
|
$
|
4,547
|
$
|
1,269
|
$
|
-
|
$
|
53,670
|
|
Net impaired loans as
a % of gross loans
|
|
0.39%
|
|
0.00%
|
|
0.23%
|
|
0.34%
|
|
-
|
|
0.30%
|
|
Allowance for
Credit Losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(000s)
|
|
|
|
|
|
For the three
months ended December 31, 2017
|
|
Single-family
|
Residential
|
Non-residential
|
|
Credit
Card
|
|
Other
|
|
|
|
Residential
|
Commercial
|
|
Commercial
|
|
Loans and
|
Consumer
|
|
|
|
|
Mortgages
|
Mortgages
|
|
Mortgages
|
Lines of
Credit
|
Retail
Loans
|
|
Total
|
|
Individual
allowances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance on loan
principal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the
beginning of the period
|
$
|
1,860
|
$
|
-
|
$
|
300
|
$
|
3,260
|
$
|
304
|
$
|
5,724
|
|
Provision for credit
losses
|
|
358
|
|
17
|
|
2,464
|
|
485
|
|
110
|
|
3,434
|
|
Write-offs1
|
|
(760)
|
|
(17)
|
|
(21)
|
|
(3,366)
|
|
(186)
|
|
(4,350)
|
|
Recoveries
|
|
271
|
|
-
|
|
7
|
|
78
|
|
48
|
|
404
|
|
|
1,729
|
|
-
|
|
2,750
|
|
457
|
|
276
|
|
5,212
|
|
Allowance on accrued
interest receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the
beginning of the period
|
|
1,108
|
|
26
|
|
358
|
|
-
|
|
9
|
|
1,501
|
|
Provision for credit
losses
|
|
(92)
|
|
(26)
|
|
120
|
|
-
|
|
(2)
|
|
-
|
|
|
1,016
|
|
-
|
|
478
|
|
-
|
|
7
|
|
1,501
|
|
Total individual
allowance
|
|
2,745
|
|
-
|
|
3,228
|
|
457
|
|
283
|
|
6,713
|
|
Collective
allowance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the
beginning of the period
|
|
23,032
|
|
327
|
|
6,000
|
|
3,904
|
|
300
|
|
33,563
|
|
Provision for credit
losses2
|
|
(2,692)
|
|
-
|
|
-
|
|
(808)
|
|
3,500
|
|
-
|
|
|
20,340
|
|
327
|
|
6,000
|
|
3,096
|
|
3,800
|
|
33,563
|
|
Total
allowance
|
$
|
23,085
|
$
|
327
|
$
|
9,228
|
$
|
3,553
|
$
|
4,083
|
$
|
40,276
|
|
Total
provision
|
$
|
(2,426)
|
$
|
(9)
|
$
|
2,584
|
$
|
(323)
|
$
|
3,608
|
$
|
3,434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(000s)
|
|
|
|
|
|
For the three months
ended September 30, 2017
|
|
Single-family
|
Residential
|
Non-residential
|
|
Credit
Card
|
|
Other
|
|
|
|
Residential
|
Commercial
|
|
Commercial
|
|
Loans and
|
Consumer
|
|
|
|
|
Mortgages
|
Mortgages
|
|
Mortgages
|
Lines of
Credit
|
Retail
Loans
|
|
Total
|
|
Individual
allowances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance on loan
principal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the
beginning of the period
|
$
|
1,302
|
$
|
-
|
$
|
141
|
$
|
3,141
|
$
|
264
|
$
|
4,848
|
|
Provision for credit
losses
|
|
1,064
|
|
4
|
|
192
|
|
756
|
|
113
|
|
2,129
|
|
Write-offs
|
|
(651)
|
|
(4)
|
|
(33)
|
|
(705)
|
|
(136)
|
|
(1,529)
|
|
Recoveries
|
|
145
|
|
-
|
|
-
|
|
68
|
|
63
|
|
276
|
|
|
1,860
|
|
-
|
|
300
|
|
3,260
|
|
304
|
|
5,724
|
|
Allowance on accrued
interest receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the
beginning of the period
|
|
1,007
|
|
24
|
|
348
|
|
-
|
|
8
|
|
1,387
|
|
Provision for credit
losses
|
|
101
|
|
2
|
|
10
|
|
-
|
|
1
|
|
114
|
|
|
1,108
|
|
26
|
|
358
|
|
-
|
|
9
|
|
1,501
|
|
Total individual
allowance
|
|
2,968
|
|
26
|
|
658
|
|
3,260
|
|
313
|
|
7,225
|
|
Collective
allowance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the
beginning of the period
|
|
23,032
|
|
327
|
|
12,500
|
|
3,904
|
|
300
|
|
40,063
|
|
Provision for credit
losses2
|
|
-
|
|
-
|
|
(6,500)
|
|
-
|
|
-
|
|
(6,500)
|
|
|
23,032
|
|
327
|
|
6,000
|
|
3,904
|
|
300
|
|
33,563
|
|
Total
allowance
|
$
|
26,000
|
$
|
353
|
$
|
6,658
|
$
|
7,164
|
$
|
613
|
$
|
40,788
|
|
Total
provision
|
$
|
1,165
|
$
|
6
|
$
|
(6,298)
|
$
|
756
|
$
|
114
|
$
|
(4,257)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(000s)
|
|
|
|
|
|
For the three months
ended December 31, 2016
|
|
Single-family
|
|
Residential
|
Non-residential
|
|
Credit
Card
|
|
Other
|
|
|
|
|
Residential
|
|
Commercial
|
|
Commercial
|
|
Loans and
|
|
Consumer
|
|
|
|
|
Mortgages
|
|
Mortgages
|
|
Mortgages
|
Lines of
Credit
|
Retail
Loans
|
|
Total
|
|
Individual
allowances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance on loan
principal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the
beginning of the period
|
$
|
1,637
|
$
|
-
|
$
|
20
|
$
|
85
|
$
|
302
|
$
|
2,044
|
|
Provision for credit
losses
|
|
783
|
|
2
|
|
5
|
|
1,164
|
|
157
|
|
2,111
|
|
Write-offs
|
|
(619)
|
|
(2)
|
|
(5)
|
|
(493)
|
|
(126)
|
|
(1,245)
|
|
Recoveries
|
|
179
|
|
-
|
|
10
|
|
24
|
|
78
|
|
291
|
|
|
1,980
|
|
-
|
|
30
|
|
780
|
|
411
|
|
3,201
|
|
Allowance on accrued
interest receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the
beginning of the period
|
|
1,095
|
|
-
|
|
58
|
|
-
|
|
9
|
|
1,162
|
|
Provision for credit
losses
|
|
246
|
|
-
|
|
40
|
|
-
|
|
3
|
|
289
|
|
|
1,341
|
|
-
|
|
98
|
|
-
|
|
12
|
|
1,451
|
|
Total individual
allowance
|
|
3,321
|
|
-
|
|
128
|
|
780
|
|
423
|
|
4,652
|
|
Collective
allowance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the
beginning of the period
|
|
23,032
|
|
327
|
|
9,500
|
|
3,904
|
|
300
|
|
37,063
|
|
Provision for credit
losses
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
23,032
|
|
327
|
|
9,500
|
|
3,904
|
|
300
|
|
37,063
|
|
Total
allowance
|
$
|
26,353
|
$
|
327
|
$
|
9,628
|
$
|
4,684
|
$
|
723
|
$
|
41,715
|
|
Total
provision
|
$
|
1,029
|
$
|
2
|
$
|
45
|
$
|
1,164
|
$
|
160
|
$
|
2,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(000s)
|
|
|
|
|
|
2017
|
|
Single-family
|
Residential
|
Non-residential
|
|
Credit
Card
|
|
Other
|
|
|
|
|
Residential
|
Commercial
|
Commercial
|
|
Loans and
|
|
Consumer
|
|
|
|
|
Mortgages
|
Mortgages
|
Mortgages
|
Lines of
Credit
|
Retail
Loans
|
|
Total
|
|
Individual
allowances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance on loan
principal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the
beginning of the year
|
$
|
1,980
|
$
|
-
|
$
|
30
|
$
|
780
|
$
|
411
|
$
|
3,201
|
|
Provision for credit
losses
|
|
2,216
|
|
16
|
|
2,816
|
|
5,387
|
|
531
|
|
10,966
|
|
Write-offs
|
|
(3,120)
|
|
(21)
|
|
(103)
|
|
(5,968)
|
|
(847)
|
|
(10,059)
|
|
Recoveries
|
|
653
|
|
5
|
|
7
|
|
258
|
|
181
|
|
1,104
|
|
|
1,729
|
|
-
|
|
2,750
|
|
457
|
|
276
|
|
5,212
|
|
Allowance on accrued
interest receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the
beginning of the year
|
|
1,341
|
|
-
|
|
98
|
|
-
|
|
12
|
|
1,451
|
|
Provision for credit
losses
|
|
(325)
|
|
-
|
|
380
|
|
-
|
|
(5)
|
|
50
|
|
|
1,016
|
|
-
|
|
478
|
|
-
|
|
7
|
|
1,501
|
|
Total individual
allowance
|
|
2,745
|
|
-
|
|
3,228
|
|
457
|
|
283
|
|
6,713
|
|
Collective
allowance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the
beginning of the year
|
|
23,032
|
|
327
|
|
9,500
|
|
3,904
|
|
300
|
|
37,063
|
|
Provision for credit
losses2
|
|
(2,692)
|
|
-
|
|
(3,500)
|
|
(808)
|
|
3,500
|
|
(3,500)
|
|
|
20,340
|
|
327
|
|
6,000
|
|
3,096
|
|
3,800
|
|
33,563
|
|
Total
allowance
|
$
|
23,085
|
$
|
327
|
$
|
9,228
|
$
|
3,553
|
$
|
4,083
|
$
|
40,276
|
|
Total
provision
|
$
|
(801)
|
$
|
16
|
$
|
(304)
|
$
|
4,579
|
$
|
4,026
|
$
|
7,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(000s)
|
|
|
|
|
|
2016
|
|
Single-family
|
Residential
|
Non-residential
|
|
Credit
Card
|
|
Other
|
|
|
|
|
Residential
|
Commercial
|
Commercial
|
|
Loans and
|
|
Consumer
|
|
|
|
|
Mortgages
|
Mortgages
|
Mortgages
|
Lines of
Credit
|
Retail
Loans
|
|
Total
|
|
Individual
allowances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance on loan
principal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the
beginning of the year
|
$
|
1,652
|
$
|
-
|
$
|
340
|
$
|
329
|
$
|
161
|
$
|
2,482
|
|
Provision for credit
losses
|
|
3,415
|
|
2
|
|
205
|
|
2,379
|
|
525
|
|
6,526
|
|
Write-offs
|
|
(3,608)
|
|
(2)
|
|
(537)
|
|
(2,117)
|
|
(519)
|
|
(6,783)
|
|
Recoveries
|
|
521
|
|
-
|
|
22
|
|
189
|
|
244
|
|
976
|
|
|
1,980
|
|
-
|
|
30
|
|
780
|
|
411
|
|
3,201
|
|
Allowance on accrued
interest receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the
beginning of the year
|
|
839
|
|
-
|
|
57
|
|
-
|
|
5
|
|
901
|
|
Provision for credit
losses
|
|
502
|
|
-
|
|
41
|
|
-
|
|
7
|
|
550
|
|
|
1,341
|
|
-
|
|
98
|
|
-
|
|
12
|
|
1,451
|
|
Total individual
allowance
|
|
3,321
|
|
-
|
|
128
|
|
780
|
|
423
|
|
4,652
|
|
Collective
allowance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the
beginning of the year
|
|
22,232
|
|
327
|
|
9,500
|
|
3,890
|
|
300
|
|
36,249
|
|
Provision for credit
losses
|
|
800
|
|
-
|
|
-
|
|
14
|
|
-
|
|
814
|
|
|
23,032
|
|
327
|
|
9,500
|
|
3,904
|
|
300
|
|
37,063
|
|
Total
allowance
|
$
|
26,353
|
$
|
327
|
$
|
9,628
|
$
|
4,684
|
$
|
723
|
$
|
41,715
|
|
Total
provision
|
$
|
4,717
|
$
|
2
|
$
|
246
|
$
|
2,393
|
$
|
532
|
$
|
7,890
|
|
|
1
Write-offs in the credit card and line of credit portfolio include
$2.3 million related to the non-core prepaid card business that was
recognized as provision for credit losses in Q1 2017.
|
|
2 The
following changes were recognized in the collective
allowance:
|
|
•
|
Single-family
residential mortgage portfolio – reduction of $2.7 million
reflecting the decrease in the portfolio size, decreased loss rates
and continued low levels of loans in arrears.
|
|
•
|
Non-residential
commercial mortgages portfolio – net reduction of $3.5 million
comprises a reduction of $6.5 million reflecting the sale of
mortgages from this portfolio (please see Note 5(H) to the audited
consolidated financial statements included in the Company's 2017
Annual and Fourth Quarter Consolidated Financial Report) offset
partially by an increase of $3.0 million reflecting an increase in
the construction and land segment of that portfolio.
|
|
•
|
Credit card loans and
lines of credit portfolio – reduction of $0.8 million reflecting
the decrease in the portfolio size, decreased loss rates and
continued low levels of loans in arrears.
|
|
•
|
Other consumer retail
loans portfolio – increase of $3.5 million reflects recent
settlement experience related to cash reserves on certain programs
within this
portfolio.
|
There were no individual provisions, allowances or net
write-offs on securitized residential mortgages.
|
Securitization
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(000s)
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
|
|
|
December
31
|
|
|
September
30
|
|
|
|
|
|
|
2017
|
|
|
|
|
|
2017
|
|
Single-family
|
Multi-unit
|
|
|
Single-family
|
Multi-unit
|
|
|
|
Residential
MBS
|
Residential
MBS
|
Total
MBS
|
Residential
MBS
|
Residential
MBS
|
Total MBS
|
|
Carrying value of
underlying mortgages derecognized
|
$
|
-
|
$
|
51,869
|
$
|
51,869
|
$
|
-
|
$
|
58,905
|
$
|
58,905
|
|
Net gains on sale of
mortgages or residual interest1
|
|
-
|
|
163
|
|
163
|
|
-
|
|
434
|
|
434
|
|
Retained interests
recorded
|
|
-
|
|
2,730
|
|
2,730
|
|
-
|
|
2,349
|
|
2,349
|
|
Servicing liability
recorded
|
|
-
|
|
444
|
|
444
|
|
-
|
|
480
|
|
480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(000s)
|
|
|
|
|
|
|
|
For the three months
ended
|
|
|
|
|
|
|
|
December
31
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
Single-family
|
Multi-unit
|
|
|
|
|
|
|
|
Residential
MBS
|
Residential
MBS
|
Total MBS
|
|
Carrying value of
underlying mortgages derecognized
|
|
|
|
|
|
|
$
|
392,298
|
$
|
314,985
|
$
|
707,283
|
|
Net gains on sale of
mortgages or residual interest1
|
|
|
|
|
|
|
|
4,284
|
|
2,722
|
|
7,006
|
|
Retained interests
recorded
|
|
|
|
|
|
|
|
-
|
|
10,004
|
|
10,004
|
|
Servicing liability
recorded
|
|
|
|
|
|
|
|
-
|
|
2,408
|
|
2,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(000s)
|
|
2017
|
|
2016
|
|
Single-family
|
Multi-Unit
|
|
|
Single
Family
|
Multi-Unit
|
|
|
|
Residential
MBS
|
Residential
MBS
|
Total
MBS
|
Residential
MBS
|
Residential
MBS
|
Total MBS
|
|
Carrying value of
underlying mortgages derecognized
|
$
|
288,458
|
$
|
510,813
|
$
|
799,271
|
$
|
1,490,850
|
$
|
1,046,457
|
$
|
2,537,307
|
|
Net gains on sale of
mortgages or residual interest1
|
|
2,084
|
|
3,611
|
|
5,695
|
|
17,368
|
|
9,604
|
|
26,972
|
|
Retained interests
recorded
|
|
-
|
|
20,815
|
|
20,815
|
|
-
|
|
41,900
|
|
41,900
|
|
Servicing liability
recorded
|
|
-
|
|
4,943
|
|
4,943
|
|
-
|
|
8,955
|
|
8,955
|
|
1 Gains on
sale of mortgages and residual interest are net of hedging
impact.
|
|
|
|
|
|
(000s)
|
|
|
For the three months
ended
|
|
December 31,
2017
|
September 30,
2017
|
December 31,
2016
|
|
Net gain on sale of
mortgages and residual interest1
|
|
$
|
163
|
$
|
434
|
$
|
7,006
|
|
Net change in
unrealized gain or loss on hedging activities
|
|
|
(137)
|
|
349
|
|
276
|
|
Servicing
income
|
|
|
1,669
|
|
1,742
|
|
1,782
|
|
Total securitization
income
|
|
$
|
1,695
|
$
|
2,525
|
$
|
9,064
|
|
|
|
|
|
|
|
|
(000s)
|
|
|
|
2017
|
|
2016
|
|
Net gain on sale of
mortgages and residual interest 1
|
|
|
$
|
5,695
|
$
|
26,972
|
|
Net change in
unrealized gain or loss on hedging activities
|
|
|
|
(247)
|
|
399
|
|
Servicing
income
|
|
|
|
7,081
|
|
6,426
|
|
Total securitization
income
|
|
|
$
|
12,529
|
$
|
33,797
|
|
1 Gains on
sale of mortgages and residual interest are net of hedging
impact.
|
Management's Responsibility for Financial Information
The Company's Audit Committee reviewed this document along with
the Company's 2017 Annual and Fourth Quarter Consolidated Financial
Report. The Company's Board of Directors approved both
documents prior to their release. A full description of
management's responsibility for financial information is included
in the Company's 2017 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
Company's 2017 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 Annual
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
2018 and its effect on Home Capital's business are material factors
the Company considers when setting its performance goals, 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. In
setting and reviewing its strategic priorities and outlook for
2018, management's expectations continue to assume:
- The Canadian economy is expected to be relatively stable in
2018, supported by expanded Federal Government spending.
- Generally, the Company expects stable employment conditions in
its established regions. 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 demand for the Company's lending products in its
established regions.
- 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 that may result.
- While the Company is assuming that interest rates will
experience modest increases in 2018, the impact of such increases
is not expected to be material. The level of interest rates is
expected to continue to support relatively low mortgage interest
rates for the foreseeable future.
- The Company believes that the current and expected levels of
housing activity indicate a relatively stable real estate market
overall. Please see Market Conditions under the 2018 Overall
Outlook section of the Company's 2017 Annual and Fourth Quarter
Consolidated Financial Report for more discussion on the Company's
expectations for the housing market.
- The Company expects that 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 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 of
the Company's 2017 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 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 brand, Oaken
Financial. Home Trust also conducts business through its
wholly owned subsidiary, Home Bank. Licensed to conduct business
across Canada, Home Trust has
offices in Ontario, Alberta, British
Columbia, Nova Scotia,
Quebec and Manitoba.
SOURCE Home Capital Group Inc.