TORONTO, Feb. 18, 2014 /CNW/ - Equity Financial Holdings Inc. (TSX:EQI)
("Equity" or the "Corporation"), a Canadian financial services company
serving the alternative retail mortgage market through its wholly-owned
subsidiary, Equity Financial Trust Company ("EFT"), today announced the
appointment of a new Chief Risk Officer. It also provided a business
update, including remediation of certain of its underwriting processes
and controls following an independent Board-led review.
Appointment of Chief Risk Officer
The Board announces the appointment of Paul Bowersas Chief Risk Officer of Equity Trust Financial Company. Mr. Bowers has
over 30 years of experience in the financial services industry in risk
management, regulation, lending and work-outs & insolvency. Prior to
joining Equity, Paul served as SVP, Credit & Origination with Trez
Capital Corporation and Chief Risk Officer with MCAN Mortgage
Corporation. He has also held various positions with The Office of the
Superintendent of Financial Institutions ("OSFI") and TD Bank Financial
Michael Jones, President, Equity Financial Trust Company said "We are
delighted that Mr. Bowers has joined us. He brings the depth of
experience and operating integrity necessary for Equity's business. Mr.
Bowers will continue with the enhancement of Equity's enterprise risk
Mr. Bowers replaces Natasha Sharpe as CRO. A member of the Equity board
of directors, Ms. Sharpe stepped in as Acting CRO following the
termination by the board of EFT's then CEO and CRO on October 3, 2013,
"We thank Ms. Sharpe for her dedicated service to Equity in taking on
the role as Acting Chief Risk Officer, particularly in the challenging
period following the change in leadership of our mortgage business,"
said Mr. Jones.
Equity has conducted a review of certain issues relating to its
underwriting processes and controls that were brought to the attention
of Equity's CEO, Paul G. Smith. An independent Board-led review was
conducted, and steps have been taken by Equity to remediate the process
and control weaknesses identified as a result of that review. Mr.
Bowers noted "Equity is committed to the continued enhancement of its
enterprise risk management program".
Equity also provided new guidance on its portfolio growth. Equity was
pleased with the pace of its mortgage originations over 2013 and the
size of its mortgage portfolio as at December 31, 2013. Mortgage
originations for fiscal 2013 were $279 million, an increase of 90%
compared to 2012. Equity's mortgage loan book grew to $395 million to
end fiscal 2013, a 99% increase from 2012. The pace of Equity's
mortgage originations is expected to slow in 2014, primarily as a
result of the remedial changes to its underwriting processes
implemented in Q1. Equity anticipates that it will be able to
originate between $150-$200 million in mortgages in 2014. As a result,
and taking into account anticipated run-off in the portfolio, Equity
expects that net growth in the loan book will be nominal in 2014.
About Equity Financial Holdings Inc.
Equity is a Canadian financial services company serving the alternative
retail mortgage market through its federally regulated and wholly-owned
subsidiary, Equity Financial Trust Company. Learn more at www.equityfinancialholdings.com.
Forward Looking Information
Certain portions of this press release as well as other public
statements by the Corporation contain "forward-looking information"
within the meaning of applicable Canadian securities legislation, which
is also referred to as "forward-looking statements", which may not be
based on historical fact. Wherever possible, words such as "will",
"plans," "expects," "targets," "continue", "estimates," "scheduled,"
"anticipates," "believes," "intends," "may," and similar expressions or
statements that certain actions, events or results "may," "could,"
"would," "might" or "will" be taken, occur or be achieved, have been
used to identify forward-looking information. Such forward-looking
statements include, without limitation, the Corporation's expectations
in respect of earnings, fee income, expense levels, general economic,
political and market factors in North America and internationally,
interest rates, global equity and capital markets, activities, the
Corporation's expected need for equity on debt financing, business
competition, technological change, changes in government regulations,
unexpected judicial or regulatory proceedings, catastrophic events, and
the Corporation's ability to complete strategic transactions and
integrate acquisitions and other factors.
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 the Corporation and the Canadian economy. Certain material
factors or assumptions are applied by the Corporation in making
forward-looking statements, including without limitation, factors and
assumptions regarding interest rates, availability of key personnel,
the effect of competition on the Corporation's business, government
regulation of its business, computer failure or security breaches,
future capital requirements, its ability to fund its mortgage business,
the value of mortgage originations, the competitive nature of the
alternative mortgage market, the expected margin between the interest
earned on its mortgage portfolio and the interest to be paid on its
deposits, the relative continued health of real estate markets,
acceptance of its products in the marketplace, as well as its operating
cost structure and the current tax regime.
Forward-looking statements reflect the Corporation's current views with
respect to future events and are subject to a number of risks and
uncertainties. Actual results may differ materially from results
contemplated by the forward-looking statements. Readers should not
place undue reliance on such forward-looking statements, as they
reflect the Corporation's current views with respect to future events
and are subject to risks and uncertainties and are necessarily based
upon a number of estimates and assumptions that, while considered
reasonable by the Corporation, are inherently subject to significant
uncertainties and contingencies. Many factors could cause the
Corporation's actual results, performance or achievements to be
materially different from any future results, performance, or
achievements that may be expressed or implied by such forward-looking
statements, including a significant downturn in capital markets or the
economy as a whole, significant increases in the cost of complying with
applicable regulatory requirements, civil unrest, economic recession,
pandemics, war and acts of terrorism which may adversely impact the
North American and global economic and financial markets, inability to
raise funds through public or private financing significant changes in
interest rates, failure by Equity Financial Trust Company ("EFT") to
meet ongoing regulatory requirements, the failure of borrowers or
counterparties to honour their financial or contractual obligations to
EFT, failure by EFT to adequately monitor and/or adjust its mortgage
portfolio management practices for changing circumstances, failure by
the Corporation to attract and to retain the necessary employees to
meet its needs, failure by EFT to adequately monitor the services
provided by third party service providers or to establish alternative
arrangements if required, failure by EFT to secure sufficient deposits
from securities dealers or a sufficient level of mortgage origination
from its mortgage broker network, a failure of the computer systems of
the Corporation or one or more of its service providers or the risks
detailed from time-to-time in the Corporation's quarterly filings,
annual information forms, annual reports and annual filings with
securities regulators. The preceding list is not exhaustive of possible
factors. The Corporation disclaims any intent or obligation to update
or revise publicly any forward-looking statements whether as a result
of new information, estimates, future events or results, or otherwise,
unless required to do so by applicable laws.
SOURCE Equity Financial Holdings Inc.