Equitable Group to Issue $70 Million of Preferred Shares

TORONTO, ONTARIO--(Marketwired - July 24, 2014) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION TO THE UNITED STATES

Equitable Group Inc. (TSX:EQB)(TSX:EQB.PR.A) today announced that it has agreed to issue 2,800,000 Non-cumulative 5-Year Rate Reset Preferred Shares Series 3 (the "Series 3 Preferred Shares") on a bought deal basis to a syndicate of underwriters led by TD Securities Inc. and Scotiabank for distribution to the public. The Series 3 Preferred Shares will be issued at a price of $25.00 per share, for aggregate gross proceeds of $70,000,000. Holders of the Series 3 Preferred Shares will be entitled to receive non-cumulative preferential quarterly fixed dividends yielding 6.35% annually for the initial period ending September 30, 2019. Thereafter, the dividend rate will be reset every five years at a rate equal to the then current 5-year Government of Canada bond yield plus 4.78%.

The Company has granted to the underwriters an over-allotment option, exercisable for a period of 30 days following closing of the offering, to purchase up to an additional 200,000 Series 3 Preferred Shares which, if exercised in full, would increase the gross offering size to $75,000,000. The Series 3 Preferred Shares will be offered in all provinces and territories of Canada by way of a supplement to the Company's existing short form base shelf prospectus dated June 24, 2014.

"Preferred shares have long formed a fundamental part of our Bank's efficient capital structure and of our strategy of supporting growth with non-dilutive forms of capital," said Andrew Moor, President and CEO of Equitable Group and its wholly owned subsidiary, Equitable Bank. "This attractive offering will keep our capital position well above most industry benchmarks as we deliver profitable growth across our lines of business."

Holders of Series 3 Preferred Shares will have the right, at their option, to convert their Series 3 Preferred Shares into Non-cumulative Floating Rate Preferred Shares Series 4 of the Company (the "Series 4 Preferred Shares"), subject to certain conditions, on September 30, 2019 and on September 30 every five years thereafter. Holders of the Series 4 Preferred Shares will be entitled to receive non-cumulative preferential quarterly floating dividends at a rate equal to the three-month Government of Canada Treasury Bill yield plus 4.78%.

The proceeds of this offering will be used by the Company to acquire Basel III compliant Non-cumulative 5-Year Rate Reset Preferred Shares Series 3 of Equitable Bank (the "Bank"), which will form part of the Bank's Tier I capital base. The Bank will in turn use the proceeds for corporate purposes and to redeem its existing Series 1 Preferred Shares, subject to the receipt of all necessary regulatory approvals. The Company likewise intends to redeem its currently outstanding Non-cumulative 5-year Rate Reset Preferred Shares Series 1 on September 30, 2014 in accordance with the terms of such shares.

"Equitable's capital ratios have consistently exceeded minimum regulatory standards as a result of years of disciplined capital allocation," said Tim Wilson, Chief Financial Officer of Equitable Group and Equitable Bank. "Giving effect to the issuance of Series 3 and the redemption of Series 1, on a pro forma basis our Total and Tier I Capital Ratios would improve by 80 basis points to 17.4% and 14.6% respectively on an all-in basis, based on our reported position at the end of our first quarter."

The offering is expected to close on or about August 8, 2014. The Company will make an application to list the Series 3 Preferred Shares and Series 4 Preferred Shares on the Toronto Stock Exchange.

The Series 3 Preferred Shares may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from the registration requirements under the U.S. Securities Act of 1933, as amended. This press release shall not constitute an offer to sell securities in the United States.

ABOUT EQUITABLE GROUP INC.

Equitable Group Inc. is a growing Canadian financial services business that operates through its wholly-owned subsidiary, Equitable Bank. Equitable Bank is a Schedule I Bank regulated by the Office of the Superintendent of Financial Institutions Canada with total assets of approximately $12 billion, with more than 300 employees and proven capabilities in lending and deposit-taking. The Company's integrated operations are organized according to specialty. We serve retail and commercial customers across Canada with a range of savings solutions and mortgage lending products. Within Equitable Bank's Core Lending business, Single Family Lending Services funds mortgages for owner-occupied and investment properties across Canada while Commercial Lending Services provides mortgages on a variety of commercial properties on a national basis. Equitable's Securitization Financing business originates and securitizes insured residential mortgages under the Canada Mortgage and Housing Corporation administered National Housing Act. Measured by assets, Equitable Bank was the ninth largest independent Schedule I Bank in Canada at March 31, 2014. For more information, visit the Company's website at www.equitablebank.ca and click on Investor Relations.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this media release constitute forward-looking information within the meaning of applicable securities laws. These statements include, but are not limited to, statements about the Company's intention to redeem its outstanding Non-cumulative 5-year Rate Reset Preferred Shares Series 1 on September 30, 2014, the expected closing date of the offering on August 8, 2014, and other statements made herein, whether with respect to the Company'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", "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", "should", "might" or "will be taken", "occur", "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, closing of transactions, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements. This includes, but is not limited to, risks related to capital markets and additional funding requirements, fluctuating interest rates and general economic conditions, legislative and regulatory developments, changes in accounting standards, as well as other factors discussed in the Company's documents filed on SEDAR at www.sedar.com.

All material assumptions used in making forward-looking statements are based on management's knowledge and expectations, including their knowledge of the current credit, interest rate and liquidity conditions affecting the Company and the Canadian economy as of the date of this media release. Although the Company 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 the Company in making forward-looking statements. 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. The Company does not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws.