Equitable Group Inc. slightly lower earnings for the fourth quarter ended Dec. 31, 2007.

Net income for the quarter was $6.9 million ($10.3 million on an adjusted basis to remove the $3.4 million after-tax write-down of the preferred share holding) compared to $7.8 million in the fourth quarter of 2006.

Diluted earnings per share were 53¢ per share (79¢ on an adjusted basis) compared to 64¢ a year ago.

Return on equity was 13.7% (20.3% on an adjusted basis) compared to 21.0% in the same period of 2006.

Conventional mortgage production, excluding warehoused mortgages, was $347.7 million, compared to $334.5 million in 2006.

Toronto-based Equitable says it deliberately slowed the pace of conventional mortgage production during the fourth quarter, in response to uncertain market conditions.

“We felt this was most appropriate for our balance sheet and return on equity objectives. By reducing warehoused mortgage production to $63.4 million (from $276.9 million in the fourth quarter of 2006) we improved our capital ratio and generated a strong ROE in spite of market conditions,” says Andrew Moor, president & CEO.

For the year, net income increased 14% to a record $31.2 million, or $2.44 per share, compared to $27.3 million, $2.26 per share, in 2006.

Adjusted net income for the year (excluding the previously-announced $3.4 million after-tax write-down of a preferred share holding) increased 26% to $34.5 million, or $2.71 per share.

Return on equity was 17.2% (18.9% adjusted) compared to 19.9% in 2006.

Mortgage assets increased to a record $2.87 billion at year end — 35% higher than the previous year.

Mortgage originations climbed to a record $2.73 billion from $2.16 billion in 2006.

“Equitable performed at a high level in 2007, achieving record earnings and an attractive return on equity,” says Moor.

Equitable’s financial goals for 2008 are: return on equity of 16%-18%; 16%-20% growth in net income over 2007; a total capital ratio (including general reserves) of 13%; and a productivity ratio (taxable equivalent basis) of 27%-30%.