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

May 28 2025 22:15 BST

TORONTO , May 28, 2025 /CNW/ - EQB Inc. (TSX: EQB) today reported earnings for the three and six months ended April 30, 2025, that reflected diversified, high-quality growth in loans under management, higher net interest income and core non-revenue from fees and multi-unit securitization, offset by credit provisions driven by the macroeconomic environment.

Q2 2025 highlights compared to Q2 2024:

Adjusted ROE ¹11.9% (reported 11.4%)
Adjusted diluted EPS ¹ $2.31, -18% y/y, -22% q/q (reported $2.21, -17% y/y, -20% q/q)
Book value per share $80.99, +10% y/y, +2% q/q
Revenue $316.0 million, -0.2% y/y, -2% q/q with non-interest revenue contributing 14% of total
Adjusted PPPT ^1,3 $160.1 million, -8% y/y, -6% q/q (reported $154.8 million, -7% y/y, -5% q/q)
Adjusted net income ¹ $94.2 million, -15% y/y, -19% q/q (reported $90.3 million, -15% y/y, -16% q/q)
Net interest margin (NIM) ² : 2.20%, +9 bps y/y, +13 bps q/q
Net interest income (NII): $271.1 million, +1% y/y, +3% q/q
Total AUM + AUA² $134 billion, +8% y/y, +2% q/q
EQ Bank customers, +23% y/y, +4% q/q to 560,000
Common share dividends declared $0.53 per share, +4% q/q, +18% y/y

YTD 2025 (six months) highlights compared to YTD 2024:

Adjusted ROE ¹13.6% (reported 12.8%)
Adjusted diluted EPS ¹ $5.29, -5% y/y (reported $4.98, -7% y/y)
Adjusted net income ¹ $ 210.4 million, -4% y/y (reported $198.0 million, -6% y/y)
Total capital ratio 15.6% and CET1 ratio of 13.2%

"Amid economic uncertainty globally and in Canada, EQB experienced one of our strongest quarters for uninsured single family loan originations, and we are pleased with notable increases in EQ Bank customers and deposits as we continued to flex our Challenger Bank muscles," said Andrew Moor, president and CEO. "Our fundamentals remain resilient despite credit provisions made necessary by tariff-driven changes in the economy and the residual impact of higher interest rates on certain borrowers. Our uncompromising focus on customer service and innovation that enriches people's lives, disciplined capital allocation to diversified market segments, dynamic risk management approach and proven loan resolution capabilities support our expectations of continued shareholder value creation in the second half of 2025 and positive outlook for 2026."

EQ Bank welcomes 24,000 new customers, bringing total to 560,000 +23% y/y, 4% q/q

The EQ Bank Notice Savings Account, an innovative and powerful alternative to GICs and traditional savings vehicles, continued to drive customer and deposit growth as it nears one year in market, bolstered by its Québécois debut as Banque EQ meets new demand for Challenger Bank offerings
Increase in payroll customers continued to confirm EQ Bank's position as bank of choice and go-to source for innovative and valuable savings and spending options
Strong customer response to recently refreshed CAD/USD foreign exchange rates within the no-fee, high interest US Dollar Account and the broader suite of international banking solutions including cost-effective global transfers with Wise and on-the-go spending with the EQ Bank Card
Experienced Equitable Bank executive, Dan Broten, recently named to lead strategy, product, marketing and digital delivery in the new role of SVP and Head of EQ Bank, while Janet Lin, SVP and Chief Information Officer, will advance culture of innovation and technological excellence at Equitable Bank

Residential Lending portfolio benefits from one of the strongest periods of originations and retention

Consistent with Q1 momentum, single-family uninsured originations grew +28% y/y as application volumes translated into high-quality asset growth, supported by renewed market activity compared to a year ago and gains in share in the mortgage broker channel; Equitable Bank's approach to credit and risk management is rigorous, demonstrated by conservative average LTV for single-family uninsured loans of 63% and credit scores consistent at 711
Portfolio balances grew +4% y/y, +2% q/q to $20.6 billion on new originations and exceptional renewal rates on responsive customer service
Decumulation lending (including reverse mortgages and insurance lending) reached $2.5 billion +45% y/y, +8% q/q; momentum reflected broker support, value to borrowers of choosing Equitable Bank's differentiated solutions and continued expansion of the available market as Canadians retire and realize the advantages of converting real asset-based equity into funds to live in place

Commercial Banking portfolio driven by insured lending for multi-unit residential properties

EQB continued to prioritize insured lending for multi-unit residential properties in major cities across the country with over 80% of total commercial LUM insured through various CMHC programs
CMHC-insured multi-unit residential LUM grew +29% y/y, +6% q/q to $29.1 billion, while the commercial portfolio's uninsured businesses also delivered healthy growth despite subdued market conditions
EQB's insured commercial construction lending grew +31% y/y, +10% q/q to $3.3 billion, driven by both new originations and construction draws on existing commitments

Provisions reflect change in macroeconomic environment, new formation rate slowing

EQB's provision for credit losses (PCL) of $30.2 million was split almost equally across each of its business lines and reflects the impacts of evolving macroeconomic forecasts, expected credit loss modelling and Stage 3 provisions of $24.5 million, 1% y/y, 77% q/q
Net impaired loans increased by $58.5 million in Q2 to $741.5 million, or 156 bps of total loan assets compared to 147 bps at Q1, 132 bps at Q4 2024 and 92 bps at Q2 2024; the increase, despite slowing formations, was driven by two newly impaired commercial loans and a decelerating pace of resolution
The Bank is appropriately reserved for credit losses with net allowances as a percentage of total loan assets of 29 bps, compared to 28 bps at Q1 2025 and 23 bps at Q2 2024; the increase in net allowance rate was across all segments and driven by a deterioration in forecasts for GDP and employment as a result of economic uncertainty related to tariffs and their potential impact
Focus remains on de-risking the equipment financing portfolio in light of challenges in the long-haul transportation market; reflecting EQB's risk appetite and a new management approach, exposure to long-haul transportation is down to 33% from Q1 while higher-quality prime leases now account for 51% of the portfolio

EQB increases common share dividend, buys back shares and reaffirms capital management guidance

EQB's Board of Directors declared a dividend of $0.53 per common share payable on June 30, 2025, to shareholders of record as of June 13, 2025, representing a 4% increase from the dividend paid in March 2025 and 18% above the payment made in June 2024
As part of management's plan to continually optimize its capital structure to support strategic objectives and maintain strong overall capital levels, the Bank also completed a $200 million subordinated debt issuance to EQB, bringing Equitable Bank's Total Capital Ratio to 15.6%; this is consistent with the Bank's intention to operate above 15% Total Capital with expectations that up to 300 bps of Total Capital could be contributed by Alternative Tier 1 and Tier 2 capital in 2027 onward and CET1 guidance for 2025 reaffirmed at 13%+
Equitable Bank's consistent organic capital generation and strength in CET1 enabled it to make a $200 million dividend to parent EQB in Q2; inclusive of dividends and the semi-annual $4.4 million payment to holders of the Bank's Limited Recourse Capital Notes, the Bank's CET1 ratio was 13.2%
In Q2, EQB repurchased 271,117 common shares through its NCIB, which allows for the repurchase and cancellation of up to 2,300,000 common shares or 8.4% of the public float of common shares outstanding at January 2, 2025

EQ Bank Tower unveiled, marking new chapter for Canada'sChallenger Bank

New Toronto-based national headquarters opened subsequent to quarter end, bringing talented employees together for more effective collaboration supported by sustainable design and intentional use of Canadian furniture and fittings

"In the second quarter, we responded to an increasingly volatile environment by focusing on unique, high-quality market opportunities that are available to Canada'sChallenger Bank by growing our uninsured and insured loan portfolios in a risk-managed way and adding strength and depth to our cost-effective funding sources," said David Wilkes, VP and head of finance. "Recent strength in loan originations will benefit future revenue while gains from insured multi-unit securitizations are expected to contribute to performance in the second half of fiscal 2025. By focusing on our fundamentals, which are strong, and investing through the business cycle, we are well-positioned to navigate uncertain economic conditions, target growth opportunities and sustain EQB's long track record as an industry performance leader."

Analyst conference call and webcast: 10:30 a.m. ETMay 29, 2025

EQB's Andrew Moor, president and CEO, Marlene Lenarduzzi, CRO, and David Wilkes, VP and head of finance, will host EQB's second quarter earnings call and webcast. The listen-only webcast with accompanying slides will be available at eqb.investorrom.com. To access the conference call with operator assistance, dial 416-945-7677 five minutes prior to the start time.

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 balance sheet (unaudited)

($000s) As at	April 30, 2025	October 31, 2024	April 30, 2024
Assets:
Cash and cash equivalents	500,747	591,641	657,219
Restricted cash	996,591	971,987	783,148
Securities purchased under reverse repurchase agreements	2,100,037	1,260,118	1,399,955
Investments	1,450,879	1,627,314	1,817,916
Loans – Personal	32,524,324	32,273,551	32,823,421
Loans – Commercial	14,703,818	14,760,367	15,085,481
Securitization retained interests	919,910	813,719	663,593
Deferred tax assets	20,874	36,104	14,921
Other assets	1,088,160	899,120	694,542
Total assets	54,305,340	53,233,921	53,940,196
Liabilities and Shareholders' Equity
Liabilities:
Deposits	35,036,491	33,739,612	34,123,703
Securitization liabilities	13,548,609	14,594,304	15,181,341
Obligations under repurchase agreements	84,092	-	-
Deferred tax liabilities	190,905	177,933	148,549
Funding facilities	1,410,370	946,956	839,841
Other liabilities	776,711	636,931	630,954
Total liabilities	51,047,178	50,095,736	50,924,388
Shareholders' Equity:
Preferred shares	-	-	181,411
Common shares	510,973	505,876	495,707
Other equity instruments	147,360	147,440	-
Contributed deficit	(19,177)	(17,374)	(24,811)
Retained earnings	2,607,001	2,483,309	2,359,116
Accumulated other comprehensive income (loss)	2,344	8,555	(7,804)
Total equity attributable to equity holders of EQB	3,248,501	3,127,806	3,003,619
Non-controlling interests	9,661	10,379	12,189
Total equity	3,258,162	3,138,185	3,015,808
Total liabilities and shareholders' equity	54,305,340	53,233,921	53,940,196

Consolidated statement of income (unaudited)

	Three months ended		Six months ended
($000s, except per share amounts)	April 30, 2025	April 30, 2024	April 30, 2025	April 30, 2024
Interest income:
Loans – Personal	461,337	482,299	942,707	951,253
Loans – Commercial	211,991	257,842	434,108	520,723
Investments	12,258	16,879	25,658	34,755
Other	19,912	27,209	45,282	49,308
	705,498	784,229	1,447,755	1,556,039
Interest expense:
Deposits	317,391	366,002	665,200	724,564
Securitization liabilities	112,213	131,776	237,645	259,029
Funding facilities	4,765	13,521	10,312	28,804
Other	70	5,592	153	20,294
	434,439	516,891	913,310	1,032,691
Net interest income	271,059	267,338	534,445	523,348
Non-interest revenue:
Fees and other income	22,713	20,564	45,633	37,179
Net gains on loans and investments	1,029	7,129	3,333	12,122
Gain on sale and income from retained interests	20,090	23,177	44,962	42,586
Net gains (losses) on securitization activities and derivatives	1,059	(1,548)	10,212	197
	44,891	49,322	104,140	92,084
Revenue	315,950	316,660	638,585	615,432
Provision for credit losses	30,234	22,217	48,912	37,752
Revenue after provision for credit losses	285,716	294,443	589,673	577,680
Non-interest expenses:
Compensation and benefits	74,280	66,961	150,214	132,330
Other	86,910	83,459	170,231	157,575
	161,190	150,420	320,445	289,905
Income before income taxes	124,526	144,023	269,228	287,775
Income taxes:
Current	26,218	32,734	42,957	71,268
Deferred	8,016	5,573	28,269	6,409
	34,234	38,307	71,226	77,677
Net income	90,292	105,716	198,002	210,098
Dividends on preferred shares	-	2,346	-	4,703
Distribution to LRCN holders	4,410	-	4,410	-
Net income available to common shareholders and non- controlling interests	85,882	103,370	193,592	205,395
Net income attributable to:
Common shareholders	85,533	103,041	192,935	204,916
Non-controlling interests	349	329	657	479
	85,882	103,370	193,592	205,395
Earnings per share:
Basic	2.23	2.70	5.02	5.38
Diluted	2.21	2.67	4.98	5.33

Consolidated statement of comprehensive income (unaudited)

	Three months ended		Six months ended
($000s)	April 30, 2025	April 30, 2024	April 30, 2025	April 30, 2024
Net income	90,292	105,716	198,002	210,098
Other comprehensive income – items that will be reclassified subsequently to income:
Debt instruments at Fair Value through Other Comprehensive Income:
Net change in gains (losses) on fair value	3,587	(16,240)	16,027	25,321
Reclassification of net (gains) losses to income	(1,523)	17,187	(11,589)	(18,640)
Other comprehensive income – items that will not be reclassified subsequently to income:
Equity instruments designated at Fair Value through Other Comprehensive Income:
Net change in (losses) gains on fair value	(203)	3,132	868	1,552
Reclassification of net gains to retained earnings	(490)	-	(868)	-
	1,371	4,079	4,438	8,233
Income tax expense	(372)	(1,090)	(1,289)	(2,233)
	999	2,989	3,149	6,000
Cash flow hedges:
Net change in unrealized (losses) gains on fair value	(8,979)	11,961	(13,189)	(269)
Reclassification of net gains to income	(5,937)	(5,070)	(9,361)	(11,764)
	(14,916)	6,891	(22,550)	(12,033)
Income tax recovery (expense)	4,049	(1,879)	6,080	3,282
	(10,867)	5,012	(16,470)	(8,751)
Total other comprehensive (loss) income	(9,868)	8,001	(13,321)	(2,751)
Total comprehensive income	80,424	113,717	184,681	207,347
Total comprehensive income attributable to:
Common shareholders	75,665	111,042	179,614	202,165
Other equity and preferred shareholders	4,410	2,346	4,410	4,703
Non-controlling interests	349	329	657	479
	80,424	113,717	184,681	207,347

Consolidated statement of changes in shareholders' equity (unaudited)

($000s) Three-month period ended

April 30, 2025

Common
Shares

Other equity
instruments

Contributed
Deficit

Retained
Earnings

Accumulated other
comprehensive income (loss)

Cash Flow
Hedges

Financial
Instruments
at FVOCI

Total

Attributable
to equity
holders

Non-
controlling
interests

Total

Balance, beginning of period

506,160

147,360

(17,437)

2,564,315

16,014

(4,814)

11,200

3,211,598

9,838

3,221,436

Net Income

89,943

349

90,292

Realized loss on sale of shares,
net of tax

(659)

Transfer of AOCI losses to
retained earnings, net of tax

1,012

Other comprehensive loss, net
of tax

(10,867)

999

(9,868)

Exercise of stock options

6,677

Common shares repurchased
and cancelled

(3,465)

(22,600)

(26,065)

Limited recourse capital note
distributions, net of tax

(4,410)

Dividends:

Common shares

(19,588)

(526)

(20,114)

Put option – non-controlling
interest

(1,203)

Stock-based compensation

1,064

Transfer relating to the
exercise of stock options

1,601

(1,601)

Balance, end of period

510,973

147,360

(19,177)

2,607,001

5,147

(2,803)

2,344

3,248,501

9,661

3,258,162

($000s) Three-month period ended									April 30, 2024
	Preferred Shares	Common Shares	Contributed deficit	Retained Earnings	Accumulated other comprehensive income (loss)
					Cash Flow Hedges	Financial Instruments at FVOCI	Total	Attributable to equity holders	Non- controlling interests	Total
Balance, beginning of period	181,411	489,944	(23,055)	2,272,116	29,855	(45,681)	(15,826)	2,904,590	12,460	2,917,050
Net Income	-	-	-	105,387	-	-	-	105,387	329	105,716
Transfer of AOCI losses to income, net of tax	-	-	-	-	-	21	21	21	-	21
Other comprehensive income, net of tax	-	-	-	-	5,012	2,989	8,001	8,001	-	8,001
Exercise of stock options	-	4,881	-	-	-	-	-	4,881	-	4,881
Dividends:
Preferred shares	-	-	-	(2,346)	-	-	-	(2,346)	-	(2,346)
Common shares	-	-	-	(16,041)	-	-	-	(16,041)	(600)	(16,641)
Put option – non-controlling interest	-	-	(1,974)	-	-	-	-	(1,974)	-	(1,974)
Stock-based compensation	-	-	1,100	-	-	-	-	1,100	-	1,100
Transfer relating to the exercise of stock options	-	882	(882)	-	-	-	-	-	-	-
Balance, end of period	181,411	495,707	(24,811)	2,359,116	34,867	(42,671)	(7,804)	3,003,619	12,189	3,015,808

($000s) Six month period ended									April 30, 2025
	Common Shares	Other equity instruments	Contributed Deficit	Retained Earnings	Accumulated other comprehensive income (loss)
					Cash Flow Hedges	Financial Instruments at FVOCI	Total	Attributable to equity holders	Non controlling interests	Total
Balance, beginning of period	505,876	147,440	(17,374)	2,483,309	21,617	(13,062)	8,555	3,127,806	10,379	3,138,185
Net Income	-	-	-	197,345	-	-	-	197,345	657	198,002
Realized loss on sale of shares, net of tax	-	-	-	(6,377)	-	-	-	(6,377)	-	(6,377)
Transfer of AOCI losses to retained earnings, net of tax	-	-	-	-	-	7,016	7,016	7,016	-	7,016
Transfer of AOCI losses to income, net of tax	-	-	-	-	-	94	94	94	-	94
Other comprehensive loss, net of tax	-	-	-	-	(16,470)	3,149	(13,321)	(13,321)	-	(13,321)
Exercise of stock options	7,137	-	-	-	-	-	-	7,137	-	7,137
Common shares repurchased and cancelled	(3,740)	-	-	(24,432)	-	-	-	(28,172)	-	(28,172)
Issuance costs, net of tax	-	(80)	-	-	-	-	-	(80)		(80)
Limited recourse capital note distributions, net of tax	-	-	-	(4,410)	-	-	-	(4,410)	-	(4,410)
Dividends:
Common shares	-	-	-	(38,434)	-	-	-	(38,434)	(1,375)	(39,809)
Put option – non-controlling interest	-	-	(2,334)	-	-	-	-	(2,334)	-	(2,334)
Stock-based compensation	-	-	2,231	-	-	-	-	2,231	-	2,231
Transfer relating to the exercise of stock options	1,700	-	(1,700)	-	-	-	-	-	-	-
Balance, end of period	510,973	147,360	(19,177)	2,607,001	5,147	(2,803)	2,344	3,248,501	9,661	3,258,162

($000s) Six-month period ended							April 30, 2024
	Preferred Shares	Common Shares	Contributed Surplus/ (deficit)	Retained Earnings	Accumulated other comprehensive income (loss)
	Preferred Shares	Common Shares	Contributed Surplus/ (deficit)	Retained Earnings	Cash Flow Hedges	Financial Instruments at FVOCI		Total	Attributable to equity holders	Non- controlling interests	Total
Balance, beginning of period	181,411	471,014	12,795	2,185,480	43,618	(48,775)		(5,157)	2,845,543	-	2,845,543
Non-controlling interest on acquisition	-	-	-	-	-	-		-	-	12,310	12,310
Net Income	-	-	-	209,619	-	-		-	209,619	479	210,098
Transfer of AOCI losses to income, net of tax	-	-	-	-	-	104		104	104	-	104
Other comprehensive income, net of tax	-	-	-	-	(8,751)	6,000		(2,751)	(2,751)	-	(2,751)
Common share issued	-	11,000	-	-	-	-		-	11,000	-	11,000
Exercise of stock options	-	11,839	-	-	-	-		-	11,839	-	11,839
Dividends:
Preferred shares	-	-	-	(4,703)	-	-		-	(4,703)	-	(4,703)
Common shares	-	-	-	(31,280)	-	-		-	(31,280)	(600)	(31,880)
Put option – non-controlling interest	-	-	(37,865)	-	-	-		-	(37,865)	-	(37,865)
Stock-based compensation	-	-	2,113	-	-	-		-	2,113	-	2,113
Transfer relating to the exercise of stock options	-	1,854	(1,854)	-	-	-		-	-	-	-
Balance, end of period	181,411	495,707	(24,811)	2,359,116	34,867	(42,671)		(7,804)	3,003,619	12,189	3,015,808

Consolidated statement of cash flows (unaudited)

	Three months ended		Six months ended
($000s)	April 30, 2025	April 30, 2024	April 30, 2025	April 30, 2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	90,292	105,716	198,002	210,098
Adjustments for non-cash items in net income:
Financial instruments at fair value through income	(157,852)	(5,177)	(178,350)	11,360
Amortization of premiums/discount	(2,753)	(34,159)	(5,583)	(31,029)
Amortization of capital and intangible costs	17,571	11,679	32,394	23,120
Provision for credit losses	30,234	22,217	48,912	37,752
Securitization gains	(13,010)	(17,486)	(30,626)	(32,002)
Stock-based compensation	1,064	1,100	2,231	2,113
Income taxes	34,234	38,307	71,226	77,677
Securitization retained interests	41,741	30,701	81,698	58,634
Changes in operating assets and liabilities:
Restricted cash	(179,566)	(120,389)	(24,604)	(15,953)
Securities purchased under reverse repurchase agreements	(300,023)	(594,342)	(839,919)	(491,122)
Loans receivable, net of securitizations	(891,443)	(222,907)	(266,146)	(715,022)
Other assets	21,821	(7,205)	81	(8,531)
Deposits	406,679	1,887,780	1,255,415	2,089,142
Securitization liabilities	(174,739)	(205,820)	(1,067,985)	677,411
Obligations under repurchase agreements	84,092	(482,574)	84,092	(1,128,238)
Funding facilities	641,557	(493,062)	463,414	(891,746)
Other liabilities	13,726	47,598	65,399	41,636
Income taxes paid	(28,528)	(23,962)	(67,759)	(50,074)
Cash flows used in operating activities	(364,903)	(61,985)	(178,108)	(134,774)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common shares	6,677	4,881	7,137	22,839
Common share repurchased and cancelled	(26,065)		(28,172)
Limited recourse capital notes	-	-	(80)	-
Distribution to other equity holders	(4,410)	-	(4,410)	-
Dividends paid on preferred shares	-	(2,346)	-	(4,703)
Dividends paid on common shares	(20,114)	(16,041)	(39,809)	(31,280)
Cash flows used in financing activities	(43,912)	(13,506)	(65,334)	(13,144)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments	(12,689)	(8,004)	(16,419)	(344,423)
Acquisition of subsidiary	-	45	-	(75,483)
Proceeds on sale or redemption of investments	128,107	191,245	159,473	656,646
Net change in Canada Housing Trust re-investment accounts	11,623	28,954	53,032	46,959
Purchase of capital assets and system development costs	(27,495)	(23,289)	(43,538)	(28,036)
Cash flows from investing activities	99,546	188,951	152,548	255,663
Net (decrease) increase in cash and cash equivalents	(309,269)	113,460	(90,894)	107,745
Cash and cash equivalents, beginning of period	810,016	543,759	591,641	549,474
Cash and cash equivalents, end of period	500,747	657,219	500,747	657,219
Supplemental statement of cash flows disclosures:
Interest received	668,744	846,075	1,378,441	1,534,404
Interest paid	(410,679)	(443,052)	(827,115)	(814,672)
Dividends received	132	564	350	1,113

About EQB Inc. 

EQB Inc. (TSX: EQB) is a leading digital financial services company with $134 billion in combined assets under management and administration (as at April 30, 2025). It offers banking services through Equitable Bank, a wholly owned subsidiary and Canada's seventh largest bank by assets, and wealth management through ACM Advisors, a majority owned subsidiary specializing in alternative assets. As Canada's Challenger Bank™, Equitable Bank has a clear mission to drive change in Canadian banking to enrich people's lives. It leverages technology to deliver exceptional personal and commercial banking experiences and services to over 742,000 customers and more than six million credit union members through its businesses. Through its digital EQ Bank platform (eqbank.ca) its customers have named it one of Canada's top banks on the Forbes World's Best Banks list since 2021. 

Please visit eqb.investorroom.com for more details. 

Investor contact: 
David Wilkes
VP and Head of Finance
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:

Q2 2025

$3.4 million new office lease related expenses prior to occupancy, and
$2.0 million intangible asset amortization.

Q1 2025

$2.8 million new office lease related expenses prior to occupancy,
$1.8 million non-recurring operational effectiveness expenses and acquisition and integration-related costs,
$2.0 million intangible asset amortization, and
$5.0 million provision for credit losses associated with an equipment financing purchase facility.

Q2 2024

$5.7 million non-recurring operational effectiveness expenses and acquisition and integration-related costs; and
$1.6 million intangible asset amortization.

The following table presents a reconciliation of GAAP reported financial results to non-GAAP adjusted financial results (unaudited).

Reconciliation of reported and adjusted financial results	For the three months ended			For the six months ended
($000, except share and per share amounts)	30-Apr-25	31-Jan-25	30-Apr-24	30-Apr-25	30-Apr-24
Reported results
Net interest income	271,059	263,386	267,338	534,445	523,348
Non-interest revenue	44,891	59,249	49,322	104,140	92,084
Revenue	315,950	322,635	316,660	638,585	615,432
Non-interest expense	161,190	159,255	150,420	320,445	289,905
Pre-provision pre-tax income⁽³⁾	154,760	163,380	166,240	318,140	325,527
Provision for credit loss	30,234	18,678	22,217	48,912	37,752
Income tax expense	34,234	36,992	38,307	71,226	77,677
Net income	90,292	107,710	105,716	198,002	210,098
Net income available to common shareholders	85,533	107,402	103,041	192,935	204,916
Adjustments
Non-interest expenses – new office lease related expenses	(3,363)	(2,789)	-	(6,152)	-
Non-interest expenses – non-recurring operational effectiveness and acquisition-related costs⁽¹⁾	-	(1,782)	(5,710)	(1,782)	(7,763)
Non-interest expenses – intangible asset amortization	(1,969)	(1,969)	(1,599)	(3,938)	(4,997)
Provision for credit loss – equipment financing	-	(5,018)	-	(5,018)	-
Pre-tax adjustments	5,332	11,558	7,309	16,890	12,760
Income tax expense – tax impact on above adjustments⁽²⁾	1,414	3,039	1,983	4,453	3,466
Post-tax adjustments – net income	3,918	8,519	5,326	12,437	9,294
Adjustments attributed to minority interests	(259)	(261)	(190)	(520)	(314)
Post-tax adjustments – net income to common shareholders	3,659	8,258	5,136	11,917	8,980
Adjusted results
Net interest income	271,059	263,386	267,338	534,445	523,348
Non-interest revenue	44,891	59,249	49,322	104,140	92,084
Revenue	315,950	322,635	316,660	638,585	615,432
Non-interest expense	155,858	152,715	143,111	308,573	277,145
Pre-provision pre-tax income⁽³⁾	160,092	169,920	173,549	330,012	338,287
Provision for credit loss	30,234	13,660	22,217	43,894	37,752
Income tax expenses	35,649	40,030	40,290	75,679	81,143
Net income	94,209	116,230	111,042	210,439	219,392
Net income available to common shareholders	89,190	115,662	108,177	204,852	213,896
Diluted earnings p er share
Weighted average diluted common shares outstanding	38,662,002	38,781,523	38,522,025	38,725,808	38,434,002
Diluted earnings per share – reported	2.21	2.77	2.67	4.98	5.33
Diluted earnings per share – adjusted	2.31	2.98	2.81	5.29	5.57
Diluted earnings per share – adjustment impact	0.10	0.21	0.14	0.31	0.24

(1)	Includes non-recurring operational effectiveness and acquisition and integration-related costs associated with Concentra Bank and ACM.
(2)	Income tax expense associated with non-GAAP adjustment was calculated based on the statutory tax rate applicable for that period.
(3)	This is a non-GAAP measure, see Non-GAAP financial measures and ratios section.

Other non-GAAP financial measures and ratios:

Adjusted return on equity (ROE) is calculated on an annualized basis and is defined as adjusted net income available to common shareholders as a percentage of weighted average common shareholders' equity (reported) outstanding during the period.
Assets under administration (AUA): is sum of (1) assets over which EQB's subsidiaries have been named as trustee, custodian, executor, administrator, or other similar role; (2) loans held by credit unions for which EQB's subsidiaries act as servicer.
Assets under management (AUM): is the sum of total balance sheet assets, loan principal derecognized but still managed by EQB, and assets managed on behalf on investors.
Loans under management (LUM): is the sum of loan principal reported on the consolidated balance sheet and loan principal derecognized but still managed by EQB.
Net interest margin (NIM): this profitability measure is calculated on an annualized basis by dividing net interest income by the average total interest earning assets for the period.
Pre-provision pre-tax income (PPPT): this is the difference between revenue and non-interest expenses.
Total loan assets: this is calculated on a gross basis (prior to allowance for credit losses) as the sum of both Loans – Personal and Loans – Commercial on the balance sheet and adding their associated allowance for credit losses.

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SOURCE EQB Inc.

Company Announcements

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