Home Capital Group Inc. strong growth and returns continue
TORONTO, April 22 /CNW/ - Home Capital Group Inc. (TSE: HCG.B) recorded
significant gains in assets, revenue, net income, fully diluted earnings per
share and return on equity during the first quarter ended March 31, 1999.
These results were generated by the Company's wholly owned subsidiary, Home
Savings & Loan Corporation.
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Three Months Three Months
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Ended Mar. 31/99 Ended Mar. 31/98
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Assets $576,002,378 $467,050,846
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Revenue $11,943,316 $9,232,470
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Net Income $1,886,130 $1,205,568
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Basic Earnings per Share $0.13 $0.10
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Fully Diluted Earnings per Share $0.12 $0.08
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Return on Equity 21.9% 18.8%
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Average Shares 14,475,000 12,137,000
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- On a year over year basis, total assets increased by 23.3%, total
mortgages increased by 20.3% and fully diluted earnings per share
increased by 50.0%.
- The return on equity for the quarter was 21.9% annualized and the
total risk based capital ratio was 13.76%.
- The Company expects to achieve or exceed all of the 1999 objectives
as stated in the 1998 annual report.
HOME CAPITAL GROUP INC.
TO OUR SHAREHOLDERS:
Your Company has entered 1999 much as it left 1998 -- marked by solid
growth, consistent earnings and a portfolio of below average risk. Our prudent
growth strategy, increasing market recognition of our niche as ''the
alternative residential mortgage lender of choice,'' and continuing focus on
business fundamentals translated into our 15th consecutive quarter of
continuing gains across a range of indicators. As in previous years, results
achieved through our wholly owned subsidiary, Home Savings & Loan Corporation,
for the first quarter of the current year, represent an improvement on a
year-over-year basis.
For the period ended March 31, 1999, net income stood at $1,886,130, or
$0.13 per share. This compares to the $1,205,568, or $0.10 per share recorded
for the same period in 1998. On a fully diluted basis, earnings per share
increased by 50.0%, from $0.08 to $0.12. The annualized return on average
shareholders' equity reached 21.9%, versus 18.8% for the first quarter of last
year. The total risk based capital ratio was 13.76%, compared to 11.99% one
year earlier.
Revenue increased by 29.4% to $11,943,316, total assets increased by
23.3% to $576,002,378 and the mortgage portfolio increased by 20.4% to
$489,171,897, year over year. Net impaired loans at March 31, 1999 represented
0.35% of the gross mortgage portfolio, compared to 0.34% one year earlier.
During the period under review, the Company also announced the
commencement of a dividend program. This dividend pays 1.5 cents per share per
quarter, which translates into 6.0 cents per annum. The Board of Directors had
long stated that the issue was not whether to introduce a dividend, but when
to do so. A review of the results for 1998 and of our performance trends was
conducted earlier this year. This review produced the conclusion that the
strong cash flow from operations plus the strength of our balance sheet could
support the implementation of a dividend program while preserving our growth
targets and maintaining the highest level of regulatory compliance. The first
dividend of 1.5 cents per share is payable on May 14, 1999 for shareholders of
record on the close of business on April 19, 1999.
The first quarter also saw the Company receive regulatory approval to
conduct business in the provinces of Manitoba, Nova Scotia, Prince Edward
Island and Saskatchewan. As in the case of our move into Alberta and British
Columbia, we will ensure that future expansion of our business activity is
undertaken in a prudent and cost effective manner.
With strong core earnings, substantial unused borrowing capacity and
registration in most Canadian provinces, the Company is in a position to
expand into related mortgage based activities. In this regard, we have
developed an increasing number of relationships with established residential
construction firms to provide mortgage based construction financing for single
family dwellings.
The outlook for the balance of this year remains positive. Our annual
report for 1998 outlines our objectives for the current year. These goals
include the achievement of a 20% increase in each of assets, earnings and
fully diluted earnings per share, plus a return on equity in the 20% range.
We believe the Company is firmly on track in its pursuit of these targets,
thereby creating additional value for our shareholders.
On behalf of the Board of Directors, I invite all shareholders and guests
to attend the Annual Meeting of Shareholders, which will be held in the Essex
Ballroom of the Sheraton Centre Hotel, 123 Queen Street West, Toronto, Ontario
on Wednesday, May 26, 1999 at 11:00 a.m. Shareholders and guests are also
invited to join Directors and Management for lunch and refreshments following
the Annual Meeting.
GERALD M. SOLOWAY
President and Chief Executive Officer
April 22, 1999.
-0- 04/22/1999
For further information: Gerald M. Soloway, President and Chief Executive Officer, or W. Roy Vincent, Senior Vice President Phone (416) 360-4663 Fax (416) 363-7611 Web site www.homecapital.com |
