EQB reports first quarter 2026 results

prnewswire.com · Feb 25, 2026 · Collected from GDELT

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, /PRNewswire/ - EQB Inc. (TSX: EQB) today reported financial results for the first quarter and three months ended January 31, 2026. Adjusted diluted EPS1: $2.26, +48% q/q and (24%) y/y (reported $2.11) Adjusted net income1: $85.2 million, +34% q/q and (27%) y/y (reported $79.5 million) Adjusted PPPT2: $156.2 million, +9% q/q and (8%) y/y (reported $148.4 million) Adjusted ROE1: 11.1%, +360 bps q/q and (410 bps) y/y (reported 10.4%) Adjusted revenue1: $306.8 million, flat q/q and (5%) y/y (reported $306.8 million) Adjusted net interest margin (NIM)1,3: 2.02%, +1 bp q/q and (8 bps) y/y (reported 2.02%) Book value per share: $81.75, +1% q/q and +3% y/y Total AUM + AUA3: $142 billion, +3% q/q +8% y/y EQ Bank customers: 633,000, +4% q/q and +18% y/y Common share dividends declared: $0.59 per share, +4% q/q and +16% y/y Capital: CET1 ratio of 13.6% and total capital ratio of 16.0% "EQB's first quarter reflects the outcome of our refreshed strategic focus and important steps forward to challenge the market, raise the bar in banking and win for Canadians, while progressing toward our ROE objectives. We strengthened execution across our core franchise, expanded loans under management, significantly improved efficiency and maintained prudent credit provisioning," said Chadwick Westlake, President and CEO. "In every environment, we must perform and deliver differentiated choice for customers. The opportunity set for Canada's Challenger Bank is tangible and growing because Canadians deserve better options. We are energized to close our agreement to acquire PC Financial, partner with Loblaw Companies and make banking more competitive across Canada with EQ Bank." Planned acquisition of PC Financial progressing with strong momentum EQB formally filed its applications with the Office of the Superintendent of Financial Institutions (OSFI) and the Competition Bureau of Canada in January 2026 EQB established its Integration Management Office to prepare for integration, achieve strategic benefits of the acquisition, including revenue and expense synergies, and deliver value to Canadians in the long-term Efficiency ratio improvement reflects disciplined expense management Proactive strategic restructuring program in Q4 2025 delivered significant cost benefits, contributing to 9% q/q and 1% y/y decline in adjusted expenses, respectively (reported down 39% q/q and 1% y/y); this was achieved while EQB continued to actively invest in technology, innovation and new capabilities as well as higher premises costs reflecting the new Toronto headquarters EQB's adjusted efficiency ratio for Q1 improved to 49.1% (reported 51.6%), down from 53.6% in Q4 2025, demonstrating meaningful execution against its low-50% efficiency ratio target for 2026 Delivered positive LUM growth despite dynamic operating environment Commercial lending loans under management (LUM) grew 3% q/q and 19% y/y, the latter driven by solid results in insured multi-unit residential mortgages as demand for CMHC-insured construction loans and the securitization market remained strong Personal lending LUM was flat q/q and declined 2% y/y, driven by the strategic decision to decelerate growth in insured single-family due to lower margins; excluding insured single-family, personal lending LUM was up 1% q/q and 7% y/y driven by growth in the single-family uninsured and decumulation portfolios. The decumulation lending portfolio grew 5% q/q and 30% y/y as EQ continued to capture market share in this rapidly growing segment EQ Bank welcomed new retail and business customers at an attractive rate EQ Bank added 26,000 new retail and business customers in Q1 who will benefit from its expanding shelf of everyday banking products and continued enhancements to the Business Banking platform, including the upcoming prepaid Business Card EQ Bank deposits grew to $9.94 billion in Q1 (flat q/q and +10% y/y), increasing to 27% of total deposit principal (up 41 bps y/y); growth was supported by continued adoption across its everyday banking offerings including the Personal Account and Business Banking platform, with the Notice Savings Account standing out as a differentiated savings solution for customers seeking more flexibility and value EQ Bank products received industry recognition as customers' products of choice including Best Savings Account in Canada from moneyGenius and Best Online Bank Account from Milesopedia Prudent provisioning materially improved PCLs in line with robust risk management approach EQB's provision for credit losses (PCL) declined 28% q/q, reflecting lower performing provisions partially offset by higher impaired provisions; lower performing was driven by a more moderate build as Q4 2025 reflected deterioration in forward-looking macroeconomic indicators, while higher impaired provisions were largely related to one commercial borrower group, partially offset by lower provisions in equipment finance given a strategic shift to higher quality assets Adjusted PCL was up 186% y/y (reported 109% y/y), primarily reflecting higher impaired provisions in the commercial and personal lending portfolios Credit performance in Q1 reflected ongoing macroeconomic pressure expected to continue through H1 2026, with prudent provisions demonstrating continued discipline across EQB's risk management framework The Bank is appropriately reserved for credit losses with net allowances as a percentage of total loan assets of 43 bps, compared to 28 bps at Q1 2025 Dividend increase and share buybacks reflect balanced approach to capital deployment to drive sustainable, long-term shareholder value EQB declared a dividend of $0.59 per common share payable on March 31, 2026, to shareholders of record as of March 13, 2026, representing 4% and 16% increases from the dividends paid in December 2025 and March 2025, respectively As part of its capital management strategy and to drive attractive returns for shareholders, EQB renewed its Normal Course Issuer Bid (NCIB) and established an Automatic Securities Purchase Plan (ASPP) in January 2026, the latter of which allows the repurchase of common shares under the NCIB during restricted trading periods; in Q1, 1,066,890 common shares were repurchased "While we expect operating environment headwinds to persist through the first half of the year, we delivered strong first quarter performance with meaningful expense improvement and continued strategic investment in high‑impact growth areas. Importantly, we also delivered stable margins and maintained our disciplined approach to lending, anchored in our robust risk management framework," said Anilisa Sainani, CFO. "We are pleased with our results and positive momentum towards our efficiency guidance in the low-50% range and 12% ROE objective for fiscal 2026. We remain focused on executing against our priorities and positioning the business to successfully capitalize on our significant opportunities ahead." Analyst conference call and webcast: 10:30 a.m. ET on February 26, 2026EQB's Chadwick Westlake, President and CEO, Anilisa Sainani, CFO, and Marlene Lenarduzzi, 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 or 888-699-1199 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 PPPT represents pre-provision-pre-tax income, a non-GAAP measure of financial performance. 3 These are non-GAAP measures, see the "Non-GAAP financial measures and ratios" section. INTERIM CONSOLIDATED FINANCIAL STATEMENTS Consolidated balance sheets (unaudited) ($000s) As at January 31, 2026 October 31, 2025 January 31, 2025 Assets: Cash and cash equivalents 889,635 717,253 810,017 Restricted cash 883,538 1,326,684 817,025 Securities purchased under reverse repurchase agreements 2,298,802 1,604,165 1,800,014 Investments 1,605,119 1,645,864 1,571,754 Loans Loans – Personal 31,762,404 31,857,508 32,360,193 Loans – Commercial 13,835,441 14,581,966 14,128,917 Allowance for credit losses (210,260) (206,801) (148,715) 45,387,585 46,232,673 46,340,395 Securitization retained interests 1,073,043 1,028,623 892,258 Deferred tax assets 33,732 36,429 28,841 Other assets Derivative financial instruments 236,240 242,799 263,856 Intangible assets 148,652 148,623 195,552 Goodwill 92,545 92,545 110,580 Investment in associate 53,510 49,884 50,225 Other 421,505 368,179 351,307 952,452 902,030 971,520 Total assets 53,123,906 53,493,721 53,231,824 Liabilities and Equity Liabilities: Deposits 37,491,813 36,616,511 34,616,801 Securitization liabilities 10,922,876 11,197,477 13,711,167 Obligations under repurchase agreements 29,356 104,568 - Deferred tax liabilities 205,217 199,151 190,419 Funding facilities 576,651 1,454,087 768,813 Other liabilities Derivative financial instruments 77,559 94,742 135,237 Other 673,826 615,386 587,951 751,385 710,128 723,188 Total liabilities 49,977,298 50,281,922 50,010,388 Equity: Common shares 494,610 503,060 506,160 Other equity instruments 147,360 147,360 147,360 Contributed deficit (16,284) (15,014) (17,437) Retained earnings 2,507,738 2,566,475 2,564,315 Accumulated other comprehensive income 5,404 1,684 11,200 Total shareholders' equity 3,138,828 3,203,565 3,211,598 Non-controlling interests 7,780 8,234 9,838 Total eq