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Smoothwater Comments on Equity's Delay of Requisitioned Meeting of Shareholders and Retainer of Fifth Advisor

TORONTO, ONTARIO -- (Marketwired) -- 12/05/13 -- Smoothwater Capital Partners LP I ("Smoothwater") today responded to the failure of the Board of Directors of Equity Financial Holdings Inc. ("Equity" or the "Company") to call the requisitioned meeting of shareholders to change the Board in a timely fashion. Equity announced that it was delaying the special shareholders' meeting to March 28, 2014 and has now engaged financial advisors, its fifth advisory firm in three weeks.

"Smoothwater requisitioned a meeting of shareholders on November 15 because we have serious concerns about Equity's lack of relevant management expertise, bloated cost structure and poor governance practices," said Stephen Griggs, CEO of Smoothwater Capital Partners Inc., the general partner of Smoothwater. "We believe the value of the Company is at risk and immediate shareholder action is required. We urged the Board to take the actions that we outlined in our letter dated November 11, 2013 or to call a meeting for no later than January 14, 2014. This would have allowed shareholders to vote on their investment in Equity without undue delay." A copy of the November 11 letter is reproduced below.

Griggs continued: "In response, Equity's Board set a meeting date for more than four months after our requisition and two months later than the date we had requested. This action is not consistent with those of a Board that feels confident about its prospects in a shareholder vote."

"We are equally dismayed to learn that Equity has now hired a fifth advisor, TD Securities, to explore an alternative path for the business. This is a wasteful use of shareholder resources. Shareholders invested in a pure play alternative mortgage lender not for the Board to consider adventures in diversification or alternative transactions, especially when faced with a confidence vote by shareholders. The Company already had the right strategy. In fact, the incumbent Board and management approved the divestment of other assets and the pure play strategy less than a year ago."

Letter to Equity's Board Outlines Shareholder Concerns

Smoothwater previously expressed its concern that the Company's precarious position could seriously damage the prospects for Equity to deliver value to all shareholders in a letter that was delivered to Equity's Board on November 11, 2013. Smoothwater urges all shareholders to read the letter in full to understand the gravity of the situation and the urgency of a meeting of shareholders.

The full version of the letter follows and is also available, along with other relevant background materials, at Smoothwater will file and mail a proxy circular to shareholders in due course.

November 11, 2013

Board of Directors
Equity Financial Holdings Inc.
Mr. Donald Wright
Chairman of the Board
- and-
Mr. Michael Eccelstone, Corporate Secretary
200 University Avenue
Suite 400
Toronto ON
M5H 4H1

Re: Changes Required at Equity Financial Holdings Inc. and Equity Financial Trust Company

Smoothwater Capital Partners LP I ("Smoothwater") has acquired 876,700 shares of Equity Financial Holdings Inc. ("EQI"), representing 9.45% of the outstanding shares of EQI, based upon your most recent public filings. The general partner of Smoothwater is our subsidiary, Smoothwater Capital Partners Inc.

As disclosed in our press release today, we have entered into support agreements with Nick Kyprianou and Darryl Ivan. Our collective shareholdings represent 12.35% of the outstanding shares of EQI, and we are the largest shareholder group of EQI.

We have had discussions with a number of other significant shareholders of EQI, and there is a consensus that the Board made a fundamental error in terminating Mr. Kyprianou and Mr. Ivan as the Chief Executive Officer ("CEO") and Chief Risk Officer ("CRO"), respectively, of Equity Financial Trust Company (the "Trust Company"), and replacing them with unproven and unqualified management.

Requests from Shareholders

Smoothwater requests that the Board undertake the following changes intended to resolve our concerns, which we believe are shared by many shareholders:

1.  The following changes to the Board:

    a.  Five current directors will resign and the following individuals
        will be appointed by the Board as directors: Mr. Stephen Griggs, Mr.
        Nick Kyprianou, and three other shareholder representatives
        independent of Smoothwater or Mr. Kyprianou with relevant financial
        institution and capital markets experience.
    b.  Mr. Griggs will be appointed Chair of the Board and Chair of the
        Governance and Compensation Committee.
    c.  The Governance and Compensation Committee will undertake a skills
        based assessment of the Board and make recommendations for the 2014
    d.  The Board will undertake a comprehensive review of its governance

2.  The following changes to management:

    a.  The Board will appoint Mr. Kyprianou as President and CEO of EQI and
        of the Trust Company.
    b.  The Board will terminate Mr. Smith and Mr. Jones without cause in
        accordance with the publicly disclosed terms of their employment
    c.  Mr. Ivan will be reappointed CRO of the Trust Company, replacing Ms.
        Sharpe, the acting CRO.

3.  EQI will agree to pay the out-of-pocket costs incurred by Smoothwater in
    connection with requesting these changes.

Fundamental Error in Terminating CEO and CRO of Equity Financial Trust

The recent actions of the Board have, or may well, seriously damage the prospects of EQI as evidenced by the precipitous drop in the share price immediately after the announcement of the termination of Mr. Kyprianou.

The primary concerns we have are as follows:

--  Kyprianou is the Architect of Alternative Mortgage Business: Mr.
    Kyprianou is the architect of the Trust Company's alternative lender
    business plan and is one of the few experienced executives in Canada
    with the unique expertise needed for its complex alternative mortgage
    business. We believe that many institutional shareholders acquired
    shares in EQI on the basis of Mr. Kyprianou's track record and expertise
    and would strongly agree that it is essential that Mr. Kyprianou return
    to run the sole business of EQI.

--  No Operating Expertise in Current Management: There are no executives at
    the Trust Company today with expertise in operating an OSFI supervised
    loan and trust company in the alternative mortgage business:

    a.  While Mr. Jones has experience in the mortgage brokerage business
        and the securitization of mortgages, he has not been an officer of
        an OSFI supervised trust company. We note that his most recent
        employer, Xceed Mortgage, was registered as a simple mortgage broker
        and was not an OSFI supervised trust company. While he may be a
        competent business executive, he clearly does not have the
        background required to operate the Trust Company.

    b.  Mr. Smith has no relevant expertise or experience operating a trust
        company or being the CEO of an alternative mortgage lending

--  Need to Eliminate an Unnecessary Level of Management: There is no
    apparent role for Mr. Smith at EQI as it has a single line of business
    in which he has no expertise. This unnecessary layer of management we
    estimate adds approximately $1,000,000 of costs to EQI, or over $0.10
    per share. This is an excessive expense for a company that has not yet
    been profitable from its continuing business.

--  EQI should be a "Pure Play": Investors expect EQI to be a "pure play"
    investment in the alternative mortgage lending business. We have been
    informed that management intends to diversify EQI and perpetuate the
    expensive holding company structure by entering into new lines of
    business. Returning to a "conglomerate" structure is likely only
    designed to justify the significant duplicate costs of the holding
    company and improve the "optics" of having two CEOs in the business.

--  Serious Governance Issues: There appear to be serious lapses in the
    governance of EQI. In particular:

    a.  Mr. Smith, the CEO, is also the chair of two other major entities,
        including VIA Rail, and is on a total of three outside boards. We
        question how a sitting CEO could have the time to devote to such
        outside interests by spending a large part of his working day on
        non-EQI matters.

    b.  Mr. Smith's role as chair of VIA Rail precludes him from being a
        director or CEO of the Trust Company. We find it difficult to
        understand how Mr. Smith could put his own personal interests ahead
        of those of EQI to this extent.

    c.  Mr. Wright, Chair of the Board of EQI and the Trust Company, is also
        the chair of the board of four other significant companies, is a
        director or trustee of sixteen entities (including seven public
        companies) and is the chief executive officer of an active
        investment business. We understand that the chair of a trust company
        is expected to devote significant time to this role and it is
        unlikely that an "over-boarded" Mr. Wright could be devoting the
        required time and attention to the business of EQI.

    d.  It appears that Mr. Wright and Mr. Smith have numerous ties and are
        close associates. We note that they have served together on the
        board of VIA Rail, and that Mr. Smith succeeded Mr. Wright as chair
        of the VIA Rail board. It is highly unusual and generally
        inappropriate for the Chair of the Board and the CEO of a financial
        institution to have such close ties.

Need for Urgent Change

Given the experience and discipline required to underwrite and administer alternative mortgages without creating material short term or long term risks, for the benefit of the business of EQI we urge the Board to immediately make the changes set out above. We also believe that the Board should avoid the very high costs of a lengthy public shareholder dispute which will be significant for a company of this size.

We do not intend to make this letter public at this time in an effort to cooperate with the Board to resolve these matters.

Request a Meeting

We request that the Board meet with Smoothwater to discuss these matters within the next two business days.

Advisors to Smoothwater

We have retained Mr. Walied Soliman of Norton Rose Fulbright Canada LLP and Mr. Wes Hall of Kingsdale Shareholder Services Inc., to advise us in connection with these matters. Please feel free to contact either of them directly if you wish to discuss aspects of this matter with them.

We are available to discuss these matters with you at any time. I may be reached at (phone number) or at any time.

Yours truly,

Stephen J. Griggs, Chief Executive Officer

Proxy Solicitation

Smoothwater is publicly soliciting proxies for the meeting of shareholders in reliance upon the public broadcast exemption to the solicitation requirements under section 9.2(4) of National Instrument 51-102 - Continuous Disclosure Obligations ("NI 51-102") and applicable Canadian corporate laws. The information that follows in this section is provided in accordance with corporate and securities laws applicable to public broadcast solicitations.

This solicitation is being made by or on behalf of Smoothwater and not by or on behalf of the management of Equity. Based on public filings, Smoothwater is the largest shareholder of Equity, with ownership and control over 1,162,400 shares or approximately 12.5% of the outstanding shares of Equity. Nick Kyprianou and Darryl Ivan, the former CEO and Chief Risk Officer of Equity's wholly-owned subsidiary Equity Financial Trust Company ("Equity Trust"), entered into support and non-disclosure agreements with Smoothwater and may be considered "joint actors" with Smoothwater. In the aggregate, Smoothwater, Mr. Kyprianou and Mr. Ivan, have ownership and control over 1,423,517 shares or approximately 15.3% of the outstanding shares of Equity. Smoothwater will bear all costs and expenses associated with this solicitation and will seek reimbursement from Equity for expenses reasonably incurred in connection with the requisitioning and solicitation of proxies for the meeting.

Smoothwater may solicit proxies by way of public broadcast, including through press releases, speeches or publications and by any other manner permitted under applicable laws. Smoothwater has also retained Kingsdale Shareholder Services Inc. ("Kingsdale") as its shareholder and proxy advisors. Kingsdale will receive a fee of up to $500,000 for its services plus disbursements on the successful completion of Smoothwater's solicitation. Kingsdale's responsibilities will principally include advising Smoothwater on governance best practices, where applicable, liaising with proxy advisory firms, developing and implementing shareholder communication and engagement strategies, and advising with respect to meeting and proxy protocol. Shareholders appointing Smoothwater as their proxyholder for the meeting may subsequently revoke such appointment in any manner permitted by law.

The address of Equity is 200 University Avenue, Suite 400, Toronto, Ontario, M5H 4H1.

Smoothwater's Nominees

As set out in Smoothwater's requisition, Smoothwater's nominees (the "Smoothwater Nominees") are Stephen J. Griggs, Nick Kyprianou and Glen Silvestri. The table below sets out, in respect of each Smoothwater Nominee, his name, province and country of residence, his principal occupation, business or employment within the five preceding years, and the number of Equity shares beneficially owned, or controlled or directed, directly or indirectly, by such nominee.

     Name, Province        Present Principal Occupation and     Number of
 and Country of Residence  Positions During Last Five Years   Common Shares
                                                                 Owned or
Stephen J. Griggs         CEO, Smoothwater Capital             1,162,400(2)
Ontario, Canada           Corporation and Smoothwater
                          Capital Partners Inc.
                          CEO and director, Smoothwater
                          (April 2013 to present); Chief
                          Executive, Underwood Capital
                          Partners Inc. (May 2012 to March
                          2013); President and Chief
                          Executive Officer, OPSEU Pension
                          Trust (June 2011 to April 2012);
                          Executive Director, Canadian
                          Coalition for Good Governance
                          (November 2007 to June 2011).
Nick Kyprianou            Financial institution executive       256,724(3)
Ontario, Canada           Former CEO of Equity Trust from
                          March 2011 to October 2013;
                          President, Mortgage Operations of
                          Equity Trust from February 2010 to
                          March 2011; various executive
                          positions at President and
                          Director of Home Trust Company
                          from 2008 to 2010; also acted as
                          Director of Regency Finance
                          Corporation, Payment Services
                          Interactive Gateway Corp. and as
                          Member of the Advisory Board of
                          First Canadian Title and Stewart
Glen Silvestri            Professional investor                    Nil
Ontario, Canada           Former Vice President of Teachers'
                          Private Capital from January 2001
                          to July 2013, including as Chair
                          of its Investment Committee from
                          2008 to 2010; also acted as
                          Director of various entities
                          including Maple Leaf Sports and
                          Entertainment, CTVglobemedia, Q9
                          Networks, Flexera Software, Kanata
                          Energy Group, Doane Pet Care
                          Company and Big Brothers and
                          Sisters of Toronto.

 (1)As at December 4, 2013.
(2) The shares are held by Smoothwater Capital Partners LP I, and Mr. Griggs
    is the CEO of its general partner Smoothwater Capital Partners Inc.
(3) Includes convertible securities exercisable into shares.

If elected, each Smoothwater Nominee will hold office until the next annual general meeting of Equity shareholders, or until his successor is duly elected or appointed. Each of the Smoothwater Nominees is qualified to be a director under the Business Corporations Act (Canada) and has consented to act as a director of Equity. Additional biographical information of each Smoothwater Nominee is provided below.

Stephen J. Griggs is the CEO, General Counsel and Secretary of Smoothwater Capital Corporation. He is also one of Canada's leading corporate governance experts with extensive senior executive experience in the investment management industry and is also a corporate lawyer. He was most recently the President and CEO of OPTrust, a major Ontario public sector pension plan, leading OPTrust's integrated investment and administrative operations. Prior to joining OPTrust in mid-2011, Mr. Griggs served for three years as Executive Director of the Canadian Coalition for Good Governance, representing the interests of leading Canadian pension plans and other institutional shareholders. As Executive Director, Mr. Griggs was instrumental in developing and implementing the Coalition's guidelines on board engagement, proxy circular disclosure, majority voting, executive compensation and "say on pay". He also served during this time as Chairman and Partner of Investeco Capital Corp., Canada's first environmental investment company. Mr. Griggs was the President and CEO of Legg Mason Canada Inc. from January 2003 to June 2007, with responsibility for the Canadian operations of Legg Mason, Inc., one of the world's largest global investment management firms, and has been Chief Operating Officer of two leading Canadian mutual fund companies (AIC and BPI). Mr. Griggs is an active corporate director and is on the board of Genesis Land Development Corp. and the Greater Toronto Airports Authority, which operates Toronto Pearson International Airport.

Nick Kyprianou is a seasoned financial institution executive and is recognized as a strategic thinker with proven expertise in strategy, finance, marketing and people leadership. With over 25 years' experience in the mortgage industry, Mr. Kyprianou was most recently the CEO of Equity Financial Trust Company, a federally chartered trust company providing alternative mortgage and deposit services. At Equity Trust, he was responsible for building and managing Equity's mortgage and deposit operations, which included the implementation of a technology platform, hiring staff, building a marketing plan and liaising with OSFI. Prior to joining Equity Trust in 2010, Mr. Kyprianou was the President of Home Trust Company where he worked for 18 years. Mr. Kyprianou attended McMaster University and is also a graduate of the Institute of Corporate Directors and the Queen's Executive Program. Mr. Kyprianou has served on the boards of Regency Finance Corporation, Payment Services Interactive Gateway Corp. and Home Trust Company. He was also a member of the advisory board at First Canadian Title and Stewart Title.

Glen Silvestri is a self-employed professional investor. Formerly, he was a Vice President of Teachers' Private Capital. Mr. Silvestri led Teachers' Private Capital's private equity transaction activities in the telecom, media, technology, and energy services sectors, as well as served as its Investment Committee Chair for several years. With a background in mergers, acquisitions and finance, Mr. Silvestri joined Teachers' Private Capital in 2001 where he worked until July 2013. Mr. Silvestri has served on the boards of Maple Leaf Sports and Entertainment, CTVglobemedia, Q9 Networks, Flexera Software, Kanata Energy Group Ltd., Doane Pet Care Company and Big Brothers and Sisters of Toronto. Mr. Silvestri is a Chartered Accountant and holds a Bachelor of Arts in English Literature from the University of Western Ontario. He is also a graduate of the Institute of Corporate Directors from the Rotman School of Business and Ivey's Executive Education Program.

Except as noted below, to the knowledge of Smoothwater, no Smoothwater Nominee is, at the date hereof, or has been, within 10 years before the date hereof: (a) a director, chief executive officer or chief financial officer of any company (including Equity) that was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation (each, an "order"), in each case that was issued while the Smoothwater Nominee was acting in the capacity as director, chief executive officer or chief financial officer, or was subject to an order that was issued after the Smoothwater Nominee ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer; (b) a director, chief executive officer or chief financial officer of any company (including Equity) that while such Smoothwater Nominee was acting in that capacity, or within a year of such Smoothwater Nominee ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or became subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or (c) someone who became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or became subject to or instituted any proceedings, arrangements or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of such Smoothwater Nominee.

Mr. Silvestri was, at the request and on behalf of the Ontario Teachers' Pension Plan, a director of CFM Corporation. CFM Corporation was granted creditor protection under the Companies' Creditors Arrangements Act and Chapter 11 of the U.S. Bankruptcy Code on April 19, 2008 which resulted in the successful sale of its assets on June 30 and July 3, 2008.

To the knowledge of Smoothwater, as at the date hereof, no Smoothwater Nominee has been subject to: (a) any penalties or sanctions imposed by a court relating to securities legislation, or by a securities regulatory authority, or has entered into a settlement agreement with a securities regulatory authority; or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a proposed director.

About Smoothwater Capital

Smoothwater Capital focuses on investing in small to midcap Canadian public companies where there is an identifiable path to significantly improve shareholder value. Smoothwater Capital Corporation works to effect change in targeted companies, often collaboratively with institutional and other like-minded investors who hold material positions but are not able to take on the time consuming and costly activist role.

Smoothwater has filed this press release, which contains the information required by NI 51-102 in respect of the proposed Smoothwater Nominees, under Equity's company profile on SEDAR at

Smoothwater Capital Partners LP I
c/o Smoothwater Capital Corporation
Suite 2500, 120 Adelaide Street West
Toronto, Ontario M5H 1T1

Smoothwater Capital Partners LP I
Stephen J. Griggs
Chief Executive Officer

Longview Communications Inc.
Joel Shaffer
(416) 649-8006

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