Core ROE target met through capital deployment and strong profitability supported by solid business growth The results presented below are for iA Financial Corporation Inc. ("iA Financial Corporation" or the "Company"), the holding company that owns 100% of the common shares of Industrial Alliance Insurance and Financial Services Inc. ("iA Insurance"). The results for iA Insurance are presented in a separate section on page 8 of this document. SECOND QUARTER HIGHLIGHTS – iA Financial Corporation Core EPS† of $2.75, up 15% YoY, and trailing-12-month core ROE† of 15.0%, meeting the medium-term target of 15%+ Strong sales momentum, reflected by solid 15% YoY increase in premiums and deposits and 12% YoY increase in assets (AUM and AUA)† Robust solvency ratio† of 141%, supported by strong organic capital generation of $175M in Q2 High level of capital deployment, including through acquisitions and $287M in share buybacks, leading to ROE expansion Book value per common share reaching $69.92 at June 30, 2024, up 9% over 12 months (excluding share buyback impact) QUEBEC CITY, Aug. 6, 2024 /CNW/ - For the second quarter ended June 30, 2024, iA Financial Corporation (TSX:IAG) recorded core diluted earnings per common share (EPS)† of $2.75, which is 15% higher than the same period in 2023. Core return on common shareholders' equity (ROE)† for the trailing twelve months was 15.0%, meeting the Company's medium-term target of 15%+. On a reported basis, which includes the impact of volatile items (primarily short-term macroeconomic variations), second quarter net income attributed to common shareholders was $206 million, diluted EPS was $2.12 and ROE† for the trailing twelve months was 11.1%. The solvency ratio† of 141% at June 30, 2024 is well above the Company's operating target of 120%. "Second quarter results were solid in every respect. Core EPS of $2.75 is at a record level, and business growth was strong across all sectors, contributing to a 15% increase in premiums and deposits. Particularly noteworthy were sales of individual insurance and segregated funds in Canada, as well as record sales in U.S. insurance," commented Denis Ricard, President and CEO of iA Financial Group. "Along with strong organic growth, we recently completed acquisitions in two high-growth sectors: our U.S. insurance operations and our wealth management distribution business in Canada, reflecting our disciplined execution of our strategy." "Profitability was strong in the second quarter with a 15% increase in core EPS. In addition to continued sales momentum, this performance was notably driven by favourable insurance experience for a third consecutive quarter," added Éric Jobin, Executive Vice–President, CFO and Chief Actuary. "This good profitability, combined with our capital deployment initiatives, has driven an increase in core ROE, which has already met our medium-term target of 15%+ with an annualized core ROE of 15.9%. Organic capital generation was strong, reaching $175 million in the second quarter, supporting our solid capital position and the continuity of our capital deployment initiatives." Earnings Highlights Second quarter Year-to-date at June 30 2024 2023 Variation 2024 2023 Variation Net income attributed to shareholders (in millions) $214 $204 5 % $448 $477 (6 %) Less: dividends on preferred shares issued by a subsidiary (in millions) ($8) ($8) ($9) ($11) Net income attributed to common shareholders (in millions) $206 $196 5 % $439 $466 (6 %) Weighted average number of common shares (in millions, diluted) 97.1 103.5 (6 %) 98.3 104.0 (5 %) Earnings per common share (diluted) $2.12 $1.89 12 % $4.47 $4.48 — Core earnings† 267 247 8 % 510 464 10 % Core earnings per common share (diluted)† $2.75 $2.39 15 % $5.19 $4.47 16 % Other Financial Highlights June 30, 2024 March 31, 2024 December 31, 2023 June 30, 2023 Return on common shareholders' equity† 11.1 % 10.9 % 11.6 % 9.7 % Core return on common shareholders' equity† 15.0 % 14.6 % 14.4 % 14.5 % Solvency ratio† 141 % 142 % 145 % 154 % Book value per share1 $69.92 $68.93 $66.90 $65.39 Assets under management and administration† (in billions) $235.4 $229.3 $218.9 $210.2 __________________________________________ 1 Book value per common share is a financial measure calculated by dividing the common shareholders' equity by the number of common shares outstanding at the end of the period; all components of this measure are IFRS measures. † This item is a non-IFRS measure; see the "Non-IFRS and Additional Financial Measures" section in this document for relevant information about such measures. Unless otherwise indicated, the results presented in this document are in Canadian dollars and are compared with those from the corresponding period last year. This news release presents non-IFRS measures used by the Company when evaluating its results and measuring its performance. These non-IFRS measures are not standardized financial measures and are not included in the financial statements. Some of these measures have no IFRS equivalents. For relevant information about non-IFRS measures used in this document, including information about the Company's core earnings,† see the "Non-IFRS and Additional Financial Measures" section in the Management's Discussion and Analysis for the period ended June 30, 2024, which is hereby incorporated by reference, and is available for review at sedarplus.ca or on iA Financial Group's website at ia.ca. ANALYSIS OF EARNINGS Reported and core earnings The Company recorded core earnings† of $267 million in the second quarter of 2024, which compares to $247 million for the second quarter of 2023. Core diluted earnings per common share (EPS)† of $2.75 in the second quarter is 15% higher than the same period last year. Core return on common shareholders' equity (ROE)† for the trailing twelve months was 15.0% at June 30, 2024, meeting the Company's medium-term target of 15%+. On a reported basis, which includes the impact of volatile items (primarily short-term macroeconomic variations), quarterly net income attributed to common shareholders was $206 million and compares with $196 million in the second quarter of 2023. EPS of $2.12 was 12% higher than the same period last year and ROE for the trailing twelve months was 11.1% at June 30, 2024. An analysis of these results is presented in the following sections. Earnings (In millions of dollars, unless otherwise indicated) Second quarter Year-to-date at June 30 2024 2023 Variation 2024 2023 Variation Net income to common shareholders 206 196 5 % 439 466 (6 %) Earnings per common share (EPS) (diluted) $2.12 $1.89 12 % $4.47 $4.48 — Core earnings 267 247 8 % 510 464 10 % Core EPS (diluted) $2.75 $2.39 15 % $5.19 $4.47 16 % Return on common shareholders' equity (ROE)† June 30, 2024 March 31, 2024 December 31, 2023 June 30, 2023 Reported ROE (trailing twelve months) 11.1 % 10.9 % 11.6 % 9.7 % Core ROE† (trailing twelve months) 15.0 % 14.6 % 14.4 % 14.5 % Reported earnings and core earnings reconciliation The following table presents net income to common shareholders and the adjustments, divided into six categories, that account for the difference between reported and core earnings. Core earnings of $267 million in the second quarter are derived from net income to common shareholders of $206 million and a total adjustment of $61 million from: the unfavourable market-related impacts that differ from management's best estimate assumptions and that total $27 million, as the impact of favourable equity variations was more than offset by investment property value adjustments and, to a lesser extent, unfavourable interest rate and credit spread variations; a total of $12 million for expenses related to the Vericity acquisition ($6 million), the charge for the Surex minority shareholders' sell option ($2 million) and restructuring costs ($4 million); the expenses associated with acquisition-related intangible assets of $17 million; the impact of non-core pension expense of $4 million; and the unfavourable impact of a minor assumption change in the Investment segment ($1 million). Reported earnings and core earnings reconciliation (In millions of dollars, unless otherwise indicated) Second quarter Year-to-date at June 30 2024 2023 Variation 2024 2023 Variation Net income to common shareholders 206 196 5 % 439 466 (6 %) Core earnings adjustments (post tax) Market-related impacts 27 72 18 2 Assumption changes and management actions 1 (43) (4) (43) Charges or proceeds related to acquisition, disposition or restructuring of a business, including acquisition, integration and restructuring costs 12 2 15 3 Amortization of acquisition-related finite life intangible assets 17 16 34 32 Non-core pension expense 4 4 8 4 Other specified unusual gains and losses