EQB Inc.: EQB releases Q1 results with milestone adjusted EPS and total AUM and AUA reaching $132 billion, increases dividend 21% y/y

TORONTO, Feb. 25, 2025 /PRNewswire/ - EQB Inc. (TSX: EQB) today reported strong financial results for the three months ended January 31, 2025, supported by accelerated year-over-year growth in loans under management and net interest income, as well as increasing non-interest revenue from higher multi-unit residential securitization and contributions from its alternative asset manager, ACM Advisors.

Highlights from Q1 2025 compared to the previous quarter and year include:

• Adjusted ROE¹ 15.2% (reported 14.1%)
• Adjusted diluted EPS¹ $2.98, +8% y/y, +19% q/q (reported $2.77, +4% y/y, +42% q/q)
• Book value per share $79.71, +12% y/y, +3% q/q
• Adjusted revenue $323 million, +8% y/y, +0.3% q/q (reported +8% y/y, +3% q/q)
• Net interest margin² 2.07%, +6bps y/y, 0 bps q/q (reported +7bps q/q)
• Adjusted PPPT³ $170 million, +3% y/y, -2% q/q (reported $163 million, +3% y/y, +3% q/q)
• Adjusted net income¹ $116 million, +7% y/y, +11% q/q (reported $108 million, +3% y/y, +36% q/q)
• Total AUM + AUA² $132 billion, +11% y/y, +4% q/q
• EQ Bank customer growth +26% y/y, +4% q/q to over 536,000
• Common share dividends $0.51 per share, +21% y/y, +4% q/q
• Total capital ratio 15.5% with CET1 of 14.1% and liquidity coverage ratio well in excess of 100%

"We enter fiscal 2025 confident in EQB's growth opportunities and ready to build on our exceptional performance this quarter," said Andrew Moor, president and CEO, EQB. "Our confidence is well-founded. Canadians - in growing numbers - are responding to our innovative EQ Bank digital offerings and choosing us as their primary bank. We enjoy leadership positions in insured multi-unit residential, single-family residential and decumulation markets where needs for capital are substantial. The tailwind of recent interest rate cuts provides a constructive backdrop for enhanced loan growth and improving credit metrics. While we will need to manage second-order effects of cross-border tariff threats carefully, our purely domestic market presence, focus on lending in large Canadian urban centres with diversified economies and the highly competitive nature of our Challenger Bank services support a positive outlook."

EQ Bank experiences double-digit customer growth +26% y/y, +4% q/q to 536,000

• Steady increase in payroll customers, now representing an accelerating ratio of total demand balances, confirm EQ Bank's growing reputation as a primary bank of choice and go-to source for innovative savings and spending options with long-term relationship intent
• Strong US Dollar Account deposit growth as customers embrace refreshed CAD/USD foreign exchange rates and no fee, high interest offering, further elevating full suite of international banking features - including cost-effective global transfers with Wise and seamless spending with the EQ Bank Card - in line with commitment to redefining value and convenience
• The Notice Savings Account, an innovative and powerful alternative to GICs and traditional savings vehicles, continued to drive customer growth and launched in Québec subsequent to quarter end, uniquely positioning Banque EQ to meet surging demand for challenger bank offerings in the province

Personal Banking LUM steady on strong customer retention and promising origination levels, bolstered by significant decumulation growth +47% y/y

• Single-family uninsured originations grew +23% in Q1 reflecting stronger activity in the housing market and Equitable Bank's leadership position based on customer service excellence and well-regarded advocacy of the broker channel; loan growth expected to accelerate with the spring housing market as borrowers respond to a more favourable interest rate environment
• Decumulation lending (including reverse mortgages and insurance lending) grew +47% y/y, +9% q/q as successful advertising, exceptional broker service and value to borrowers worked to broaden category awareness among growing number of Canadians choosing to enjoy the benefits of a reverse mortgage
• Loans undermanagement (LUM) grew +2% y/y, +1% q/q to $20.2 billion with sequential growth fueled by strong originations and renewals, despite reduction in single-family insured lending (-15% y/y, -4% q/q to $8.8 billion) reflecting EQB's earlier decision to exit this part of the market

Commercial Banking LUM +18% y/y to $37.0 billion, supported by +30% y/y expansion in multi-unit residential loans LUM

• EQB continues to prioritize insured lending for multi-unit residential properties (primarily rental apartments) in major cities across the country with 82% of its total commercial LUM insured through various CMHC programs
• CMHC-insured multi-unit residential LUM grew +30% y/y, +5% q/q to $27.5 billion and insured commercial construction lending grew +48% y/y, +13% q/q to $3.0 billion, driven by both new originations and construction draws on existing commitments

Provisions in-line with EQB's expectations and reflect anticipated moderation in equipment finance

• Adjusted provision for credit losses (PCL)² of $13.7 million (reported $18.7 million in Q1) reflects the impacts of evolving macroeconomic forecasts, expected credit loss modelling and improved Stage 3 provisions of $10.1 million (reported $13.8 million), down -12% y/y, -62% q/q
• Net impaired loans increased by $59.3 million in Q1 to $683.0 million, corresponding to 147 bps of total loan assets compared to 132 bps at Q4 2024 and 94 bps at Q1 2024; nearly one-third of new impaired loans are attributable to a single multi-unit residential loan insured by CMHC
• The Bank is appropriately reserved for credit losses with net allowances as a percentage of total loan assets of 28 bps, compared to 32 bps at Q4 2024 and 22 bps at Q1 2024; decline in Q1 net allowance rate driven by writing down loans to expected recoverable amount
• Following decisive action in previous quarters related to equipment finance, long-haul transportation portfolio fundamentals continued to progress as expected with an improvement in delinquency rates; exposure to this market continues to tighten in favour of higher-quality, prime leases

EQB increases common share dividend and shares capital management guidance

• EQB's Board of Directors declared a dividend of $0.51 per common share payable on March 31, 2025, to shareholders of record as of March 14, 2025, representing a 4% increase from the dividend paid in December 2024 and 21% above the payment made in March 2024
• For the purposes of the Income Tax Act (Canada) and any similar provincial legislation, dividends declared are eligible dividends, unless otherwise indicated
• Equitable Bank continually optimizes its capital structure to support strategic objectives and maintain strong overall capital levels; f ollowing its recent Internal Capital Adequacy Assessment Process (ICAAP) for 2025, the Bank established that it will operate above 15% Total Capital and expects that up to 300 bps of Total Capital could be contributed by Alternative Tier 1 and Tier 2 capital in 2027 and beyond, while maintaining consistent CET1 guidance at 13%+ for the balance of fiscal 2025

"We are pleased with EQB's strong start to 2025 and are invigorated by external recognition of our growth potential, reinforcing the calibre of our challenger business model and ability to consistently generate 15%+ ROE," said Chadwick Westlake, CFO, EQB. "EQB has excellent momentum from purposeful asset class expansion with strategic funding diversification progress importantly in EQ Bank. We continue to cement our position as a leading player in multi-unit residential lending and, paired with growing real estate market activity, these positive dynamics validate our outlook for the year as we remain well-positioned to deliver long-term shareholder value."

Analyst conference call and webcast: 8:00 a.m. ET February 26, 2025

Andrew Moor, president and CEO, Chadwick Westlake, CFO, and Marlene Lenarduzzi, CRO, will host EQB's first quarter conference call and webcast. The listen-only webcast with accompanying slides will be available at: eqb.investorroom.com. To access the conference call with operator assistance, dial 416-945-7677 five minutes prior to the start time.

¹ Adjusted measures and ratios are Non-Generally Accepted Accounting Principles (GAAP) measures and ratios. Adjusted measures and ratios are calculated in the same manner as reported measures and ratios, except that financial information included in the calculation of adjusted measures and ratios is adjusted to exclude the impact of the Concentra Bank and ACM acquisition and integration related costs, and certain items which management determines would have a significant impact on a reader's assessment of business performance. For additional information and a reconciliation of reported results to adjusted results, see the "Non-GAAP financial measures and ratios" section.

² These are non-GAAP measures, see the "Non-GAAP financial measures and ratios" section.

³ PPPT represents pre-provision-pre-tax income, a non-GAAP measure of financial performance.

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Consolidated balance sheet (unaudited)

($000s) As at	January 31, 2025	October 31, 2024	January 31, 2024
Assets:
Cash and cash equivalents	810,017	591,641	543,759
Restricted cash	817,025	971,987	662,759
Securities purchased under reverse repurchase agreements	1,800,014	1,260,118	805,612
Investments	1,571,754	1,627,314	2,025,978
Loans - Personal	32,303,971	32,273,551	32,680,816
Loans - Commercial	14,036,424	14,760,367	15,111,488
Securitization retained interests	892,258	813,719	607,822
Deferred tax assets	28,841	36,104	14,871
Other assets	971,520	899,120	645,770
Total assets	53,231,824	53,233,921	53,098,875
Liabilities and Shareholders' Equity
Liabilities:
Deposits	34,616,801	33,739,612	32,245,509
Securitization liabilities	13,711,167	14,594,304	15,389,417
Obligations under repurchase agreements	-	-	482,574
Deferred tax liabilities	190,419	177,933	141,543
Funding facilities	768,813	946,956	1,332,903
Other liabilities	723,188	636,931	589,879
Total liabilities	50,010,388	50,095,736	50,181,825
Shareholders' Equity:
Preferred shares	-	-	181,411
Common shares	506,160	505,876	489,944
Other equity instruments	147,360	147,440	-
Contributed deficit	(17,437)	(17,374)	(23,055)
Retained earnings	2,564,315	2,483,309	2,272,116
Accumulated other comprehensive income (loss)	11,200	8,555	(15,826)
Total equity attributable to equity holders of EQB	3,211,598	3,127,806	2,904,590
Non-controlling interests	9,838	10,379	12,460
Total equity	3,221,436	3,138,185	2,917,050
Total liabilities and shareholders' equity	53,231,824	53,233,921	53,098,875

Consolidated statement of income (unaudited)

($000s, except per share amounts) Three-month period ended	January 31, 2025	January 31, 2024
Interest income:
Loans - Personal	481,370	468,954
Loans - Commercial	222,117	262,881
Investments	13,400	17,876
Other	25,370	22,099
	742,257	771,810
Interest expense:
Deposits	347,809	358,562
Securitization liabilities	125,432	127,253
Funding facilities	5,547	15,283
Other	83	14,702
	478,871	515,800
Net interest income	263,386	256,010
Non-interest revenue:
Fees and other income	22,920	16,615
Net gains on loans and investments	2,304	4,993
Gain on sale and income from retained interests	24,872	19,409
Net gains on securitization activities and derivatives	9,153	1,745
	59,249	42,762
Revenue	322,635	298,772
Provision for credit losses	18,678	15,535
Revenue after provision for credit losses	303,957	283,237
Non-interest expenses:
Compensation and benefits	75,934	65,369
Other	83,321	74,116
	159,255	139,485
Income before income taxes	144,702	143,752
Income taxes:
Current	16,739	38,534
Deferred	20,253	836
	36,992	39,370
Net income	107,710	104,382
Dividends on preferred shares	-	2,357
Distribution to LRCN holders	-	-
Net income available to common shareholders and non-controlling interests	107,710	102,025
Net income attributable to:
Common shareholders	107,402	101,875
Non-controlling interests	308	150
	107,710	102,025
Earnings per share:
Basic	2.79	2.68
Diluted	2.77	2.66

Consolidated statement of comprehensive income (unaudited)

($000s) Three-month period ended	January 31, 2025	January 31, 2024
Net income	107,710	104,382
Other comprehensive income - items that will be reclassified subsequently to income:
Debt instruments at Fair Value through Other Comprehensive Income:
Net change in gains on fair value	12,440	41,561
Reclassification of net gains to income	(10,066)	(35,827)
Other comprehensive income - items that will not be reclassified subsequently to income:
Equity instruments designated at Fair Value through Other Comprehensive Income:
Net change in gains (losses) on fair value	1,071	(1,580)
Reclassification of net gains to retained earnings	(378)	-
	3,067	4,154
Income tax expense	(917)	(1,143)
	2,150	3,011
Cash flow hedges:
Net change in unrealized losses on fair value	(4,210)	(12,230)
Reclassification of net gains to income	(3,424)	(6,694)
	(7,634)	(18,924)
Income tax recovery	2,031	5,161
	(5,603)	(13,763)
Total other comprehensive loss	(3,453)	(10,752)
Total comprehensive income	104,257	93,630
Total comprehensive income attributable to:
Common shareholders	103,949	93,480
Non-controlling interests	308	150
	104,257	93,630

Consolidated statement of changes in shareholders' equity (unaudited)

($000s) Three-month period endedJanuary 31, 2025
	Common Shares		Contributed Surplus/ (deficit)	Retained Earnings	Accumulated other comprehensive income (loss)
		Other equity instruments			Cash Flow Hedges	Financial Instruments at FVOCI	Total	Attributable to equity holders	Non- controlling interests	Total
Balance, beginning of period	505,876	147,440	(17,374)	2,483,309	21,617	(13,062)	8,555	3,127,806	10,379	3,138,185
Net Income	-	-	-	107,402	-	-	-	107,402	308	107,710
Realized losses on sale of shares, net of tax	-	-	-	(5,718)	-	-	-	(5,718)	-	(5,718)
Transfer of AOCI losses to retained earnings, net of tax	-	-	-	-	-	6,004	6,004	6,004	-	6,004
Transfer of AOCI losses to income, net of tax	-	-	-	-	-	94	94	94	-	94
Other comprehensive loss (gain), net of tax	-	-	-	-	(5,603)	2,150	(3,453)	(3,453)	-	(3,453)
Exercise of stock options	460	-	-	-	-	-	-	460	-	460
Common shares repurchased and cancelled	(275)	-	-	(1,832)	-	-	-	(2,107)	-	(2,107)
Issuance cost, net of tax	-	(80)	-	-	-	-	-	(80)	-	(80)
Dividends:
Common shares	-	-	-	(18,846)	-	-	-	(18,846)	(849)	(19,695)
Put option - non-controlling interest	-	-	(1,131)	-	-	-	-	(1,131)	-	(1,131)
Stock-based compensation	-	-	1,167	-	-	-	-	1,167	-	1,167
Transfer relating to the exercise of stock options	99	-	(99)	-	-	-	-	-	-	-
Balance, end of period	506,160	147,360	(17,437)	2,564,315	16,014	(4,814)	11,200	3,211,598	9,838	3,221,436

($000s) Three-month period ended January 31, 2024
	Preferred Shares	Common Shares	Contributed Surplus/ (deficit)	Retained Earnings	Accumulated other comprehensive income (loss)
					Cash Flow Hedges	Financial Instruments at FVOCI	Total	Attributable to equity holders	Non- controlling interests	Total
Balance, beginning of period	181,411	471,014	12,795	2,185,480	43,618	(48,775)	(5,157)	2,845,543	-	2,845,543
Non-controlling interests on acquisition	-	-	-	-	-	-	-	-	12,310	12,310
Net Income	-	-	-	104,232	-	-	-	104,232	150	104,382
Transfer of AOCI losses to income, net of tax	-	-	-	-	-	83	83	83	-	83
Other comprehensive loss, net of tax	-	-	-	-	(13,763)	3,011	(10,752)	(10,752)	-	(10,752)
Common share issued	-	11,000	-	-	-	-	-	11,000	-	11,000
Exercise of stock options	-	6,958	-	-	-	-	-	6,958	-	6,958
Dividends:
Preferred shares	-	-	-	(2,357)	-	-	-	(2,357)	-	(2,357)
Common shares	-	-	-	(15,239)	-	-	-	(15,239)	-	(15,239)
Put option - non-controlling interest	-	-	(35,891)	-	-	-	-	(35,891)	-	(35,891)
Stock-based compensation	-	-	(35,891)	-	-	-	-	(35,891)	-	(35,891)
Transfer relating to the exercise of stock options	-	972	(972)	-	-	-	-	-	-	-
Balance, end of period	181,411	489,944	(23,055)	2,272,116	29,855	(45,681)	(15,826)	2,904,590	12,460	2,917,050

Consolidated statement of cash flows (unaudited)

($000s) Three-month period ended	January 31, 2025	January 31, 2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	107,710	104,382
Adjustments for non-cash items in net income:
Financial instruments at fair value through income	(20,498)	16,537
Amortization of premiums/discount	(2,830)	3,130
Amortization of capital and intangible assets	14,823	11,441
Provision for credit losses	18,678	15,535
Securitization gains	(17,616)	(14,516)
Stock-based compensation	1,167	1,013
Income taxes	36,992	39,370
Securitization retained interests	39,957	27,933
Changes in operating assets and liabilities:
Restricted cash	154,962	104,436
Securities purchased under reverse repurchase agreements	(539,896)	103,221
Loans receivable, net of securitizations	625,297	(492,116)
Other assets	(21,739)	(1,326)
Deposits	848,736	201,362
Securitization liabilities	(893,246)	883,231
Obligations under repurchase agreements	-	(645,664)
Funding facilities	(178,143)	(398,684)
Other liabilities	51,673	(5,962)
Income taxes paid	(39,231)	(26,112)
Cash flows from (used in) operating activities	186,796	(72,789)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common shares	460	17,958
Common shares repurchased	(2,107)	-
Limited recourse capital notes	(80)	-
Dividends paid on preferred shares	-	(2,357)
Dividends paid on common shares	(19,695)	(15,239)
Cash flows (used in) from financing activities	(21,422)	362
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments	(3,730)	(336,419)
Acquisition of subsidiary	-	(75,528)
Proceeds on sale or redemption of investments	31,366	465,401
Net change in Canada Housing Trust re-investment accounts	41,409	18,005
Purchase of capital assets and system development costs	(16,043)	(4,747)
Cash flows from investing activities	53,002	66,712
Net increase (decrease) in cash and cash equivalents	218,376	(5,715)
Cash and cash equivalents, beginning of period	591,641	549,474
Cash and cash equivalents, end of period	810,017	543,759
Cash flows from operating activities include:	218,376	(5,715)
Supplemental statement of cash flows disclosures
Interest received	709,697	688,329
Interest paid	(416,436)	(371,620)
Dividends received	218	549

About EQB Inc.

EQB Inc. (TSX: EQB) is a leading digital financial services company with $132 billion in combined assets under management and administration (as at January 31, 2025). It offers banking services through Equitable Bank, a wholly owned subsidiary and Canada's seventh largest bank by assets, and wealth management through ACM Advisors, a majority owned subsidiary specializing in alternative assets. As Canada's Challenger Bank, Equitable Bank has a clear mission to drive change in Canadian banking to enrich people's lives. It leverages technology to deliver exceptional personal and commercial banking experiences and services to over 700,000 customers and more than six million credit union members through its businesses. Through its digital EQ Bank platform (eqbank.ca), its customers have named it one of Canada's top banks on the Forbes World's Best Banks list since 2021.

Please visit eqb.investorroom.com for more details.

Investor contact:
Mike Rizvanovic
Managing Director, Investor Relations
[email protected]

Media contact:
Maggie Hall
Director, PR & Communications
[email protected]

Cautionary Note Regarding Forward-Looking Statements

Statements made by EQB in the sections of this news release, in other filings with Canadian securities regulators and in other communications include forward-looking statements within the meaning of applicable securities laws (forward-looking statements). These statements include, but are not limited to, statements about EQB's objectives, strategies and initiatives, financial performance expectation, statements with respect to EQB's intention to renew and/or make share repurchases under its NCIB, and other statements made herein, whether with respect to EQB's businesses or the Canadian economy. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "intends", "scheduled", "planned", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases which state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved", or other similar expressions of future or conditional verbs. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, closing of transactions, performance or achievements of EQB to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to capital markets and additional funding requirements, fluctuating interest rates and general economic conditions including, without limitation global geopolitical risk, uncertainty arising from ongoing United States / Canada tariff concerns and related impacts, business acquisition, legislative and regulatory developments, changes in accounting standards, the nature of our customers and rates of default, and competition as well as those factors discussed under the heading "Risk Management" in EQB's Q1 MD&A and in EQB's documents filed on SEDAR+ at www.sedarplus.ca. All material assumptions used in making forward-looking statements are based on management's knowledge of current business conditions and expectations of future business conditions and trends, including their knowledge of the current credit, interest rate and liquidity conditions affecting EQB and the Canadian economy. Although EQB believes the assumptions used to make such statements are reasonable at this time and has attempted to identify in its continuous disclosure documents important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Certain material assumptions are applied by EQB in making forward-looking statements, including without limitation, assumptions regarding its continued ability to fund its mortgage business, a continuation of the current level of economic uncertainty that affects real estate market conditions, continued acceptance of its products in the marketplace, as well as no material changes in its operating cost structure and the current tax regime. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. EQB does not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws.

Non-Generally Accepted Accounting Principles (GAAP) Financial Measures and Ratios

In addition to GAAP prescribed measures, this news release references certain non-GAAP measures, including adjusted financial results, that we believe provide useful information to investors regarding EQB's financial condition and results of operations. Readers are cautioned that non-GAAP measures often do not have any standardized meaning, and therefore, are unlikely to be comparable to similar measures presented by other companies.

Adjustments listed below are presented on a pre-tax basis:

Q1 2025

• $2.8 million new office lease related expenses prior to occupancy,
• $1.8 million non-recurring operational effectiveness expenses and acquisition and integration-related costs,
• $2.0 million intangible asset amortization, and
• $5.0 million provision for credit losses associated with an equipment financing purchase facility⁽¹⁾.

Q4 2024

• $8.8 million fair value adjustment on a covered bond maturity,
• $2.2 million new office lease related expenses prior to occupancy,
• $0.8 million non-recurring operational effectiveness expenses and acquisition and integration-related costs,
• $2.1 million intangible asset amortization, and
• $16.1 million provision for credit losses associated with an equipment financing purchase facility⁽¹⁾.

Q1 2024

• $2.1 million acquisition and integration-related costs, and
• $3.4 million intangible asset amortization.

(1) This adjustment related to the provision provided for the equipment financing loans acquired from a Canadian subsidiary of Pride Group Holdings Inc.

The following table presents a reconciliation of GAAP reported financial results to non-GAAP adjusted financial results (unaudited).

Reconciliation of reported and adjusted financial results	For the three months ended
($000, except share and per share amounts)	31-Jan-25	31-Oct-24	31-Jan-24
Reported results
Net interest income	263,386	255,774	256,010
Non-interest revenue	59,249	56,998	42,762
Revenue	322,635	312,772	298,772
Non-interest expense	159,255	153,625	139,485
Pre-provision pre-tax income(3)	163,380	159,147	159,287
Provision for credit loss	18,678	47,987	15,535
Income tax expense	36,992	31,740	39,370
Net income	107,710	79,420	104,382
Net income available to common shareholders	107,402	75,382	101,875
Adjustments
Net interest income - covered bond fair value adjustment	-	8,804	-
Non-interest expenses - new office lease related expenses	(2,789)	(2,208)	-
Non-interest expenses - non-recurring operational effectiveness and Acquisition-related costs(1)	(1,782)	(755)	(2,053)
Non-interest expenses - intangible asset amortization	(1,969)	(2,115)	(3,398)
Provision for credit loss - equipment financing	(5,018)	(16,085)	-
Pre-tax adjustments	11,558	29,967	5,451
Income tax expense - tax impact on above adjustments(2)	3,039	7,988	1,483
Post-tax adjustments - net income	8,519	21,979	3,968
Adjustments attributed to minority interests	(261)	(288)	(124)
Post-tax adjustments - net income to common shareholders	8,258	21,691	3,844
Adjusted results
Net interest income	263,386	264,578	256,010
Non-interest revenue	59,249	56,998	42,762
Revenue	322,635	321,576	298,772
Non-interest expense	152,715	148,547	134,034
Pre-provision pre-tax income(3)	169,920	173,029	164,738
Provision for credit loss	13,660	31,902	15,535
Income tax expenses	40,030	39,728	40,853
Net income	116,230	101,399	108,350
Net income available to common shareholders	115,662	97,073	105,719
Diluted earnings per share
Weighted average diluted common shares outstanding	38,781,523	38,723,974	38,344,339
Diluted earnings per share - reported	2.77	1.95	2.66
Diluted earnings per share - adjusted	2.98	2.51	2.76
Diluted earnings per share - adjustment impact	0.21	0.56	0.10

(1) Includes non-recurring operational effectiveness and acquisition and integration-related costs associated with Concentra Bank and ACM. (2) Income tax expense associated with non-GAAP adjustment was calculated based on the statutory tax rate applicable for that period. (3) This is a non-GAAP measure, see Non-GAAP financial measures and ratios section.

Other non-GAAP financial measures and ratios:

• Adjusted return on equity (ROE) is calculated on an annualized basis and is defined as adjusted net income available to common shareholders as a percentage of weighted average common shareholders' equity (reported) outstanding during the period.
• Assets under administration (AUA): is sum of (1) assets over which EQB's subsidiaries have been named as trustee, custodian, executor, administrator, or other similar role; (2) loans held by credit unions for which EQB's subsidiaries act as servicer.
• Assets under management (AUM): is the sum of total balance sheet assets, loan principal derecognized but still managed by EQB, and assets managed on behalf on investors.
• Loans under management (LUM): is the sum of loan principal reported on the consolidated balance sheet and loan principal derecognized but still managed by EQB.
• Net interest margin (NIM): this profitability measure is calculated on an annualized basis by dividing net interest income by the average total interest earning assets for the period.
• Pre-provision pre-tax income (PPPT): this is the difference between revenue and non-interest expenses.
• Total loan assets: this is calculated on a gross basis (prior to allowance for credit losses) as the sum of both Loans - Personal and Loans - Commercial on the balance sheet and adding their associated allowance for credit losses.

SOURCE EQB Inc.