TORONTO, Feb. 18, 2014 /CNW/ - Equity Financial Holdings Inc. (EQI.TO) ("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 Bowers as 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 Group.
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 management program."
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.
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