Home Capital Reports Solid Fourth Quarter and Annual Results


    --  Basic earnings per share were $1.70 for the quarter and $6.40
        for 2012, up 17.2% and 16.8%, respectively, from the $1.45 and
        $5.48 in the comparative periods.
    --  Net income for 2012 was $222.0 million, an increase of 16.8%
        over 2011.
    --  Return on equity for the year was 25.5%, surpassing 20% for the
        15(th) consecutive year and 25% for the 10(th) consecutive
        year.

TORONTO, Feb. 13, 2013 /CNW/ - Home Capital Group Inc. (TSX: HCG) today 
reported strong results for the fourth quarter and for the year, meeting the 
Company's targets for growth in net income and earnings per share and 
recording annual return on equity in excess of 25% for 10 consecutive years 
and surpassing 20% for 15 consecutive years.

"Despite a slowing housing market, tighter mortgage lending rules and 
challenging economic conditions in the US and Europe, the Canadian economy has 
proved resilient. The Company was well positioned in 2012 to deliver strong 
growth in our core business and consistent net interest margins that led to 
increased profits." commented CEO Gerald Soloway. "We have a proven business 
model and continue to execute well on our strategy."

The Company's Annual and Fourth Quarter Consolidated Financial Report, 
including Management's Discussion and Analysis, for each of the three- and 
twelve-month periods ended December 31, 2012 is available at 
www.homecapital.com and on the Canadian Securities Administrators' website at 
www.sedar.com.

Financial                                                                      
Highlights( )
                                                                               

(000s, except                        For the three months    For the year ended
Per Share and                                       ended
Percentage
Amounts)( )
                  December 31     September   December 31   December   December
                                         30                       31         31
                        2012          2012          2011       2012       2011 

OPERATING                                                                      
RESULTS( )

Net Income( )   $     58,965  $     57,254  $     50,280  $ 221,983  $ 190,080 

Total Revenue        227,649       226,603       208,399    887,685    790,274 
( )

Earnings per    $       1.70  $       1.65  $       1.45  $    6.40  $    5.48 
Share - Basic
( )

Earnings per            1.70          1.65          1.45       6.38       5.46 
Share - Diluted
( )

Return on               25.0%         25.6%         26.7%      25.5%      27.1%
Shareholders'
Equity( )

Return on                1.2%          1.2%          1.2%       1.2%       1.1%
Average Assets
( )

Net Interest            2.13%         2.14%         2.06%      2.09%      2.06%
Margin (TEB)
(1 )

Net Interest            3.11%         3.17%         3.03%      3.10%      3.04%
Margin
Non-Securitized
Assets (TEB)
(1 )

Net Interest            0.79%         0.89%         1.16%      0.93%      1.24%
Margin
Securitized
Assets( )

Provision as a          0.09%         0.10%         0.07%      0.09%      0.05%
Percentage of
Gross Loans
(annualized)( )

Efficiency              27.3%         28.1%         27.1%      27.7%      27.9%
Ratio (TEB)(1 )

As at( )          December 31     September   December 31                      
                                         30
                        2012          2012          2011                       

BALANCE SHEET                                                                  
HIGHLIGHTS( )

Total Assets( ) $ 18,800,079  $ 19,241,999  $ 17,696,471                       

Total Assets      19,681,750    19,410,132    17,696,471                       
Under
Administration
(2 )

Total Loans(3 )   16,904,435    17,292,395    16,089,648                       

Securitized        6,450,682     7,238,946     8,243,350                       
Loans
On-Balance
Sheet( )

Total Loans       17,786,106    17,460,528    16,089,648                       
Under
Administration
(4 )

Liquid Assets        771,772       998,219       808,222                       
( )

Deposits( )       10,136,599     9,870,691     7,922,124                       

Shareholders'        968,213       919,618       774,785                       
Equity( )

FINANCIAL                                                                      
STRENGTH( )

Capital                                                                        
Measures(5 )

Risk-Weighted   $  5,491,513  $  5,271,674  $  4,549,696                       
Assets( )

Tier 1 Capital         17.01%        16.97%        17.29%                      
Ratio( )

Total Capital          20.68%        20.78%        20.46%                      
Ratio( )

Assets to              13.98         14.07         14.44                       
Regulatory
Capital
Multiple( )

Credit Quality                                                                 
( )

Net                     0.33%         0.28%         0.25%                      
Non-Performing
Loans as a
Percentage of
Gross Loans( )

Allowance as a          57.0%         64.7%         74.9%                      
Percentage of
Gross
Non-Performing
Loans( )

Share                                                                          
Information( )

Book Value per  $      27.96  $      26.53  $      22.38                       
Common Share( )

Common Share    $      59.07  $      51.44  $      49.10                       
Price - Close
( )

Market          $  2,045,594  $  1,783,322  $  1,700,088                       
Capitalization
( )

Number of             34,630        34,668        34,625                       
Common Shares
Outstanding( )

(1 ) See definition of Taxable Equivalent Basis (TEB) under Non-GAAP
     Measures in the Company's 2012 Annual and Fourth Quarter
     Consolidated Financial Report.

(2 ) Total assets under administration include total on-balance sheet
     assets and off-balance sheet loans

(3 ) Total loans include loans held for sale.

(4 ) Total Loans under administration include total loans and
     off-balance sheet loans.

(5 ) These figures relate to the Company's operating subsidiary, Home
     Trust Company.
                                                             

2012 Targets                                                           
and Performance
( )
                                                                       
                                            For the year ended December
                                                               31, 2012
                2012 Targets Actual Results               Increase over
                         ( )            ( )        Amount          2011

Growth in net     13%-18%( )       16.8%( ) $    221,983  $     31,903 
income( )

Growth in         13%-18%( )       16.8%( )         6.38          0.92 
diluted
earnings per
share( )

Growth in total   13%-18%( )        5.1%( )   16,904,435       814,787 
loans(1 )

Return on           20.0%( )       25.5%( )                            
shareholders'
equity( )

Efficiency       28.0%-34.0%       27.7%( )                            
ratio (TEB)(2 )          ( )

Capital ratios                                                         
(3 )

  Tier 1( )       Minimum of      17.01%( )                            
                      13%( )

  Total( )        Minimum of      20.68%( )                            
                      14%( )

Provision as a   0.05%-0.15%       0.09%( )                            
percentage of            ( )
gross loans( )

(1    ) Includes loans held for sale.

(2)     See definition of Taxable Equivalent Basis (TEB) under Non-GAAP
        Measures in the Management's Discussion and Analysis included
        in the Company's 2012 Annual and Fourth Quarter Consolidated
        Financial Report.

(3)     Based on the Company's wholly owned subsidiary, Home Trust
        Company.

The Company was successful in meeting or exceeding all of its performance 
targets in 2012 except for growth in total loans. The Company was able to 
achieve its profit objectives with lower loan growth by focusing on higher 
yielding core mortgages, balancing its profit objectives with maintaining 
strong capital ratios under the Basel II and upcoming Basel III frameworks. 
Total loans were also reduced during the year by $896.0 million for loans that 
qualified for off-balance sheet treatment in 2012. Including these loans, 
growth was 10.5% over 2011.

FOURTH QUARTER AND 2012 HIGHLIGHTS

The Company recorded another period of solid performance in the fourth quarter 
of 2012 and for the year. Key results for the fourth quarter of 2012 and the 
year are as follows:

● Net income was $59.0 million in the fourth quarter and
        $222.0 million for the year, increasing 17.3% over the
        comparable quarter of 2011 and 16.8% over 2011. Sequentially
        in 2012, fourth quarter net income increased by 3.0% over
        third quarter net income. The annual results were well
        within the Company's 2012 objective of 13% to 18% growth in
        net income over 2011, and reflect the strong loan growth in
        the traditional portfolio, strengthening total net interest
        margin, continued low provisions for credit losses and a low
        efficiency ratio.
    ● Basic and diluted earnings per share reached $1.70 for the
        fourth quarter and $6.40 and $6.38, respectively, for the
        year.  This represents an increase of 17.2% from the $1.45
        basic and diluted earnings per share in the fourth quarter
        of 2011 and increases of 16.8% over the $5.48 and $5.46
        basic and diluted earnings per share earned in 2011. These
        results are well within the Company's 2012 annual objective
        of 13% to 18% growth in diluted earnings per share.
    ● Return on equity was 25.0% in the quarter and 25.5% for
        2012, well in excess of the Company's minimum performance
        objective of 20% for the fifteenth consecutive year and
        exceeding 25% for the tenth consecutive year.
    ● During the fourth quarter of 2012 the Company completed the
        sale of residual interests in National Housing Authority
        (NHA) mortgage-backed security (MBS) loan securitizations
        related to $662.2 million in existing on-balance sheet
        mortgages, leading to off-balance accounting for the
        mortgages and a gain on sale of $4.8 million. As of the date
        of the Management's Discussion and Analysis (MD&A) the
        regulatory treatment for these transactions has not been
        confirmed. For purposes of the calculation of the assets to
        capital multiple (ACM) the Company has included these
        off-balance sheet mortgages in the determination of
        regulatory balance sheet assets. While the ultimate
        regulatory treatment will impact the Company's volume of
        sales of residual interests in securitization transactions,
        it expects to continue sales when the economic returns are
        favourable.
    ● The securitization gains were partly offset by $3.6 million
        in charges recorded in derivative gains and losses.  These
        charges relate to the reversal of gains on derivatives
        recorded prior to adoption of International Financial
        Reporting Standards (IFRS) and are charged to income as the
        related CMB bonds mature.  See the Non-Interest Income
        section of the MD&A report for a discussion of the
        derivative gains and losses.
    ● Net interest income rose to $99.9 million in the fourth
        quarter and to $381.5 million for the year. This represents
        an increase of 13.0% over the $88.4 million recorded in the
        fourth quarter of 2011 and 14.2% over the $334.0 million
        recorded in 2011. Net interest income increased marginally
        over the $99.5 million recorded in the third quarter of
        2012. The growth in total net interest income quarter over
        quarter was reduced as a result of the sale of the residual
        interests in securitization transactions discussed above, as
        the interest income associated with such securitized
        mortgages is no longer reflected in interest income.  Net
        interest income on non-securitized assets of $85.1 million
        in the fourth quarter was up 3.8% from $81.9 million in the
        third quarter and 34.6% from the $63.2 million reported in
        the fourth quarter of 2011.
    ● Net interest margin (TEB) was 2.13% in the fourth quarter
        and 2.09% for the year 2012 compared to 2.06% in the fourth
        quarter of 2011 and for the year 2011. Net interest margin
        (TEB) was 2.14% in the third quarter of 2012. Total net
        interest margin is influenced by the mix of the loan
        portfolio between securitized and non-securitized mortgages
        and the net interest margin on each of these portfolios.
        Beginning in 2011 and continuing through 2012 the weighting
        of lower yielding securitized mortgages in the total
        portfolio declined, generally leading to higher total net
        interest margins. The net interest margin on the
        non-securitized portfolio also generally improved over that
        period, with some fluctuations quarter to quarter. The
        fourth quarter net interest margin for non-securitized
        mortgages was 3.11%, a decline from 3.17% in the third
        quarter. This is due to a change in the mix of the
        non-securitized portfolio and the spreads achieved in the
        quarter. The securitized net interest margin was 0.79% in
        the fourth quarter compared to 0.89% in the third quarter,
        which reflects the maturity of higher yielding Canada
        Mortgage Bond (CMB) mortgages during the quarter and lower
        yielding replacement assets in the program.
    ● The credit performance of the loans portfolio remained
        strong in the fourth quarter and for the year. Net
        non-performing loans ended 2012 at 0.33% of the total loans
        portfolio compared to 0.25% at the end of 2011 and 0.28% at
        the end of the third quarter of 2012, with the increase
        reflecting the relatively higher proportion of uninsured
        mortgages in the total portfolio in the portfolio. The
        provision for credit losses for the fourth quarter was 0.09%
        of gross loans on an annualized basis and 0.09% for the year
        compared to 0.07% in the comparable quarter of 2011 and
        0.05% in 2011 and 0.10% in the third quarter of 2012.  This
        reflects a year-over-year increase in the proportion of
        uninsured mortgages. The 2012 results are within the
        Company's objective of provisions being 0.05% to 0.15% of
        gross loans. Total write-offs remain low and were $3.6
        million in the quarter compared to $5.1 million the
        comparable quarter of 2011 and $3.4 million last quarter.
    ● Home Trust's Tier 1 and Total capital ratios remained very
        strong at 17.01% and 20.68%, respectively, at December 31,
        2012, and well above Company and regulatory minimum
        targets.  Home Trust's ACM was 13.98 at December 31, 2012
        compared to 14.44 at December 31, 2011 and 14.07 at
        September 30, 2012. In the first quarter of 2013, the
        Company will be required to adopt the new capital
        requirements known as Basel III. Based on the Office of the
        Superintendent of Financial Institutions Canada's (OSFI)
        implementation requirements, the Company remains well
        capitalized under Basel III measurements. At December 31,
        2012, the Company's  Basel III ratios are as follows:
           ● "all-in" Common Equity Tier 1 capital ratio of  
                16.09%,
           ● "all-in" Tier 1 Capital Ratio of 16.11%,        
           ● "all-in" Total Capital Ratio of 19.82%          
           ● transitional ACM of 14.12                       
         
        The Basel III capital ratios remain well in excess of the
        targets set out by OSFI for 2013 and 2014. Please see the
        Capital Management section of the annual MD&A for further
        information.
         

● Total loans increased by $0.81 billion in 2012 to $16.90
        billion, representing growth of 5.1% over the $16.09 billion
        at the end of 2011 and decreased by 2.2% or $0.39 billion
        from the $17.29 billion at the end of the third quarter of
        2012.  Total loans under administration (which includes all
        loans carried on the balance sheet plus off-balance sheet
        securitized loans) increased by $1.70 billion in 2012 to
        $17.79 billion, representing growth of 10.5% over the $16.09
        billion at the end of 2011 and 1.9% or $0.33 billion from
        the $17.46 billion at the end of the third quarter of 2012.
        Loan growth was below the Company's 2012 objective of 13% to
        18%, while profitability was within targets due to
        additional focus on the Company's traditional mortgages
        portfolio.
         

● The total value of mortgages originated in the fourth
        quarter of 2012 was $1.47 billion and $6.01 billion for the
        year, compared to $1.25 billion in the fourth quarter of
        2011 and $5.12 billion for the year.  Total originations
        were $1.68 billion in the third quarter of 2012. The
        year-over-year increase in originations reflects increased
        focus on and increased demand for the Company's traditional
        mortgage products. Compared to the third quarter, a decline
        in originations reflects normal and expected seasonal
        factors.  The Company has generally observed increased
        credit quality on new originations.
    ● The Company originated $1.16 billion of traditional
        mortgages in the fourth quarter and $4.56 billion for the
        year, compared to $0.95 billion and $3.51 billion in the
        comparative periods of 2011 and $1.26 billion in the third
        quarter of 2012.
         

● Accelerator (insured) mortgage originations were $174.2
        million in the fourth quarter of 2012 and $804.7 million for
        the year, compared to $188.5 million and $1.10 billion in
        the comparative periods of 2011 and $236.7 million in the
        third quarter of 2012.
         

● Multi-unit residential originations were $57.2 million for
        the fourth quarter of 2012 and $286.9 million for the year,
        compared to $6.5 million and $137.0 million in the same
        periods of 2011 and $114.3 million in the third quarter of
        2012. A significant portion of multi-unit residential
        mortgages originated in 2012 are insured and securitized
        through programs that qualify for off-balance sheet
        accounting. The Company sold $64.6 million through these
        programs in the fourth quarter and recognized $0.8 million
        in gains and $233.9 million for $3.3 million in gains for
        the year. The Company did not participate in this program in
        2011.
         

● Non-residential mortgage advances were $52.4 million in the
        fourth quarter of 2012 and $210.2 million for the year,
        compared to $41.5 million and $182.2 million in the
        comparative periods of 2011 and $46.6 million in the third
        quarter of 2012. The Company continues to maintain a
        cautious approach to increases in this portfolio.
         

● Store and apartment advances were $24.8 million for the
        quarter and $118.7 million for the year, compared to $35.5
        million and $123.0 million in the same periods in 2011 and
        $18.2 million in the third quarter of 2012.
         

● The mortgage lending segment recorded net income of $53.7
        million in the fourth quarter and $198.4 million for 2012,
        increasing from $42.7 million and $155.3 million in the same
        periods in 2011. This reflects strong originations in the
        traditional portfolio coupled with strong net interest
        margins in that portfolio. The securitized mortgage
        portfolio balance, while declining, continues to contribute
        to the net income of the segment.
         

● The consumer lending segment recorded net income of $8.4
        million in the fourth quarter and $32.7 million for the year
        compared to $7.6 million and $30.1 million in the
        comparative periods of 2011. The Company opened 716 new
        Equityline Visa accounts in the fourth quarter and 3,484 for
        the year compared to 1,814 accounts and 7,697 accounts
        opened in the same periods in 2011. The consumer lending
        segment also added $49.9 million in receivables in the
        retail credit portfolio in the fourth quarter and $98.7
        million for the year, compared to $14.5 million and $57.1
        million in the comparative periods of 2011.

Subsequent to the end of the quarter, and in light of the Company's solid 
performance, profitability and strong financial position, the Board of 
Directors declared a quarterly dividend of $0.26 per Common share, payable on 
March 1, 2013 to shareholders of record at the close of business on February 
25, 2013.

2013 Overall Outlook

 _____________________________________________________________________
|Supported by the stable Canadian economy and healthy real estate     |
|market in 2012, the Company continued to reposition the lending      |
|portfolio to take advantage of the attractive returns available in   |
|the alternative mortgage space, the Company's traditional business.  |
|This business, which is within the Company's risk appetite, provides |
|superior returns on the allocated capital. In 2013, the continued    |
|expansion of the traditional business will be accompanied by         |
|commensurate strengthening of governance, risk management and control|
|processes, through further investment in tools, technology and       |
|people. The Company will continue to offer insured mortgages through |
|the Accelerator program, supporting the Company's "one-stop" and     |
|"flexible lending solutions" strategies. The Company will also       |
|continue to increase its presence in suitable urban and suburban     |
|markets across Canada. Additional focus will be placed on growth of  |
|the Company's high margin non-residential and consumer lending       |
|portfolios within the Company's risk tolerance.                      |
|                                                                     |
|The Company expects supply and demand in the real estate market to   |
|remain balanced in 2013, with softening conditions in most markets   |
|when compared to the activity levels of recent years. The Company    |
|believes that uncertainty in global economic conditions will continue|
|to pose risks to the Canadian economy. The tightening of mortgage    |
|underwriting requirements and changes in mortgage insurance          |
|qualification rules in 2012 can be expected to continue to dampen the|
|level of activity in the real estate market in 2013.  The Company    |
|believes that slowing housing activity will lead to healthier real   |
|estate markets overall that are supported by continued low interest  |
|rates, stable to improving employment, stable net immigration and    |
|good housing affordability. The Company expects continued strong     |
|demand for its traditional mortgage and other retail products,       |
|reflecting balanced real estate markets and increased market share.  |
|                                                                     |
|In view of the continued uncertainty and risk within the global      |
|financial environment, the Company will continue to maintain         |
|relatively high levels of liquidity and low overall leverage, as     |
|measured by the ACM, to provide safety and soundness for depositors. |
|To support this conservative approach to liquidity and leverage, the |
|Company will continue to pursue opportunities for revenue            |
|contributions from fees, loan sales and sales of residual interests  |
|in loan securitizations.                                             |
|                                                                     |
|The Company expects that the rate of growth in the Company's         |
|non-securitized loan portfolio in 2013 will be relatively consistent |
|with the growth rate experienced in 2012. The traditional mortgage   |
|business is expected to maintain strong net interest margin and net  |
|interest income levels, while net interest margins on securitized    |
|assets continue to decline as older securitization programs reach    |
|maturity. The decline primarily reflects a combination of two        |
|factors: spreads on new securitization transactions are generally    |
|lower than the spreads earned on the maturing programs and the assets|
|provided as replacement assets in the CMB program are generally lower|
|yielding as compared to the maturing or discharging assets. While the|
|Company actively hedges the CMB reinvestment risk, the structure of  |
|the hedges will become less effective as the programs mature. This   |
|dynamic will tend to put pressure on the overall net interest margin.|
|The increased weighting of the Company's traditional uninsured       |
|mortgages will tend to offset this downward pressure, as the margins |
|on these products are more favourable and risk levels are well within|
|the Company's tolerance.                                             |
|                                                                     |
|The Company will increase its marketing and sales activities related |
|to the development of more diversified sources of deposits and       |
|additional costs will be incurred in this initiative. Reductions in  |
|other areas and increases in net interest income will tend to        |
|mitigate these increases and other costs and the Company expects that|
|its efficiency ratio for 2013 will continue to be in the target range|
|of 28% to 34%.                                                       |
|_____________________________________________________________________|

Conference Call and Webcast

Fourth Quarter Results Conference Call

The conference call will take place on Thursday, February 14, 2013, at 10:30 
a.m. Participants are asked to call 5 to 15 minutes in advance, 647-427-7450 
in Toronto or toll-free 1-888-231-8191 throughout North America. The call will 
also be accessible in listen-only mode via the Internet at www.homecapital.com.

Conference Call Archive

A telephone replay of the call will be available between 1:30 p.m. Thursday, 
February 14, 2013 and midnight Thursday, February 21, 2013 by calling 
416-849-0833 or 1-855-859-2056 (enter passcode 89405755). The archived audio 
web cast will be available for 90 days on CNW Group's website at 
www.newswire.ca and Home Capital's website at www.homecapital.com.

Annual Meeting Notice

The Annual Meeting of Shareholders of Home Capital Group Inc. will be held at 
the Design Exchange, Trading Floor, Second Floor, 234 Bay Street, Toronto, 
Ontario, on Wednesday, May 15, 2013 at 11:00 a.m. local time. Shareholders and 
guests are invited to join Directors and Management for lunch and refreshments 
following the Annual Meeting. All shareholders are encouraged to attend.

Consolidated Balance Sheets                                            
                                                                  As at
                               December 31   September 30   December 31

thousands of Canadian                2012           2012          2011 
dollars

ASSETS                                                                 

Cash Resources and           $    439,287  $     543,825  $    665,806 
Restricted Cash

Securities                                                             

Available for sale                414,344        401,830       391,754 

Pledged securities                843,547        784,098       341,588 
                                1,257,891      1,185,928       733,342 

Loans Held for Sale                21,921         36,405             - 

Loans                                                                  

Residential mortgages           8,843,923      8,456,791     6,339,883 

Securitized residential         6,450,682      7,238,946     8,243,350 
mortgages

Non-residential mortgages         988,416        993,174       946,222 

Personal and credit card          599,493        567,079       560,193 
loans
                               16,882,514     17,255,990    16,089,648 

Collective allowance for          (30,000)       (29,800)      (29,440)
credit losses
                               16,852,514     17,226,190    16,060,208 

Other                                                                  

Derivative assets                  45,388         57,651        72,424 

Other assets                       94,405        102,741        79,650 

Capital assets                      6,578          7,165         5,372 

Intangible assets                  66,343         66,342        63,917 

Goodwill                           15,752         15,752        15,752 
                                  228,466        249,651       237,115 
                             $ 18,800,079  $  19,241,999  $ 17,696,471 

LIABILITIES AND                                                        
SHAREHOLDERS' EQUITY

Liabilities                                                            

Deposits                                                               

  Deposits payable on demand $    105,923  $      49,835  $     75,965 

  Deposits payable on a        10,030,676      9,820,856     7,846,159 
  fixed date
                               10,136,599      9,870,691     7,922,124 

Senior Debt                       150,684        153,724       153,336 

Securitization Liabilities                                             

  Mortgage-backed security      1,301,693      1,923,017     2,417,801 
  liabilities

  Canada Mortgage Bond          6,034,202      6,155,475     6,231,274 
  liabilities
                                7,335,895      8,078,492     8,649,075 

Other                                                                  

Derivative liabilities              2,386          3,767         3,458 

Income taxes payable               21,912          8,689        17,628 

Other liabilities                 148,590        168,743       136,025 

Deferred tax liabilities           35,800         38,275        40,040 
                                  208,688        219,474       197,151 
                               17,831,866     18,322,381    16,921,686 

Shareholders' Equity                                                   

Capital stock                      61,903         61,873        55,104 

Contributed surplus                 6,224          5,847         5,873 

Retained earnings                 903,831        857,339       722,999 

Accumulated other                  (3,745)        (5,441)       (9,191)
comprehensive loss
                                  968,213        919,618       774,785 
                             $ 18,800,079  $  19,241,999  $ 17,696,471 

Consolidated Statements of                                             
Income
                             For the three months    For the year ended
                                            ended
                  December   September   December   December   December
                        31          30         31         31         31

(thousands of        2012        2012       2011       2012       2011 
Canadian
dollars, except
per share
amounts)

Net Interest                                                           
Income
Non-Securitized
Assets

Interest from   $ 144,310  $  138,271  $ 111,065  $ 525,722  $ 400,997 
loans

Dividends from      3,502       3,172      4,559     14,171     18,417 
securities

Other interest        949       1,093      1,241      4,019      5,487 
                  148,761     142,536    116,865    543,912    424,901 

Interest on        61,873      58,962     51,989    230,006    192,357 
deposits

Interest on         1,825       1,648      1,673      6,831      4,364 
senior debt

Net interest       85,063      81,926     63,203    307,075    228,180 
income
non-securitized
assets
                                                                       

Net Interest                                                           
Income
Securitized
Loans and
Assets

Interest income    64,351      70,618     81,876    287,871    330,491 
from
securitized
loans and
assets

Interest           49,506      53,053     56,667    213,474    224,719 
expense on
securitization
liabilities

Net interest       14,845      17,565     25,209     74,397    105,772 
income
securitized
loans and
assets
                                                                       

Total Net          99,908      99,491     88,412    381,472    333,952 
Interest Income

Provision for       3,685       4,239      2,979     14,720      7,519 
credit losses
                   96,223      95,252     85,433    366,752    326,433 

Non-Interest                                                           
Income

Fees and other     11,059      11,281     11,294     43,994     37,997 
income

Securitization      5,659       1,204          -      8,131          - 
income

Net realized         (883)     (1,172)    (1,306)       (71)     4,088 
and unrealized
(losses) gains
on securities
and mortgages

Net realized       (1,298)      2,136       (330)     3,848     (7,203)
and unrealized
(loss) gain on
derivatives
                   14,537      13,449      9,658     55,902     34,882 
                  110,760     108,701     95,091    422,654    361,315 

Non-Interest                                                           
Expenses

Salaries and       14,991      15,465     13,184     58,956     52,523 
benefits

Premises            2,562       2,296      2,007      8,833      7,776 

Other operating    14,067      14,304     11,916     54,946     44,703 
expenses
                   31,620      32,065     27,107    122,735    105,002 
                                                                       

Income Before      79,140      76,636     67,984    299,919    256,313 
Income Taxes

Income taxes                                                           

  Current          22,649      19,904     15,909     82,176     66,270 

  Deferred         (2,474)       (522)     1,795     (4,240)       (37)
                   20,175      19,382     17,704     77,936     66,233 

NET INCOME      $  58,965  $   57,254  $  50,280  $ 221,983  $ 190,080 
                                                                       

NET INCOME PER                                                         
COMMON SHARE

Basic           $    1.70  $     1.65  $    1.45  $    6.40  $    5.48 

Diluted         $    1.70  $     1.65  $    1.45  $    6.38  $    5.46 

AVERAGE NUMBER                                                         
OF COMMON
SHARES
OUTSTANDING

Basic              34,655      34,697     34,668     34,692     34,677 

Diluted            34,779      34,803     34,782     34,820     34,787 
                                                                       

Total number of    34,630      34,668     34,625     34,630     34,625 
outstanding
common shares

Book value per  $   27.96  $    26.53  $   22.38  $   27.96  $   22.38 
common share

Consolidated Statements of Comprehensive Income                        
                                  For the three      For the year ended
                                   months ended
              December 31 September December 31 December 31 December 31
                                 30

thousands of        2012      2012        2011        2012        2011 
Canadian
dollars
                                                                       

NET INCOME    $   58,965  $ 57,254  $   50,280  $  221,983  $  190,080 
                                                                       

OTHER                                                                  
COMPREHENSIVE
INCOME (LOSS)
                                                                       

Available for                                                          
Sale
Securities

Net                1,471     1,667         700       6,462      (8,602)
unrealized
gains
(losses) on
securities
available for
sale

Net losses           457     1,141       1,174        (114)     (4,815)
(gains)
reclassified
to net income
                   1,928     2,808       1,874       6,348     (13,417)

Income tax           509       742         505       1,775      (3,370)
expense
(recovery)
                   1,419     2,066       1,369       4,573     (10,047)
                                                                       

Cash Flow                                                              
Hedges

Net                    -         -        (639)       (370)     (7,386)
unrealized
losses on
cash flow
hedges

Net losses           376       376         338       1,462         618 
reclassified
to net income
                     376       376        (301)      1,092      (6,768)

Income tax            99        99         (36)        219      (1,718)
expense
(recovery)
                     277       277        (265)        873      (5,050)
                                                                       

Total other        1,696     2,343       1,104       5,446     (15,097)
comprehensive
income (loss)
                                                                       

COMPREHENSIVE $   60,661  $ 59,597  $   51,384  $  227,429  $  174,983 
INCOME

Consolidated Statements of Changes in Shareholders' Equity
                                                                                                                     
                                                                 Net            Net           Total                  
                                                          Unrealized     Unrealized
                                                            (Losses)      Losses on     Accumulated                  
                                                               Gains
                                                                  on      Cash Flow           Other             Total
                                                          Securities

thousands of      Capital     Contributed     Retained     Available        Hedges,   Comprehensive     Shareholders'
Canadian                                                         for
dollars,

except per          Stock         Surplus     Earnings         Sale,      After Tax   (Loss) Income            Equity
share amounts                                              After Tax
                                                                                                                     

Balance at      $ 55,104    $      5,873    $ 722,999    $   (4,141)   $    (5,050)   $     (9,191)   $      774,785 
December 31,
2011

Comprehensive          -               -      221,983         4,573            873           5,446           227,429 
income

Stock options      7,088          (1,408)           -             -              -               -             5,680 
settled

Amortization                                                                                                         
of fair value
of

employee               -           1,759            -             -              -               -             1,759 
stock options

Repurchase of       (289)              -       (7,828)            -              -               -            (8,117)
shares

Dividends                                                                                                            
paid

($0.90 per             -               -      (33,323)            -              -               -           (33,323)
share)

Balance at      $ 61,903    $      6,224    $ 903,831    $      432    $    (4,177)   $     (3,745)   $      968,213 
December 31,
2012
                                                                                                                     

Balance at      $ 50,427    $      4,571    $ 567,681    $    5,906    $         -    $      5,906    $      628,585 
December 31,
2010

Comprehensive          -               -      190,080       (10,047)        (5,050)        (15,097)          174,983 
income

Stock options      4,921          (1,098)           -             -              -               -             3,823 
settled

Amortization                                                                                                         
of fair value
of

employee               -           2,400            -             -              -               -             2,400 
stock options

Repurchase of       (244)              -       (7,702)            -              -               -            (7,946)
shares

Dividends                                                                                                            
paid

($0.76 per             -               -      (27,060)            -              -               -           (27,060)
share)

Balance at      $  55,104   $      5,873    $ 722,999    $   (4,141)   $    (5,050)   $     (9,191)   $      774,785 
December 31,
2011

Consolidated Statements of Cash Flows
                                                     For the year ended
                                              December 31   December 31

thousands of Canadian dollars                       2012          2011 

CASH FLOWS FROM OPERATING ACTIVITIES                                   

Net income for the year                     $    221,983  $    190,080 

Adjustments to determine cash flows                                    
relating to operating activities:

  Deferred income taxes                           (4,240)          (37)

  Amortization of capital assets                   3,118         3,052 

  Amortization of intangible assets                6,715           679 

  Amortization of net premium (discount) on        2,460           (49)
  securities

  Amortization of securitization and senior       13,396        14,153 
  debt transaction costs

  Provision for credit losses                     14,720         7,519 

  Change in accrued interest payable              13,519         4,993 

  Change in accrued interest receivable           (5,449)       (6,686)

  Net realized and unrealized losses                  71        (4,088)
  (gains) on securities and mortgages

  Realized gain on securitization                 (8,131)            - 

  Settlement of derivatives                         (370)       (7,385)

  (Gain) loss on derivatives                      (3,848)        7,203 

  Net increase in mortgages                   (1,687,717)   (1,897,308)

  Net increase in personal and credit card       (40,858)     (107,817)
  loans

  Net increase in deposits                     2,214,475     1,326,145 

  Activity in securitization liabilities                               

  Proceeds from sale of mortgage-back            242,009             - 
  securities
    Proceeds from securitization of              641,696     1,233,754 
    mortgage-backed security liabilities
    Settlement and repayment of               (1,278,521)     (753,085)
    securitization liabilities

  Amortization of fair value of employee           1,759         2,400 
  stock options

  Changes in taxes payable and other              (6,732)       23,293 

Cash flows provided by operating activities      340,055        36,816 

CASH FLOWS FROM FINANCING ACTIVITIES                                   

Repurchase of shares                              (8,117)       (7,946)

Exercise of employee stock options                 5,680         3,823 

Issuance of senior debt                                -       149,052 

Dividends paid to shareholders                   (31,244)      (26,371)

Cash flows (used in) provided by financing       (33,681)      118,558 
activities

CASH FLOWS FROM INVESTING ACTIVITIES                                   

Activity in securities                                                 

  Purchases                                   (4,291,902)   (1,641,985)

  Proceeds from sales                            381,049       389,978 

  Proceeds from maturities                     3,391,425       935,824 

Purchases of capital assets                       (4,324)       (3,530)

Purchases of intangible assets                    (9,141)      (16,679)

Cash flows used in investing activities         (532,893)     (336,392)

Net decrease in cash resources and              (226,519)     (181,018)
restricted cash during the year

Cash resources and restricted cash at            665,806       846,824 
beginning of the year

Cash Resources and Restricted Cash at End   $    439,287  $    665,806 
of the Year

Supplementary Disclosure of Cash Flow                                  
Information

Dividends received on investments           $     12,626  $     17,318 

Interest received                                518,537       725,476 

Interest paid                                    223,318       416,764 

Income taxes paid                                 87,184        36,636 

Net Interest Margin
                                                                      
                    For the three months ended      For the year ended
                December September December 31 December 31 December 31
                      31        30
                   2012      2012        2011        2012        2011 

Net interest       3.11%     3.17%       3.03%       3.10%       3.04%
margin
non-securitized
interest
earning assets
(TEB)

Net interest       3.07%     3.13%       2.95%       3.05%       2.96%
margin
non-securitized
interest
earning assets
(non-TEB)

Net interest       0.79%     0.89%       1.16%       0.93%       1.24%
margin
securitized
assets

Total net          2.13%     2.14%       2.06%       2.09%       2.06%
interest margin
(TEB)

Total net          2.11%     2.11%       2.02%       2.07%       2.01%
interest margin
(non-TEB)

Spread of          3.13%     3.16%       3.16%       3.13%       3.09%
non-securitized
loans over
deposits only

Net Interest Income( )
                      For the three months ended       For the three months ended
                            December 31, 2012( )            September 30, 2012( )

(000s, except                            Average                          Average
%)                 Average( )    Income/     ( )    Average( )    Income/     ( )
                                            Rate                             Rate
                  Balance(1 )    Expense    (1 )  Balance( 1 )    Expense    (1 )

Assets                                                                           

Cash resources  $ 817,669 ( ) $   4,451    2.18% $ 731,533 ( ) $   4,265    2.33%
and securities                               ( )                              ( )

Traditional        8,017,732    109,208    5.45%    7,386,369    102,660    5.56%
single-family             ( )                ( )           ( )                ( )
residential
mortgages

Accelerator       582,728 ( )     4,470    3.07%   646,033 ( )     5,219    3.23%
single-family                                ( )                              ( )
residential
mortgages

Multi-unit        107,658 ( )     1,274    4.73%   141,761 ( )     1,187    3.35%
residential                                  ( )                              ( )
mortgages

Non-residential   981,483 ( )    15,789    6.43%    1,017,194     15,685    6.17%
mortgages                                    ( )           ( )                ( )

Personal and      578,116 ( )    13,569    9.39%   567,186 ( )    13,520    9.53%
credit card                                  ( )                              ( )
loans

Total
non-securitized   10,267,717               5.62%    9,758,543               5.67%
loans                     ( )   144,310      ( )           ( )   138,271      ( )

Taxable                     -     1,243        -             -     1,126        -
equivalent
adjustment

Total on
non-securitized
interest          11,085,386               5.41%   10,490,076               5.48%
earning assets            ( )   150,004      ( )           ( )   143,662      ( )

Securitized        7,627,113     64,351    3.37%    8,073,588     70,618    3.50%
loans and                 ( )                ( )           ( )                ( )
pledged assets

Other assets      294,020 ( )         -        -   249,064 ( )         -        -


              19,006,519               4.51%   18,812,728               4.56%
Total Assets    $         ( ) $ 214,355      ( ) $         ( ) $ 214,280      ( ) 
Liabilities and                                                                  
Shareholders'
Equity 
Deposits        $  9,944,774  $  61,873    2.49% $  9,400,930  $  58,962    2.51% 


                          ( )                ( )           ( )                ( )

Securitization     7,661,311     49,506    2.58%    8,123,804     53,053    2.61%
liabilities               ( )                ( )           ( )                ( )

Other              1,400,434      1,825    0.52%    1,287,994      1,648    0.51%
liabilities and           ( )                ( )           ( )                ( )
shareholders'
equity

Total           $ 19,006,519  $ 113,204    2.38% $ 18,812,728  $ 113,663    2.42%
Liabilities and           ( )                ( )           ( )                ( )
Shareholders'
Equity

Net Interest                  $ 101,151                        $ 100,617         
Income (TEB)

Tax Equivalent                   (1,243)                          (1,126)        
Adjustment

Net Interest                  $  99,908                        $  99,491         
Income per
Financial
Statements
                                                                                 
                                                       For the three months ended
                                                             December 31, 2011( )

(000s, except                                       Average( )    Income/ Average
%)                                                                            ( )
                                                  Balance( 1 )    Expense    Rate
                                                                            ( 1 )

Assets                                                                           

Cash resources                                   $ 987,740 ( ) $   5,800    2.35%
and securities                                                                ( )

Traditional                                         5,513,181     77,933    5.65%
single-family                                              ( )                ( )
residential
mortgages

Accelerator                                        436,066 ( )     3,304    3.03%
single-family                                                                 ( )
residential
mortgages

Multi-unit                                         112,288 ( )     1,562    5.56%
residential                                                                   ( )
mortgages

Non-residential                                    957,859 ( )    14,998    6.26%
mortgages                                                                     ( )

Personal and                                       555,359 ( )    13,268    9.56%
credit card                                                                   ( )
loans

Total                                               7,574,753    111,065    5.87%
non-securitized                                            ( )                ( )
loans

Taxable                                                      -     1,785        -
equivalent
adjustment

Total on                                            8,562,493    118,650    5.54%
non-securitized                                            ( )                ( )
interest
earning assets

Securitized                                         8,703,077     81,876    3.76%
loans and                                                  ( )                ( )
pledged assets

Other assets                                       254,958 ( )         -        -

Total Assets                                     $ 17,520,528  $ 200,526    4.58%
                                                           ( )                ( )

Liabilities and                                                                  
Shareholders'
Equity

Deposits                                         $  7,662,457  $  51,989    2.71%
                                                           ( )                ( )

Securitization                                      8,725,546     56,667    2.60%
liabilities                                                ( )                ( )

Other                                               1,132,525      1,673    0.59%
liabilities and                                            ( )                ( )
shareholders'
equity

Total                                            $ 17,520,528  $ 110,329    2.52%
Liabilities and                                            ( )                ( )
Shareholders'
Equity

Net Interest                                                   $  90,197         
Income (TEB)

Tax Equivalent                                                    (1,785)        
Adjustment

Net Interest                                                   $  88,412         
Income per
Financial
Statements

Mortgage                                                                        
Production
                                  For the three months        For the year ended
                                                 ended
                    December    September     December     December     December
                          31           30           31           31           31

(000s)                 2012         2012         2011         2012         2011 

Traditional     $ 1,164,037  $ 1,257,379  $   948,848  $ 4,556,379  $ 3,514,430 
single family
residential
mortgages

Accelerator         174,214      236,673      188,484      804,692    1,103,555 
single family
residential
mortgages

Multi-unit           57,245      114,279        6,522      286,879      137,005 
residential
mortgages

Non-residential      52,417       46,624       41,508      210,228      182,163 
mortgages

Store and            24,835       18,175       35,544      118,689      122,957 
apartment
mortgages

Warehouse                 -        6,000       27,000       28,500       56,750 
commercial
mortgages

Total mortgage  $ 1,472,748  $ 1,679,130  $ 1,247,906  $ 6,005,367  $ 5,116,860 
advances

Provision                                                             
for Credit
Losses 
                                 For the three      For the year ended
                                  months ended

(000s,       December 31 September December 31 December 31 December 31
except %)                       30
                   2012      2012        2011        2012        2011 

Collective   $      200  $    300  $       50  $      560  $      287 
provision

Individual        3,485     3,939       2,929      14,160       7,232 
provision

Total        $    3,685  $  4,239  $    2,979  $   14,720  $    7,519 
provision

Provision as       0.09%     0.10%       0.07%       0.09%       0.05%
a % of gross
loans
(annualized)

Net          $    3,294  $  3,075  $    4,843  $   12,381  $   10,673 
write-offs

Net                0.08%     0.07%       0.12%       0.07%       0.07%
write-offs
as a % of
gross loans
(annualized)

Net Non-Performing Loans and Allowances                               
                                                                 As at

(000s, except %)              December 31   September 30      December
                                    2012           2012          2011 

Net non-performing loans    $     56,308  $      48,817  $     40,297 

Gross loans (excluding        16,885,233     17,258,569    16,091,162 
allowances)

Net non-performing loans as         0.33%          0.28%         0.25%
% of gross loans

Collective allowance        $     30,000  $      29,800  $     29,440 

Individual allowance               3,638          3,447         1,859 

Total allowance             $     33,638  $      33,247  $     31,299 

Impaired                                                                 
Loans
                                                                         

(000s)                                                     As at December
                                                                 31, 2012
                         Securitized                                     
           Residential   Residential   Non-residential Personal          
                                                            and
             Mortgages     Mortgages         Mortgages   Credit     Total
                                                           Card
                                                          Loans

Gross      $   54,696  $          -  $            501  $ 3,830  $ 59,027 
amount of
impaired
loans

Individual     (2,381)            -                 -     (338)   (2,719)
allowances
on
principal

Net        $   52,315  $          -  $            501  $ 3,492  $ 56,308 
                                                                         

(000s)                                                     As at December
                                                                 31, 2011
                         Securitized                                     
           Residential   Residential   Non-residential Personal          
                                                            and
             Mortgages     Mortgages         Mortgages   Credit     Total
                                                           Card
                                                          Loans

Gross      $   36,845  $          -  $            822  $ 4,144  $ 41,811 
amount of
impaired
loans

Individual       (742)            -               (78)    (694)   (1,514)
allowances
on
principal

Net        $   36,103  $          -  $            744  $ 3,450  $ 40,297 

Allowance for Credit Losses
                                                                       

(000s)                          For the three months ended December 31,
                                                                   2012
                 Residential Non-Residential Personal and              
                   Mortgages       Mortgages  Credit Card         Total
                                                    Loans

Individual                                                             
allowances

Allowance on                                                           
loan principal

  Balance at the $    1,660  $            -  $       919  $      2,579 
  beginning of
  the period

  Provision for       3,413               -           21         3,434 
  credit losses

  Write-offs         (2,848)              -         (794)       (3,642)

  Recoveries            156               -          192           348 
                      2,381               -          338         2,719 

Allowance on                                                           
accrued interest
receivable

  Balance at the        868               -            -           868 
  beginning of
  the period

  Provision for          51               -            -            51 
  credit losses
                        919               -            -           919 

Total individual      3,300               -          338         3,638 
allowance

Collective                                                             
allowance

  Balance at the     16,659           9,300        3,841        29,800 
  beginning of
  the period

  Provision for         200               -            -           200 
  credit losses
                     16,859           9,300        3,841        30,000 

Total allowance  $   20,159  $        9,300  $     4,179  $     33,638 

Total provision  $    3,664  $            -  $        21  $      3,685 
                                                                       

(000s)                         For the three months ended September 30,
                                                                   2012
                 Residential Non-Residential Personal and              
                   Mortgages       Mortgages  Credit Card         Total
                                                    Loans

Individual                                                             
allowances

Allowance on                                                           
loan principal

  Balance at the $    1,179  $            -  $       663  $      1,842 
  beginning of
  the period

  Provision for       3,216               -          596         3,812 
  credit losses

  Write-offs         (2,898)              -         (464)       (3,362)

  Recoveries            163               -          124           287 
                      1,660               -          919         2,579 

Allowance on                                                           
accrued interest
receivable

  Balance at the        741               -            -           741 
  beginning of
  the period

  Provision for         127               -            -           127 
  credit losses
                        868               -            -           868 

Total individual      2,528               -          919         3,447 
allowance

Collective                                                             
allowance

  Balance at the     16,359           9,300        3,841        29,500 
  beginning of
  the period

  Provision for         300               -            -           300 
  credit losses
                     16,659           9,300        3,841        29,800 

Total allowance  $   19,187  $        9,300  $     4,760  $     33,247 

Total provision  $    3,643  $            -  $       596  $      4,239 
                                                                       

(000s)                          For the three months ended December 31,
                                                                   2011
                 Residential Non-Residential Personal and              
                   Mortgages       Mortgages  Credit Card         Total
                                                    Loans

Individual                                                             
allowances

Allowance on                                                           
loan principal

  Balance at the $    1,312  $           33  $     1,854  $      3,199 
  beginning of
  the period

  Provision for       2,108              45        1,005         3,158 
  credit losses

  Write-offs         (2,874)              -       (2,223)       (5,097)

  Recoveries            196               -           58           254 
                        742              78          694         1,514 

Allowance on                                                           
accrued interest
receivable

  Balance at the        574               -            -           574 
  beginning of
  the period

  Provision for        (229)              -            -          (229)
  credit losses
                        345               -            -           345 

Total individual      1,087              78          694         1,859 
allowance

Collective                                                             
allowance

  Balance at the     16,919           8,334        4,137        29,390 
    beginning of
      the period

  Provision for        (620)            966         (296)           50 
  credit losses
                     16,299           9,300        3,841        29,440 

Total allowance  $   17,386  $        9,378  $     4,535  $     31,299 

Total provision  $    1,259  $        1,011  $       709  $      2,979 
                                                                       

(000s)                             For the year ended December 31, 2012
                 Residential Non-residential Personal and              
                   Mortgages       Mortgages  Credit Card         Total
                                                    Loans

Individual                                                             
allowances

Allowance on                                                           
loan principal

  Balance at the $      742  $           78  $       694  $      1,514 
  beginning of
  the year

  Provision for      12,107             (78)       1,557        13,586 
  credit losses

  Write-offs        (10,921)              -       (2,332)      (13,253)

  Recoveries            453               -          419           872 
                      2,381               -          338         2,719 

Allowance on                                                           
accrued interest
receivable

  Balance at the        345               -            -           345 
  beginning of
  the year

  Provision for         574               -            -           574 
  credit losses
                        919               -            -           919 

Total individual      3,300               -          338         3,638 
allowance

Collective                                                             
allowance

  Balance at the     16,299           9,300        3,841        29,440 
  beginning of
  the year

  Provision for         560               -            -           560 
  credit losses
                     16,859           9,300        3,841        30,000 

Total allowance  $   20,159  $        9,300  $     4,179  $     33,638 

Total provision  $   13,241  $          (78) $     1,557  $     14,720 
                                                                       

(000s)                             For the year ended December 31, 2011
                 Residential Non-residential Personal and              
                   Mortgages       Mortgages  Credit Card         Total
                                                    Loans

Individual                                                             
allowances

Allowance on                                                           
loan principal

  Balance at the $    1,757  $            -  $     3,140  $      4,897 
  beginning of
  the year

  Provision for       6,248              78          964         7,290 
  credit losses

  Write-offs         (7,754)              -       (3,574)      (11,328)

  Recoveries            491               -          164           655 
                        742              78          694         1,514 

Allowance on                                                           
accrued interest
receivable

  Balance at the        403               -            -           403 
  beginning of
  the year

  Provision for         (58)              -            -           (58)
  credit losses
                        345               -            -           345 

Total individual      1,087              78          694         1,859 
allowance

Collective                                                             
allowance

  Balance at the     16,299           9,357        3,497        29,153 
  beginning of
  the year

  Provision for           -             (57)         344           287 
  credit losses
                     16,299           9,300        3,841        29,440 

Total allowance  $   17,386  $        9,378  $     4,535  $     31,299 

Total provision  $    6,190  $           21  $     1,308  $      7,519 

Earnings by                                                          
Business
Segment
                                                                     
                                  For the three months ended December
                                                             31, 2012

(000s)              Mortgage   Consumer        Other            Total
                     Lending    Lending

Net interest   $     86,650  $  11,002  $     2,256  $        99,908 
income

Provision for        (3,664)       (21)           -           (3,685)
credit losses

Fees and other        7,318      3,739            2           11,059 
income

Securitization        5,659          -            -            5,659 
income

Net (loss)           (2,557)         -          376           (2,181)
gain on
securities and
other

Non-interest        (20,203)    (3,350)      (8,067)         (31,620)
expenses

Income before        73,203     11,370       (5,433)          79,140 
income taxes

Income taxes        (19,532)    (3,018)       2,375          (20,175)

Net income     $     53,671  $   8,352  $    (3,058) $        58,965 
(loss)

Goodwill       $      2,324  $  13,428  $         -  $        15,752 

Total assets   $ 17,198,250  $ 769,098  $   832,731  $    18,800,079 
                                                                     
                                 For the three months ended September
                                                             30, 2012

(000s)              Mortgage   Consumer        Other            Total
                     Lending    Lending

Net interest   $     86,523  $  10,874  $     2,094  $        99,491 
income

Provision for        (3,644)      (595)           -           (4,239)
credit losses

Fees and other        7,128      4,087           66           11,281 
income

Securitization        1,204          -            -            1,204 
income

Net gain              1,447          -         (483)             964 
(loss) on
securities and
other

Non-interest        (20,200)    (3,277)      (8,588)         (32,065)
expenses

Income before        72,458     11,089       (6,911)          76,636 
income taxes

Income taxes        (19,110)    (2,951)       2,679          (19,382)

Net income     $     53,348  $   8,138  $    (4,232) $        57,254 
(loss)

Goodwill       $      2,324  $  13,428  $         -  $        15,752 

Total assets   $ 17,623,833  $ 717,386  $   900,780  $    19,241,999 
                                                                     
                                  For the three months ended December
                                                             31, 2011

(000s)              Mortgage   Consumer        Other            Total
                     Lending    Lending

Net interest   $     74,164  $  10,639  $     3,609  $        88,412 
income

Provision for        (1,975)    (1,004)           -           (2,979)
credit losses

Fees and other        6,829      4,343          122           11,294 
income

Net loss on          (1,095)         -         (541)          (1,636)
securities and
other

Non-interest        (18,824)    (3,417)      (4,866)         (27,107)
expenses

Income before        59,099     10,561       (1,676)          67,984 
income taxes

Income taxes        (16,370)    (2,987)       1,653          (17,704)

Net income     $     42,729  $   7,574  $       (23) $        50,280 
(loss)

Goodwill       $      2,324  $  13,428  $         -  $        15,752 

Total assets   $ 15,997,106  $ 614,626  $ 1,084,739  $    17,696,471 
                                                                     
                                 For the year ended December 31, 2012

(000s)              Mortgage   Consumer        Other            Total
                     Lending    Lending

Net interest   $    328,087  $  43,598  $     9,787  $       381,472 
income

Provision for       (13,164)    (1,556)           -          (14,720)
credit losses

Fees and other       27,465     16,527            2           43,994 
income

Securitization        8,131          -            -            8,131 
income

Net gain on             944          -        2,833            3,777 
securities and
other

Non-interest        (78,573)   (14,056)     (30,106)        (122,735)
expenses

Income before       272,890     44,513      (17,484)         299,919 
income taxes

Income taxes        (74,534)   (11,821)       8,419          (77,936)

Net income     $    198,356  $  32,692  $    (9,065) $       221,983 
(loss)

Goodwill       $      2,324  $  13,428  $         -  $        15,752 

Total assets   $ 17,198,250  $ 769,098  $   832,731  $    18,800,079 
                                                                     
                                 For the year ended December 31, 2011

(000s)              Mortgage   Consumer        Other            Total
                     Lending    Lending

Net interest   $    273,738  $  41,782  $    18,432  $       333,952 
income

Provision for        (5,916)    (1,603)           -           (7,519)
credit losses

Fees and other       19,457     18,051          489           37,997 
income

Net (loss)           (4,821)         -        1,706           (3,115)
gain on
securities and
other

Non-interest        (67,851)   (16,255)     (20,896)        (105,002)
expenses

Income before       214,607     41,975         (269)         256,313 
income taxes

Income taxes        (59,331)   (11,872)       4,970          (66,233)

Net income     $    155,276  $  30,103  $     4,701  $       190,080 

Goodwill       $      2,324  $  13,428  $         -  $        15,752 

Total assets   $ 15,997,106  $ 614,626  $ 1,084,739  $    17,696,471 

 _____________________________________________________________________
|Management's Responsibility for Financial Information                |
|                                                                     |
|The Company's Audit Committee reviewed this document along with the  |
|Company's 2012 Annual and Fourth Quarter Consolidated Financial      |
|Report.  The Company's Board of Directors approved both documents    |
|prior to their release.   A full description of management's         |
|responsibility for financial information is included in the Company's|
|2012 Annual and Fourth Quarter Consolidated Financial Report.        |
|                                                                     |
|Caution Regarding Forward-looking Statements                         |
|                                                                     |
|From time to time Home Capital makes written and verbal              |
|forward-looking statements. These are included in the Annual Report, |
|periodic reports to shareholders, regulatory filings, press releases,|
|Company presentations and other Company communications.              |
|Forward-looking statements are made in connection with business      |
|objectives and targets, Company strategies, operations, anticipated  |
|financial results and the outlook for the Company, its industry, and |
|the Canadian economy. These statements regarding expected future     |
|performance are "financial outlooks" within the meaning of National  |
|Instrument 51-102.  Please see the risk factors, which are set forth |
|in detail in the Risk Management and Other Risks sections of the     |
|Company's 2012 Annual and Fourth Quarter Consolidated Financial      |
|Report, as well as its other publicly filed information, which are   |
|available on the System for Electronic Document Analysis and         |
|Retrieval (SEDAR) at                                                 |
|www.sedar.com, for the material   |
|factors that could cause the Company's actual results to differ      |
|materially from these statements.  These risk factors are material   |
|risk factors a reader should consider, and include credit risk,      |
|liquidity and funding risk, structural interest rate risk,           |
|operational risk, investment risk, strategic and business risk,      |
|reputational risk and regulatory and legal risk along with additional|
|risk factors that may affect future results. Forward-looking         |
|statements can be found in the Report to the Shareholders and the    |
|Outlook sections in the Annual Report.   Forward-looking statements  |
|are typically identified by words such as "will,"  "believe,"        |
|"expect," "anticipate," "estimate," "plan," "forecast," "may," and   |
|"could" or other similar expressions.                                |
|                                                                     |
|By their very nature, these statements require the Company to make   |
|assumptions and are subject to inherent risks and uncertainties,     |
|general and specific, which may cause actual results to differ       |
|materially from the expectations expressed in the forward-looking    |
|statements.  These risks and uncertainties include, but are not      |
|limited to, global capital market activity, changes in government    |
|monetary and economic policies, changes in interest rates, inflation |
|levels, general economic conditions, legislative and regulatory      |
|developments, competition and technological change. The preceding    |
|list is not exhaustive of possible factors.                          |
|                                                                     |
|These and other factors should be considered carefully and readers   |
|are cautioned not to place undue reliance on these forward-looking   |
|statements. The Company does not undertake to update any             |
|forward-looking statements, whether written or verbal, that may be   |
|made from time to time by it or on its behalf, except as required by |
|securities laws.                                                     |
|                                                                     |
|Assumptions about the performance of the Canadian economy in 2013 and|
|its effect on Home Capital's business are material factors the       |
|Company considers when setting its objectives and outlook.  In       |
|determining expectations for economic growth, both broadly and in the|
|financial services sector, the Company primarily considers historical|
|and forecasted economic data provided by the Canadian government and |
|its agencies.  In setting and reviewing the outlook and objectives   |
|for 2013, management's expectations assume:                          |
|                                                                     |
|                                                                     |
|    --  The Canadian economy will produce modest growth in 2013 with |
|        stable to modestly improving employment conditions in most   |
|        regions. The economy will continue to be heavily influenced  |
|        by the economic conditions in the United States and global   |
|        markets.  Inflation will generally be within the Bank of     |
|        Canada's target of 1%-3%.                                    |
|                                                                     |
|    --  The Bank of Canada has indicated that increases to its target|
|        overnight interest rate are not imminent and, as such, the   |
|        Company is assuming the rate will remain at its current level|
|        for most of 2013. This is expected to continue to support low|
|        mortgage interest rates.                                     |
|                                                                     |
|    --  The housing market will remain stable with balanced supply   |
|        and demand conditions in most regions supported by continued |
|        low interest rates, stable to improving employment and       |
|        immigration.  There will be declines in housing starts and   |
|        resale activity with stable to modestly declining prices     |
|        through most of Canada.                                      |
|                                                                     |
|    --  Consumer debt levels will remain serviceable by Canadian     |
|        households.                                                  |
|                                                                     |
|Non-GAAP Measures                                                    |
|                                                                     |
|The Company has adopted IFRS as its accounting framework. IFRS are   |
|the generally accepted accounting principles (GAAP) for Canadian     |
|publicly accountable enterprises for years beginning on or after     |
|January 1, 2011. The Company uses a number of financial measures to  |
|assess its performance.  Some of these measures are not calculated in|
|accordance with GAAP, are not defined by GAAP, and do not have       |
|standardized meanings that would ensure consistency and comparability|
|between companies using these measures.  Definitions of non-GAAP     |
|measures used in this report can be found under Non-GAAP Measures in |
|the Management's Discussion and Analysis included in the Company's   |
|2012 Annual and Fourth Quarter Consolidated Financial Report.        |
|                                                                     |
|Regulatory Filings                                                   |
|                                                                     |
|The Company's continuous disclosure materials, including interim     |
|filings, annual Management's Discussion and Analysis and audited     |
|consolidated financial statements, Annual Information Form, Notice of|
|Annual Meeting of Shareholders, and Proxy Circular are available on  |
|the Company's website at                                             |
|www.homecapital.com and on  |
|the Canadian Securities Administrators' website at                   |
|www.sedar.com.                    |
|_____________________________________________________________________|

Home Capital Group Inc. is a public company, traded on the Toronto Stock 
Exchange (HCG), operating through its principal subsidiary, Home Trust 
Company. Home Trust is a federally regulated trust company offering deposits, 
residential and non-residential mortgage lending, securitization of insured 
residential first mortgage products, consumer lending and credit card 
services. Licensed to conduct business across Canada, Home Trust has offices 
in Ontario, Alberta, British Columbia, Nova Scotia, Quebec and Manitoba.







Gerald M. Soloway, CEO, or Martin Reid, President 416-360-4663 
www.homecapital.com

SOURCE: Home Capital Group Inc.

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/February2013/13/c5126.html

CO: Home Capital Group Inc.
ST: Ontario
NI: FIN ERN CONF 

-0- Feb/13/2013 22:00 GMT


 
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