[August 04, 2022]

Home Capital Reports Second Quarter 2022 Results

Home Capital Group Inc. ("Home Capital" or "the Company") (TSX: HCG) today reported financial results for the three and six months ended June 30, 2022. This press release should be read in conjunction with the Company's 2022 Second Quarter Report including Financial Statements and Management's Discussion and Analysis which are available on Home Capital's website at www.homecapital.com and on SEDAR at www.sedar.com.

"We are making progress in all our businesses and delivering on our goals in this evolving macroeconomic environment," said Yousry Bissada, President and Chief Executive Officer. "Our strong balance sheet and prudent underwriting discipline make us confident that we are very well positioned to continue to execute our strategy and generate value."

Net Income: Diluted earnings per share of $0.97 in Q2 2022 compared with $1.42 in Q2 2021

• Net income of $41.3 million or $0.97 diluted earnings per share in Q2 2022, a decrease of 4.9% from $1.02 per share in Q1 2022 and a decrease of 31.7% from $1.42 per share in Q2 2021.
• Net interest margin of 1.97% in Q2 2022, compared with 2.18% in Q1 2022 and 2.61% in Q2 2021.
• Non-interest expenses of $60.9 million in Q2 2022, compared with $65.0 million in Q1 2022 and $58.5 million in Q2 2021.

Asset Growth: Mortgage originations increased 42.8% over Q2 2021

• Mortgage originations of $3.04 billion in Q2 2022, compared with $2.76 billion in Q1 2022 and $2.13 billion in Q2 2021.
• Single-family mortgage originations of $2.27 billion in Q2 2022, compared with $2.30 billion in Q1 2022 and $1.84 billion in Q2 2021.
• Total loan portfolio of $20.60 billion at the end of Q2 2022, an increase of 5.8% from the end of Q1 2022 and 20.1% from the end of Q2 2021.
• Loans under administration of $26.69 billion at the end of Q2 2022, up 5.2% from the end of Q1 2022 and 17.0% from the end of Q2 2021.

Funding: Deposits through our Oaken channel of $4.64 billion make up 30.9% of total deposits

• Total deposits of $15.02 billion at the end of Q2 2022, compared with $14.39 billion at the end of Q1 2022 and $13.47 billion at the end of Q2 2021.
• Total Oaken deposits of $4.64 billion at the end of Q2 2022, an increase of 2.3% from the end of Q1 2022 and 11.4% from the end of Q2 2021.
• Oaken's share of total deposits was 30.9% at the end of Q2 2022, compared with 31.5% at the end of Q1 2022 and 30.9% at the end of Q2 2021.

Credit Quality: Provision for credit losses of $4.7 million compared to a provision reversal of $18.8 million in Q2 2021

• Total provision for credit losses ("PCL") of $4.7 million in Q2 2022, compared with a reversal of provision for credit losses of $0.1 million in Q1 2022 and $18.8 million in Q2 2021.
• Allowance for credit losses of 0.19% of gross loans at the end of Q2 2022, compared with 0.18% at the end of Q1 2022 and 0.23% at the end of Q2 2021.
• Net write-offs as a percentage of gross loans on an annualized basis were 0.01% in Q2 2022, compared to 0.01% in Q1 2022 and net recoveries of less than one basis point in Q2 2021.
• Net non-performing loans (represented by Stage 3 loans under IFRS 9) as a percentage of gross loans at 0.14% at the end of Q2 2022, compared with 0.11% at the end of Q1 2022 and 0.24% at the end of Q2 2021.

Outlook

"We have built our business to be resilient in the face of challenging conditions," stated Mr. Bissada. "We are better prepared than ever to manage through any market environment and deliver value. As part of our focus on delivering sustainable value to shareholders, today we are announcing a $115 million Substantial Issuer Bid to be completed by the end of the third quarter. This transaction will enable us to repurchase shares at an attractive valuation and, at the same time, achieve our target CET1 ratio."

Second Quarter 2022 Results Conference Call and Webcast

The conference call and webcast will take place on Thursday, August 4, 2022, at 8:00 a.m. ET. Participants may register in advance by visiting this link. The call will also be accessible in listen-only mode on Home Capital's website at www.homecapital.com in the Investor Relations section of the website. The archived audio webcast will be available for 90 days on Home Capital's website at www.homecapital.com.

Caution Regarding Forward-Looking Statements

From time to time, Home Capital Group Inc. 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 section of the 2022 Second Quarter Report, as well as the Company's other publicly filed information, which is available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com, for the material factors that could cause the Company's actual results to differ materially from these statements. These risk factors are material risk factors a reader should consider, and include credit risk, liquidity and funding risk, structural interest rate risk, operational risk, investment risk, strategic risk, reputational risk, compliance risk and capital adequacy 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 section of the 2022 Second Quarter Report. Forward-looking statements are typically identified by words such as "will," "believe," "expect," "anticipate," "intend," "should," "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 uncertainty, 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, the impacts of the COVID-19 pandemic and government responses to it, 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, climate change, 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 presents forward-looking statements to assist shareholders in understanding the Company's assumptions and expectations about the future that are relevant in management's setting of performance goals, strategic priorities and outlook. The Company presents its outlook to assist shareholders in understanding management's expectations on how the future will impact the financial performance of the Company. These forward-looking statements may not be appropriate for other purposes. 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 2022 and its effect on Home Capital's business are material factors the Company considers when setting strategic priorities 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 and other third-party providers. In setting and reviewing its strategic priorities and outlook for 2022, management makes certain assumptions about the Canadian economy, employment conditions, interest rates, levels of housing activity, household debt service levels and the Company's continued access to broker mortgage and deposit markets. These assumptions are discussed in greater detail in the 2022 Second Quarter Report.

The current economic uncertainties pertaining to rising interest rates, declining house prices, inflationary pressure and continued economic impacts from the COVID-19 pandemic, such as supply chain challenges from China, significantly impact the assumptions made by management in setting and reviewing the Company's strategic priorities and outlook. Updated forward-looking macroeconomic assumptions have been incorporated into the models used in the Company's expected credit loss estimation process. Please see Note 5(C) to the unaudited interim consolidated financial statements included in the Company's 2022 Second Quarter Report for more information on these assumptions. The full extent of the impact that the heightened economic uncertainties mentioned above will have on the Canadian economy and the Company's business remains uncertain and difficult to predict. Please see the Outlook and the Risk Management sections in the Management's Discussion and Analysis included in the 2022 Second Quarter Report for more information.

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.

About Home Capital

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 residential and non-residential mortgage lending, securitization of residential mortgage products, consumer lending and credit card services. In addition, Home Trust and its wholly owned subsidiary, Home Bank, offer deposits via brokers and financial planners, and through a direct-to-consumer brand, Oaken Financial. Licensed to conduct business across Canada, we have offices in Ontario, Alberta, British Columbia, Nova Scotia, and Quebec.

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