EQB Inc.

Instructions will be provided at that time. It is now my pleasure to turn the call over to Sandy Duville, Vice President of Investor Relations and ESG Strategy for EQB. Please go ahead.

Thanks, Julie, and good morning, everyone. Your hosts today are Andrew Moore, President and Chief Executive Officer, Chadwick Westlake, Chief Financial Officer, and Marlene Lenarduzzi, Chief Risk Officer. For those on the phone lines only, we encourage you to also log on to our webcast to view our accompanying presentation. There, on slide two, you'll find EQB's caution regarding forward-looking statements, as well as the use of non-IFRS measures on this call. All figures referenced today are adjusted where applicable or otherwise noted. Due to EQB's change in fiscal year and the four-month prior period for Q4 2023, Commentary today will focus on year-over-year comparisons for income measures. Year-over-year measures compare this first quarter of 2024 ending January 31st and including ACM midway through the quarter to the closest applicable period, which is Q4 2022 ending December 31st. As you review the MD&A, this period also includes the acquisition of Concentra Bank and its contribution for two of three months for that quarter. And it is now my pleasure to turn the call over to Andrew.

Thanks, Sandy, and good morning, everyone. In the next few weeks, we will mark our 20th year as a publicly listed company. While we have not quite reached that milestone yet, it does appear that we will be able to celebrate the best 20-year total shareholder return of any bank on the TSX and on the S&P 500 when we opened the Toronto Stock Exchange that morning. We achieved benchmark-setting performance one quarter at a time, And you can see from our most recent results that Canada's challenger bank continues to work well for our customers while rewarding our investors. Our quarterly earnings per share increased 12% year over year. We again delivered more than 15% ROE. Our board of directors authorized a dividend payment 20% higher than the prior year. These are good results achieved despite a slower housing market resulting from Bank of Canada tightening. This is also our first fiscal quarter to align with other publicly traded banks. We recognize that the fiscal year-end change adds complexity to interpreting results, and I hope you agree that the team has done a nice job in trying to cut through this noise. In reaffirming our 2024 guidance today, we believe we have started the year well and we're set up to see stronger performance in the next few quarters. The sales activity in residential markets increases, and based on our expectations, for our securitization activities. We also expect provisions for credit losses will moderate in the second half of the year. Understanding this is a busy day of bank reporting, I will highlight just a couple of important developments, beginning with brand awareness and customer growth. In January, we launched our Second Chance campaign, featuring Eugene and Dan Levy, and followed in Quebec en Francais with Deuxième Chance, starring Quebecois mother-daughter duo Diane Levalet and Laurence Leboeuf. Both of these campaigns are rooted in a key insight that many Canadians still bank with the financial institution their parents led them to, despite the downsides of high fees, little to no interest, and widespread dissatisfaction with financial incentives, a curious feature of banking compared to the choice and change in so many other aspects of life. As Canada's Challenger Bank, we use these insights to create tension and encourage Canadians to ask whether they're being properly served by their first ever banks, to look beyond what is familiar and to get a second chance to recoup bank where they can make more. Many of you will have joined the 19 million Canadians who tuned into the Super Bowl this year and saw our campaign ads run throughout the game in English and French and continue to see our name pop up on screens, social media, TVs and billboards across the country. We are pleased with the approach of having recognizable Canadian celebrities in our advertising and are confident that our Second Chance campaign is dramatically enhancing brand recognition that will in turn have a positive impact on customer sign-ups and the cost of customer acquisition. Of particular note is the exceptional positive reaction that Quebecois consumers have had to Second Chance, where search, web traffic, and new account sign-ups are all up by significant margins. We launched Banque Q in Quebec just over a year ago. We're excited about how many Quebecers seem to agree with us that Banque Q is a better way to bank. It's also time for something more. It's time for EQ Bank to enter the small business market, which we'll do later this spring. EQ Bank's small business will provide entrepreneurs with the opportunity to earn high daily interest on their hard-earned cash with great access to payment solutions traditionally been pretty clunky for these customers as a long-time lender to small business we intimately understand the challenges faced by entrepreneurs this no fee product is all digital meaning being available whenever and wherever a business client wants to use it this launch is just a start as we continue to build new services for canadian entrepreneurs as a technology leader in the banking world we're also making substantive gains in digital innovation with an embrace of automation and artificial intelligence. Our technology team works in agile pods, allowing us to leverage our technology and talent to drive faster and better customer value. We're running a pilot project using generative AI agent assist tools in our customer care center. And we have a new partnership with Trulio to enhance the EQ Bank customer onboarding experience using their AI tools to deliver advanced security and identity protection. Taken together, these advancements add to our Challenge Bank advantage. Another development worthy of note is the 55% year-over-year growth in our decumulation business. We now have a $1.6 billion portfolio and continue to expect strong growth going forward, led by demand for reverse mortgages on the back of market-leading product value and consumer awareness, courtesy of our Talking House campaigns. For our personal bank, more broadly, we expect to see a stronger market this year for single-family housing, buoyed up by pent-up demand and Bank of Canada easing, which will support our single-family mortgage origination activities. While expanding, we've been investing in risk management and compliance to ensure our bank is well prepared for the growth we see in the years ahead. Well, you can see from our financial statements that there's been an increase in arrears We are confident that we are well-reserved and we will maintain our low loss rates. The portfolio remains strong, supported by conservative LTV and good credit scores. Our lending has always been prudent to fit the circumstances. Today, over 70% of our commercial loans under management are insured through various CMHC programs, and we continue to prioritize lending secured by buildings where people live. In order to help Canada close a significant housing supply gap and as a matter of strategy and risk management, we focus on multi-unit residential lending in urban markets with loans under management growing 34% year over year. Now some brief comments on our credit book, which is standing up well. Our real estate lending business is using a consistent approach and we essentially lend with the goal of not losing money. Our equipment financing business which accounts for just 2% of the bank's total loans under management, is quite different. In that segment, we priced loans at a wider spread, expecting that some of this spread will come at the cost of credit losses. True to form, this is an area where we saw elevated losses representing over 80% of our net PCL for Q1, or $12.7 million. These losses were largely a result of the cyclical downturn in the long-haul transportation sector, which represents about 44% of our leasing business assets. What we're seeing here is a trucking industry that has been negatively impacted as demand for transportation services has declined with shifts in consumer spending patterns since the high watermark of 2022. This has put pressure on some of our customers, which has resulted in elevated default rates. The PCL is mostly due to lease originations from the 2022 vintages. More generally across the commercial book, we're getting increasingly comfortable that our commercial portfolios impaired will start to normalize in the second half of this year as we reach resolution of larger commercial loans. In fact, already in February, $55 million has been resolved or made current, and we have a plan to exit the vast majority of these loans with full recovery on many of them. I'll wrap up my thoughts by acknowledging another important milestone. Partway through Q1, we completed our majority interest acquisition of ACM Advisors, bringing nearly $5 billion in assets under management into EQB and a very talented team. We're excited about the potential of the ACM business and are working with management toward a goal of doubling this business over the next five years. While it's early days, ACM is performing to plan and our partnership is focused on elevating performance for ACM and their fund investors across Canada. To conclude, EQB started the fiscal year with good results, and all our businesses are set up to see even stronger performance in the next few quarters. Now over to Chadwick.