Unaudited Condensed Consolidated Interim Financial
Statements of
Echelon Financial Holdings Inc.
For nine months ended September 30, 2020 and 2019
NOTICE OF NO AUDITOR REVIEW OF
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
In accordance with National Instrument 51-102 of the Canadian Securities Administrators, the Company discloses that its external auditors have not reviewed the unaudited condensed consolidated interim financial statements for the nine months ended September 30, 2020. These financial statements have been prepared by management and approved by the Audit Committee and the Board of Directors of the Company.
ECHELON FINANCIAL HOLDINGS INC.
Consolidated Balance Sheet
(unaudited, in thousands of Canadian dollars)
Note | September 30, | December 31, | |
2020 | 2019 | ||
Assets | |||
Cash and short-term deposits | 7 | 14,097 | 70,932 |
Accounts receivable | 11,832 | 10,020 | |
Investments | 7 | 37,583 | 48,019 |
Due from insurance companies | 1,068 | 324 | |
Deferred policy acquisition costs | 4,764 | 4,209 | |
Income taxes recoverable | 2,179 | 1,184 | |
Prepaid expenses and other assets | 1,772 | 4,028 | |
Reinsurers' share - unearned premiums | 773 | 1,031 | |
- provision for unpaid claims | 8 | 2,769 | 3,268 |
Right of use asset | 487 | 777 | |
Deferred income taxes | 216 | 228 | |
Total assets | 77,540 | 144,020 | |
Liabilities | |||
Accounts payable and accrued liabilities | 3,668 | 4,528 | |
Lease liability | 411 | 712 | |
Unearned premiums | 21,559 | 18,749 | |
Unearned commission | 229 | 195 | |
Income taxes payable | 1,246 | - | |
Provision for unpaid claims | 8 | 27,342 | 26,629 |
Total liabilities | 54,455 | 50,813 | |
Equity | |||
Share capital | 2,794 | 2,794 | |
Contributed surplus | 1,507 | 1,507 | |
Retained earnings | 13,914 | 83,140 | |
Accumulated other comprehensive income | 12 | 406 | 2,034 |
Equity attributed to shareholders of the Company | 18,621 | 89,475 | |
Non-controlling interest | 15 | 4,464 | 3,732 |
Total equity | 23,085 | 93,207 | |
Total liabilities and equity | 77,540 | 144,020 | |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
ECHELON FINANCIAL HOLDINGS INC.
Consolidated Statement of Income and Comprehensive Income (unaudited, in thousands of Canadian dollars, except per share amounts)
3 months ended | 9 months ended | ||||
September 30 | September 30 | ||||
Note | 2020 | 2019 | 2020 | 2019 | |
Revenue | |||||
Gross written and assumed premiums | 11,739 | 10,271 | 31,569 | 28,200 | |
Less premiums ceded to reinsurers | (598) | (591) | (1,630) | (1,613) | |
Net written and assumed premiums | 11,141 | 9,680 | 29,939 | 26,587 | |
Change in gross unearned premiums | (1,766) | (1,271) | (2,810) | (2,477) | |
Change in unearned premiums, reinsurers' share | 66 | (47) | (258) | (286) | |
Change in provision for unearned premiums | (1,700) | (1,318) | (3,068) | (2,763) | |
Net earned premiums | 9,441 | 8,362 | 26,871 | 23,824 | |
Investment income | 7 | 3,046 | 874 | 4,012 | 1,859 |
Total revenue | 12,487 | 9,236 | 30,883 | 25,683 | |
Expenses | |||||
Gross claims incurred | 5,433 | 6,687 | 14,732 | 16,158 | |
Claims (recoveries) from reinsurers | (98) | (165) | (242) | (231) | |
Net incurred claims | 5,335 | 6,522 | 14,490 | 15,927 | |
Gross acquisition costs | 2,423 | 1,887 | 6,540 | 5,288 | |
Acquisition cost (recoveries) from reinsurers | (17) | (19) | (50) | (56) | |
Net acquisition costs | 2,406 | 1,868 | 6,490 | 5,232 | |
Operating costs | 11 | 1,483 | 1,782 | 4,710 | 4,647 |
Total expenses | 9,224 | 10,172 | 25,690 | 25,806 | |
Income (loss) before taxes and discount rate impact on | 3,263 | (936) | 5,193 | (123) | |
claims | |||||
Impact of change in discount rate on claims (1) | (101) | (78) | (101) | (386) | |
Income (loss) before income taxes | 3,162 | (1,014) | 5,092 | (509) | |
Income tax expense (recovery) | 10 | 55 | (341) | 665 | (236) |
Net income (loss) on continued operations | 3,107 | (673) | 4,427 | (273) | |
Net income (loss) on discontinued operations | 14 | (5,866) | - | (5,866) | 46,220 |
Net income (loss) | (2,759) | (673) | (1,439) | 45,947 | |
Attributed to: | |||||
Shareholders of the Company - continued operations | 2,923 | (505) | 3,877 | (284) | |
Shareholders of the Company - discontinued operations | 14 | (5,866) | - | (5,866) | 46,220 |
Non-controlling interest - continued operations | 15 | 184 | (168) | 550 | 11 |
Net income (loss) | (2,759) | (673) | (1,439) | 45,947 | |
Other comprehensive income (loss), net of taxes that may be | |||||
classified subsequently to net income | |||||
Available-for-sale investments: | |||||
Change in net unrealized gains | 1,002 | 301 | 1,379 | 2,233 | |
Reclassification of net realized (gains) losses to net | (2,407) | 2 | (2,509) | (79) | |
income | |||||
Tax impact | (83) | 10 | (316) | (132) | |
Other comprehensive income (loss) on continued operations | (1,488) | 313 | (1,446) | 2,022 | |
Other comprehensive income on discontinued operations | - | - | - | 1,254 | |
Other comprehensive income (loss) | (1,488) | 313 | (1,446) | 3,276 | |
ECHELON FINANCIAL HOLDINGS INC.
Consolidated Statement of Income and Comprehensive Income (unaudited, in thousands of Canadian dollars, except per share amounts)
3 months ended | 9 months ended | ||||
September 30 | September 30 | ||||
Note | 2020 | 2019 | 2020 | 2019 | |
Attributed to: | |||||
Shareholders of the Company - continued operations | (1,535) | 320 | (1,628) | 1,947 | |
Shareholders of the Company - discontinued operations | - | - | - | 1,254 | |
Non-controlling interest - continued operations | 15 | 47 | (7) | 182 | 75 |
Other comprehensive income (loss) | (1,488) | 313 | (1,446) | 3,276 | |
Total comprehensive income (loss) | (4,247) | (360) | (2,885) | 49,223 | |
Attributed to: | |||||
Shareholders of the Company - continued operations | 1,388 | (185) | 2,249 | 1,663 | |
Shareholders of the Company - discontinued operations | (5,866) | - | (5,866) | 47,474 | |
Non-controlling interest - continued operations | 15 | 231 | (175) | 732 | 86 |
Total comprehensive income (loss) | (4,247) | (360) | (2,885) | 49,223 | |
Earnings per share attributable to shareholders of the Company | 13 | ||||
Earnings per share continued operations - basic | 0.24 | (0.04) | 0.32 | (0.02) | |
Earnings per share discontinued operations - basic | (0.49) | - | (0.49) | 3.86 | |
Earnings per share - basic | (0.25) | (0.04) | (0.17) | 3.84 | |
Earnings per share continued operations - diluted | 0.24 | (0.04) | 0.32 | (0.02) | |
Earnings per share discontinued operations - diluted | (0.49) | - | (0.49) | 3.80 | |
Earnings per share - diluted | (0.25) | (0.04) | (0.17) | 3.78 | |
- As interest rates may change each period, and have an impact to the incurred claims and therefore management believes it is beneficial to the users to see the impact of this change separately in order to understand the true movement in claims incurred.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
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Echelon Financial Holdings Inc. published this content on 12 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 November 2020 00:58:07 UTC