EQB Inc.

Welcome to EQB's earnings call for the third quarter of 2026. Note that this call is being recorded on Thursday, August 27th, 2026. It is now my pleasure to turn the call over to Lemar Persaud, Senior Vice President, Investor Relations. Please go ahead.

Thank you, Sylvie, and good morning, everyone. Your hosts for today's Q3 results call are Chadwick Westlake, President and CEO, CFO, and Punisha Arora CRO. Also present for the Q&A session is Darren Lorimer, EVP Commercial Banking, and Daniel Rattazzi, EVP Personal Banking. After prepared remarks, we will open the lines for questions from our pre-qualified analysts. We encourage you to also log into our webcast and view our quarterly presentation, which will be referenced during the prepared remarks. On slide two of our presentation, you will find EQB's caution Thanks Lemar and good morning. The third quarter marked a historic inflection point for EQB. It is worth taking a moment to acknowledge what it took to get here. The complexity,

The pace of change and the sheer amount of effort to decisively close our PC Financial transaction. Hundreds of people across EQB and PC Financial spent months planning, testing, and preparing to make a very complex integration feel seamless from day one. Through it all, we remained focused on our customers, supported one another, and delivered an extraordinary outcome. We're a very different challenger now, with a new level of relevance, reach, and choice for millions of everyday Canadians. What excites me most is that we're only beginning to unlock the opportunity ahead. At the same time, the quarter behind us is not a clean reflection of the earnings power of the combined franchise. We reported only one month of PC financial results in a seasonally dynamic cards business, alongside the accounting and capital impacts associated with the transactions. Even in that context, PC Financial contributed approximately 10 million of earnings, excluding the favorable impacts of purchase price accounting, reinforcing our confidence in the long-term value. Early days, the integration is at, and in some cases, ahead of expectations. Against our 30 million cost synergy target, we achieved 50% on an annualized basis in the first month, plus organic growth month over month across our new product shelf. The composition of our earnings is very different now. On a pro forma basis, PC Financial would have approximately doubled revenue excluding loyalty point costs and nearly tripled non-interest revenue, significantly increasing the proportion of recurring fee-based earnings within the franchise. We've also started to go to market with real ambition for our EQ Bank brand as part of the early integration and with our game-changing PC Optimum and Loblob partnerships. For example, a few weeks ago we announced the Grand Scan Contest, the largest PC Optimum Points giveaway in history, with 25 million points for a single winner. As part of this, we introduced multiple EQ Bank pop-up stores inside Loblaws and three major cities across Canada. Most banks compete for a customer with a one-time offer and an appointment. We're now meeting 14 to 15 million Canadians where they are every week. In the grocery aisle, we're running errands and filling up their cars with brands they trust. This gives us a unique opportunity to build tremendous awareness, engagement, and ultimately customer relationships at a scale very few banks can match. Our purpose is to help Canadians get ahead every day. Today, we have the reach, capabilities, and scale to do that in entirely new ways. Now, before moving to some points on the quarter, a few comments on talent. We welcomed over 300 new PC Financial colleagues, and the transition was seamless from day one. These new colleagues include our Chief Risk Officer, Punish, who you'll hear from shortly. Since joining as part of the PC Financial, he has spent considerable time evaluating our risk capabilities and making enhancements. He is part of a broader strengthening of our team, as we also welcome Michaela Garfield, a Senior Vice President, Customer Growth, Experience and Strategy, and Ian Hanning as Senior Vice President, Credit Cards, Insurance and Operations. On the technology side, we also welcome Basil Eltham, Chief Technology Officer for Digital Business. I want to again thank Marlene Lenarduzzi for her years of service as CRO. We are pleased to continue benefiting from her experience in Council and her role as Special Advisor. Shifting to three areas I'll speak to before Anilisa shares more on results. One, contacts for the quarter. Two are core businesses and three outlook. Despite being a complex and noisy quarter as anticipated, there were several clear encouraging outcomes. ROE and return on tangible common equity, or ROTCE, both improved sequentially and year-over-year. With the closing of PC Financial, we recognize significant goodwill in intangibles, reflecting the value of the acquired franchise and an increase in EQB share price at closing. ROE will continue to show you the full capital we deployed, while ROTCE excludes Goodwill and other intangible assets. We believe it offers a cleaner view of operating performance with the deal closed. For the first time, we generated over $1 billion of revenue through the first nine months into a fiscal year. With just one month of PC results, net interest margin rose to 2.41%, reflecting the evolution of our business mix and earnings profile. We exited the quarter with a much more diversified balance sheet and revenue mix, plus our highest ever level of direct retail deposits. We have an efficient operating model with opportunities for continued improvement in our cost base. Taken together, these results point to a stronger, more resilient franchise with growing earnings power. The primary headwind in the third quarter was a higher level of performing and impaired credit provisions. We proactively updated our provisions following a comprehensive review of our portfolio and the evolution of economic indicators, alongside our assessment of the operating environment and ongoing uncertainty, which Punish will discuss. Early-stage delinquency trends across the portfolio are stable to improving, and we believe we are positioned to perform well across a range of economic outcomes. Turning to the core business, this is a very different company than it was a year ago. We said we would restore efficiency as a competitive advantage, and that work is showing up in our results. We are making clear choices about where to invest capital, focusing on businesses where we see sustainable and attractive returns, and just as importantly, stepping back where we do not. With new energy and focus in personal banking under Daniel's leadership, we gain meaningful market share in single-family uninsured originations and continue to drive strong growth in reverse mortgages. We are leaning into our competitive advantages, sharpening our execution, and winning in areas we choose to compete. I expect that momentum will increasingly translate into stronger net asset growth in the quarters ahead. While market share gains are encouraging, the housing market in general remains subdued with limited industry-wide growth. That said, taking share matters. We are seeing stronger application volumes, deepening broker relationships, and improving underwriting efficiency. As market activity returns, we will be well-positioned to convert that momentum into earnings growth. Our largest revenue-generating business is now credit card interest and fee income, from the tens of billions in annual spend across our suite of PC MasterCards. In the first month following close, credit card applications increased 3% month-over-month, with initial cross-selling to existing eqBank customers. It was also a record month for new PC insurance policies, reaching 93,000 in force. These indicators point to strong customer engagement and an encouraging start. Commercial banking continues to perform well under Darren's leadership. Importantly, our insured multi-unit residential business, which finances exactly what Canada needs more of, purpose-built rental housing supply. Uninsured commercial real estate remains the more challenging part of the market, and our approach has been consistent. Fewer, better opportunities with strong risk adjusted yields and close attention to credit quality. Being cloud native and API first was a deliberate choice years ago and it's paying off now. It's why we can integrate a business like PC Financial at this pace, why we can scale without adding costs at the same rate and why our investments in technology and AI translate into efficiency rather than added overhead. This creates a structural advantage over institutions many times our size, and we intend to keep pressing it. That brings me to outlook. We have one quarter left in fiscal 2026, and we look forward to sharing our fiscal 2027 and refreshed median term outlook at our investor day on December 7th, which is set to be an immersive and highly engaging morning for attendees here in the EQ Bank Tower. In Q4, investors will see their first full quarter contribution of PC Financial, a further increase in weighted average shares outstanding, and still only a portion of the synergies we expect to realize. We have all experienced sentiment in past days, weeks, and months about the magnitude of geopolitical and macro uncertainty and the potential impact to Canadian employment and the economy broadly. We do believe Canadian households are proving resilient. and our balance sheet shows that. But we do focus on everyday Canadians and small business owners that are impacted. Our purpose is to be there to help them get ahead every day, and this volatility and uncertainty could continue for an extended period of time. But taking those factors into account, we expect fiscal 2026 ROE will improve further from our Q3 level, including ROTCE and the 12% range as we make strides toward our medium-term ranges. We built proactive provisioning in Q3 in readiness for this type of environment, and the ongoing trade uncertainty could still add more sensitivity to these ranges. On capital allocation, our focus is reinvestment in the business while maintaining the flexibility that has long been one of EQB's strategic advantages. Our top priority is a successful integration and progress to our ROE objectives. We will remain opportunistic across share repurchases with capacity under our existing NCIP, Thanks, Chadwick, and good morning, everyone.