financial group inc. SECOND QUARTER REPORT for period ended june 30 2011

financial group inc. SECOND QUARTER REPORT for period ended june 30

financial group inc. financial highlights Earnings before income tax decreased 4% to $4.38 million for the six months ending from $4.58 million for the same period last year. Earnings from operations (before interest) decreased 38% to $2.07 million for the six months ending from $3.33 million for the same period last year. Earnings from continuing operations (after interest and tax) decreased 3% to $3.04 million for the six months ending from $3.14 million for the same period last year. Total revenue (revenue from continuing operations and interest) increased 4% to $19.59 million for the six months ending from $18.78 million for the same period last year. Revenue from continuing operations decreased 1% to $17.32 million for the six months ending from $17.53 million for the same period last year. Interest received increased 83% to $2.27 million for the six months ending from $1.24 million for the same period last year. 2.5 2.0 1.5 1.0 0.5 0 Q2 2004 Earnings before income taxes for the quarter ending June 30 (millions of dollars) Q2 2005 Q2 2006 Q2 2007 Q2 2008 Table of contents Q2 2009 Q2 Q2 MANAGEMENT S RESPONSIBILITY FOR INTERIM CONSOLIDATED FINANCIAL STATEMENTS 4 INTERIM CONSOLIDATED FINANCIAL STATEMENTS 5 NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 9 CORPORATE INFORMATION 41 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 3

Management s responsibility for interim consolidated financial statements For the second quarters ended and The accompanying unaudited interim consolidated financial statements and all of the data included in this quarterly report have been prepared by and are the responsibility of the Board of Directors and management of Olympia. The unaudited interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as set out in the Handbook of the Canadian Institute of Chartered Accountants and reflect management s best estimates and judgments based on currently available information. The Audit Committee, comprised of non-management directors, acts on behalf of the Board of Directors to ensure that management fulfills its financial reporting and internal control responsibilities. In performing its duties, the Audit Committee acts only in an oversight capacity and necessarily relies on the work and assurances of Olympia s management. Olympia s independent auditor has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity s auditor. Signed Rick Skauge Signed Gerhard Barnard Rick Skauge PRESIDENT & CHIEF EXECUTIVE OFFICER Gerhard Barnard, CMA CHIEF FINANCIAL OFFICER Calgary, Canada, August 29, 4 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

INTERIM CONSOLIDATED BALANCE SHEET ASSETS Current assets June 30 December 31 January 1 Cash & cash equivalents (note 8) $ 13,027,194 $ 9,738,066 $ 10,262,228 Restricted cash (note 7) 1,815,440 1,509,868 710,537 Trade & other receivables (note 5) 1,838,320 1,864,223 2,056,837 Prepaid expenses 572,993 397,284 397,358 Current tax assets 1,493,402 1,276,527 156,337 Derivative financial instruments (note 9) - Forward foreign exchange contracts 445,173 796,615 3,375,038 Total current assets 19,192,522 15,582,583 16,958,335 Non-current assets Equipment & other (note 10) 903,674 1,065,551 888,533 Intangible assets (note 11) 416,829 300,729 288,522 Available for sale investment 375,000 375,000 - Deferred tax assets (note 15) 27,713 56,045 14,886 Total non-current assets 1,723,216 1,797,325 1,191,941 Total assets $ 20,915,738 $ 17,379,908 $ 18,150,276 LIABILITIES Current liabilities Trade & other payables (note 12) $ 891,596 $ 952,726 $ 1,291,725 Deferred revenue 3,845,787 403,809 361,982 Provision for other liabilities & charges 1,700,280 1,028,876 366,348 Current tax liabilities - 229,715 - Derivative financial instruments (note 9) - Forward foreign exchange contracts 329,193 640,155 2,963,448 Total current liabilities 6,766,856 3,255,281 4,983,503 EQUITY Share capital (note 13) 7,736,564 7,482,463 7,470,156 Contributed surplus (note 13) 267,402 308,714 268,980 Retained earnings 6,144,916 6,333,450 5,427,637 Total equity 14,148,882 14,124,627 13,166,773 Total equity & liabilities $ 20,915,738 $ 17,379,908 $ 18,150,276 Commitments and Contingencies (notes 22 & 21) See accompanying notes to the interim consolidated financial statements OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 5

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Continuing operations SIX MONTHS ENDED THREE MONTHS ENDED Revenue $ 17,321,464 $ 17,534,912 $ 8,758,747 $ 8,793,544 Direct expenses 2,452,101 2,356,756 1,314,796 1,236,847 14,869,363 15,178,156 7,443,951 7,556,697 Administrative expenses (note 17) 12,800,026 11,840,845 6,540,759 5,975,958 Earnings from operations 2,069,337 3,337,311 903,192 1,580,739 Interest received 2,269,969 1,243,311 1,342,972 707,075 Other gains & losses, net (note 16) 40,002 (4,216 ) 33,409 1,393 Earnings before income tax 4,379,308 4,576,406 2,279,573 2,289,207 Income tax expense (note 15) 1,338,899 1,440,303 708,277 782,492 Earnings from continuing operations 3,040,409 3,136,103 1,571,296 1,506,715 Other comprehensive income - - - - Net earnings and comprehensive income Earnings per share: $ 3,040,409 $ 3,136,103 $ 1,571,296 $ 1,506,715 Basic (note 19) $ 1.22 $ 1.27 $ 0.63 $ 0.61 Diluted (note 19) $ 1.22 $ 1.27 $ 0.63 $ 0.61 See accompanying notes to the interim consolidated financial statements 6 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Attributable to owners of Olympia Share Capital Contributed Surplus Retained Earnings Total Equity Balance as at January 1, $ 7,470,156 $ 268,980 $ 5,427,637 $ 13,166,773 Total comprehensive income - - 3,136,103 3,136,103 7,470,156 268,980 8,563,740 16,302,876 Dividends - - (2,474,552 ) (2,474,552 ) Employee share options: Value of services recognized - 55,565-55,565 Proceeds on issuing shares - - - - Transfer to share capital on issuing shares - - - - Balance as at $ 7,470,156 $ 324,545 $ 6,089,188 $ 13,883,889 Balance as at January 1, $ 7,482,463 $ 308,714 $ 6,333,450 $ 14,124,627 Net earnings and comprehensive income - - 3,040,409 3,040,409 7,482,463 308,714 9,373,859 17,165,036 Dividends - - (3,228,943 ) (3,228,943 ) Employee share options: Value of services recognized - 11,539-11,539 Proceeds on issuing shares 201,250 - - 201,250 Transfer to share capital on issuing shares 52,851 (52,851 ) - - Balance as at $ 7,736,564 $ 267,402 $ 6,144,916 $ 14,148,882 See accompanying notes to the interim consolidated financial statements OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 7

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWs SIX MONTHS ENDED Cash flow from (used in) operating activities Net earnings $ 3,040,409 $ 3,136,103 Items not affecting cash Depreciation of equipment & other 238,694 274,978 Depreciation of intangible assets 82,058 129,334 Loss on disposal of capital assets 478 1,416 Future income taxes 28,332 (46,809) Stock-based compensation expense 11,539 55,565 Unrealized forward exchange gain 40,480 240,659 3,441,990 3,791,246 Changes in working capital balances Trade & other receivables 25,905 80,011 Current taxes receivable (446,590) (960,691) Prepaid expenses (175,709) (105,491) Trade & other payables (61,132) 365,018 Deferred revenue 3,441,978 2,766,753 Provision for other liabilities & charges 671,404 235,700 6,897,846 6,172,546 Investing activities Sale of equipment & other 16,410 5,495 Purchase of equipment & other (93,705) (390,422) Purchase of intangible assets (198,158) (89,677) (275,453) (474,604) Financing activities Issuance of capital stock 201,250 - Dividends (3,228,943) (2,474,552) (3,027,693 ) (2,474,552) Change in cash position 3,594,700 3,223,390 Cash, beginning of period 11,247,934 10,972,765 Cash, end of period $ 14,842,634 $ 14,196,155 Cash is representated by: Cash & cash equivalents 13,027,194 12,685,974 Restricted cash 1,815,440 1,510,181 $ 14,842,634 $ 14,196,155 See accompanying notes to the interim consolidated financial statements 8 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

1. NATURE OF BUSINESS Olympia Financial Group Inc. ( Olympia ) was incorporated on July 12, 1994 under the Alberta Business Corporation Act, further, Olympia is a reporting issuer in British Columbia, Alberta, and Ontario, and its common shares are listed on the TSX Venture Exchange. Olympia s registered head office is 2300, 125-9th Avenue S.E., Calgary, Alberta T2G 0P6. The majority of Olympia s business is conducted through its wholly owned subsidiary Olympia Trust Company ( Olympia Trust ), a non-deposit taking trust institution. Olympia Trust received its letters patent on September 6, 1995, authorizing the formation of a trust company to be registered under the Loan and Trust Corporation Act (Alberta). Olympia Trust acts as a trustee and manages self-administered registered plans, acts as a registrar and transfer agent for public companies, administers employee stock purchase plans for corporations, and provides foreign currency exchange services and other trustee services. The self-insured private health services plan division conducts business as Olympia Benefits Inc. ( OBI ), a wholly owned subsidiary of Olympia. 2. BASIS OF PREPARATION AND ADOPTION OF IFRS Olympia prepared its financial statements in accordance with Canadian generally accepted accounting principles ( GAAP ) as set out in the Handbook of the Canadian Institute of Chartered Accountants ( CICA Handbook ). In, the CICA Handbook was revised to incorporate International Financial Reporting Standards ( IFRS ). Publicly accountable enterprises are now required to apply IFRS to reporting years effective for years beginning on or after January 1,. Accordingly, Olympia has used IFRS for these interim consolidated financial statements. In these financial statements, the term Canadian GAAP refers to Canadian GAAP before the adoption of IFRS. These interim consolidated financial statements have been prepared in accordance with IFRS applicable to the preparation of interim financial statements, including IAS 34 and IFRS 1. Olympia has consistently applied the same accounting policies in its opening IFRS balance sheet at January 1, and throughout all periods presented, as if these policies had always been in effect. Current International Financial Reporting Standards have had no financial impact on Olympia s reported balance sheet, financial performance and cash flows. The transition to IFRS had minimal impact in accounting policies from those used in Olympia s consolidated financial statements for the year ended December 31,. The policies applied in these condensed interim consolidated financial statements are based on IFRS, issued and outstanding as of August 29,. Any subsequent changes to IFRS that are given effect in Olympia s annual financial statements for the year ending December 31, could result in restatement of these interim consolidated financial statements, including the transition adjustments recognized on change over to IFRS. The interim consolidated financial statements should be read in conjunction with Olympia s Canadian GAAP annual financial statements for the year ended December 31,. Based on current reporting standards, IFRS will not have a financial impact on Olympia s operations, strategic decisions, cash flow, capital expenditures or key performance indicators. OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 9

3. SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies used in the preparation of these interim consolidated financial statements are described below. Basis of measurement The consolidated financial statements have been prepared under the historical cost convention, except for the revaluation of certain financial assets and financial liabilities to fair value, including derivative instruments and available for sale investments. Use of estimates and judgments The preparation of consolidated financial statements in conformity with IFRS requires management to make estimates and judgments that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. By their nature, these estimates and judgments are subject to measurement uncertainty. The effect of changes in such estimates and judgments on the consolidated financial statements in future periods could be significant. In particular, assessing the allowance, the depreciation of equipment, the depreciation of intangible assets, and assumptions used to calculate the compensation require the use of estimates. Note 4 discloses the areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements. Critical accounting judgments Financial instruments traded in an active market The classification and measurement of many of Olympia s financial instruments depends on whether or not the instruments are considered to be traded in an active market. This assessment is based on available market data, however, significant judgment by management is required to evaluate whether such data is indicative of an active market. Functional and presentation currency These consolidated financial statements are presented in Canadian dollars, which is the functional currency of Olympia and its subsidiaries. Transactions denominated in foreign currencies are translated into Canadian dollars using the exchange rates prevailing at the dates of the transactions. Under this method, monetary assets and liabilities denominated in foreign currencies are translated into Canadian dollars at the rates in effect at the consolidated balance sheet dates. Revenues and expenses are translated at the rates prevailing at the respective transaction dates. 10 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

Basis of consolidation The consolidated financial statements include the accounts of Olympia and its subsidiary corporations, all of which are wholly owned. Olympia has had no business combinations or acquisitions since inception. All inter-corporate balances and transactions have been eliminated. The subsidiaries consist of Olympia Trust Company and Olympia Benefits Inc., which are subsidiaries of Olympia and Olympia Transfer Services Inc., which is a wholly owned subsidiary of Olympia Trust Company. Segment reporting Management has determined the operating segments used to make strategic decisions based on the reports reviewed by the President and the Executive Vice President. An operating segment is a component of Olympia that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of Olympia s other components. Operation results are reviewed regularly by the President and the Executive Vice President to make decisions about resources to be allocated to the segment and to assess its performance. Discrete financial information is available for each operating segment. Segment results that are reported to the President and the Executive Vice President include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Considering the business from both a product and geographic perspective has identified four reporting segments. The Private Health Services Plan Division markets, sells and administers health and dental benefits to business owners. The Corporate and Shareholder Services Division deals primarily with public companies to provide a variety of services which include: acting as transfer agent and registrar, acting as disbursing agent, providing dividend reinvestment services, administering employee share purchase plans, assisting companies as depository with respect to corporate reorganizations and shareholder solicitations, scrutineering shareholder meetings and acting as trustee in a variety of roles with income trusts, debt issues, warrants and escrows. The Registered Plan Division specializes in niche account administration needs. The Foreign Exchange Division provides corporations and private clients a personalized service for buying and selling foreign currencies. Equipment and other Equipment and other is measured and accounted for at cost less accumulated depreciation. Olympia does not follow the practice of revaluing equipment and other. Additions and subsequent expenditures are capitalized only in the event that they enhance the future economic benefits to be derived from the assets. Depreciation is provided on the depreciable amount of equipment and other on a straight-line basis over the estimated useful economic life of each asset. The depreciable amount is the gross carrying amount less the estimated residual value at the end of its useful economic life. The annual depreciation rates and methods are as follows: Furniture and fixtures Leasehold improvements Computer and equipment Straight-line over 5 years Straight-line over the lease term Straight-line over 3 years OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 11

Depreciation rates, methods and residual values used to calculate depreciation of items of equipment and other are kept under review for any change in circumstances. The principal factors Olympia takes into account when deciding on rates and methods of depreciation are the expected rate of developments in technology, expected market requirements, and the pattern of usage for each asset. When reviewing residual values, Olympia estimates the amount that it would currently obtain for the disposal of the asset after deducting the estimated cost of disposal if the asset were already of the age and condition expected at the end of its useful economic life. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the income statements. Assets are derecognized on disposal or when no future economic benefits are expected from their use. Intangible assets Intangible assets include computer software and in-house developed software. Computer software is stated at cost, less depreciation and provisions for impairment, if any. The identifiable and directly associated external and internal costs of acquiring and developing software are capitalized where the software is controlled by Olympia, and where it is probable that future economic benefits that exceed its cost will flow from its use over more than one year. The cost of purchase of computer software that is separable from an item of related hardware is capitalized separately. Internally generated intangible assets are primarily comprised of internally developed software. Such software, as well as other internally generated assets for internal use, are valued at cost and amortized over their useful lives. Impairments are recorded if the carrying amount of an asset exceeds the recoverable amount. The annual depreciation rates and methods are as follows: Computer software Straight-line over 3 years Research costs and costs associated with maintaining software are recognized as an expense when incurred. Development costs are capitalized under intangible assets if they can be identified as an intangible asset that is expected to generate probable future economic benefit and if the costs of this asset can be reliably calculated. Development costs also include, in addition to those costs directly attributable to the development of the asset, an appropriate allocation of overhead cost. Impairment of non-financial assets Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset s fair value less value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets, other than goodwill, that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. 12 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

Olympia assesses all non-financial assets on an ongoing basis for indications of impairment and to determine whether a previously recognized impairment loss should be reversed. If such indicators are found to exist, then detailed impairment testing is carried out. Impairments and the reversal of previously recognized impairments are recognized in the income statement. Financial instruments A financial asset is cash or the contractual right to receive cash or another financial asset, including equity, from another party. A financial liability is the contractual obligation to deliver cash or another financial asset to another party. A derivative is a financial instrument whose value changes in response to a specified variable, requires little or no net investment and is settled at a future date. An embedded derivative is a derivative that is a part of a non-derivative contract and not directly related to that contract. Under this standard, embedded derivatives must be accounted for as a separate financial instrument. A non-financial derivative is a contract that can be settled net in cash or by other financial instruments. Classification All financial instruments are initially recorded at fair value and are subsequently accounted for based on one of five classifications: financial instruments at fair value through profit or loss; loans and receivables; held-to-maturity; investments and available for sale financial assets; and other financial liabilities. Management determines the classification of financial assets and liabilities at initial recognition. (i) Financial assets at fair value through profit and loss Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorized as held for trading unless they are designated as hedges. Assets in this category are classified as current assets. (ii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and which are not classified as available for sale. Loans and receivables are initially recognized at fair value including direct and incremental transaction costs. They are subsequently valued at amortized cost, using the effective interest method where applicable. OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 13

(iii) Held-to-maturity Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments that Olympia s management has the intention and ability to hold to maturity. They are initially recognized at fair value including direct and incremental transaction costs. They are subsequently valued at amortized cost, using the effective interest method where applicable. (iv) Available for sale financial assets Available for sale assets are non-derivative financial assets that are designated as available for sale and are not categorized into any of the other categories described above. They are initially recognized at fair value including direct and incremental transaction costs. They are subsequently held at fair value. Gains and losses arising from changes in fair value are included as a separate component of equity until sale, when the cumulative gain or loss is transferred to the statement of comprehensive income. Interest is determined using the effective interest method, and impairment losses and translation differences on monetary items are recognized in the income statement. (v) Other financial liabilities Items classified as other financial liabilities on Olympia s consolidated financial statements are accounted for at amortized cost using the effective interest method. Any gains or losses in the realization of other financial liabilities are included in earnings. The fair value of accounts payable and accrued liabilities and bonuses payable approximate their carrying values, due to the shortterm nature of these instruments. Recognition and measurement Regular purchases and sales of financial assets are recognized on the trade date on which Olympia commits to purchase or sell the asset. Investments are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognized at fair value and transaction costs are expensed in the income statement. Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and Olympia has substantially transferred all risks and rewards of ownership. Available for sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortized cost using the effective interest method. Gains or losses arising from changes in the fair value of the financial assets at fair value through profit or loss are presented in the income statement within the period in which they arise. When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments recognized in equity are included in the income statement as gains and losses from investment securities. Impairment of financial assets Assets carried at amortized cost At each balance sheet date, Olympia assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred if, and only if, there is objective evidence of impairment as a result of 14 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

one or more events that occurred after the initial recognition of the asset (a loss event), and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. If a loan and receivable or held-to-maturity asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. For practical reasons, Olympia may measure impairment of an instrument s fair value using an observable market price. Calculation of the present value of estimated future cash flows of a collateralized financial asset reflects the cash flows that may result from foreclosure, less cost for obtaining and selling the collateral, whether or not foreclosure is probable. Evidence of impairment The amount of the loss is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows (excluding future credit losses) discounted at the financial asset s original effective interest rate. The asset s carrying amount is reduced and the amount of the loss is recognized in the consolidated income statement. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. For practical reasons, Olympia may measure impairment on the basis of an instrument s fair value using an observable market price. Offsetting financial instrument Financial assets and liabilities are offset and the net amount reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously. Funds in trust Private health services plans ( Health ) OBI holds cash of $5.16 million ( - $5.64 million) on behalf of its self-insured private health clients. These assets are the property of the plan holders and OBI does not maintain effective control over the assets. Therefore, the assets are not reflected in these consolidated financial statements. Self-administered registered plans ( RRSP ) Self-administered registered plans consist of securities and mutual funds with an approximate market value of $2,255 million ( $1,947 million) plus cash and term deposits of approximately $145.37 million ( $141.81 million). These assets are the property of the plan holders and Olympia Trust does not maintain effective control over the assets. Therefore, the assets are not reflected in these consolidated financial statements. Corporate and shareholder services ( CSS ) Olympia Trust holds funds in trust of approximately $91.16 million ( $192.26 million) and securities with an approximate market value of $2.31 million ( $2.91 million) for clients who have hired Olympia Trust to provide trustee services. These assets are the property of the plan holders and Olympia Trust does not maintain effective control over the assets. Therefore, the assets are OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 15

not reflected in these consolidated financial statements. Foreign exchange ( FX ) Olympia Trust holds funds in trust of $0.93 million ( $1 million) for clients who have paid margin on forward foreign exchange contracts. These assets are the property of the contract holders and Olympia Trust does not maintain effective control over the assets. Therefore, the assets are not reflected in these consolidated financial statements. Foreign currency exchange contracts Olympia Trust periodically purchases forward contracts when it enters into a transaction to buy or sell foreign currency in the future. These contracts are short term in nature, are in the regular course of business and are used to manage foreign exchange exposures. Foreign exchange contracts are not designed as hedges. They are initially recorded at fair value based on Bank of Canada published rates and subsequently adjusted based on published foreign currency curves. They are recorded in Olympia s balance sheet as either an asset or liability, with changes in fair value recorded to net earnings. The estimated fair value of all derivative instruments is based on quoted market prices, or, in their absence, third-party indications and forecasts. Foreign exchange translation gains and losses on these instruments are recognized as an adjustment to revenues when the sale is recorded. Revenue recognition Revenue is recognized through four business segments. The revenue of each division is distinctly unique to that division. Each division in return has revenue streams that originate from different product and services offerings. Foreign exchange transaction fee revenue is earned from foreign currency exchange services offered. Olympia earns interest income from funds held with financial institutions, and from term deposits and balances held in trust, as stipulated in its service contracts with its clients. Corporate and shareholder services (i) Annual administration fees Certain services are invoiced on an annual basis. Such fees are levied once a year on the contract anniversary date. The annual fees are recognized as deferred revenue and recognized as revenue on a straight-line basis in relation to service terms performed by Olympia Trust. Where contractual services are terminated, the unearned deferred revenue is recognized as revenue. (ii) Monthly program fees Certain services are invoiced on a monthly basis over a one-year period. These fees are recognized monthly. (iii) Monthly basic fees Certain services are provided and billed on an ongoing monthly basis. Such fees are recognized monthly at the time of billing. 16 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

Self-administered registered plans (i) Account set-up fees Client set-up fees are recognized upon creation of a client account in Olympia Trust s record. (ii) Annual administration fees Annual fees for maintaining registered plan services are billed once a year. The annual fees are recognized as deferred revenue and recognized as revenue on a straight-line basis in relation to Olympia Trust s expenditure for rendering these services. Where contractual services are terminated, the unearned deferred revenue is recognized as revenue. Private health services plans (i) Medical benefit account set-up fees Client set-up fees are recognized upon creation of a client account in OBI s record. (ii) Travel medical benefit insurance brokerage fees Commission earned on the selling of short-term medical insurance is recognized in full, on the basis that no underwriting risks remain with OBI. (iii) Monthly fees Certain services are provided and billed on an ongoing monthly basis. Such fees are recognized monthly at the time of billing. (iv) Life insurance brokerage fees Commissions earned on the selling of long-term insurance related products is recognized in full, on the basis that no underwriting risks remain with OBI. Foreign exchange (i) Trading profits and losses Trading profits and losses from spot-trading and trading in future foreign exchange contracts are recognized at the time the trade transaction occurs. Transaction fees and trading profits for foreign currency exchange services and transactions are recognized at the time the transaction is entered into. Profits and commission payable are recognized when the contracts are signed. (ii) Unrealized profits and losses Unrealized profits and losses in foreign exchange future contracts are recognized on a net basis at each period end using mark-to-market method and recorded in the consolidated statement of comprehensive income as other gains and losses. OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 17

Share-based payments Olympia has equity-settled share-based compensation plans. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equitysettled share-based payments is expensed over the vesting period, based on Olympia s estimate of awards that will eventually vest. The fair value of options granted is determined using the Black Scholes option pricing model, which takes into account the exercise price of the option, the current share price, the risk-free interest rate, the expected volatility of the share price over the life of the option, and other relevant factors. The amount is credited to contributed surplus. Any consideration paid by employees on exercise of stock options or purchase of stock is credited to share capital, in addition the related amounts originally recorded to contributed surplus are reclassified as share capital. Common shares Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of any tax effects. Cash and cash equivalents Cash and cash equivalents consist primarily of balances with financial institutions and term deposits with maturities, at purchase, of less than three months. Cash and cash equivalents are reported separately from restricted cash. Restricted cash Restricted cash is not readily accessible for use in operations and is reported separately from cash and cash equivalents on the balance sheet. Restricted cash is held by two financial institutions as collateral securing Olympia s foreign exchange trading platform. Provisions and contingencies Provisions are recognized for present obligations arising as a consequence of past events where it is more likely than not that a transfer of economic benefit will be necessary to settle the obligation, and it can be reliably estimated. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessment of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as a finance cost. Contingent liabilities are possible obligations whose existence will be confirmed only by uncertain future events or present obligations where the transfer of economic benefit is uncertain or cannot be reliably measured. Contingent liabilities are not recognized but are disclosed anyway unless they are remote. 18 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

Employee benefits (i) Short-term employee benefits Wages, salaries, employment insurance premiums, Canada Pension Plan contributions, paid annual leave and sick leave, bonuses, profit sharing and non-monetary benefits are accrued for pursuant to contractual arrangements and in accordance with the nature of constructive benefits Olympia provides in addition to remuneration upon an employee joining or in the year in which the associated services are rendered by employees of Olympia. The accruals of such constructive benefits are derecognized pursuant to the contractual arrangements and in accordance with the nature of constructive benefits when employee services terminate or as provided for in employee contracts. Where Olympia provides long-term employee benefits, the cost is accrued to match the rendering of the services by the employees concerned. (ii) Other long-term employee benefits All employees are entitled to long-term service monetary awards based on the number of years of service with Olympia. Olympia recognizes long service award obligations on a straight-line basis in accordance with the number of completed year of service and in accordance with the qualifying criteria attached to having earned these awards. The award expense is therefore accrued and recognized in profit and loss based on completed year of services. Taxation (i) Taxation and deferred taxation Taxes, including deferred taxes, are income tax payable on taxable profits (tax reporting), and are recognized as an expense in the period in which the profits arise. Income tax recoverable on tax allowable losses is recognized as an asset only to the extent that it is regarded as recoverable by offset against current or future taxable profits. Deferred income tax is provided in full, using the liability method, on temporary differences arising from the differences between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined using tax rates and legislation enacted or substantially enacted by the balance sheet date that are expected to apply when the deferred tax asset is realized or the deferred tax liability is settled. Deferred and current tax assets and liabilities are only offset when they arise in the same tax reporting group and where there is both the legal right and the intention to settle on a net basis or to realize the asset and settle the liability simultaneously. OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 19

(ii) Investment tax credits Leases Certain expenditures qualifies for Investment Tax Credits ( ITCs ) pursuant to the Scientific Research and Experimental Development program, which is a federal tax incentive program to encourage Canadian businesses of all sizes and in all sectors to conduct research and development in Canada that will lead to new, improved, or technologically advanced products or processes. Based on this, Olympia is entitled to investment tax credits on certain research and experimental development costs incurred. Refundable cash credits stemming from the ITCs is in respect of credits recognized in prior years when there is reasonable assurance of their recovery using the cost reduction method. ITCs are subject to assessment and approval by the Canada Revenue Agency. Adjustments required, if any, are reflected in the year when such assessments are received. Investment Tax Credits and other cost recoveries related to furniture and fixtures, computer and equipment and intangible assets are credited against the book value of such assets and the credit is released to income on a straight-line basis as a reduction of depreciation expense over the above-mentioned estimated useful economic lives of the relevant assets. The remaining balance is recorded as a reduction of scientific research and experimental development expenses. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership. At the commencement of the lease term, finance leases are recognized as assets and liabilities at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. The discount rate to be used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease, if this is practicable to determine; if not, the incremental borrowing rate is used. Failing that, the cost-of-equity rate is used. Any initial direct costs attached to the lease are added to the amount recognized as an asset. Lease payments under an operating lease are recognized as an expense on a straight-line basis over the lease term unless another systematic basis is more representative of the time pattern of the lease benefit. Lease incentives received are recognized as an integral part of the total lease expense, over the term of the lease. Contingent rents, in respect of operating leases, are charged as expenses to profit and loss in the periods in which they are incurred. Related parties Olympia enters from time to time into transactions with related parties in the normal course of business. Related party transactions are recognized at exchange amount. Olympia considers the following as related parties: Directors, vice presidents and key management personnel (post-employment benefit plans where applicable) Associated entities and joint ventures An entity controlled, jointly controlled or significantly being influenced by any of the aforementioned Children, spouses or individuals related to any of the aforementioned persons 20 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

Earnings per share ( EPS ) The calculation of basic earnings per share is based on net earnings divided by the weighted average number of common shares outstanding during the period. For the calculation of diluted EPS, the weighted average number of common shares is the same as for basic EPS, with the addition of the weighted average number of common shares that would be issued on conversion of all the dilutive potential common shares. Dilutive potential common shares are deemed to have been converted at the start of the period or at the date of their issue, if later. The number of common shares that would be issued on conversion of dilutive potential common shares is determined from their terms of conversion. Where the terms could vary, it is deemed that they would be exercised at the rate or exercise price that would be most advantageous to the holder of such potentially dilutive common shares. Dividends Dividends on common shares are recognized in equity in the period in which they are paid or, if earlier, approved by the Olympia board of directors. 4. RECENT ACCOUNTING PRONOUNCEMENTS IFRS 9 Financial instruments amends the classification and measurement criteria for financial instruments included within the scope of IAS 39, Financial Instruments: Recognition and Measurements. IFRS 9 will be published in three phases, of which only the first phase has been published. The first phase addresses the accounting for financial assets and financial liabilities. The second phase will address the impairment of financial instruments, and the third phase will address hedge accounting. For financial assets, IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, and replaces the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. Although the classification criteria for financial liabilities will not change under IFRS 9, the approach to the fair value option for financial liabilities may require different accounting for changes to the fair value of a financial liability as a result of changes to an entity s own credit risk. IFRS 9 is effective for annual periods beginning on or after January 1, 2013 with different transitional arrangements depending on the date of initial application. Olympia is currently evaluating the impact of adopting IFRS 9 on its consolidated financial statements. IFRS 10 Consolidated financial statements builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. IFRS 10 is effective for annual periods beginning on or after January 1, 2013. Olympia is currently evaluating the impact of adopting IFRS 10 on its consolidated financial statements. OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 21

IFRS 11 Addresses joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form. The standard addresses inconsistencies in the reporting of joint arrangements by requiring a single method to account for interests in jointly controlled entities. IFRS 11 is effective for annual periods beginning on or after January 1, 2013. Olympia is currently evaluating the impact of adopting IFRS 11 on its consolidated financial statements. IFRS 12 Disclosure of interests in other entities is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. IFRS 12 is effective for annual periods beginning on or after January 1, 2013. Olympia is currently evaluating the impact of adopting IFRS 12 on its consolidated financial statements. IFRS 13 Fair Value Measurement provides a consistent and less complex definition of fair value, establishes a single source for determining fair value and introduces consistent requirements for disclosures related to fair value measurement. IFRS 13 is effective for annual periods beginning on or after January 1, 2013 and applies prospectively from the beginning of the annual period in which the standard is adopted. Early adoption is permitted. Olympia is currently evaluating the impact of adopting IFRS 13 on its consolidated financial statements. IAS 19 Employee Benefits is amended to eliminate the option to defer the recognition of actuarial gains and losses, commonly known as the corridor approach, and requires an entity to recognize actuarial gains and losses in Other Comprehensive Income ( OCI ) immediately. In addition, the net change in the defined benefit liability or asset must be disaggregated into three components: service cost, net interest and remeasurements. Service cost and net interest will continue to be recognized in net earnings while remeasurements, which include changes in estimates or the valuation of plan assets, will be recognized in OCI. Furthermore, entities will be required to calculate net interest on the net defined benefit liability or asset using the same discount rate used to measure the defined benefit obligation. The amendment also enhances financial statement disclosures. This amended standard is effective for annual periods beginning on or after January 1, 2013, with modified retrospective application. Earlier adoption is permitted. The Company is currently evaluating the impact of adopting these amendments on its consolidated financial statements. IAS 1 Presentation of Financial Statements was amended and requires companies to group items presented within OCI based on whether they may be subsequently reclassified to profit or loss. This amendment to IAS 1 is effective for annual periods beginning on or after July 1, 2012 with full retrospective application. Early adoption is permitted. Olympia is currently evaluating the impact of adopting this amendment on its consolidated financial statements. 22 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

5. FINANCIAL INSTRUMENTS AND FINANCIAL RISK FACTORS Fair value of financial instruments The fair value of cash and cash equivalents, trade and other receivables, trade and other payables, and provision for other liabilities and charges approximate their carrying amounts due to the short-term maturity of these instruments. These instruments are recognized and measured at amortized cost less allowances and write-downs for impairment. Risks associated with financial instruments Olympia is exposed to financial risks arising from normal course business operations and its financial assets and liabilities. The financial risks include liquidity risk, market risk relating to foreign currency exchange rates, and interest rates and credit risk. (i) Liquidity risk Liquidity risk is the risk that Olympia will encounter difficulties in meeting its financial liability obligations. Olympia manages its liquidity risk by keeping surplus cash in liquid investments and fixed term deposits with highly rated financial institutions and institutions that benefit from government guarantees. This allows Olympia to earn interest on surplus cash while having access to it within a very short time. Occasionally, surplus cash may be invested in marketable securities. Olympia seeks to ensure the security and liquidity of those investments. Since inception, Olympia has financed its cash requirements primarily through its own cash resources and interest income. The timing of cash outflows relating to trade accounts payable is outlined in the following table: December 31, Current $ 317,638 $ 333,009 31 to 60 days 82 988 61 to 90 days 8,332 3,228 Over 90 days 27,371 25,436 $ 353,423 $ 362,661 At, other payables and trade payables above totaled $891,596 (December 31, - $952,726). Olympia met all the obligations associated with its financial liabilities. The liquidity table relating to derivative financial instruments payable is outlined in the table below: December 31, Current $ 207,847 $ 106,557 31 to 60 days 12,086 167,949 61 to 90 days 31,705 57,115 Over 90 days 77,555 308,534 $ 329,193 $ 640,155 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 23

(ii) Market risk Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because of changes in market prices and is composed of the following: Foreign currency exchange risk Olympia is exposed to changes in foreign exchange rates because revenues or financial instruments may fluctuate because of changing rates. Transactions in the applicable financial market are executed consistent with established risk management policies. Olympia Trust purchases forward contracts whenever it enters into a transaction to buy or sell foreign currency in the future. These contracts are short term in nature and in the regular course of business. Management understands that the currency markets are volatile and therefore subject to higher risk. Olympia Trust applies the following policy to mitigate the currency risk. For forward contracts, a margin of 5% is payable on signature of the contract. Olympia Trust sets up a corresponding position with its currency supplier. If market rates vary by 4% or more, the client is required to adjust their margin to match the variance by the end of the trading day. If the United States dollar to Canadian dollar exchange rate at, were to have increased by $0.01, it is estimated that Olympia s after-tax earnings for the six months ended, would have decreased by approximately $835 (December 31, - $1,127). A $0.01 decrease in the United States dollar to Canadian dollar exchange rate would have had an equal but opposite effect. This sensitivity analysis assumes that all other variables, in particular foreign exchange rates, remain constant. Interest rate risk Interest rate risk is the risk that the value of a financial instrument will fluctuate because of changes in market interest rates. Olympia is exposed to interest rate risk as the cash flows generated from its cash and cash equivalents fluctuate in response to changes in market interest rates. The primary exposure is related to cash balances and fixed day term deposits. If the interest rates were to have increased by 1%, it is estimated that Olympia s after-tax earnings for the six months ended, would have increased by approximately $53,433 (December 31, - $80,391) on account of its own assets. A 1% decrease in interest rates would have had an equal but opposite effect. This sensitivity analysis assumes that all other variables, in particular interest rates, remain constant. Credit risk Credit risk is the risk that the counterparty to a financial asset will default, resulting in Olympia incurring a financial loss. Before transactions begin with a new customer or counterparty, its creditworthiness is assessed. The assessment practice considers both quantitative and qualitative factors. Olympia constantly monitors the exposure to any single customer or counterparty along with the financial position of the customer or counterparty. If it is deemed that a customer or counterparty has become materially weaker, Olympia will work to reduce the credit exposure and lower the credit limit allocated. Olympia is exposed to credit risk on its cash and cash equivalents 24 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

and accounts receivable. The maximum exposure to credit risk of Olympia at the end of the period is the carrying value of cash and cash equivalents and accounts receivable. Cash and cash equivalents Olympia mitigates its exposure to credit risk by maintaining its bank accounts with a diversified number of financial institutions, of which two benefit from a guarantee from the Provincial Government of Alberta. Accounts receivable Olympia has policies and procedures in place to govern the credit risk it will assume in accordance with Olympia s revenue recognition policy. The table below shows no significant credit risk exposure in the trade accounts receivable as at: December 31, Current $ 1,636,404 $ 1,552,181 31 to 60 days - 153,946 61 to 90 days 42,420 63,328 Over 90 days 250,165 205,121 Allowance for doubtful accounts (90,669 ) (110,353 ) $ 1,838,320 $ 1,864,223 The allowance for doubtful accounts is based on an account-by-account analysis and prior credit history. Movements on Olympia s provision for impairment of trade receivables are as follows: December 31, At January 1 $ 110,353 $ 108,920 Provision for receivable impairments 258,763 159,139 Amounts used (278,447 ) (127,706 ) Unused amounts reversed - (30,000 ) $ 90,669 $ 110,353 The creation and release of provision for impaired receivables have been included in administrative expenses in the interim consolidated statement of comprehensive income. Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash. (iii) Capital risk management Olympia s objectives when managing capital are to safeguard Olympia s ability to continue as a going concern in order to provide returns and benefits to shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, Olympia may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets. OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 25

Olympia includes cash, cash equivalents and shareholders equity in the definition of capital. Olympia s main objectives when managing its capital structure are to: Maintain sufficient cash and cash equivalents over the short and medium term in order to finance its growth and development including capital expenditure; Maintain strong dividend payments and minimize dilution to existing shareholders whenever possible; and Maintain investor and creditor confidence to sustain future development of the business. Olympia does not use financial ratios to manage its capital structure. Olympia s objective when managing capital is to maintain adequate financial flexibility to preserve its ability to meet financial obligations. In managing capital, Olympia estimates its future dividend payments and capital expenditure, which is compared to planned business growth for purposes of sustainability. The capital structure of Olympia is managed and adjusted to reflect changes in economic conditions. In order to maintain or adjust the capital structure, adjustments may be made to the amount of dividends, if any, to shareholders, in addition to the number of new common shares issued. In support thereof, management reviews the financial position of Olympia on a monthly and cumulative basis. Financing decisions are set based on the timing and extent of expected operating and capital cash outlays. Factors considered when determining capital and the amount of operational cash requirements are weighed against the costs associated with excess cash, its terms and availability and whether to issue equity. Olympia works toward managing its capital objectives to the extent possible while facing the challenges of market conditions and the public s assessment of Olympia s risk profile. Olympia s capital management objectives have not changed over the periods presented. 6. OPERATING SEGMENTS Olympia has four reportable segments, as presented below, which are also Olympia s strategic business unit or divisions. The strategic business units offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the strategic business units, Olympia s President reviews internal management reports on a monthly basis. There are varying levels of integration between the reportable segments. This integration includes transfers of costs and shared management services, respectively. The accounting policies of the reportable segments are the same as those policies described in notes 2 and 3. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segmental transactions consist mainly of cost recoveries which are recognized at cost. Although each segment operates in various locations across Canada, it is not of value to report segment performance on a location basis due to each segment having different offices in different geographic locations. In addition, reportable segments are managed on a functional basis through regular reporting to the President as opposed to reporting on a per-location basis. 26 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

IFRS 8 has been amended so that a measure of segment assets is only required to be disclosed if the measure is regularly provided to the President. The amendment is effective for periods beginning on or after January 1,. Olympia reports profit and net income information for all operating segments to the President. All other assets and liabilities are reported on a consolidated basis. Costs are allocated to divisions based on usage. Corporate costs are allocated equally amongst the divisions. Net operations for the six months ended Health CSS RRSP FX Corporate Total Revenue $ 3,645,211 $ 5,152,081 $ 5,025,306 $ 3,497,066 $ 1,800 $ 17,321,464 Interest received 66,593 742,087 1,372,174 25,985 63,130 2,269,969 Direct expenses (1,239,066 ) (392,175 ) (77,839 ) (743,021 ) - (2,452,101 ) General & administrative (1,992,062 ) expenses 2,472,738 5,501,993 6,319,641 2,780,030 64,930 17,139,332 (4,148,149 ) (3,969,297 ) (2,346,663 ) (23,103) (12,479,274 ) Depreciation (60,539 ) (75,580 ) (123,454 ) (61,179 ) - (320,752 ) Earnings from operations Other (expenses) / income 420,137 1,278,264 2,226,890 372,188 41,827 4,339,306 (107 ) (84 ) (199 ) 40,392-40,002 Income taxes (128,417 ) (390,782 ) (680,773 ) (126,139 ) (12,788 ) (1,338,899 ) Net earnings reconciled to reported total earnings $ 291,613 $ 887,398 $ 1,545,918 $ 286,441 $ 29,039 $ 3,040,409 Net operations for the six months ended Health CSS RRSP FX Corporate Total Revenue $ 3,769,141 $ 5,199,495 $ 5,073,196 $ 3,485,815 $ 7,265 $ 17,534,912 Interest received 46,713 257,329 914,850 3,516 20,903 1,243,311 Direct expenses (1,323,360 ) (366,680 ) - (666,716 ) - (2,356,756 ) General & administrative (1,922,569 ) expenses 2,492,494 5,090,144 5,988,046 2,822,615 28,168 16,421,467 (3,808,471 ) (3,868,712 ) (1,775,254 ) (61,527 ) (11,436,533 ) Depreciation (97,022 ) (96,952 ) (120,982 ) (89,356 ) - (404,312 ) Earnings (loss) from operations 472,903 1,184,721 1,998,352 958,005 (33,359 ) 4,580,622 Investment losses - (2,800 ) - - - (2,800 ) Other (expenses) / income (1,613 ) 1,151 (979 ) 25 - (1,416 ) Income taxes (148,326 ) (372,341 ) (628,620 ) (301,515 ) 10,499 (1,440,303 ) Net earnings reconciled to reported total earnings $ 322,964 $ 810,731 $ 1,368,753 $ 656,515 $ (22,860 ) $ 3,136,103 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 27

Net operations for the three months ended Health CSS RRSP FX Corporate Total Revenue $ 1,610,832 $ 2,661,219 $ 2,486,072 $ 1,999,724 $ 900 $ 8,758,747 Interest received 32,369 509,962 758,604 11,851 30,186 1,342,972 Direct expenses (573,018 ) (235,770 ) (36,718 ) (469,290 ) - (1,314,796 ) General & administrative (960,276 ) expenses 1,070,183 2,935,411 3,207,958 1,542,285 31,086 8,786,923 (2,194,234 ) (1,934,133 ) (1,279,466 ) (13,060 ) (6,381,169 ) Depreciation (29,969 ) (37,125 ) (61,424 ) (31,072 ) - (159,590 ) Earnings (loss) from operations Other (expenses) / income 79,938 704,052 1,212,401 231,747 18,026 2,246,164 - - - 33,409-33,409 Income taxes (26,276 ) (218,352 ) (376,147 ) (81,863 ) (5,639 ) (708,277 ) Net earnings reconciled to reported total earnings $ 53,662 $ 485,700 $ 836,254 $ 183,293 $ 12,387 $ 1,571,296 Net operations for the three months ended Health CSS RRSP FX Corporate Total Revenue $ 1,783,891 $ 2,606,784 $ 2,356,987 $ 2,043,025 $ 2,857 $ 8,793,544 Interest received 26,968 111,318 556,261 2,022 10,506 707,075 Direct expenses (632,962 ) (194,051 ) - (409,834 ) - (1,236,847 ) General & administrative (976,925 ) expenses 1,177,897 2,524,051 2,913,248 1,635,213 13,363 8,263,772 (1,929,708 ) (1,866,975 ) (988,618 ) (11,465 ) (5,773,691 ) Depreciation (48,138 ) (47,342 ) (61,435 ) (45,352 ) - (202,267 ) Earnings (loss) from operations 152,834 547,001 984,838 601,243 1,898 2,287,814 Investment losses - - - - - - Other (expenses) / income - 1,498 (105 ) - - 1,393 Income taxes (56,891 ) (190,127 ) (338,525 ) (207,448 ) 10,499 (782,492 ) Net earnings reconciled to reported total earnings $ 95,943 $ 358,372 $ 646,208 $ 393,795 $ 12,397 $ 1,506,715 A single client contributed 18% to the foreign exchange division s revenue for the six months ending. The same client contributed 28% to the foreign exchange division s revenue for the same period ending. 28 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

7. RESTRICTED CASH December 31, Foreign exchange trading deposits paid to counterparties $ 1,815,440 $ 1,509,868 8. CASH AND CASH EQUIVALENTS December 31, Cash at bank and on hand $ 8,527,194 $ 8,738,066 Short-term bank deposits 4,500,000 1,000,000 $ 13,027,194 $ 9,738,066 9. DERIVATIVE FINANCIAL INSTRUMENTS. Fair value as at Margins held in Canadian dollars Fair value as at December 31, Margins held in Canadian dollars Current assets $ 445,173 $ 927,895 $ 796,615 $ 1,673,690 Current liabilities 329,193 640,155 Unrealized revenue $ 115,980 $ 156,460 Olympia Trust has entered into foreign exchange contracts with its customers and bulk suppliers. The expiry dates vary between July 5, and October 1, 2012. Forward foreign exchange contracts are recorded at fair value through profit or loss and are presented within changes in working capital in the statement of cash flows. Changes in fair values of forward foreign exchange contracts at fair value through profit or loss are recorded in other gains and losses in the interim consolidated statement of comprehensive income (note 15). The fair value of all forward foreign exchange contracts is based on current bid prices for their respective remaining term to maturity in an active market. The three levels of fair value hierarchy are: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities Level 2 Inputs other than quoted prices that are observable for asset or liability, either directly or indirectly Level 3 Inputs that are not based on observable market data Olympia Trust s forward foreign exchange contracts are derivatives, are recorded at fair value based on published foreign currency curves, are subject to adjustments for credit risk and are classified at Level 2 in the fair value hierarchy. OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 29

10. EQUIPMENT AND OTHER January 1, Furniture & fixtures Computers & equipment Leasehold improvements Cost $ 601,845 $ 436,736 $ 1,581,216 $ 2,619,797 Accumulated depreciation (303,365) (215,949 ) (1,211,950 ) (1,731,264 ) Net book value $ 298,480 $ 220,787 $ 369,266 $ 888,533 Total December 31, Cost At beginning of period $ 601,845 $ 436,736 $ 1,581,216 $ 2,619,797 Additions 173,555 229,992 339,270 742,817 Disposals - - (33,053) (33,053) At end of period $ 775,400 $ 666,728 $ 1,887,433 $ 3,329,561 Accumulated depreciation At beginning of period $ 303,365 $ 215,949 $ 1,211,950 $ 1,731,264 Disposals - - (24,215) (24,215) Depreciation charge for the period 111,600 145,184 300,177 556,961 At end of period $ 414,965 $ 361,133 $ 1,487,912 $ 2,264,010 Closing net book value $ 360,435 $ 305,595 $ 399,521 $ 1,065,551 Cost At beginning of period $ 775,400 $ 666,728 $ 1,887,433 $ 3,329,561 Additions 24,817 7,240 61,648 93,705 Disposals - (11,557) (16,496) (28,053) At end of period $ 800,217 $ 662,411 $ 1,932,585 $ 3,395,213 Accumulated depreciation At beginning of period $ 414,965 $ 361,133 $ 1,487,912 $ 2,264,010 Disposals - - (11,165) (11,165) Depreciation charge for the period 56,940 68,780 112,974 238,694 At end of period $ 471,905 $ 429,913 $ 1,589,721 $ 2,491,539 Closing net book value $ 328,312 $ 232,498 $ 342,864 $ 903,674 30 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

11. INTANGIBLE ASSETS January 1, Computer software Cost $ 972,016 Accumulated depreciation (683,494 ) December 31, Cost $ 288,522 At beginning of period $ 972,016 Additions 230,753 Re-classifications (21,614 ) At end of period $ 1,181,155 Accumulated depreciation At beginning of period $ 683,494 Depreciation charge for the period 217,278 Re-classifications (20,346) At end of period $ 880,426 Closing net book value $ 300,729 Cost At beginning of period $ 1,181,155 Additions 198,158 Disposals - At end of period $ 1,379,313 Accumulated depreciation At beginning of period $ 880,426 Disposals - Depreciation charge for the period 82,058 At end of period $ 962,484 Closing net book value $ 416,829 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 31

12. TRADE AND OTHER PAYABLES December 31, Trade payables $ 353,423 $ 362,661 Agents & commissions payable 192,624 $ 195,960 Amounts due to related parties (note 23) 339,204 195,779 GST, HST and other taxes payable 6,345 198,326 $ 891,596 $ 952,726 13. SHARE CAPITAL January 1, Number of common shares Common shares Contributed surplus At beginning of period 2,474,552 $ 7,470,156 $ 268,980 $ 7,739,136 Issued on exercise of employee stock options 500 12,307 (2,307 ) 10,000 Stock-based compensation expense - - 42,041 42,041 December 31, 2,475,052 $ 7,482,463 $ 308,714 $ 7,791,177 Issued on exercise of employee stock options 9,500 254,101 (52,851 ) 201,250 Stock-based compensation expense - - 11,539 11,539 2,484,552 $ 7,736,564 $ 267,402 $ 8,003,966 The total authorized number of common shares is unlimited ( - unlimited shares). All issued shares are fully paid, except common shares issued to employees that are subject to vesting conditions. Pursuant to the employee share-based payment scheme, these shares are recognized against share premium until the vesting conditions have been met. 14. SHARE BASED PAYMENTS Olympia has established a stock option plan for directors, officers and employees to purchase common shares. Stock options are issued with an exercise price equal to the fair value of Olympia s common shares on the date of grant. The fair value of Olympia s shares is determined by considering the share trading activities, dividend multiples and earnings per share multiples. Stock options have a maximum term of five years and vest one third on date of issuance and one third on each of the next two anniversary dates from issuance. Changes in the number of options, with their weighted average exercise prices are summarized below: Total December 31, 32 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

Number of options Average exercise price Number of options Average exercise price At January 1 36,500 $ 28.04 27,000 $ 27.50 Granted - - 10,000 29.10 Exercised (9,500 ) 21.18 (500 ) 20.00 At end of period 27,000 $ 30.45 36,500 $ 28.04 Share options outstanding at the end of the period have the following expiry date and exercise prices: Expiry date Exercise price October 1, 2012 $ 31.25 17,000 February 16, 2015 29.10 10,000 $ 30.45 27,000 Olympia granted 10,000 options during the first quarter of. No options were granted during the second quarter of. No options were granted during the first and second quarters of. Assumptions for, including a risk-free interest rate of 2.21%, expected life of five years, expected dividends of $1.85, and volatility of 42% were used to calculate stock-based compensation expense. The weighted average grant-date fair value of the options granted during the six months ended was $6.58 per option. For the six months ended, the amount of $11,539 ( - $55,565) has been charged to salary expense with an offsetting credit to contributed surplus. 15. INCOME TAXES a) The significant components which give rise to future income tax assets and liabilities are as follows: Deferred income taxes December 31, Carrying amount of equipment less than the tax basis $ (16,583 ) $ (44,508 ) Cumulative eligible capital available for tax purposes (11,130 ) (11,537 ) $ (27,713 ) $ (56,045 ) b) The provision for income taxes recorded in the financial statements differs from the amount which would be obtained by applying the statutory rate of 28% ( 28%) to the earnings for the period as follows: Earnings for the year before income tax $ 4,379,308 $ 4,576,406 Anticipated income tax expense 1,226,206 1,278,874 Non-deductible expenses 18,850 25,737 Other 93,843 135,692 $ 1,338,899 $ 1,440,303 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 33

16. OTHER GAINS AND LOSSES Loss on disposal of assets $ (478 ) $ (1,416 ) Loss on sale of marketable securities - (2,800 ) Foreign exchange forward contracts Held for trading unrealized gains 40,480 - $ 40,002 $ (4,216 ) 17. EXPENSE BY NATURE Employee benefit expense (note 18) $ 671,925 $ 570,975 Depreciation - equipment & other (note 10) 238,694 274,978 Depreciation - intangible assets (note 11) 82,058 129,334 Salaries, management fees & bonuses 7,243,852 6,781,928 General administration 2,381,205 2,220,290 Rent 972,793 825,468 Management compensation & benefits 931,052 997,563 Bad debts 278,447 40,309 $ 12,800,026 $ 11,840,845 18. EMPLOYEE BENEFITS Benefit expenses Share options granted and share ownership assistance scheme $ 120,703 $ 157,632 Long-term service awards and education assistance 48,036 46,001 Wellness benefits 23,764 - Medical benefits 359,205 267,613 Other benefits 120,217 99,729 $ 671,925 $ 570,975 34 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

Number of employees Executive management 9 9 Full-time employees 177 162 Part-time employees 18 18 Contract employees 4 1 208 190 19. EARNINGS PER SHARE Basic Basic earnings per share is calculated by dividing the profit attributable to equity holders of Olympia by the weighted average number of common shares in issue during the period. Net income $ 3,040,409 $ 3,136,103 Weighted average number of shares 2,483,110 2,474,552 Basic earnings per share $ 1.22 $ 1.27 Diluted Diluted earnings per share is calculated by adjusting the weighted average number of common shares outstanding to assume conversion of all dilutive potential common shares. Olympia has one category of dilutive potential common shares: share options. For the share options, a calculation is made to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of Olympia s shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options. Net income $ 3,040,409 $ 3,136,103 Weighted average number of shares in issue 2,483,110 2,474,552 Share options 3,107 2,139 Adjusted weighted number of shares 2,486,217 2,476,691 Diluted earnings per share $ 1.22 $ 1.27 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 35

20. DIVIDENDS PER SHARE The dividends paid amounted to $3,228,943 ( - $2,474,552) which amounted to $0.65 per quarter ( - $0.50 per quarter) per share. These interim consolidated statements of comprehensive income do not reflect dividends payable. Dividends are declared and paid in the same period. 21. CONTINGENCIES Olympia is involved in various lawsuits, the losses which, if any, are not anticipated to have a material effect on the consolidated financial statements. 22. COMMITMENTS Operating lease commitments Olympia leases various offices under cancellable operating lease agreements. The lease terms are between one to five years, and the majority of lease agreements are renewable at market rate when the lease period ends. Olympia is required to give a 3-month notice for the termination of these agreements. The lease expenditure charged to the interim consolidated statement of comprehensive income during the year is disclosed in note 17. The future aggregate minimum lease payments under cancellable operating leases are as follows: December 31, $ 445,187 $ 912,069 2012 708,904 610,432 2013 369,355 266,904 2014 304,135 199,695 2015 240,366 135,926 Subsequent 34,813 - $ 2,102,760 $ 2,125,026 23. RELATED PARTY TRANSACTIONS Olympia is directly and indirectly controlled by the President, who owns and controls 32.07% of Olympia s shares. Senior management and directors own less than 5%, with the remaining 63% of the shares held by CDS Inc., and other minority shareholders. The ultimate controlling party of Olympia is the President. During the period, Olympia entered into transactions with the following related parties: Companies and businesses controlled by the President of Olympia Trust and Olympia; Companies and businesses controlled by directors of Olympia Trust and Olympia.; Family members of the President, management and directors; and Companies and businesses controlled by management of Olympia Trust and Olympia. 36 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

The following transactions were carried out with related parties: Revenue Associated entities: - Altiplano Minerals Ltd. $ 3,221 $ - - Argonaut Exploration Inc. 7,841 - - Cedar Mountain Exploration Inc. 9,156 3,567 - Exempt Market Consultants Inc. 3,875 - - Eyelogic Systems Inc. 16,693 12,953 - North Country Gold Corp. 10,092 8,702 - Orbus Pharma Inc. - 4,445 - Stoneset Equity Development Corp. 9,126 26,813 - Target Capital Inc. 19,575 3,877 - Tarman Inc. 2,000 - - Management - 5,395 $ 81,579 $ 65,752 Olympia earned revenue in the amount of $12,000 from services provided by Olympia Trust s in-house general counsel, $7,575 from transfer agent services provided to Target Capital Inc., a company controlled by Olympia s President and Chief Executive Officer, for a total of $19,575. Olympia also earned revenue in the amount of $3,500 from services provided by Olympia Trust s inhouse general counsel, $1,355 from health benefit administration fees and $11,838 from transfer agent services provided to Eyelogic Systems Inc., a company of which Olympia s President and Chief Executive Officer is the largest shareholder, for a total of $16,693. Additional revenue in the amount of $3,875 and $2,000 were earned from services provided to Exempt Market Consultants Inc., and Tarman Inc. by Olympia Trust s in-house general counsel. Olympia s President and Chief Executive Officer is the largest shareholder in both of these companies. Transfer agent services were provided in the amount of $39,436, to companies controlled by directors of Olympia. Direct expenses Associated entities: - 174973 Canada Ltd. $ - $ 18,458 - CC Management Inc. 7,993 10,301 - JR Financial Management Inc. 9,628 13,897 - Target Capital Inc. 39,809 49,551 $ 57,430 $ 92,207 Payments set out above to companies controlled by the President of Olympia are to Tarman Inc. for monthly OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 37

management fees and to Target Capital Inc. for commissions related to the sale of health plans offered by OBI. Payments to management consist of commissions relating to the sale of health plans offered by OBI, management bonuses and donations to the Olympia Charitable Foundation. Directors payments consist of commissions relating to the sale of health plans offered by OBI and directors remuneration payable. These payments are all current. Operating expenses Associated entities - Olympia Charitable Foundation $ 44,290 $ - - Tarman Inc. 772,814 865,488 - The Shire Limited 158,237 130,905 Close family members of Olympia and associates 2,684 5,843 $ 978,025 $ 1,002,236 Operating expenses were paid to companies controlled by the President and management for services described below: Olympia Charitable Foundation was formed and approved as a charity during the second quarter. It is funded by Olympia and the employees of Olympia. As of, Olympia and its employees have donated a total amount of $44,290. Tarman Inc., a company controlled by Olympia s President and Chief Executive Officer, receives management fees based on a percentage of the pre-tax profits of Olympia s divisions, except for the Private Health Services Plan Division, where the management fee is based on a percentage of health claims administered. The Shire Limited is a company controlled by the President of OBI. The operating expenses are related to services and advice with respect to the marketing of OBI s Private Health Services Plans. 38 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

Balances arising from transactions with related parties Receivables from related parties - Altiplano Minerals Ltd. $ 1,261 $ - - Bearspaw Tree Farm Inc. 228 225 - Cedar Mountain Exploration Inc. 1,407 1,801 - Exempt Market Consultants Inc. 7,252 4,316 - Eyelogic Systems Inc. 3,734 7,936 - North Country Gold Corp. 3,088 686 - Orbus Pharma Inc. - 7,384 - Stoneset Equity Development Corp. 7,159 4,543 - Target Capital Inc. 7,048 3,470 - Tarman Inc. 7,358 8,555 - Western Exempt Marketing 134 - - Management - 684 $ 38,669 $ 39,600 The above amounts for companies controlled by the President of Olympia reflect an arrangement whereby Tarman Inc., Target Capital Inc. and Exempt Market Consultants Inc. pay a portion of the remuneration for three of Olympia s personnel who deliver services to both Olympia and the companies mentioned. The other receivable is for transfer agent services provided by the Corporate and Shareholders Services Division to Eyelogic Systems Inc. Receivables from Bearspaw Tree Farm Inc. and Western Exempt Marketing are for expense recoveries. Directors receivables are for transfer agent services provided by the Corporate and Shareholder Services Division to Altiplano Minerals Inc., Cedar Mountain Exploration Inc., North Country Gold Corp. and Stoneset Equity Development Corp. Payables to related parties - 174973 Canada Inc. $ - $ 2,191 - CC Management Inc. 819 1,614 - JR Financial Management Inc. 500 1,782 - Olympia Charitable Foundation 2,353 - - Target Capital Inc. 3,520 8,739 - Tarman Inc. 144,339 140,900 - Directors (fees accrued) 77,838 72,016 - Management 109,835 177,583 $ 339,204 $ 404,825 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 39

Directors receivables are for transfer agent services provided by the Corporate and Shareholder Services Division to Altiplano Minerals Inc., Cedar Mountain Exploration Inc., North Country Gold Corp. and Stoneset Equity Development Corp. Key management compensation Compensation paid to key management is included in the note on expenses by nature (note 17). Key management includes directors, the presidents of OBI and Olympia and vice presidents. The compensation paid or payable to key management is shown below: Salaries, bonuses and profit sharing $ 1,256,902 $ 1,129,115 Short-term employee benefits 94,214 58,858 Share-based payments 11,540 55,656 Director fees 169,134 155,890 Management fees 931,051 997,563 $ 2,462,841 $ 2,397,082 40 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

corporate information Directors Rick Skauge Charles Chebry 1 Randy Gregory Gerard Janssen 1 5 6 Russell Kalmacoff 5 6 Brian Newman 1 Lyle Oberg 5 6 Jim Peterson 2 3 4 Gary Seveny 2 3 4 Craig Skauge Laurie Yaworski 2 3 4 Board Committees Transfer Agent Olympia Trust Company 2300, 125 9th Avenue SE Calgary, AB T2G 0P6 Tel: 403-261-0900 Fax: 403-265-1455 Auditors PricewaterhouseCoopers LLP Chartered Accountants Suite 3100, 111 5th Avenue SW Calgary, AB T2P 5L3 1 Audit Committee 2 Compliance Committee 3 Corporate Governance Committee 4 Executive Compensation Committee 5 Investment Committee 6 Risk Management Committee Head Office 2300, 125 9th Avenue SE Calgary, AB T2G 0P6 Tel: 403-261-0900 Fax: 403-265-1455 www.olympiatrust.com info@olympiatrust.com OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30 41

Officers RICK SKAUGE President and Chief Executive Officer GERHARD BARNARD Chief Financial Officer and Vice President, Finance LORI BENDER Vice President, Registered Plans ROBIN FRY President, Olympia Benefits Inc. RANDY GREGORY Executive Vice President, Corporate and Shareholder Services DERICK KACHUIK Vice President, Foreign Exchange 42 OLYMPIA FINANCIAL GROUP INC. SECOND QUARTER REPORT FOR PERIOD ENDED JUNE 30

2300, 125-9th Avenue SE Calgary, Alberta T2G 0P6 Tel: 403-261-0900 Fax: 403-265-1455 www.olympiafinancial.com info@olympiafinancial.com