Accord Reports Record Business Activity, Announces Second Quarter and First Half Earnings and Increase in Quarterly Dividend

TORONTO, July 23, 2014 /CNW/ - Accord Financial Corp. (TSX - ACD) today released its financial results for the three and six months ended June 30, 2014.  The financial figures presented in this release are reported in Canadian dollars and have been prepared in accordance with International Financial Reporting Standards ("IFRS").

Net earnings for the second quarter of 2014 rose 21% to $1,537,000 compared to $1,267,000 last year. Earnings increased as a result of higher revenue.  Earnings per share ("EPS") increased 20% to 18 cents compared to 15 cents last year.

Adjusted net earnings totaled $1,593,000 in the second quarter of 2014, 11% above the $1,430,000 earned in the second quarter of 2013. Adjusted EPS were 19 cents compared to 17 cents in last year's second quarter.

Factoring volume rose 22% to a second quarter record of $525 million compared to $431 million last year. Funds employed increased 37% to a record high $149 million at June 30, 2014 compared to $109 million a year ago. Revenue was 15% higher at $7,529,000 in the current quarter compared to $6,388,000 last year. Revenue increased on higher funds employed and factoring volume.

Net earnings for the first half of 2014 declined 7% to $2,334,000 compared with $2,513,000 in the first half of 2013 as a result of higher expenses. EPS were 28 cents compared to 31 cents last year.

Adjusted net earnings increased by 5% to $2,828,000 in the first half of 2014 compared to $2,696,000 in the first half of 2013. Adjusted EPS were 34 cents compared to 33 cents last year.

Factoring volume for the first six months of 2014 rose 18% to a first half record $1,041 million compared to $879 million last year.  Revenue increased 15% to $14,145,000 compared to $12,335,000 last year for reasons noted above.

Commenting on the second quarter and first half 2014 results, Mr. Tom Henderson, the Company's President and CEO, stated: "In many ways the second quarter felt much like the first across all our business units. Competition continues to be very aggressive but nevertheless we continue to perform well as evidenced by the 11% increase in adjusted second quarter earnings. Our funds employed rose to record levels in the quarter and, as one of the main drivers of our business, this bodes well for the future. The really good news is we remain popular with referral sources and potential clients. Inquiries from these constituencies are at an all-time high reflecting, in part, the increased recognition of the Accord brand.  The new business pipeline augurs well for our financial performance the balance of the year."

The Company's Board of Directors today declared a quarterly dividend of $0.085 per common share, payable September 2, 2014 to shareholders of record August 15, 2014. This represents a 6% increase from the previous dividend of $0.08 per common share.

Note: Non-IFRS measures

The Company's financial statements have been prepared in accordance with IFRS. The Company uses a number of other financial measures to monitor its performance and believes these measures may be useful to investors in evaluating the Company's operating performance and financial position. These measures may not have standardized meanings or computations as prescribed by IFRS that would ensure consistency between companies using these measures and are, therefore, considered to be non-IFRS measures.

Adjusted net earnings and adjusted earnings per common share ("EPS") are non-IFRS measures used in this press release. The Company derives these measures from amounts presented in its IFRS prepared financial statements. Adjusted net earnings comprise net earnings before non-operating stock-based compensation and business acquisition expenses (namely, transaction and integration costs and amortization of intangibles). Adjusted EPS is adjusted net earnings divided by the weighted average number of common shares outstanding in the quarter. Management believes adjusted net earnings is a more appropriate measure of operating performance as it excludes items which do not relate to ongoing operating activities. The following table provides a reconciliation of the Company's net earnings to adjusted net earnings:

SOURCE Accord Financial Corp.