Equity Sells its Transfer Agent and Corporate Trust Business

TORONTO, ONTARIO--(Marketwire - Feb. 13, 2013) - Equity Financial Holdings Inc. (TSX:EQI), a Canadian financial services company serving the corporate and institutional markets and the retail mortgage market, today announced that it had reached an agreement with TMX Group Limited (TSX:X) to sell its transfer agent and corporate trust business. Equity has made the strategic decision to focus on its rapidly growing retail mortgage lending and deposit-taking business.

"This is a great day for Equity. Over the years we have built a strong and diversified company that has excelled in the transfer agent and corporate trust business and, more recently, entered the mortgage lending and deposit-taking business," said Equity President & CEO, Paul G. Smith. "We have made the strategic decision to move exclusively into the mortgage and deposit business and will now have the necessary capital to invest in and support our new business strategy. At the same time, we see TMX Group as an organization that is well-positioned to support the future growth and continued success of the transfer agent and corporate trust business, which is great news for employees and clients."

Under the terms of the agreement, TMX Group will acquire Equity's transfer agent and corporate trust business for $64 million payable in cash at closing, subject to certain post-closing price adjustments. With 700 transfer agent clients, the business serves companies from its offices in Toronto, Vancouver, Calgary and Montreal. A critical component of the transfer agent and corporate trust business is the highly skilled and experienced management and client service teams, who will be joining TMX Group. The agreement is subject to certain conditions, including Equity shareholder approval, which will be sought at the annual and special meeting of shareholders, planned for late March or early April.

Significant Growth Segment

Having grown significantly since Equity first entered the business in 2011, the mortgage lending and deposit-taking business gained significant strength over the past fiscal year. It represents the Company's fastest growing income stream, with $42 million in new mortgage loans in the fourth quarter alone, for a total of more than $198.0 million in total loans outstanding as at December 31, 2012. As announced at the end of its fourth quarter, Equity's mortgage business is the primary driver of the 260 per cent year-to-date increase in net interest income.

Focusing on Future Growth Opportunities

Nick Kyprianou, CEO of Equity Financial Trust Company added, "Since starting in the mortgage and deposit business, Equity has demonstrated its expertise and superior ability to serve our mortgage broker partners and deposit dealers. This transaction allows us to make the necessary investments to leverage the infrastructure we have developed for continued growth."

Transfer Agent and Trust Clients to Benefit from new Ownership

Mr. Smith noted, "Equity has been a major player in the transfer agency and corporate trust markets in Canada. We are confident that clients will benefit from being part of a larger organization like TMX Group that is not only committed to providing the same level of customer service excellence, but also has the ability to invest in the future growth of the business."

"The expansion of our company services business in this area makes a great deal of sense for TMX Group," said Kevan Cowan, President TSX Markets and Group Head of Equities, TMX Group. "The stock transfer and corporate trust businesses fit very well with the other products and services we provide to companies listed on Toronto Stock Exchange and TSX Venture Exchange. We have the key relationships and resources to enhance the great business that the Equity team has built. We look forward to working with this group of dedicated professionals from Equity."

Advisors

Equity Financial Holdings Inc. engaged Blair Franklin Capital Partners Inc. as its financial advisor in connection with the transaction. Blair Franklin has provided the Board of Directors with an opinion that, as of the date hereof, the consideration to be received pursuant to the transaction is fair from a financial point of view to Equity Financial Holdings Inc.

Blake, Cassels & Graydon LLP acted as legal counsel for Equity Financial Holdings Inc.

Investor and Analyst Conference Call

Equity will hold a conference call on February 13, 2013 at 9:00AM Eastern Time to discuss the transaction agreement and answer questions from its investors and analysts.

Participants can dial 416-340-2218 or toll free 1-866-226-1793.

About Equity Financial Holdings Inc.

Through its wholly owned subsidiaries, EQI provides transfer agent, corporate trust, foreign exchange and retail mortgage services to the corporate and institutional markets, and the retail mortgage market. Learn more at www.equityfinancialholdings.com.

Statements regarding Forward-Looking Information

Certain portions of this press release as well as other public statements by the Corporation contain "forward-looking information" within the meaning of applicable Canadian securities legislation, which is also referred to as "forward-looking statements", which may not be based on historical fact. Wherever possible, words such as "will", "plans," "expects," "targets," "continue", "estimates," "scheduled," "anticipates," "believes," "intends," "may," and similar expressions or statements that certain actions, events or results "may," "could," "would," "might" or "will" be taken, occur or be achieved, have been used to identify forward-looking information. Such forward-looking statements include, without limitation, the Corporation's earnings expectations, fee income, expense levels, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, catastrophic events, and the Corporation's ability to complete strategic transactions and integrate acquisitions and other factors.

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 the Corporation and the Canadian economy. Certain material factors or assumptions are applied by the Corporation in making forward-looking statements, including without limitation, factors and assumptions regarding interest and foreign exchange rates, availability of key personnel, the effect of competition, government regulation of its business, computer failure or security breaches, future capital requirements, its ability to fund its mortgage business, the value of mortgage originations, the competitive nature of the alternative mortgage market, the expected margin between the interest earned on its mortgage portfolio and the interest to be paid on its deposits, the relative continued health of real estate markets, acceptance of its products in the marketplace, as well as its operating cost structure and the current tax regime.

Forward-looking statements reflect the Corporation's current views with respect to future events and are subject to a number of risks and uncertainties. Actual results may differ materially from results contemplated by the forward-looking statements. Readers should not place undue reliance on such forward-looking statements, as they reflect the Corporation's current views with respect to future events and are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Corporation, are inherently subject to significant business, economic, regulatory, competitive, political and social uncertainties and contingencies.
Many factors could cause the Corporation's actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including among others a significant downturn in capital markets or the economy as a whole, reduced large-volume foreign exchange revenue which could lead to an impairment of goodwill in our foreign exchange unit, errors or omissions by the Corporation in providing services to its customers, significant changes in foreign currency exchange rates, extreme price and volume fluctuations in the stock markets, significant increases in the cost of complying with applicable regulatory requirements, civil unrest, economic recession, pandemics, war and acts of terrorism which may adversely impact the North American and global economic and financial markets, inability to raise funds through public or private financing in the event that the Corporation incurs operating losses or requires substantial capital investment in order to respond to unexpected competitive pressures, significant changes in interest rates, failure by Equity Financial Trust Company ("EFT") to meet ongoing regulatory requirements, the failure of borrowers or counterparties to honour their financial or contractual obligations to EFT, failure by the Corporation to generate or obtain sufficient cash or cash equivalents in a timely manner and at a reasonable price or to meet its commitments as they become due, failure by EFT to adequately monitor and/or adjust its mortgage portfolio management practices for changing circumstances, failure by the Corporation to attract and to retain the necessary employees to meet its needs, failure by EFT to adequately monitor the services provided by third party service providers or to establish alternative arrangements if required, failure by EFT to secure sufficient deposits from securities dealers or a sufficient level of mortgage origination from its mortgage broker network, a failure of the computer systems of the Corporation or one or more of its service providers or the risks detailed from time-to-time in the Corporation's quarterly filings, annual information forms, annual reports and annual filings with securities regulators. Forward-looking information will be updated as required pursuant to the requirements of applicable securities laws.