TORONTO, Aug. 26, 2026 /CNW/ -- EQB Inc. (TSX: EQB) today reported earnings for the third quarter and nine months ended July 31, 2026, including one month of results from the acquisition of President's Choice Bank ("PC Bank"), PC$(R)$ Financial Insurance Agency Inc., PC(R) Financial Insurance Broker Inc. and certain affiliated entities of PC Bank (collectively, "PC Financial").
-- Adjusted diluted EPS1: $2.12, +4% q/q and +2% y/y (reported -$3.39)
-- Adjusted PPPT1: $196.2 million, +28% q/q and +36% y/y (reported $135.1
million)
-- Adjusted ROE1: 10.3%, +10 bps q/q and +20 bps y/y (reported -16.2%)
-- Adjusted ROTCE1: 11.1%, +40 bps q/q and +50 bps y/y (reported -17.1%)
-- Adjusted revenue1: $393.0 million, +30% q/q and +27% y/y (reported $391.3
million)
-- Book value per share: $86.86, +7% q/q and +5% y/y
-- Common share dividends declared: $0.63 per share, +3% q/q and +15% y/y
-- Capital: CET1 ratio of 13.4% and total capital ratio of 16.6%
"With the closing of PC Financial on Canada Day, EQB has structurally shifted in customer reach, products, revenue mix and growth potential. The integration is progressing to plan, and we now meet millions of Canadians where they already are, including at the grocery aisle, at the pump, and across everyday spending moments," said Chadwick Westlake, President and CEO, EQB. "Underneath the transaction, earnings were impacted by elevated performing and impaired provisions that reflect the continued pressure many Canadians are facing. Despite a housing market that has yet to turn, our core businesses performed well, and we made great progress growing market share and loans under management. The earnings power of the combined business will become more visible in Q4, and we will set out the path to our 2027 and medium-term return objectives at our Investor Day in December."
Closed PC Financial, positioning EQB to realize the benefits of integration, scale and synergies
-- Transformational acquisition expands EQB's reach to more than 4 million
directly served customers, establishes EQB as the exclusive financial
services partner of the PC Optimum$(TM)$ loyalty program and its more than
18 million active members, and elevates EQB's assets under management and
administration1 to $151 billion
-- Credit card and recurring PC insurance fee income meaningfully adds to
EQB's revenue and brings diversification, contributing to 30% q/q and 27%
y/y revenue growth, while increasing non-interest revenue to 19% of total
revenue despite Q3/26 including only one month of PC Financial results
-- Integration execution remains well underway with $15 million in
annualized cost savings to date; on track toward a $30 million pre-tax
annual run-rate synergy target
Significantly increased retail deposit customers with the completed acquisition of PC Financial
-- Direct retail deposits increased to $10.8 billion in Q3 (+8% q/q and +11%
y/y) driven by the addition of PC Bank direct retail deposits, which
further diversified EQB's funding base. Direct retail deposits
represented 29% of total deposit principal (up 155 bps q/q)
-- With a combined customer base of over 4 million, establishes a solid
foundation to grow the deposit base
Delivered growth in loans under management(1) against a difficult operating environment
-- Personal LUM1 increased 14% q/q and 11% y/y, reflecting the acquired
credit card portfolio, momentum in the fast-growing decumulation segment
and uninsured residential lending origination market share gains in
Ontario, partially offset by a deliberate slowdown in lower risk-adjusted
return segments including single-family insured mortgages
-- Personal LUM1, excluding insured single-family mortgages, increased 19%
q/q and 23% y/y
-- Commercial LUM1 increased 2% q/q and 12% y/y, driven by strong growth in
construction loans (predominantly insured) and continued strength in CMHC
insured multi-unit residential mortgages
Expanding and diversifying revenue sources with PC Financial
-- Net interest income (NII) increased 22% q/q and y/y, reflecting an
increase in net interest margin $(NIM)$1 of 33 bps to 2.41% and a modest 2%
increase in average interest earning assets. NIM1 expanded due to the
addition of the higher yielding credit cards associated with the
acquisition of PC Financial and related fair value marks. NIM1 on the
Personal and Commercial lending portfolios remained relatively stable
-- Adjusted non-interest revenue (NIR)1 increased 77% q/q and 55% y/y,
reflecting a diversification of revenue, including credit card fee income
(net of loyalty costs), insurance, and the accretion of fair value marks.
These increases were partially offset by lower securitization gains
-- Reported total revenue increased 29% q/q and 28% y/y
Higher provisions reflect acquired credit cards and real estate market conditions
-- Reported provisions for credit losses $(PCL)$ were up $258 million, primarily reflecting Day 1 PCL of $219 million on the acquired credit card portfolio -- Adjusted PCL1 reflects provisions relating to credit card activity in the month of July and increases in residential and commercial lending portfolios driven by softer real estate market conditions and equipment lease defaults -- Total gross impaired loans increased 4% q/q as new formations outpaced resolutions, primarily reflecting extended workout timelines. Total formations decreased $39 million or 16% q/q, with lower formations in Commercial partially offset by a modest increase in Personal residential lending portfolios -- The Bank is appropriately reserved for credit losses with net allowances as a percentage of total loan assets1 of 95 bps, compared to 46 bps at Q2/26, primarily reflecting the addition of an unsecured lending portfolio
Expense discipline remains strong
-- EQB's adjusted efficiency ratio1 increased 70 bps q/q to 50.1% (reported
65.5%) and remains on track against its low-50% efficiency ratio target
for 2026
-- Adjusted expenses1 increased 32% q/q and 19% y/y reflecting the inclusion
of one month of PC Financial and disciplined expense management
-- Reported expenses increased 40% q/q and 50% y/y, reflecting PC Financial,
integration-related costs, acquisition-related intangible asset
amortization, and impairment charges
Capital strength supported dividend increase and buyback activity
-- EQB declared a dividend of $0.63 per common share payable on September
29, 2026, to shareholders of record as of September 15, 2026,
representing +3% and +15% increases from the dividends paid in June 2026
and September 2025, respectively
-- In connection with the acquisition of PC Financial, EQB issued 7.2
million common shares on July 1, 2026. In Q3/26, EQB purchased and
cancelled 147,589 common shares through its Normal Course Issuer Bid
(NCIB) (2,441,213 repurchased year-to-date), supporting attractive return
of capital for shareholders
"In Q3, we continued to execute with discipline: maintaining a strong efficiency ratio, expanding net interest margins, and proactively provisioning for credit losses," said Anilisa Sainani, CFO. "The closing of PC Financial represents a meaningful evolution in our business model, adding new revenue streams, enhancing earnings diversification, and reducing our reliance on housing and spread related income. Together, these changes strengthen the resilience of our earnings profile and position EQB for continued growth."
Analyst conference call and webcast: 10:30 a.m. ET on August 27, 2026
EQB's Chadwick Westlake, President and CEO, Anilisa Sainani, CFO, and Puneesh Arora, CRO, will host EQB's quarterly earnings call and webcast. The webcast with accompanying slides will be available at eqb.investorroom.com. To access the conference call with operator assistance, dial 416-945-7677 five minutes prior to the start time.
(1) These are Non-Generally Accepted Accounting Principles (GAAP) measures or ratios, see "Non-GAAP financial measures and ratios" section for more details.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Consolidated balance sheets (unaudited)
($000s) As at July 31, 2026 October 31, 2025 July 31, 2025
Assets:
Cash and cash equivalents 802,497 717,253 485,757
Restricted cash 1,037,856 1,326,684 1,218,685
Securities purchased under
reverse repurchase agreements 2,000,246 1,604,165 1,949,171
Investments 1,755,772 1,645,864 1,731,462
Loans:
Personal 34,984,026 31,027,017 31,534,296
Commercial 14,285,038 15,412,457 15,823,942
Allowance for credit losses (485,387) (206,801) (170,399)
48,783,677 46,232,673 47,187,839
Securitization retained
interests 1,111,015 1,028,623 999,729
Deferred tax assets 63,410 36,429 19,967
Other assets
Derivative financial
instruments 162,657 242,799 246,162
Intangible assets 643,608 148,623 189,092
Goodwill 236,874 92,545 110,580
Investment in associate 52,720 49,884 49,877
Other 535,629 368,179 373,323
1,631,488 902,030 969,034
Total assets 57,185,961 53,493,721 54,561,644
Liabilities and Equity
Liabilities:
Deposits 37,405,378 36,616,511 36,360,714
Securitization liabilities 12,790,549 11,197,477 12,498,948
Obligations under repurchase
agreements - 104,568 148,623
Deferred tax liabilities 208,049 199,151 204,296
Funding facilities 1,705,918 1,454,087 1,385,306
Other liabilities
Derivative financial
instruments 59,569 94,742 70,489
Other 966,668 615,386 581,710
1,026,237 710,128 652,199
Total liabilities 53,136,131 50,281,922 51,250,086
Equity:
Common shares 1,448,151 503,060 512,172
Other equity instruments 345,098 147,360 147,360
Contributed deficit (18,610) (15,014) (15,034)
Retained earnings 2,264,240 2,566,475 2,656,635
Accumulated other
comprehensive income 3,439 1,684 2,035
Total shareholders' equity 4,042,318 3,203,565 3,303,168
Non-controlling interests 7,512 8,234 8,390
Total equity 4,049,830 3,211,799 3,311,558
Total liabilities and equity 57,185,961 53,493,721 54,561,644
Consolidated statements of income (unaudited)
Three months ended Nine months ended
($000s, except per July 31, 2026 July 31, 2025 July 31, 2026 July 31, 2025
share amounts)
Interest income:
Loans:
Personal 476,990 441,296 1,295,394 1,338,864
Commercial 212,041 239,468 653,211 718,715
Investments 20,768 21,314 62,976 61,438
Other 29,449 24,727 79,583 70,009
739,248 726,805 2,091,164 2,189,026
Interest expense:
Deposits 296,657 334,109 899,928 999,309
Securitization
liabilities 108,799 122,476 314,635 360,250
Funding facilities 11,074 11,703 22,918 22,015
Other 3,544 34 10,337 187
420,074 468,322 1,247,818 1,381,761
Net interest
income 319,174 258,483 843,346 807,265
Non-interest
revenue:
Fees and other
income 61,585 24,747 114,231 70,380
Net gains on loans
and investments 902 521 2,984 3,854
Gain on sale from
securitization
activities 9,044 18,027 39,334 48,652
Net gains on
hedging and
derivatives 628 4,351 596 14,563
72,159 47,646 157,145 137,449
Revenue 391,333 306,129 1,000,491 944,714
Provision for
credit losses 302,984 33,968 387,463 82,880
Revenue after
provision for
credit losses 88,349 272,161 613,028 861,834
Non-interest
expenses:
Compensation and
benefits 83,440 79,791 227,887 230,005
Product costs 55,696 25,343 104,351 74,002
Technology and
system costs 31,557 25,362 74,686 71,344
Marketing and
corporate
expenses 28,653 18,046 76,876 54,359
Regulatory and
legal and
professional fees 47,847 14,540 87,672 40,158
Premises 9,086 7,872 26,028 21,531
256,279 170,954 597,500 491,399
(Loss) income
before income
taxes (167,930) 101,207 15,528 370,435
Income tax
(recovery)
expense (40,671) 27,843 11,940 99,069
Net (loss) income (127,259) 73,364 3,588 271,366
Distribution to
limited recourse
capital notes
holders - - 4,410 4,410
Net (loss) income
available to
common
shareholders
and
non-controlling
interests (127,259) 73,364 (822) 266,956
Net (loss) income
attributable to:
Common
shareholders (127,580) 73,014 (1,793) 265,949
Non-controlling
interests 321 350 971 1,007
(127,259) 73,364 (822) 266,956
(Loss) earnings
per share:
Basic (3.39) 1.91 (0.05) 6.93
Diluted (3.39) 1.90 (0.05) 6.88
Consolidated statements of comprehensive income (unaudited)
Three months ended Nine months ended
($000s) July 31, 2026 July 31, 2025 July 31, 2026 July 31, 2025
Net (loss) income (127,259) 73,364 3,588 271,366
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 697 (11,334) (5,807) 4,693
Recovery of credit
losses recognized
to income (49) - (242) -
Reclassification
of net losses to
income 1,524 13,075 8,871 1,486
Other
comprehensive
income -- items
that will not
be reclassified
subsequently to
income:
Equity instruments
designated at fair
value through
other
comprehensive
income:
Net change in
gains on fair
value 560 - 2,063 868
Reclassification
of net gains to
retained earnings - - - (868)
2,732 1,741 4,885 6,179
Income tax expense (963) (639) (1,626) (1,928)
1,769 1,102 3,259 4,251
Cash flow hedges
Net change in
unrealized gains
(losses) on fair
value 23,681 5,501 25,698 (7,688)
Reclassification
of net (gains)
losses to income (21,589) (6,954) (27,729) (16,315)
2,092 (1,453) (2,031) (24,003)
Income tax
(expense)
recovery (556) 3 554 6,083
1,536 (1,450) (1,477) (17,920)
Total other
comprehensive
income (loss) 3,305 (348) 1,782 (13,669)
Total
comprehensive
(loss) income (123,954) 73,016 5,370 257,697
Total
comprehensive
(loss) income
attributable to:
Common
shareholders (124,275) 72,666 (11) 252,280
Other equity - - 4,410 4,410
Non-controlling
interests 321 350 971 1,007
(123,954) 73,016 5,370 257,697
Consolidated statements of changes in equity (unaudited)
($000s) Three-month period ended July 31, 2026
Common Contributed Retained Accumulated other comprehensive
shares deficit earnings income (loss)
Other Cash Financial Total Attributable Non-controlling Total
equity flow instruments to equity interests
instruments hedges at FVOCI holders
Balance,
beginning of
period 483,598 345,105 (17,341) 2,420,049 (1,316) 1,432 116 3,231,527 7,653 3,239,180
Net (loss)
Income - - - (127,580) - - - (127,580) 321 (127,259)
Transfer of AOCI
losses to
income, net of
tax - - - - - 18 18 18 - 18
Other
comprehensive
income, net of
tax - - - - 1,536 1,769 3,305 3,305 - 3,305
Common shares
issued on
acquisition 962,601 - - - - - - 962,601 - 962,601
Common share
issuance costs,
net of tax (208) - - - - - - (208) (208)
Exercise of
stock options 2,601 - - - - - - 2,601 - 2,601
Common shares
repurchased and
cancelled (1,936) - - (10,734) - - - (12,670) - (12,670)
Automatic Share
purchase
obligation - - - 4,034 - - - 4,034 - 4,034
Limited resource
capital notes
issuance costs,
net
of tax - (7) - - - - - (7) - (7)
Common share
dividends - - - (21,529) - - - (21,529) (462) (21,991)
Put option --
non-controlling
interests - - (908) - - - - (908) - (908)
Stock-based
compensation - - 1,134 - - - - 1,134 - 1,134
Transfer
relating to the
exercise of
stock options 1,495 - (1,495) - - - - - - -
Balance, end of
period 1,448,151 345,098 (18,610) 2,264,240 220 3,219 3,439 4,042,318 7,512 4,049,830
($000s) Three-month period ended July 31, 2025
Common Contributed Retained Accumulated other comprehensive
shares deficit earnings income (loss)
Other Cash Financial Total Attributable Non- Total
equity flow instruments to equity controlling
instruments hedges at FVOCI holders interests
Balance,
beginning of
period 510,973 147,360 (19,177) 2,607,001 5,147 (2,803) 2,344 3,248,501 9,661 3,258,162
Net Income - - - 73,014 - - - 73,014 350 73,364
Transfer of AOCI
losses to net
income, net of
tax - - - - - 39 39 39 - 39
Other
comprehensive
loss, net of
tax - - - - (1,450) 1,102 (348) (348) - (348)
Exercise of
stock options 952 - - - - - - 952 - 952
Common share
dividends - - - (20,297) - - - (20,297) (462) (20,759)
Put option --
non-controlling
interests - - (1,442) - - - - (1,442) - (1,442)
Acquisition of
non-controlling
interests - - 4,242 (3,083) - - - 1,159 (1,159) -
Stock-based
compensation - - 1,590 - - - - 1,590 - 1,590
Transfer
relating to the
exercise of
stock options 247 - (247) - - - - - - -
Balance, end of
period 512,172 147,360 (15,034) 2,656,635 3,697 (1,662) 2,035 3,303,168 8,390 3,311,558
($000s) Nine-month period July 31, 2026
ended
Common Contributed Retained Accumulated other
shares deficit earnings comprehensive income (loss)
Other Cash Financial Total Attributable Non- Total
equity flow instruments to equity controlling
instruments hedges holders
at FVOCI interests
Balance,
beginning of
period 503,060 147,360 (15,014) 2,566,475 1,697 (13) 1,684 3,203,565 8,234 3,211,799
Net Income - - - 2,617 - - 2,617 971 3,588
Transfer of AOCI
gains to
income, net of
tax - - - - - (27) (27) (27) - (27)
Other
comprehensive
(loss) income,
net of tax - - - - (1,477) 3,259 1,782 1,782 - 1,782
Common shares
issued on
acquisition 962,601 - - - - - - 962,601 - 962,601
Common shares
issuance costs,
net of tax (208) - - - - - - (208) - (208)
Exercise of
stock options 10,982 - - - - - - 10,982 - 10,982
Common shares
repurchased and
cancelled (31,786) - - (236,688) - - - (268,474) - (268,474)
Limited recourse
capital notes
issued - 200,000 - - - - - 200,000 - 200,000
Limited recourse
capital notes
issuance costs,
net
of tax - (2,262) - - - - - (2,262) - (2,262)
Limited recourse
capital notes
distributions - - - (4,410) - - - (4,410) - (4,410)
Common share
dividends - - - (63,754) - - - (63,754) (1,693) (65,447)
Put option --
non-controlling
interests - - (2,818) - - - - (2,818) - (2,818)
Stock-based
compensation - - 2,724 - - - - 2,724 - 2,724
Transfer
relating to the
exercise of
stock options 3,502 - (3,502) - - - - - - -
Balance, end of
period 1,448,151 345,098 (18,610) 2,264,240 220 3,219 3,439 4,042,318 7,512 4,049,830
($000s) Nine-month period July 31, 2025
ended
Common Contributed Retained Accumulated other
shares deficit earnings comprehensive income (loss)
Other Cash Financial Total Attributable Non- Total
equity flow instruments to equity controlling
instruments hedges holders
at FVOCI interests
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 - - - 270,359 - - - 270,359 1,007 271,366
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 - - - - - 133 133 133 - 133
Other
comprehensive
loss, net of
tax - - - - (17,920) 4,251 (13,669) (13,669) - (13,669)
Exercise of
stock options 8,089 - - - - - - 8,089 - 8,089
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)
Common share
dividends - - - (58,731) - - - (58,731) (1,837) (60,568)
Put option --
non-controlling
interests - - (3,776) - - - - (3,776) - (3,776)
Acquisition of
non-controlling
interests - - 4,242 (3,083) - - - 1,159 (1,159) -
Stock-based
compensation - - 3,821 - - - - 3,821 - 3,821
Transfer
relating to the
exercise of
stock options 1,947 - (1,947) - - - - - - -
Balance, end of
period 512,172 147,360 (15,034) 2,656,635 3,697 (1,662) 2,035 3,303,168 8,390 3,311,558
Consolidated statements of cash flows (unaudited)
Three months ended Nine months ended
($000s) July 31, 2026 July 31, July 31, 2026 July 31, 2025
2025
CASH FLOWS FROM
OPERATING
ACTIVITIES
Net (loss) income (127,259) 73,364 3,588 271,366
Adjustments for
non-cash items in
net income:
Financial
instruments at
fair value through
income 30,135 110,533 (998) (67,817)
Amortization of
premiums/discounts
on financial
instruments (8,681) (692) (13,238) (6,275)
Depreciation of
capital assets and
amortization of
intangible assets 27,315 16,844 57,776 49,238
Impairment of
intangible assets 15,809 - 15,809 -
Provision for
credit losses 302,984 33,968 387,463 82,880
Securitization
gains (9,044) (18,027) (39,334) (48,653)
Stock-based
compensation 1,134 1,590 2,724 3,821
Income taxes (40,671) 27,843 11,940 99,069
Securitization
retained interests 55,230 44,691 158,559 126,389
Changes in
operating assets
and liabilities:
Restricted cash 116,706 (222,094) 300,737 (246,698)
Securities
purchased under
reverse repurchase
agreements 149,789 150,866 (396,081) (689,053)
Loans receivable,
net of
securitizations 138,592 (176,355) 1,286,652 (442,501)
Other assets 42,383 (9,003) 7,368 (8,922)
Deposits (1,542,405) 1,349,617 (1,469,280) 2,605,032
Securitization
liabilities 162,176 (1,060,539) (410,696) (2,128,524)
Obligations under
repurchase
agreements (50,493) 64,531 (104,568) 148,623
Funding facilities 767,142 (25,064) (645) 438,350
Other liabilities (82,759) (27,275) (15,215) 38,124
Income taxes paid (3,322) (20,287) (61,936) (88,046)
Cash flows (used
in) from operating
activities (55,239) 314,511 (279,375) 136,403
CASH FLOWS FROM
FINANCING
ACTIVITIES
Proceeds from
issuance of common
shares 2,393 952 10,774 8,089
Net proceeds from
issuance of
limited recourse
notes (7) - 197,738 (80)
Common share
repurchased (4,602) - (268,474) (28,172)
Dividends paid on
common shares (21,991) (20,759) (65,447) (60,568)
Distribution to
other equity
holders - - (4,410) (4,410)
Funding facilities
used for the
Acquisition 252,475 - 252,475 -
Cash flows from
(used in)
financing
activities 228,268 (19,807) 122,656 (85,141)
CASH FLOWS FROM
INVESTING
ACTIVITIES
Purchase of
investments (252,179) (370,789) (849,361) (387,208)
Acquisition of
subsidiary, net of
cash acquired 37,404 - 37,404 -
Proceeds on sale or
redemption of
investments 265,672 82,864 1,134,381 242,337
Investment in
associate - - (3,598) -
Net change in
Canada Housing
Trust
re-investment
accounts - - - 53,032
Purchase of capital
assets and system
development
costs (24,662) (21,769) (76,863) (65,307)
Cash flows from
(used in)
investing
activities 26,235 (309,694) 241,963 (157,146)
Net increase
(decrease) in cash
and cash
equivalents 199,264 (14,990) 85,244 (105,884)
Cash and cash
equivalents,
beginning of
period 603,233 500,747 717,253 591,641
Cash and cash
equivalents, end
of period 802,497 485,757 802,497 485,757
Supplemental
statement of cash
flows disclosure:
Cash flows from
operating
activities include:
Interest received 683,031 683,755 1,996,582 2,062,196
Interest paid (501,223) (498,078) (1,198,541) (1,325,193)
Dividends received - - - 350
About EQB Inc.
EQB Inc. (TSX: EQB) is a leading Canadian financial services company with approximately $151 billion in combined assets under management and administration. It is the parent company of Equitable Bank, the country's seventh largest Schedule I bank by assets, which operates EQ Bank, Canada's Challenger Bank(TM).
Our purpose is to remake banking so every Canadian gets ahead, every day. Since 1970, we have built thoughtful financial solutions that serve more than 4 million customers, turning everyday moments into meaningful progress. As the exclusive financial partner of Loblaw Companies Limited's PC Optimum(TM) loyalty program -- one of Canada's largest loyalty programs with more than 18 million members -- EQ Bank's financial solutions are deeply embedded into the daily lives of Canadians.
We provide personal and commercial banking services to Canadian households and businesses through everyday banking, tailored lending and connected payments, while fueling competition and choice in Canadian banking. Through our subsidiaries, we also offer home and auto insurance, estate and trust services, credit union solutions and alternative asset management.
To learn more, visit eqb.investorroom.com and eqbank.ca, or connect with us on Instagram, Facebook or LinkedIn.
Investor contact:
Lemar Persaud
SVP, IR and Enterprise Performance Management
investor_enquiry@eqb.com
Media contact:
Danielle Mason
Director, PR & Communications
press@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 expectations 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", "scheduled", "guidance", "planned", "estimates", "forecasts", "outlook", "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", "should", "might" or "will be taken", "occur", "be achieved", "will likely" or other similar expressions of future or conditional verbs. These statements include, but are not limited to, statements with respect to EQB's ability to successfully integrate an acquired business, including but not limited to EQB's announced acquisition of PC Financial(1) from Loblaw Companies Limited (the Acquisition), entering into the related commercial arrangement and future communications and disclosures regarding the Acquisition, the timing and expected benefits of such transactions, statements relating to the expected impact of the Acquisition, the anticipated benefits of the Acquisition, including the expected impact on EQB's size, operations, capabilities, growth drivers and opportunities, activities, attributes, profile, business services portfolio and loans, revenue and assets mix, market position, profitability, performance, and strategy; the expected impact of the Acquisition on EQB's financial performance; expectations regarding EQB's business model, plans and strategy, the maintenance of CET1 ratio and changes in adjusted EPS; strategic fit and complementarity of PC Financial and Equitable Bank; anticipated synergies and estimated transaction and integration costs and the timing of incurrence thereof, as well as EQB's financial performance objectives, vision and strategic goals, the economic and market review and outlook, the regulatory environment in which we operate, the outlook and priorities for each of its business lines, the expected impact on PC Financial customers and employees, the risk environment including liquidity and funding risk, and statements by EQB representatives.
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 EQB's customers and rates of default, the integration of PC Financial and the realization of the anticipated benefits and synergies of the Acquisition in the timeframe anticipated, including impact and accretion in various financial metrics; the ability to retain management and key employees of PC Financial; and competition as well as those factors discussed under the heading "Risk Management" in EQB's Q3 2026 Management's Discussion and Analysis (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 loan business, a continuation of the current level of economic uncertainty that affects real estate market conditions including, without limitation, 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.
(1) On July 1, 2026, EQB completed the previously announced acquisition of PC Financial which is comprised of President's Choice Bank (PC Bank), PC(R) Financial Insurance Agency Inc., PC(R) Financial Insurance Broker Inc., and certain other affiliated entities of PC(R) Bank. In connection with the closing of the acquisition, EQB entered into a long-term strategic relationship with Loblaw pursuant to a commercial agreement to become the exclusive financial partner of Loblaw and its PC Optimum(TM) loyalty program.
Non-Generally Accepted Accounting Principles (GAAP) Financial Measures and Ratios
To enable readers to better assess trends in underlying business performance and increase consistency with the reporting regimens used by other leading Canadian financial institutions, EQB provides adjusted results in parallel with reported measures. Adjusted results are non-GAAP financial measures that enable readers to assess underlying business results and trends. Adjustments listed below are presented on a pre-tax basis:
Q3 2026
-- $37.42 million PC Financial acquisition and integration-related costs;
-- $22.00 million intangible asset amortization and impairments related to
acquisitions;
-- $1.71 million business exit costs(1); and
-- $219.06 million initial provisions for credit losses associated with
acquired PC Financial credit cards.
Q2 2026
-- $17.75 million business exit costs(1);
-- $13.84 million PC Financial acquisition and integration-related costs;
and
-- $1.97 million acquisitions-related intangible asset amortization.
Q3 2025
-- $4.04 million fair value adjustment on a covered bond maturity;
-- $2.59 million accelerated long-term incentive expense following the
former CEO's passing;
-- $0.86 million new office lease related expenses; and
-- $1.97 million acquisitions-related intangible asset amortization.
YTD 2026
-- $57.10 million PC Financial acquisition and integration-related costs;
-- $25.93 million intangible asset amortization and impairments related to
acquisitions;
-- $19.46 million business exit costs(1); and
-- $219.06 million initial provisions for credit losses associated with
acquired PC Financial credit cards.
YTD 2025
-- $4.04 million fair value adjustment on a covered bond maturity;
-- $5.91 million acquisitions-related intangible asset amortization;
-- $7.01 million new office lease related expenses prior to occupancy;
-- $2.59 million accelerated long-term incentive expense following the
former CEO's passing;
-- $1.78 million non-recurring operational effectiveness expenses and ACM
and Concentra Bank acquisition and integration-related costs; and
-- $5.02 million provision for credit losses associated with an equipment
financing purchase facility.
(1) As part of its Challenger Bank strategy, EQB is
actively optimizing its business mix, with a clear
focus on disciplined capital allocation and prioritization
of high-return growth opportunities. During Q3 2026,
EQB exited a strategic investment that is no longer
being pursued and during Q2 2026, EQB exited its Merchant
Payments business. Both exits were not core to EQB's
growth strategy and contributed minimally to earnings
and return on equity.
The following table presents a reconciliation of GAAP reported financial results to non-GAAP adjusted financial results.
Reconciliation of For the three months ended For the nine months reported and ended adjusted financial results ($000s, except share 31-Jul-26 30-Apr-26 31-Jul-25 31-Jul-26 31-Jul-25 and per share amounts) Reported results Net interest income (1) 319,174 260,732 258,483 843,346 807,265 Non-interest revenue (1) 72,159 41,632 47,646 157,145 137,449 Revenue 391,333 302,364 306,129 1,000,491 944,714 Non-interest expenses 256,279 182,858 170,954 597,500 491,399 Pre-provision pre-tax income (2) 135,054 119,506 135,175 402,991 453,315 Provision for credit loss 302,984 45,351 33,968 387,463 82,880 Income taxes (40,671) 22,839 27,843 11,940 99,069 Net income (127,259) 51,316 73,364 3,588 271,366 Net income attributable to common shareholders (127,580) 46,571 73,014 (1,793) 265,949 Adjustments Net interest income -- covered bond fair value adjustment - - 4,035 - 4,035 Non-interest revenue -- strategic investment exit 1,709 - - 1,709 - Non-interest expenses -- PC Financial acquisition and integration-related costs (37,420) (13,839) - (57,096) - Non-interest expenses -- acquisition-related intangible asset amortization and impairments (21,995) (1,969) (1,969) (25,933) (5,907) Non-interest expenses -- business exit costs - (17,753) - (17,753) - Non-interest expenses -- new office lease related costs - - (857) - (7,009) Non-interest expenses -- accelerated incentive expense - - (2,594) - (2,594) Non-interest expenses -- non-recurring operational effectiveness and acquisition-related costs - - - - (1,782) Provision for credit loss -- acquired credit cards (219,061) - - (219,061) - Provision for credit loss -- equipment financing purchase facility - - - - (5,018) Impact on net income before taxes from adjustments 280,185 33,561 9,455 321,552 26,345 Income taxes -- tax impact on above adjustments (3) 71,639 6,568 2,561 80,310 7,014 Post-tax adjustments -- net income 208,546 26,993 6,894 241,242 19,331 Adjustments attributed to minority interests (230) (228) (230) (687) (750) Post-tax adjustments -- net income to common shareholders 208,316 26,765 6,664 240,555 18,581 Adjusted results (2) Net interest income (1) 319,174 260,732 262,518 843,346 811,300 Non-interest revenue (1) 73,868 41,632 47,646 158,854 137,449 Revenue 393,042 302,364 310,164 1,002,200 948,749 Non-interest expenses 196,864 149,297 165,534 496,718 474,107 Pre-provision pre-tax income 196,178 153,067 144,630 505,482 474,642 Provision for credit
loss 83,923 45,351 33,968 168,402 77,862 Income taxes 30,968 29,407 30,404 92,250 106,083 Net income 81,287 78,309 80,258 244,830 290,697 Net income attributable to common shareholders 80,736 73,336 79,678 238,762 284,530 Diluted earnings per share Weighted average diluted common shares outstanding 37,996,057 36,055,643 38,519,991 37,184,721 38,654,423 Diluted (loss) earnings per share -- reported (3.39) 1.29 1.90 (0.05) 6.88 Diluted earnings per share -- adjusted (2) 2.12 2.03 2.07 6.42 7.36 Diluted earnings per share -- adjustment impact 5.51 0.74 0.17 6.47 0.48 (1) Effective November 1, 2024, interest income earned from retained interests and interest expense incurred on servicing liabilities are reclassed from Non-interest revenue to Net interest income. Prior period comparative figures have been updated to conform to current period presentation. (2) These are non-GAAP measures or ratios, see "Non-GAAP financial measures and ratios" section.. (3) Income tax expense associated with non-GAAP adjustment was calculated based on the statutory tax rate applicable for that period.
Return on tangible common equity (ROTCE)
Effective Q3 2026, EQB began reporting Return on Tangible common equity (ROTCE), a non-GAAP financial measure that reflects the return generated on tangible common equity. Management uses ROTCE, together with other financial measures, to assess how efficiently EQB generates earnings from the tangible capital available to support its business. Following the acquisition of PC Financial, which increased goodwill and intangible assets, ROTCE provides readers with a useful additional perspective on EQB's underlying profitability, capital efficiency and comparability.
The table below presents the computation of ROTCE and a reconciliation to the most directly comparable GAAP measures.
For the three months ended For the nine
months ended
($000s, except 31-Jul-26 30-Apr-26 31-Jul-25 31-Jul-26 31-Jul-25
percentage)
Net (loss) income
attributable to
common shareholders (127,580) 46,571 73,014 (1,793) 265,949
Amortization of
acquisition-related
intangible assets
(Post-tax and
non-controlling
interests) 3,428 1,258 1,256 5,943 3,708
Net (loss) income
attributable to
common shareholders
excluding the
post-tax and
non-controlling
interests
impact of
amortization of
acquisition-related
intangible
assets [A] (124,152) 47,829 74,270 4,150 269,657
After-tax impact of
other adjusting items
(Post non-controlling
interests) 204,888 25,507 5,408 234,612 14,873
Adjusted net income
attributable to
common shareholders
[B] 80,736 73,336 79,678 238,762 284,530
Average common
shareholders' equity 3,123,129 2,936,317 3,128,320 2,997,083 3,068,010
Average goodwill (128,627) (92,545) (110,580) (106,978) (110,580)
Average
acquisition-related
intangible assets (159,756) (53,297) (59,203) (96,668) (61,172)
Net of average related
deferred tax
liabilities 41,923 12,804 14,251 24,645 14,734
Average tangible
common equity [C] 2,876,669 2,803,279 2,972,788 2,818,082 2,910,992
ROTCE -- reported
[A]/[C] (17.1 %) 7.0 % 9.9 % 0.2 % 12.4 %
ROTCE -- adjusted
[B]/[C] 11.1 % 10.7 % 10.6 % 11.3 % 13.1 %
Other non-GAAP financial measures and ratios:
-- Adjusted efficiency ratio: derived by dividing adjusted non-interest
expenses by adjusted revenue. A lower adjusted efficiency ratio reflects
a more efficient cost structure.
-- Adjusted return on equity $(ROE)$: calculated on an annualized basis and
defined as adjusted net income available to common shareholders as a
percentage of weighted average common shareholders' equity outstanding
during the period.
-- Adjusted return on Tangible common equity (ROTCE): calculated on an
annualized basis and defined as adjusted net income available to common
shareholders as a percentage of average Tangible common equity
outstanding during the period.
-- Assets under administration (AUA): is the 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): 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): is the difference between revenue
and non-interest expenses.
-- Return on Tangible common equity (ROTCE): calculated on an annualized
basis and is defined as net income available to common shareholders,
excluding the amortization and write-down of acquisition-related
intangible assets other than software, as a percentage of average
Tangible common equity outstanding during the period.
-- Tangible common equity: calculated as common shareholders' equity less
goodwill and acquisition-related intangible assets other than software,
net of deferred tax.
-- Total loan assets: 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.
View original content to download multimedia:https://www.prnewswire.com/news-releases/eqb-reports-third-quarter-2026-results-including-one-month-of-results-from-pc-financial-and-announces-dividend-increase-302860983.html
SOURCE EQB Inc.
Copyright CNW Group 2026
Comments