TORONTO, March 14 /CNW/ - Home Capital Group Inc. (TSX:HCG) announced today that its first quarter results for the period ending March 31, 2006 are not expected to exceed its results for the last quarter of 2005, and will probably be in line with its results from the first quarter of 2005. The results for the first quarter of 2006 will be impacted compared to the last quarter of 2005 by the following factors: - As a result of the upward movement in five-year interest rates in recent months, the recent securitization of two pools of CMHC-insured mortgages produced a smaller gain compared to past securitizations. A hedging program is being instituted to lock in securitization gains going forward. - A modest compression in the interest rate spread on the core mortgage portfolio, which the Company is taking appropriate measures to address. - A large increase in staffing during the quarter to date to accommodate anticipated business volume growth in 2006. The productivity of these employees will become apparent over the remainder of the year. Gerald M. Soloway, President and Chief Executive Officer stated, "The Company's record of 42 consecutive quarters of growth in earnings will be interrupted this quarter however, with the exception of the specific items we have noted, all other areas of the Company's business remain strong and are continuing to grow as previously anticipated." It is expected that new mortgage originations in the first quarter of 2006 will be approximately 18 - 20% greater than the comparable quarter last year. In addition, the Company will open new Equityline VISA accounts with more than twice the dollar value of authorized credits this quarter as compared to the first quarter of 2005. "We are confident that we are taking the appropriate measures to meet the challenges encountered during the first quarter of 2006," said Mr. Soloway. "These issues are not likely to impact on our profitable growth going forward." CONFERENCE CALL A conference call, hosted by Gerald M. Soloway, President and Chief Executive Officer and Cathy A. Sutherland, Vice President, Finance, will be held on Tuesday, March 14, 2006 at 11:00 AM ET. Participants are asked to call 5 to 15 minutes in advance, 416-644-3424 in Toronto or 1-800-796-7558 throughout North America. The call will also be accessible in listen-only mode via the internet at www.homecapital.com. CONFERENCE CALL ARCHIVE A telephone replay of the call will be available between 1:00 PM Tuesday, March 14, 2006 and midnight Tuesday, March 21, 2006 by calling 416-640-1917 or 1-877-289-8525 (enter pass code 21181407 followed by the number sign). The archived audio web case will be available for 90 days on CNW Group's web site at www.newswire.ca. Caution Regarding Forward-Looking Statements This release may contain forward-looking statements, including statements regarding the business and anticipated financial performance of Home Capital Group Inc. These statements are subject to a number of risks and uncertainties. Actual results may differ materially from results contemplated by the forward-looking statements, principally related to 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, competition and technological change. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and should not place undue reliance on such forward-looking statements. Home Capital Group Inc. does not undertake to update any forward-looking statements, oral or written, made by itself or on its behalf. Home Capital Group Inc. is a holding company, publicly traded on the Toronto Stock Exchange (HCG), operating through its principal subsidiary, Home Trust Company. Home Trust is a federally regulated trust company offering deposit, mortgage lending, retail credit and credit card issuing services. Licensed to conduct business across Canada, Home Trust has offices in Ontario, Alberta, British Columbia and Nova Scotia.