Home Capital Reports Strong Fourth Quarter Results, 14.3% Dividend Increase, and Stock Dividend Effecting a Two-for-One Split

Home Capital Reports Strong Fourth Quarter Results, 14.3% Dividend Increase, 
and Stock Dividend Effecting a Two-for-One Split 


        --  Net income up 15.6% year over year and earnings per share up
            14.7%
        --  Dividend increased 14.3% to $0.32 quarterly, for a total
            dividend increase of 23% year over year
        --  Stock dividend declared of one common share per each issued and
            outstanding common share, providing a two-for-one split

TORONTO, Feb. 12, 2014 /CNW/ - Home Capital Group Inc. (TSX: HCG) today 
reported positive results for the fourth quarter and for the year, meeting the 
Company's targets for growth in net income, earnings per share and loans under 
administration, and recording an annual return on equity surpassing 20% for 
the 16th consecutive year.

"We are very pleased with our results for the fourth quarter and the year," 
commented CEO Gerald Soloway. "The growth of revenue and earnings reflect the 
continued strength of our business model, the commitment of the Home Capital 
team, and our consistent success in growing our market share."

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, 2013 is available at 
www.homecapital.com and on the Canadian Securities Administrators' website at 
www.sedar.com.
    Financial
    Highlights                                                                    
                                    For the three months ended  For the year ended
    (000s, except Per
    Share and                                                   December  December
    Percentage Amounts)  December 31 September 30  December 31        31        31
                                2013         2013         2012      2013      2012
    OPERATING RESULTS                                                             
    Net Income          $     68,827 $     66,417 $     58,965 $ 256,542 $ 221,983
    Total Revenue            246,365      239,433      227,649   949,547   887,685
    Diluted Earnings
    per Share           $       1.97 $       1.90 $       1.70 $    7.32 $    6.38
    Return on
    Shareholders'
    Equity                     23.9%        24.3%        25.0%     23.9%     25.5%
    Return on Average
    Assets                      1.4%         1.3%         1.2%      1.3%      1.2%
    Net Interest Margin
    (TEB)1                     2.22%        2.16%        2.13%     2.17%     2.09%
    Provision as a
    Percentage of Gross
    Loans (annualized)         0.09%        0.06%        0.09%     0.09%     0.09%
    Efficiency Ratio
    (TEB)1                     28.3%        29.6%        27.3%     28.7%     27.7%
                                                         As at                    
                         December 31 September 30  December 31                    
                                2013         2013         2012                    
    BALANCE SHEET
    HIGHLIGHTS                                                                    
    Total Assets        $ 20,075,850 $ 19,840,797 $ 18,800,079                    
    Total Assets Under
    Administration2       21,997,781   21,287,095   19,681,750                    
    Total Loans3,4        18,019,901   18,084,382   17,159,913                    
    Securitized Loans
    On-Balance Sheet3      5,210,021    6,164,544    6,706,160                    
    Total Loans Under
    Administration3,4,5   19,941,832   19,530,680   18,041,584                    
    Liquid Assets          1,492,977    1,097,429      771,772                    
    Deposits              12,765,954   11,936,647   10,136,599                    
    Shareholders'
    Equity                 1,177,697    1,121,362      968,213                    
    FINANCIAL STRENGTH                                                            
    Capital Measures6                                                             
    Risk-Weighted
    Assets              $  6,495,767 $  6,240,690 $  5,491,513                    
    Common Equity Tier
    1 Capital Ratio           16.80%       16.72%          N/A                    
    Tier 1 Capital
    Ratio                     16.80%       16.72%       17.01%                    
    Total Capital Ratio       19.69%       19.72%       20.68%                    
    Assets to
    Regulatory Capital
    Multiple7                  13.19        13.34        13.39                    
    Credit Quality                                                                
    Net Non-Performing
    Loans as a
    Percentage of Gross
    Loans                      0.35%        0.32%        0.33%                    
    Allowance as a
    Percentage of Gross
    Non-Performing
    Loans                      52.4%        57.0%        57.0%                    
    Share Information                                                             
    Book Value per
    Common Share        $      33.90 $      32.27 $      27.96                    
    Common Share Price
    - Close             $      80.93 $      72.03 $      59.07                    
    Market
    Capitalization      $  2,811,832 $  2,502,754 $  2,045,594                    
    Number of Common
    Shares Outstanding        34,744       34,746       34,630                    

(1 )See definition of Taxable Equivalent Basis (TEB) under Non-GAAP Measures 
in the Company's 2013 Annual and Fourth Quarter Consolidated Financial Report.
(2 )Total assets under administration include total on-balance sheet assets 
and off-balance sheet loans.
(3 )In 2013 the Company classified Home Trust mortgages used as CMB 
replacement assets as securitized mortgages.  In 2012 these were classified as 
pledged securities.  Prior periods in 2012 have been restated to reflect the 
current classification.
(4 )Total loans include loans held for sale.
(5 )Loans under administration includes total loans and off-balance sheet 
loans.
(6 )These figures relate to the Company's operating subsidiary, Home Trust 
Company and are calculated under Basel III for 2013 and Basel II for 2012.
(7 )Commencing in Q3 2013, the Company excluded from its assets, for the 
purposes of calculating the Assets to Regulatory Capital Multiple, mortgages 
that are off-balance sheet as a result of sales of residual interests in light 
of regulatory communications confirming this treatment.  The comparative 
multiples have been restated to reflect this treatment.
    2013 Targets
    and Performance                                                   
                                  For the year ended December 31, 2013
                                   Actual                Increase over
                     2013 Targets Results       Amount            2012
    Growth in net
    income                13%-18%   15.6% $    256,542 $        34,559
    Growth in
    diluted
    earnings per
    share                 13%-18%   14.7%         7.32            0.94
    Growth in total
    loans under
    administration1       10%-15%   10.5%   19,941,832       1,900,248
    Return on
    shareholders'
    equity                  20.0%   23.9%                             
    Efficiency
    ratio (TEB)2    28.0% - 34.0%   28.7%                             
    Provision as a
    percentage of
    gross loans       0.10%-0.18%   0.09%                             

(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 2013 
Annual and Fourth Quarter Consolidated Financial Report.

Key assumptions underlying the Company's targets are related to interest 
rates, unemployment levels, inflation, economic growth, and consumer debt 
levels.  These assumptions are set out in the Company's 2013 Annual and Fourth 
Quarter Consolidated Financial Report.  Developments within the general 
Canadian economy and the real estate market have been, and are expected to be, 
consistent with these assumptions.  The Company was successful in meeting or 
exceeding all of its performance targets in 2013.

FOURTH QUARTER AND 2013 HIGHLIGHTS

The Company recorded another period of solid performance in the fourth quarter 
of 2013 and for the year. Key results and accomplishments for the fourth 
quarter of 2013 and the year are as follows:
        --  Net income was $68.8 million in the fourth quarter and $256.5
            million for the year, increasing 16.7% over the comparable
            quarter of 2012 and 15.6% over 2012. Sequentially in 2013,
            fourth quarter net income increased by 3.6% over third quarter
            net income. The annual results were well within the Company's
            2013 objective of 13% to 18% growth in net income over 2012,
            and reflect the continued strong loan growth in the traditional
            portfolio, strengthening total net interest margin, continued
            low provisions for credit losses and a low efficiency ratio.
        --  Diluted earnings per share reached $1.97 for the fourth quarter
            and $7.32 for the year.  This represents an increase of 15.9%
            from the $1.70 diluted earnings per share in the fourth quarter
            of 2012 and an increase of 14.7% over the $6.38 diluted
            earnings per share earned in 2012. These results are well
            within the Company's 2013 annual objective of 13% to 18% growth
            in diluted earnings per share.
        --  Adjusted net income, as defined in the Non-GAAP Measures
            section of the Company's 2013 Annual and Fourth Quarter
            Consolidated Financial Report, was $68.2 million in the quarter
            and $257.7 million for the year, representing increases of
            10.8% and 14.8% over the comparable periods of 2012.
        --  Return on equity was 23.9% and for the year, well in excess of
            the Company's minimum performance objective of 20% for the
            sixteenth consecutive year.
        --  The Company recorded $3.5 million in gains on the sale of
            residual interests in Q4 2013 and $5.4 million for the year
            compared to $4.8 million in gains in Q4 2012 and for 2012. In
            Q3 2013, the Company received a favourable regulatory ruling
            confirming that the underlying mortgages in these transactions
            can be excluded from the regulatory Assets to Capital Multiple
            (ACM) allowing the Company to continue generating stable income
            from this source going forward.  The Company also recorded
            gains on the securitization of multi-unit residential mortgages
            of $1.2 million in the quarter and $5.7 million for the year,
            compared to $0.9 million and $3.3 million in the same periods
            last year. The Company expects these transactions to provide
            ongoing income.
        --  Net interest income rose to $111.0 million in Q4 2013 and to
            $422.0 million for the year. This represents an increase of
            11.1% over $99.9 million recorded in Q4 2012 and 10.6% over
            $381.5 million recorded in 2012. Net interest income increased
            4.1% over the $106.6 million recorded in Q3 2013. Net interest
            income growth is lower than net income growth as the gain on
            sale of retained interest replaces net interest income on
            certain securitized assets.
        --  Net interest margin (TEB) continued strong at 2.22% in the
            quarter and 2.17% for 2013 up from 2.13% Q4 2012 and 2.09% for
            2012 and up from 2.16% in Q3 2013. Total net interest margin
            has been positively influenced by the mix of the loan portfolio
            between non-securitized and securitized mortgages and the net
            interest margin on each of these portfolios. Beginning in 2011
            and continuing through 2013, 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
            remained strong over that period, with some fluctuations
            quarter to quarter with relatively stable interest rate
            spreads. Net interest margin for non-securitized assets was
            2.94% for Q4 2013, a decline from 2.99% in the third quarter,
            primarily reflecting a  larger proportion of lower yielding
            insured mortgages awaiting securitization as the Company began
            to increase originations of insured mortgages, while spreads of
            the traditional portfolio over deposits rates improved
            marginally in Q4 2013 compared to Q3 2013.
        --  The credit performance of the loans portfolio remained strong
            in the quarter and for the year and was better than the
            Company's objectives. The annualized credit provision as
            percentage of gross loans (PCL ratio) was 0.09% in the quarter
            and for the year, consistent with the comparable periods of
            2012. The Company's objective was a PCL ratio of between 0.10%
            and 0.18% for 2013. Net non-performing loans ended 2013 at
            0.35% of the total loans portfolio compared to 0.33% at the end
            of 2012 and 0.32% at the end Q3 2013, with the marginal
            increase primarily reflecting a specific larger commercial loan
            where no losses are expected.  Excluding this commercial loan
            would result in net non-performing loans ending 2013 at 0.31%
            of the total loans portfolio.  The ratio has remained stable
            despite the relatively higher proportion of uninsured mortgages
            in the total portfolio.
        --  The efficiency ratio declined to 28.5% in Q4 2013, as expenses
            were relatively flat quarter over quarter.  The Company has
            been reducing consulting costs, while increasing permanent
            employees leading to increased efficiencies.
        --  Home Trust's Common Equity Tier 1 (CET 1) and Total capital
            ratios remained very strong at 16.80% and 19.69%, respectively,
            at December 31, 2013, and well above Company and regulatory
            minimum targets.  Home Trust's ACM was 13.19 at December 31,
            2013 compared to 13.39 at December 31, 2012 and 13.34 at
            September 30, 2013. ACM declined from one year ago as the
            Company completed sales of residual interests and removed
            underlying mortgage loans from the calculation of the ACM.
        --  Total loans under administration, including off-balance sheet
            mortgages, increased by almost $2 billion in 2013 to $19.94
            billion, an increase of 10.5% from $18.04 billion one year ago
            and up $411.2 million from Q3 2013.  Annual growth met the
            Company's 2013 target range of 10-15% despite a slower start
            than planned for Accelerator (insured) originations as the
            Company awaited the ruling on the residual interest regulatory
            treatment.
        --  Total Q4 2013 mortgage originations were $1.91 billion and
            $6.92 billion for the year, compared to $1.47 billion and $6.01
            billion in the same periods of 2012.  Total originations were
            $1.99 billion in the third quarter of 2013. The year-over-year
            increase in originations reflects increased focus on and
            increased demand for the Company's traditional mortgage
            products and an increase in Accelerator originations later in
            2013. Compared to the third quarter, a decline in originations
            reflects normal and expected seasonal factors.  The Company has
            generally observed stable credit quality on new originations
            over 2013 and improved credit quality compared to 2012.
        --  Traditional mortgage originations were $1.23 billion in Q4 2013
            and $4.77 billion for the year, compared to $1.16 billion and
            $4.49 billion in the comparative periods of 2012 and $1.31
            billion in Q3 2013.
        --  Accelerator (insured) mortgage originations were $357.1 million
            in Q4 2013, more than double the $174.2 million originated in
            Q4 2012 and up from $272.6 million originated last quarter,
            reflecting the Company's renewed focus on this product. 
            Accelerator originations were $1.01 billion for the year, up
            25.7% from $804.7 million in 2012. The Company is pleased with
            the positive market response to its renewed focus in the
            product and expects increasing originations in 2014.
        --  Multi-unit residential originations were $239.9 million in Q4
            2013 and $823.2 million for the year, up from $57.2 million and
            $286.9 million in the same periods of 2012 and down from $326.6
            million in the third quarter of 2013. A significant portion of
            multi-unit residential mortgages originated in 2013 and 2012
            were insured and securitized through programs that qualified
            for off-balance sheet accounting.
        --  Commercial mortgage advances were $56.1 million in Q4 2013 and
            $180.1 million for the year, compared to $52.4 million and
            $238.7 million in the same periods of 2012, and $49.3 million
            in the third quarter of 2013. The Company continues to maintain
            a cautious approach to increases in this portfolio.
        --  Store and apartment advances were $24.5 million for the quarter
            and $100.0 million for the year, compared to $24.8 million and
            $118.7 million in the same periods in 2012, and $24.3 million
            in the third quarter of 2013.
        --  The consumer retail portfolio, which includes durable household
            good, such as water heaters and larger ticket home improvement
            items, reached $340.0 million in Q4 2013, up 25.0% from $272.0
            million one year ago and 3.7% from $328.0 million last quarter.
        --  In Q4 2013, Home Trust launched a new direct to consumer brand,
            Oaken Financial, offering a line of consumer deposit products,
            including Guaranteed Investment Certificates (GICs) and a new
            Oaken Savings Account as part of its strategy to continue to
            diversify funding sources and to provide customers with a
            secure alternative to managing their savings independently.
        --  In Q4 2013, Home Trust successfully closed its inaugural
            issuance of institutional five-year deposit notes. Given strong
            investor demand, the transaction was upsized from $250 million
            to $300 million and priced at the tight end of initial
            guidance. The Company expects that it will become a regular
            issuer of wholesale deposit notes, likely on a semi-annual
            basis.
        --  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 an increase in the
            quarterly dividend by $0.04 to $0.32 per Common share, payable
            on March 1, 2014 to shareholders of record at the close of
            business on February 24, 2014, representing an increase of
            14.3%.  In addition, the Board approved a stock dividend of one
            share per each issued and outstanding common share, effecting a
            two-for-one stock split.

2014 Overall Outlook

Supported by the stable Canadian economy and healthy real estate market in 
2013, the Company continued to grow its traditional mortgage loan portfolio 
and market share, taking advantage of the attractive returns available in the 
alternative mortgage space. This business, which is the Company's historical 
core business, provides superior returns on the allocated capital. The 
continued expansion of the traditional business was accompanied by 
commensurate strengthening of governance, risk management and control 
processes through further investment in tools, technology and people.  The 
Company maintained very low loss ratios, even with a continued shift to the 
traditional portfolio which carries inherently higher credit risk than the 
insured Accelerator products. The Company expects continued growth of the 
traditional mortgage loan portfolio and will continue to strengthen risk 
management and control processes to manage the business within its risk 
appetite.

In the third quarter of 2013, the Company received a favourable ruling from 
the Office of the Superintendent of Financial Institutions Canada (OSFI) with 
respect to the Company's initiative to structure its Accelerator lending and 
securitization activity in a manner that allows off-balance sheet treatment of 
securitized loans and effectively expands the Company's capacity and appetite 
for prime insured single-family mortgage lending. In this connection, the 
Company will increase its efforts and focus on Accelerator lending and 
anticipates renewed growth of this portfolio, which will be included in assets 
under administration and will reinforce 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 2014, with moderating conditions in most markets when compared to 
the activity levels of recent years. The tightening of mortgage underwriting 
requirements and changes in mortgage insurance qualification that have 
occurred over the past few years can be expected to continue to dampen the 
level of new and resale residential transaction activity in 2014, reducing the 
risk of a major disruption of the real estate market.  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 and stable net immigration. Should interest rates 
increase modestly over the next year, there will be no disruption to the 
Company's business plans. The Company expects continued strong demand for its 
traditional mortgage and other retail products, reflecting the balanced real 
estate markets and an increasing market share.

The Company will continue to maintain relatively high levels of liquidity and 
low overall leverage, as measured by the assets to capital multiple (ACM), to 
provide safety and soundness for depositors.  The Company expects that the 
rate of growth in the Company's non-securitized loan portfolio in 2014 will be 
relatively consistent with the growth rate experienced in 2013.

The Company expects that loans under administration will grow in the range of 
15% to 20% in 2014. The relative growth of the traditional mortgage portfolio 
will moderate compared to 2013 as the Company achieves the balance in the 
portfolios to support sustained growth in earnings and returns on equity.  The 
Company will expand offerings of insured mortgages through the Accelerator 
insured mortgage program, supporting the "one-stop" and "flexible lending 
solutions" lender strategies.

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 securitized portfolio carried on-balance sheet will decline as 
older portfolios mature and are replaced by portfolios that qualify for 
off-balance sheet accounting treatment. Consequently, the contribution to net 
interest income from these portfolios will become less significant and the 
Company will record more gains as securitized portfolios are sold.  The 
Company will also record increased revenue from the servicing of such 
portfolios.  The Company will increase its marketing and sales activities 
related to the development of more diversified sources of deposits, including 
its Oaken Financial business which will include an e-banking platform for 
direct to consumer business and additional costs will be incurred in 
connection to this. Increases in net interest income and gains on sales of 
securitized portfolios will tend to mitigate these increases in costs, and the 
Company expects that its efficiency ratio for 2014 will be in the target range 
of 28% to 32%.

Conference Call and Webcast

Fourth Quarter Results Conference Call

The conference call will take place on Thursday, February 13, 2014, 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 13, 2014 and midnight Thursday, February 20, 2014 by calling 
416-849-0833 or 1-855-859-2056 (enter passcode 35336026). 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 
One King West, Grand Banking Hall, Toronto, Ontario, M5H 1A1, on Wednesday, 
May 14, 2014 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
    dollars                              2013           2013          2012
    ASSETS                                                                
    Cash and Cash Equivalents   $     728,469 $      774,591 $     301,863
    Available for Sale
    Securities                        424,272        441,689       414,344
    Loans Held for Sale               137,975         77,655        21,921
    Loans                                                                 
    Securitized mortgages           5,210,021      6,164,544     6,706,160
    Non-securitized mortgages
    and loans                      12,671,905     11,842,183    10,431,832
                                   17,881,926     18,006,727    17,137,992
    Collective allowance for
    credit losses                    (31,500)       (30,900)      (30,000)
                                   17,850,426     17,975,827    17,107,992
    Other                                                                 
    Restricted assets                 652,986        303,410       725,493
    Derivative assets                  29,886         32,731        45,388
    Other assets                      162,679        148,548       100,983
    Goodwill and intangible
    assets                             89,157         86,346        82,095
                                      934,708        571,035       953,959
                                $  20,075,850 $   19,840,797 $  18,800,079
    LIABILITIES AND
    SHAREHOLDERS' EQUITY                                                  
    Liabilities                                                           
    Deposits                                                              
    Deposits payable on demand  $     429,269 $      281,348 $     105,923
    Deposits payable on a fixed
    date                           12,336,685     11,655,299    10,030,676
                                   12,765,954     11,936,647    10,136,599
    Senior Debt                       147,343        149,822       150,684
    Securitization Liabilities                                            
    Mortgage-backed security
    liabilities                       660,964        913,103     1,301,693
    Canada Mortgage Bond
    liabilities                     5,112,100      5,495,144     6,034,202
                                    5,773,064      6,408,247     7,335,895
    Other                                                                 
    Derivative liabilities              3,809          2,378         2,386
    Other liabilities                 173,558        187,301       170,502
    Deferred tax liabilities           34,425         35,040        35,800
                                      211,792        224,719       208,688
                                   18,898,153     18,719,435    17,831,866
    Shareholders' Equity                                                  
    Capital stock                      70,233         70,237        61,903
    Contributed surplus                 5,984          5,412         6,224
    Retained earnings               1,119,959      1,061,015       903,831
    Accumulated other
    comprehensive loss               (18,479)       (15,302)       (3,745)
                                    1,177,697      1,121,362       968,213
                                $  20,075,850 $   19,840,797 $  18,800,079
    
    Consolidated                                                           
    Statements of
    Income
                                        For the three               For the
                                         months ended                  year
                                                                      ended
                      December   September   December   December   December
                            31          30         31         31         31
    thousands of
    Canadian
    dollars, except
    per share
    amounts               2013        2013       2012       2013       2012
    Net Interest
    Income
    Non-Securitized
    Assets                                                                 
    Interest from
    loans           $  168,045 $   159,573 $  144,310 $  629,247 $  525,722
    Dividends from
    securities           2,556       2,621      3,502     11,165     14,171
    Other interest       2,663       2,386        949      8,283      4,019
                       173,264     164,580    148,761    648,695    543,912
    Interest on
    deposits            71,744      67,911     61,873    268,233    230,006
    Interest on
    senior debt          1,793       1,635      1,825      6,612      6,831
    Net interest
    income
    non-securitized
    assets              99,727      95,034     85,063    373,850    307,075
                                                                           
    Net Interest
    Income
    Securitized
    Loans and
    Assets                                                                 
    Interest income
    from
    securitized
    loans and
    assets              51,274      55,229     64,351    225,793    287,871
    Interest
    expense on
    securitization
    liabilities         40,034      43,669     49,506    177,664    213,474
    Net interest
    income
    securitized
    loans and
    assets              11,240      11,560     14,845     48,129     74,397
                                                                           
    Total Net
    Interest Income    110,967     106,594     99,908    421,979    381,472
    Provision for
    credit losses        4,004       2,768      3,685     15,868     14,720
                       106,963     103,826     96,223    406,111    366,752
    Non-Interest
    Income                                                                 
    Fees and other
    income              15,402      15,472     10,928     61,252     43,863
    Securitization
    income               5,770       4,864      5,761     12,648      8,306
    Net realized
    and unrealized
    gains (losses)
    on securities          148       (668)      (457)      2,589       (55)
    Net realized
    and unrealized
    gain (loss) on
    derivatives            507        (44)    (1,695)    (1,430)      3,788
                        21,827      19,624     14,537     75,059     55,902
                       128,790     123,450    110,760    481,170    422,654
    Non-Interest
    Expenses                                                               
    Salaries and
    benefits            19,563      17,768     14,991     70,954     58,956
    Premises             2,610       2,407      2,562      9,901      8,833
    Other operating
    expenses            15,689      17,460     14,067     62,883     54,946
                        37,862      37,635     31,620    143,738    122,735
                                                                           
    Income Before
    Income Taxes        90,928      85,815     79,140    337,432    299,919
    Income taxes                                                           
         Current        22,337      20,258     22,649     82,128     82,176
         Deferred        (236)       (860)    (2,474)    (1,238)    (4,240)
                        22,101      19,398     20,175     80,890     77,936
    NET INCOME      $   68,827 $    66,417 $   58,965 $  256,542 $  221,983
                                                                           
    NET INCOME PER
    COMMON SHARE                                                           
    Basic           $     1.98 $      1.91 $     1.70 $     7.40 $     6.40
    Diluted         $     1.97 $      1.90 $     1.70 $     7.32 $     6.38
    AVERAGE NUMBER
    OF COMMON
    SHARES
    OUTSTANDING                                                            
    Basic               34,745      34,703     34,655     34,670     34,692
    Diluted             34,969      34,953     34,779     35,023     34,820
                                                                           
    Total number of
    outstanding
    common shares       34,744      34,746     34,630     34,744     34,630
    Book value per
    common share    $    33.90 $     32.27 $    27.96 $    33.90 $    27.96
    
    Consolidated Statements of Comprehensive Income                        
                               For the three months                 For the
                                              ended              year ended
                    December   September   December   December     December
                          31          30         31         31           31
    thousands of        2013        2013       2012       2013         2012
    Canadian
    dollars
                                                                           
    NET INCOME    $   68,827 $    66,417 $   58,965 $  256,542 $    221,983
                                                                           
    OTHER                                                                  
    COMPREHENSIVE
    (LOSS) INCOME
                                                                           
    Available for                                                          
    Sale
    Securities
    and Retained
    Interests
    Net              (5,320)    (10,638)      1,471   (19,530)        6,462
    unrealized
    (losses)
    gains
    Net (gains)        (147)         671        457    (2,584)        (114)
    losses
    reclassified
    to net income
                     (5,467)     (9,967)      1,928   (22,114)        6,348
    Income tax       (1,449)     (2,640)        509    (5,859)        1,775
    (recovery)
    expense
                     (4,018)     (7,327)      1,419   (16,255)        4,573
                                                                           
    Cash Flow                                                              
    Hedges
    Net                  897       (195)          -        702        (370)
    unrealized
    gains
    (losses)
    Net losses           247         376        376      1,362        1,462
    reclassified
    to net income
                       1,144         181        376      2,064        1,092
    Income tax           303          48         99        543          219
    expense
                         841         133        277      1,521          873
                                                                           
    Total other      (3,177)     (7,194)      1,696   (14,734)        5,446
    comprehensive
    (loss) income
                                                                           
    COMPREHENSIVE $   65,650 $    59,223 $   60,661 $  241,808 $    227,429
    INCOME
    
    Consolidated Statements of Changes in Shareholders' Equity
                                                                                                               
                                                               Net                                             
                                                        Unrealized
                                                            Gains           Net           Total                
                                                          (Losses)   Unrealized
                                                                on   Losses on      Accumulated                
                                                        Securities
                                                               and
                                                          Retained    Cash Flow           Other           Total
    thousands of    Capital   Contributed    Retained    Interests      Hedges,   Comprehensive   Shareholders'
    Canadian                                             Available
    dollars,
    except per        Stock       Surplus    Earnings    for Sale,    After Tax            Loss          Equity
    share amounts                                        After Tax
                                                                                                               
    Balance at    $  61,903 $       6,224 $   903,831 $        432 $    (4,177) $       (3,745) $       968,213
    December 31,
    2012
    Comprehensive         -             -     256,542     (16,255)        1,521        (14,734)         241,808
    income
    Stock options     8,400       (2,202)           -            -            -               -           6,198
    settled
    Amortization                                                                                               
    of fair value
    of
    employee              -         1,962           -            -            -               -           1,962
    stock options
    Repurchase of      (70)             -     (2,232)            -            -               -         (2,302)
    shares
    Dividends                                                                                                  
    ($1.08 per            -             -    (38,182)            -            -               -        (38,182)
    share)
    Balance at    $  70,233 $       5,984 $ 1,119,959 $   (15,823) $    (2,656) $      (18,479) $     1,177,697
    December 31,
    2013
                                                                                                               
                                                                                                               
    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                                                                                                  
    ($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
    
    Consolidated Statements of Cash Flows
                                                         For the year ended
                                           December 31          December 31
    thousands of Canadian dollars                 2013                 2012
    CASH FLOWS FROM OPERATING                                              
    ACTIVITIES
    Net income for the year              $     256,542 $            221,983
    Adjustments to determine cash                                          
    flows relating to operating
    activities:
        Deferred income taxes                  (1,238)              (4,240)
        Amortization of capital                  3,504                3,118
        assets
        Amortization of intangible               7,864                6,715
        assets 
        Amortization of net premium              2,562                2,460
        on securities
        Amortization of                         18,729               13,396
        securitization and senior
        debt transaction costs
        Provision for credit losses             15,868               14,720
        Change in accrued interest              13,624               13,519
        payable
        Change in accrued interest             (1,388)              (5,434)
        receivable
        Net realized and unrealized            (2,589)                   55
        (gains) losses on securities
        Realized gain on                      (12,648)              (8,306)
        securitization
        Settlement of derivatives                3,816                (370)
        Loss (gain) on derivatives               1,643              (3,788)
        Net increase in mortgages          (1,980,163)          (1,943,195)
        Net decrease (increase) in              72,507            (252,493)
        restricted assets
        Net increase in credit card           (35,002)             (40,845)
        loans and other consumer
        retail loans
        Net increase in deposits             2,629,355            2,214,475
        Activity in securitization                                         
        liabilities
          Proceeds from sale of                602,948              242,576
          mortgage-backed securities
          derecognized
          Proceeds from sale of                635,101              407,848
          mortgage-backed
          securities 
          Settlement and repayment         (1,686,739)          (1,044,674)
          of securitization
          liabilities
        Amortization of fair value               1,962                1,759
        of employee stock options
        Changes in taxes payable and          (31,475)              (7,194)
        other
    Cash flows provided by (used in)           514,783            (167,915)
    operating activities
    CASH FLOWS FROM FINANCING                                              
    ACTIVITIES
    Repurchase of shares                       (2,302)              (8,117)
    Exercise of employee stock                   6,198                5,680
    options
    Dividends paid to shareholders            (37,458)             (31,244)
    Cash flows used in financing              (33,562)             (33,681)
    activities
    CASH FLOWS FROM INVESTING                                              
    ACTIVITIES
    Activity in securities                                                 
        Purchases                            (182,382)            (335,218)
        Proceeds from sales                    150,494              317,748
    Purchases of capital assets                (7,801)              (4,324)
    Capitalized intangible                    (14,926)              (9,141)
    development costs
    Cash flows used in investing              (54,615)             (30,935)
    activities
    Net increase (decrease) in cash            426,606            (232,531)
    and cash equivalents during the
    year
    Cash and cash equivalents at               301,863              534,394
    beginning of the year
    Cash and Cash Equivalents at End     $     728,469 $            301,863
    of the Year
    Supplementary Disclosure of Cash                                       
    Flow Information
    Dividends received on                $       9,022 $             12,626
    investments
    Interest received                          853,125              807,870
    Interest paid                              443,646              438,026
    Income taxes paid                           98,724               79,887
    
    Net Interest Margin
                                                                          
                        For the three months ended                 For the
                                                                year ended
                    December September December 31 December 31 December 31
                          31        30
                        2013      2013        2012        2013        2012
    Net interest       2.92%     2.96%       3.07%       2.98%       3.05%
    margin
    non-securitized
    interest
    earning assets
    (non-TEB)
    Net interest       2.94%     2.99%       3.11%       3.01%       3.10%
    margin
    non-securitized
    interest
    earning assets
    (TEB)
    Net interest       0.74%     0.69%       0.79%       0.73%       0.93%
    margin
    securitized
    assets
    Total net          2.20%     2.14%       2.11%       2.15%       2.07%
    interest margin
    (non-TEB)
    Total net          2.22%     2.16%       2.13%       2.17%       2.09%
    interest margin
    (TEB)
    Spread of          3.11%     3.16%       3.13%       3.14%       3.13%
    non-securitized
    loans over
    deposits only
    
    Net Interest Income by
    Product and Average Rate                                                      
                         For the three months ended     For the three months ended
                                  December 31, 2013             September 30, 2013
    (000s, except %)      Average   Income/ Average      Average   Income/ Average
                         Balance1   Expense   Rate1    Balance 1   Expense  Rate 1
    Assets                                                                        
    Cash resources
    and securities   $  1,292,322 $   5,219   1.62% $  1,248,482 $   5,007   1.60%
    Traditional
    single-family
    residential
    mortgages           9,819,720   128,659   5.24%    9,331,924   122,329   5.24%
    Accelerator
    single-family
    residential
    mortgages             617,356     5,282   3.42%      407,046     3,604   3.54%
    Residential
    commercial
    mortgages 2           327,988     4,043   4.93%      280,565     3,393   4.84%
    Non-residential
    commercial
    mortgages             987,049    15,749   6.38%      965,285    15,932   6.60%
    Credit card
    loans                 295,315     6,934   9.39%      300,776     7,147   9.50%
    Other consumer
    retail loans          333,521     7,378   8.85%      318,300     7,168   9.01%
    Total
    non-securitized
    loans              12,380,949   168,045   5.43%   11,603,896   159,573   5.50%
    Taxable
    equivalent
    adjustment                  -       921       -            -       942       -
    Total on
    non-securitized
    interest-earning
    assets             13,673,271   174,185   5.10%   12,852,378   165,522   5.15%
    Securitized
    single-family
    residential
    mortgages           4,151,111    33,112   3.19%    4,605,786    35,943   3.12%
    Securitized
    multi-unit
    residential
    mortgages           1,639,678    16,429   4.01%    1,795,004    17,715   3.95%
    Assets pledged
    as collateral
    for
    securitization        440,539     1,733   1.57%      379,419     1,571   1.66%
    Total
    securitized
    residential
    mortgages           6,231,328    51,274   3.29%    6,780,209    55,229   3.26%
    Other assets          282,816         -       -      254,310         -       -
    Total Assets     $ 20,187,415 $ 225,459   4.47% $ 19,886,897 $ 220,751   4.44%
    Liabilities and
    Shareholders'
    Equity                                                                        
    Deposits         $ 12,383,947 $  71,744   2.32% $ 11,629,822 $  67,911   2.34%
    Senior debt           148,725     1,793   4.82%      149,025     1,635   4.39%
    Securitization
    liabilities         6,271,332    40,034   2.55%    6,785,334    43,669   2.57%
    Other
    liabilities and
    shareholders'
    equity              1,383,411         -       -    1,322,716         -       -
    Total
    Liabilities and
    Shareholders'
    Equity           $ 20,187,415 $ 113,571   2.25% $ 19,886,897 $ 113,215   2.28%
    Net Interest
    Income (TEB)                  $ 111,888                      $ 107,536        
    Tax Equivalent
    Adjustment                        (921)                          (942)        
    Net Interest
    Income per
    Financial
    Statements                    $ 110,967                      $ 106,594        
                                                                                  
                                                        For the three months ended
                                                                 December 31, 2012
    (000s, except %)                                     Average   Income/ Average
                                                       Balance 1   Expense  Rate 1
    Assets                                                                        
    Cash resources
    and securities                                  $    817,669 $   4,451   2.18%
    Traditional
    single-family
    residential
    mortgages                                          7,919,965   107,692   5.44%
    Accelerator
    single-family
    residential
    mortgages                                            582,728     4,470   3.07%
    Residential
    commercial
    mortgages 2                                          205,425     2,790   5.43%
    Non-residential
    commercial
    mortgages                                            981,483    15,789   6.43%
    Credit card
    loans                                                334,778     7,998   9.56%
    Other consumer
    retail loans                                         243,338     5,571   9.16%
    Total
    non-securitized
    loans                                             10,267,717   144,310   5.62%
    Taxable
    equivalent
    adjustment                                                 -     1,243       -
    Total on
    non-securitized
    interest-earning
    assets                                            11,085,386   150,004   5.41%
    Securitized
    single-family
    residential
    mortgages                                          5,136,096    43,081   3.36%
    Securitized
    multi-unit
    residential
    mortgages                                          1,949,071    19,704   4.04%
    Assets pledged
    as collateral
    for
    securitization                                       541,946     1,566   1.16%
    Total
    securitized
    residential
    mortgages                                          7,627,113    64,351   3.37%
    Other assets                                         294,020         -       -
    Total Assets                                    $ 19,006,519 $ 214,355   4.51%
    Liabilities and
    Shareholders'
    Equity                                                                        
    Deposits                                        $  9,944,774 $  61,873   2.49%
    Senior debt                                          152,283     1,825   4.79%
    Securitization
    liabilities                                        7,661,311    49,506   2.58%
    Other
    liabilities and
    shareholders'
    equity                                             1,248,151         -       -
    Total
    Liabilities and
    Shareholders'
    Equity                                          $ 19,006,519 $ 113,204   2.38%
    Net Interest
    Income (TEB)                                                 $ 101,151        
    Tax Equivalent
    Adjustment                                                     (1,243)        
    Net Interest
    Income per
    Financial
    Statements                                                   $  99,908        
                                                                                  
                        For the year ended December    For the year ended December
                                           31, 2013                       31, 2012
    (000s, except %)      Average   Income/ Average      Average   Income/ Average
                         Balance1   Expense   Rate1    Balance 1   Expense  Rate 1
    Assets                                                                        
    Cash resources
    and securities   $  1,149,994 $  19,448   1.69% $    807,022 $  18,190   2.25%
    Traditional
    single-family
    residential
    mortgages           9,116,538   482,491   5.29%    6,961,740   381,971   5.49%
    Accelerator
    single-family
    residential
    mortgages             446,636    15,044   3.37%      540,610    17,440   3.23%
    Residential
    commercial
    mortgages 2           263,447    12,954   4.92%      202,027    11,000   5.44%
    Non-residential
    commercial
    mortgages             975,217    62,681   6.43%      985,089    61,229   6.22%
    Credit card
    loans                 307,310    28,966   9.43%      361,808    34,722   9.60%
    Other consumer
    retail loans          308,155    27,111   8.80%      206,978    19,360   9.35%
    Total
    non-securitized
    loans              11,417,303   629,247   5.51%    9,258,252   525,722   5.68%
    Taxable
    equivalent
    adjustment                  -     4,016       -            -     5,031       -
    Total on
    non-securitized
    interest-earning
    assets             12,567,297   652,711   5.19%   10,065,274   548,943   5.45%
    Securitized
    single-family
    residential
    mortgages           4,559,463   144,702   3.17%    5,651,599   200,679   3.55%
    Securitized
    multi-unit
    residential
    mortgages           1,780,245    73,712   4.14%    1,985,035    80,757   4.07%
    Assets pledged
    as collateral
    for
    securitization        467,481     7,379   1.58%      497,312     6,435   1.29%
    Total
    securitized
    residential
    mortgages           6,807,189   225,793   3.32%    8,133,946   287,871   3.54%
    Other assets          257,386         -       -      260,470         -       -
    Total Assets     $ 19,631,872 $ 878,504   4.47% $ 18,459,690 $ 836,814   4.53%
    Liabilities and
    Shareholders'
    Equity                                                                        
    Deposits         $ 11,327,983 $ 268,233   2.37% $  9,004,518 $ 230,006   2.55%
    Senior debt           149,899     6,612   4.41%      153,285     6,831   4.46%
    Securitization
    liabilities         6,849,261   177,664   2.59%    8,170,337   213,474   2.61%
    Other
    liabilities and
    shareholders'
    equity              1,304,729         -       -    1,131,550         -       -
    Total
    Liabilities and
    Shareholders'
    Equity           $ 19,631,872 $ 452,509   2.30% $ 18,459,690 $ 450,311   2.44%
    Net Interest
    Income (TEB)                  $ 425,995                      $ 386,503        
    Tax Equivalent
    Adjustment                      (4,016)                        (5,031)        
    Net Interest
    Income per
    Financial
    Statements                    $ 421,979                      $ 381,472        

(1 )The average is calculated with reference to opening and closing monthly 
asset and liability balances.
(2 )Residential commercial mortgages include non-securitized multi-unit 
residential mortgages and commercial mortgages secured by residential property 
types.
    
    Mortgage
    Production                                                                 
                                   For the three months
                                                  ended      For the year ended
                       December   September    December    December    December
                             31          30          31          31          31
    (000s)                 2013        2013        2012        2013        2012
    Single-family
    residential
    mortgages                                                                  
      Traditional   $ 1,227,462 $ 1,312,648 $ 1,159,387 $ 4,770,773 $ 4,487,473
      Accelerator       357,125     272,576     174,214   1,011,650     804,692
    Residential
    commercial
    mortgages                                                                  
      Multi-unit
      uninsured
      residential
      mortgages          62,276      19,475       7,786     129,738      30,605
      Multi-unit
      insured
      residential
      mortgages         177,632     306,863      49,459     693,461     256,274
      Other1              4,411       9,000       4,650      31,479      68,906
    Non-residential
    commercial
    mortgages                                                                  
      Stores and
      apartments         24,514      24,347      24,835      99,951     118,689
      Commercial         56,134      49,320      52,417     180,131     238,728
    Total mortgage
    advances        $ 1,909,554 $ 1,994,229 $ 1,472,748 $ 6,917,183 $ 6,005,367

(1 )Other residential commercial mortgages include mortgages such as builders' 
inventory.   
    Provision for                                                         
    Credit Losses 
               As at December 31, 2013 For the three months ended December
                                                                  31, 2013
    (000s, except   Net Non-Performing       Provision1     Net Write-Offs
    %)                           Loans
                                             Annualized         Annualized
                                  % of       % of Gross         % of Gross
                                 Gross
                       Amount    Loans   Amount   Loans   Amount     Loans
    Single-family   $  51,636    0.48% $  3,560   0.13% $  3,135     0.12%
    residential
    mortgages
    Residential        1,8362    0.93%       49   0.10%      168     0.34%
    commercial
    mortgages
    Non-residential    7,1893    0.72%       99   0.04%       79     0.03%
    commercial
    mortgages
    Credit card         2,584    0.88%      183   0.25%      293     0.40%
    loans
    Other consumer          -        -      113   0.13%       94     0.11%
    retail loans
    Securitized             -        -        -       -        -         -
    single-family
    residential
    mortgages
    Securitized             -        -        -       -        -         -
    multi-unit
    residential
    mortgages
    Total           $  63,245    0.35% $  4,004   0.09% $  3,769     0.08%
                                                                          
              As at September 30, 2013          For the three months ended
                                                        September 30, 2013
    (000s, except   Net Non-Performing      Provision 1     Net Write-Offs
    %)                           Loans
                                             Annualized         Annualized
                                  % of       % of Gross         % of Gross
                                 Gross
                       Amount    Loans   Amount   Loans   Amount     Loans
    Single-family   $  50,224    0.50% $  2,704   0.11% $  1,734     0.07%
    residential
    mortgages
    Residential       1,836 2    0.71%      152   0.24%        -         -
    commercial
    mortgages
    Non-residential     1,576    0.16%     (38) (0.02)%      153     0.06%
    commercial
    mortgages
    Credit card         3,603    1.21%     (99) (0.13)%       96     0.13%
    loans
    Other consumer          -        -       49   0.06%       96     0.12%
    retail loans
    Securitized             -        -        -       -        -         -
    single-family
    residential
    mortgages
    Securitized             -        -        -       -        -         -
    multi-unit
    residential
    mortgages
    Total           $  57,239    0.32% $  2,768   0.06% $  2,079     0.05%
                                                                  
                     As at December 31,        For the three months ended
                                   2012                 December 31, 2012
    (000s, except    Net Non-Performing      Provision 1   Net Write-Offs
    %)                            Loans
                                              Annualized       Annualized
                             % of Gross       % of Gross       % of Gross
                      Amount      Loans   Amount   Loans   Amount   Loans
    Single-family   $ 47,788      0.55% $  3,470   0.16% $  2,546   0.12%
    residential
    mortgages
    Residential        4,527      2.93%       48   0.12%        -       -
    commercial
    mortgages
    Non-residential      501      0.05%      146   0.06%      146   0.06%
    commercial
    mortgages
    Credit card        3,505      1.07%      (5) (0.01)%      512   0.63%
    loans
    Other consumer         -          -       26   0.04%       90   0.13%
    retail loans
    Securitized            -          -        -       -        -       -
    single-family
    residential
    mortgages
    Securitized            -          -        -       -        -       -
    multi-unit
    residential
    mortgages
    Total           $ 56,321      0.33% $  3,685   0.09% $  3,294   0.08%
                                                                         
                                                                         
                                          For the year ended December 31,
                                                                     2013
    (000s, except                             Provision1   Net Write-Offs
    %)
                                              % of Gross       % of Gross
                                          Amount   Loans   Amount   Loans
    Single-family                       $ 11,766   0.11% $ 11,165   0.10%
    residential
    mortgages
    Residential                            2,783   1.41%    3,199   1.62%
    commercial
    mortgages
    Non-residential                          274   0.03%      230   0.02%
    commercial
    mortgages
    Credit card                              679   0.23%      589   0.20%
    loans
    Other consumer                           366   0.11%      345   0.10%
    retail loans
    Securitized                              -         -      -         -
    single-family
    residential
    mortgages
    Securitized                              -         -      -         -
    multi-unit
    residential
    mortgages
    Total                               $ 15,868   0.09% $ 15,528   0.09%
                                                                         
                                          For the year ended December 31,
                                                                     2012
    (000s, except                            Provision 1   Net Write-Offs
    %)
                                              % of Gross       % of Gross
                                          Amount   Loans   Amount   Loans
    Single-family                       $ 12,581   0.14% $ 10,148   0.12%
    residential
    mortgages
    Residential                              340   0.22%        -       -
    commercial
    mortgages
    Non-residential                          241   0.02%      319   0.03%
    commercial
    mortgages
    Credit card                            1,291   0.39%    1,572   0.48%
    loans
    Other consumer                           267   0.10%      342   0.13%
    retail loans
    Securitized                                -       -        -       -
    single-family
    residential
    mortgages
    Securitized                                -       -        -       -
    multi-unit
    residential
    mortgages
    Total                               $ 14,720   0.09% $ 12,381   0.07%
    1Provisions include both individual and collective provisions.
    2The non-performing residential commercial amount comprises one loan.
    3The non-performing non-residential commercial amount includes $6.4
    million related to one loan.
    Loans by Geographic Region and Type (net of individual allowances for     
    credit losses)
                                                                                       
    (000s, except %)                                            As at December 31, 2013
                        British                                                        
                       Columbia   Alberta      Ontario    Quebec     Other        Total
    Securitized     $   334,511 $ 256,770 $  2,835,878 $ 192,751 $ 100,187 $  3,720,097
    single-family
    residential
    mortgages
    Securitized         201,181   191,910      706,883   186,521   203,429    1,489,924
    multi-unit
    residential
    mortgages
    Total               535,692   448,680    3,542,761   379,272   303,616    5,210,021
    securitized
    mortgages
    Single-family       536,228   367,291    9,391,586   360,684   191,578   10,847,367
    residential
    mortgages
    Residential           8,897    16,192      135,133    28,689     7,969      196,880
    commercial
    mortgages1
    Non-residential       7,753    38,660      881,702    16,234    49,861      994,210
    commercial
    mortgages
    Credit card           7,230    19,324      262,016     1,260     3,655      293,485
    loans
    Other consumer          899     1,256      334,652     2,900       256      339,963
    retail loans
    Total               561,007   442,723   11,005,089   409,767   253,319   12,671,905
    non-securitized
    mortgages and
    loans2
                    $ 1,096,699 $ 891,403 $ 14,547,850 $ 789,039 $ 556,935 $ 17,881,926
    As a % of              6.1%      5.0%        81.4%      4.4%      3.1%       100.0%
    portfolio
                                                                                       
    (000s, except %                                                 As at September 30,
    )                                                                              2012
                        British                                                        
                       Columbia   Alberta      Ontario    Quebec     Other        Total
    Securitized     $   382,042 $ 298,719 $  3,409,845 $ 229,049 $ 114,187 $  4,433,842
    single-family
    residential
    mortgages
    Securitized         239,146   198,938      849,537   215,291   227,790    1,730,702
    multi-unit
    residential
    mortgages
    Total               621,188   497,657    4,259,382   444,340   341,977    6,164,544
    securitized
    mortgages
    Single-family       475,002   336,318    8,686,457   323,892   164,964    9,986,633
    residential
    mortgages
    Residential          20,319    20,810      159,334    52,788     3,739      256,990
    commercial
    mortgages1
    Non-residential       3,851    37,745      867,132    16,071    47,313      972,112
    commercial
    mortgages
    Credit card           7,550    21,322      264,691     1,274     3,632      298,469
    loans
    Other consumer          946     1,103      325,616         -       314      327,979
    retail loans
    Total               507,668   417,298   10,303,230   394,025   219,962   11,842,183
    non-securitized
    mortgages and
    loans2
                    $ 1,128,856 $ 914,955 $ 14,562,612 $ 838,365 $ 561,939 $ 18,006,727
    As a % of              6.3%      5.1%        80.8%      4.7%      3.1%       100.0%
    portfolio
                                                                                       
    (000s, except %                                                  As at December 31,
    )                                                                              2012
                        British                                                        
                       Columbia   Alberta      Ontario    Quebec     Other        Total
    Securitized     $   433,529 $ 343,318 $  3,616,877 $ 256,953 $ 113,080 $  4,763,757
    single-family
    residential
    mortgages
    Securitized         258,757   203,081      908,513   339,477   232,575    1,942,403
    multi-unit
    residential
    mortgages
    Total               692,286   546,399    4,525,390   596,430   345,655    6,706,160
    securitized
    mortgages
    Single-family       420,953   342,841    7,499,242   278,671   147,739    8,689,446
    residential
    mortgages
    Residential           5,642    19,380      102,674    25,201     1,580      154,477
    commercial
    mortgages1
    Non-residential       3,521    25,953      860,703    61,691    36,548      988,416
    commercial
    mortgages
    Credit card           9,104    25,062      287,877     1,532     3,941      327,516
    loans
    Other consumer          975       787      269,594         -       621      271,977
    retail loans
    Total               440,195   414,023    9,020,090   367,095   190,429   10,431,832
    non-securitized
    mortgages and
    loans2
                    $ 1,132,481 $ 960,422 $ 13,545,480 $ 963,525 $ 536,084 $ 17,137,992
    As a % of              6.6%      5.6%        79.1%      5.6%      3.1%       100.0%
    portfolio
    1 Residential commercial mortgages include non-securitized multi-unit
      residential mortgages and commercial mortgages secured by residential
      property types.
    2 Loans exclude mortgages held for sale.
        Impaired                                                                          
    Loans
                                                                                            
    (000s)                                                                As at December 31,
                                                                                        2013
                 Single-Family   Residential   Non-Residential               Other          
                   Residential    Commercial        Commercial   Credit   Consumer          
                                                                   Card
                     Mortgages     Mortgages         Mortgages    Loans     Retail     Total
                                                                             Loans
    Gross      $        52,837 $       1,836 $           7,189 $  2,785 $      236 $  64,883
    amount of
    impaired
    loans
    Individual         (1,201)             -                 -    (201)      (236)   (1,638)
    allowances
    on
    principal
    Net amount $        51,636 $       1,836 $           7,189 $  2,584 $        - $  63,245
    of
    impaired
    loans
                                                                                            
    (000s)                                                               As at September 30,
                                                                                        2013
                 Single-Family   Residential   Non-Residential               Other          
                   Residential    Commercial        Commercial   Credit   Consumer          
                                                                   Card
                     Mortgages     Mortgages         Mortgages    Loans     Retail     Total
                                                                             Loans
    Gross      $        51,665 $       1,836 $           1,576 $  3,914 $      219 $  59,210
    amount of
    impaired
    loans
    Individual         (1,441)             -                 -    (311)      (219)   (1,971)
    allowances
    on
    principal
    Net amount $        50,224 $       1,836 $           1,576 $  3,603 $        - $  57,239
    of
    impaired
    loans
                                                                                            
                                                                                            
    (000s)                                                                As at December 31,
                                                                                        2012
                 Single-Family   Residential   Non-Residential               Other          
                   Residential    Commercial        Commercial   Credit   Consumer          
                                                                   Card
                     Mortgages     Mortgages         Mortgages    Loans     Retail     Total
                                                                             Loans
    Gross      $        50,169 $       4,527 $             501 $  3,616 $      214 $  59,027
    amount of
    impaired
    loans
    Individual         (2,381)             -                 -    (111)      (214)   (2,706)
    allowances
    on
    principal
    Net amount $        47,788 $       4,527 $             501 $  3,505 $        - $  56,321
    of
    impaired
    loans
    Allowance for Credit Losses                                                         
                                                                                  
                                                                                        
    (000s)                                       For the three months ended December 31,
                                                                                    2013
               Single-family   Residential Non-residential               Other          
                 Residential    Commercial      Commercial   Credit   Consumer          
                                                               Card
                   Mortgages     Mortgages       Mortgages    Loans     Retail     Total
                                                                         Loans
    Individual                                                                          
    allowances
    Allowance                                                                           
    on loan
    principal
    Balance at $       1,441 $           - $             - $    311 $      219 $   1,971
    the
    beginning
    of the
    period
    Provision          2,895           168              79      183        111     3,436
    for credit
    losses
    Write-offs       (3,259)         (376)            (87)    (314)      (118)   (4,154)
    Recoveries           124           208               8       21         24       385
                       1,201             -               -      201        236     1,638
    Allowance                                                                           
    on accrued
    interest
    receivable
    Balance at           813            25              24        -         10       872
    the
    beginning
    of the
    period
    Provision           (54)             -              20        -          2      (32)
    for credit
    losses
                         759            25              44        -         12       840
    Total              1,960            25              44      201        248     2,478
    individual
    allowance
    Collective                                                                          
    allowance
    Balance at        17,313           446           9,300    3,541        300    30,900
    the
    beginning
    of the
    period
    Provision            719         (119)               -        -          -       600
    for credit
    losses
                      18,032           327           9,300    3,541        300    31,500
    Total      $      19,992 $         352 $         9,344 $  3,742 $      548 $  33,978
    allowance
    Total      $       3,560 $          49 $            99 $    183 $      113 $   4,004
    provision
                                                                                        
    (000s)                                 For the three months ended September 30, 2013
               Single-family   Residential Non-residential               Other          
                 Residential    Commercial      Commercial   Credit   Consumer          
                                                               Card
                   Mortgages     Mortgages       Mortgages    Loans     Retail     Total
                                                                         Loans
    Individual                                                                          
    allowances
    Allowance                                                                           
    on loan
    principal
    Balance at $         929 $           - $           170 $    506 $      262 $   1,867
    the
    beginning
    of the
    period
    Provision          2,246             -            (17)     (99)         53     2,183
    for credit
    losses
    Write-offs       (2,123)             -           (154)    (106)      (111)   (2,494)
    Recoveries           389             -               1       10         15       415
                       1,441             -               -      311        219     1,971
    Allowance                                                                           
    on accrued
    interest
    receivable
    Balance at           628             -              45        -         14       687
    the
    beginning
    of the
    period
    Provision            185            25            (21)        -        (4)       185
    for credit
    losses
                         813            25              24        -         10       872
    Total              2,254            25              24      311        229     2,843
    individual
    allowance
    Collective                                                                          
    allowance
    Balance at        17,040           319           9,300    3,541        300    30,500
    the
    beginning
    of the
    period
    Provision            273           127               -        -          -       400
    for credit
    losses
                      17,313           446           9,300    3,541        300    30,900
    Total      $      19,567 $         471 $         9,324 $  3,852 $      529 $  33,743
    allowance
    Total      $       2,704 $         152 $          (38) $   (99) $       49 $   2,768
    provision
                                                                                           
    (000s)                                       For the three months ended December 31,
                                                                                    2012
               Single-family   Residential Non-residential               Other          
                 Residential    Commercial      Commercial   Credit   Consumer          
                                                               Card
                   Mortgages     Mortgages       Mortgages    Loans     Retail     Total
                                                                         Loans
    Individual                                                                          
    allowances
    Allowance                                                                           
    on loan
    principal
    Balance at $       1,660 $           - $             - $    628 $      291 $   2,579
    the
    beginning
    of the
    period
    Provision          3,267             -             146      (5)         13     3,421
    for credit
    losses
    Write-offs       (2,699)             -           (149)    (685)      (109)   (3,642)
    Recoveries           153             -               3      173         19       348
                       2,381             -               -      111        214     2,706
    Allowance                                                                           
    on accrued
    interest
    receivable
    Balance at           503           365               -        -          -       868
    the
    beginning
    of the
    period
    Provision           (16)            67               -        -         13        64
    for credit
    losses
                         487           432               -        -         13       932
    Total              2,868           432               -      111        227     3,638
    individual
    allowance
    Collective                                                                          
    allowance
    Balance at        16,304           355           9,300    3,541        300    29,800
    the
    beginning
    of the
    period
    Provision            219          (19)               -        -          -       200
    for credit
    losses
                      16,523           336           9,300    3,541        300    30,000
    Total      $      19,391 $         768 $         9,300 $  3,652 $      527 $  33,638
    allowance
    Total      $       3,470 $          48 $           146 $    (5) $       26 $   3,685
    provision
                                                                                          
    (000s)                                            For the year ended December 31, 2013
               Single-family   Residential Non-residential                Other           
                 Residential    Commercial      Commercial    Credit   Consumer           
                                                                Card
                   Mortgages     Mortgages       Mortgages     Loans     Retail      Total
                                                                          Loans
    Individual                                                                            
    allowances
    Allowance                                                                             
    on loan
    principal
    Balance at $       2,381 $           - $             - $     111 $      214 $    2,706
    the
    beginning
    of the
    year
    Provision          9,985         3,199             230       679        367     14,460
    for credit
    losses
    Write-offs      (12,048)       (3,407)           (241)   (1,129)      (436)   (17,261)
    Recoveries           883           208              11       540         91      1,733
                       1,201             -               -       201        236      1,638
    Allowance                                                                             
    on accrued
    interest
    receivable
    Balance at           487           432               -         -         13        932
    the
    beginning
    of the
    year
    Provision            272         (407)              44         -        (1)       (92)
    for credit
    losses
                         759            25              44         -         12        840
    Total              1,960            25              44       201        248      2,478
    individual
    allowance
    Collective                                                                            
    allowance
    Balance at        16,523           336           9,300     3,541        300     30,000
    the
    beginning
    of the
    year
    Provision          1,509           (9)               -         -          -      1,500
    for credit
    losses
                      18,032           327           9,300     3,541        300     31,500
    Total      $      19,992 $         352 $         9,344 $   3,742 $      548 $   33,978
    allowance
    Total      $      11,766 $       2,783 $           274 $     679 $      366 $   15,868
    provision
                                                                                          
    (000s)                                                     For the year ended December
                                                                                  31, 2012
               Single-family   Residential Non-residential                Other           
                 Residential    Commercial      Commercial    Credit   Consumer           
                                                                Card
                   Mortgages     Mortgages       Mortgages     Loans     Retail      Total
                                                                          Loans
    Individual                                                                            
    allowances
    Allowance                                                                             
    on loan
    principal
    Balance at $         760 $           - $            60 $     392 $      290 $    1,502
    the
    beginning
    of the
    year
    Provision         11,769             -             259     1,291        266     13,585
    for credit
    losses
    Write-offs      (10,598)             -           (322)   (1,914)      (419)   (13,253)
    Recoveries           450             -               3       342         77        872
                       2,381             -               -       111        214      2,706
    Allowance                                                                             
    on accrued
    interest
    receivable
    Balance at           327             -              18         -         12        357
    the
    beginning
    of the
    year
    Provision            160           432            (18)         -          1        575
    for credit
    losses
                         487           432               -         -         13        932
    Total              2,868           432               -       111        227      3,638
    individual
    allowance
    Collective                                                                            
    allowance
    Balance at        15,871           428           9,300     3,541        300     29,440
    the
    beginning
    of the
    year
    Provision            652          (92)               -         -          -        560
    for credit
    losses
                      16,523           336           9,300     3,541        300     30,000
    Total      $      19,391 $         768 $         9,300 $   3,652 $      527 $   33,638
    allowance
    Total      $      12,581 $         340 $           241 $   1,291 $      267 $   14,720
    provision
    Securitization                                                                          
    Activities
                                                                                            
    (000s)                                                                     For the three
                                                                                months ended
                                             December 31                        September 30
                                                    2013                                2013
                   Single-Family  Multi-Unit             Single-Family  Multi-Unit          
                     Residential Residential   Total MBS   Residential Residential Total MBS
                             MBS         MBS                       MBS         MBS
    Carrying value $     327,500 $   177,700 $   505,200 $     191,761 $   235,483 $ 427,244
    of underlying
    mortgages
    derecognized
    Gains on sale          3,460       1,189       4,649         1,894       2,647     4,541
    of mortgages
    or residual
    interest 1
    Retained                   -       7,983       7,983             -      11,146    11,146
    interests
    recorded
    Servicing                  -       1,186       1,186             -       1,809     1,809
    liability
    recorded
                                                                                            
    (000s)                                                        For the three months ended
                                                                                 December 31
                                                                                        2012
                                                         Single-Family  Multi-Unit          
                                                           Residential Residential Total MBS
                                                                   MBS         MBS
    Carrying value                                       $     662,153 $    64,634 $ 726,787
    of underlying
    mortgages
    derecognized
    Gains on sale                                                4,845         891     5,736
    of mortgages
    or residual
    interest 1
    Retained                                                         -       2,447     2,447
    interests
    recorded
    Servicing                                                        -         487       487
    liability
    recorded
                                                                                            
    (000s)               For the year ended December 31,     For the year ended December 31,
                                                    2013                                2012
                   Single-Family  Multi-Unit             Single Family  Multi-Unit          
                     Residential Residential   Total MBS   Residential Residential Total MBS
                             MBS         MBS                       MBS         MBS
    Carrying value $     519,261 $   617,244 $ 1,136,505 $     662,153 $   233,892 $ 896,045
    of underlying
    mortgages
    derecognized
    Gains on sale          5,354       5,687      11,041         4,845       3,300     8,145
    of mortgages
    or residual
    interest 1
    Retained                   -      26,131      26,131             -       9,691     9,691
    interests
    recorded
    Servicing                  -       4,563       4,563             -       1,786     1,786
    liability
    recorded

(1 )Gains on sale of mortgages are net of hedging impact.

Management's Responsibility for Financial Information

The Company's Audit Committee reviewed this document along with the Company's 
2013 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 2013 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 2013 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, funding and liquidity 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 and 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 2014 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 its 
target, objectives and outlook for 2014, management's expectations assume:
        --  The Canadian economy will continue produce modest growth in
            2014 with stable to modestly improving employment conditions in
            most regions and inflation will generally be within the Bank of
            Canada's target of 1% to 3%, leading to stable credit losses
            and strong demand for the Company's lending products.
        --  The Canadian economy will continue to be influenced by the
            economic conditions in the United States and global markets; as
            such, the Company is prepared for the variability to plan that
            may result.
        --  The Bank of Canada continues to indicate 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
            rate into 2014, with the potential for modest increases later
            in 2014. This is expected to continue to support relatively low
            mortgage interest rates for the foreseeable future.
        --  The housing market will likely 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 modest declines in housing
            starts and resale activity with stable prices throughout most
            of Canada. This supports stable credit losses and strong demand
            for the Company's lending products.
        --  Consumer debt levels will remain serviceable by Canadian
            households.
        --  The Company will maintain uninterrupted access to the mortgage
            and deposit markets through broker networks.

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 2013 Annual 
and Fourth Quarter Consolidated Financial Report.
    Reconciliation                                                                        
    of Net Income
    to Adjusted
    Net Income
                                                        Quarter               Year to date
                                                                                     
    (000s, except         Q4        Q3       %       Q4       %                          %
    % and per
    share amounts)
                                                                                     
                        2013      2013  Change     2012  Change      2013      2012 Change
    Net income     $  68,827 $  66,417    3.6% $ 58,965   16.7% $ 256,542 $ 221,983  15.6%
    Adjustment for       850       931  (8.7)%    2,602 (67.3)%     5,873     2,602 125.7%
    derivative
    restructuring
    - IFRS
    conversion
    (net of tax)
    Adjustment for         -         -       -        -       -     1,508         -      -
    disputed loans
    to condominium
    corporations
    (net of tax)
    Adjustment for   (1,470)   (2,735) (46.3)%        -       -   (6,190)         -      -
    investment tax
    credit
    benefits (net
    of tax)
    Adjusted Net   $  68,207 $  64,613    5.6% $ 61,567   10.8% $ 257,733 $ 224,585  14.8%
    Income1
    Adjusted Basic $    1.96 $    1.86    5.4% $   1.78   10.1% $    7.43 $    6.47  14.8%
    Earnings per
    Share1
    Adjusted       $    1.95 $    1.85    5.4% $   1.77   10.2% $    7.36 $    6.45  14.1%
    Diluted
    Earnings per
    Share1
                                                                                          
    1 Adjusted net income and Adjusted earnings per share are defined in the              
    Non-GAAP section of the Company's 2013 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.



SOURCE  Home Capital Group Inc. 
Gerald M. Soloway, CEO, or Martin Reid, President 416-360-4663 
www.homecapital.com 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/February2014/12/c9488.html 
CO: Home Capital Group Inc.
ST: Ontario
NI: FIN ERN DIV CONF  
-0- Feb/12/2014 22:00 GMT
 
 
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