goeasy Ltd.

Good day, ladies and gentlemen, and welcome to the Go Easy first quarter 2021 financial results. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star, then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to our host, Farhan Ali Khan, your line is, you may begin.

Thank you, operator, and good morning, everyone. My name is Farhan Ali Khan, the company's Senior Vice President of Corporate Development and Investor Relations, and thank you for joining us to discuss GoEasy Limited results for the first quarter ended March 31, 2021. The news release, which was issued yesterday after the close of market, is available on Globe Newswire and on the GoEasy website. Today, Jason Mullins, GoEasy's President and Chief Executive Officer, will review the results for the first quarter and provide an outlook for the business. Hal Akuri, the company's Chief Financial Officer, will also provide an overview of our capital and liquidity position. Jason Appel, the company's Chief Risk Officer, is also on the call. After the prepared remarks, we will then open the line for questions from investors. Before we begin, I remind you that this conference call is open to all investors and is being webcast through the company's investor website and supplemented by a quarterly earnings presentation. For those dialing in directly by phone, the presentation can also be found directly on our investor site. All shareholders, analysts, and portfolio managers are welcome to ask questions over the phone after management has finished the prepared remarks. The operator will pull for questions and provide instructions at the appropriate times. Business media are welcome to listen on this call and to use management's comments and responses to questions and any coverage. However, we would ask that they do not quote callers unless that individual has granted their consent. Today's discussion may contain forward-looking statements. I'm not going to read the full statement, but I will direct you to the caution regarding forward-looking statements included in the MD&A. I will now turn the call over to Jason Mullins.

Thanks, Farhan, and welcome to today's call, everyone. I want to first extend our sympathies to the families and communities both here in Canada and around the world that continue to deal with the ongoing effects of COVID-19. As an incredibly diverse organization represented by over 70 nationalities, many of our team members have friends or family in other countries and call those places home. In addition to prioritizing the health and safety of our team, we will continue to assist others through various charitable causes, and we hope that the support helps make an impact. Turning to first quarter results, it was a strong start to the year, in which our business continued to perform well, and we produced record, reported, and adjusted earnings. Furthermore, subsequent to the quarter, we were pleased to announce our successful acquisition of LendCare, one of Canada's leading point-of-sale financing platforms. In the first quarter, we experienced a gradually improving level of demand for consumer credit, though seasonal trends and provincial stay-at-home orders continue to keep borrowing at more modest levels. After our second strongest quarter for web traffic, Loan originations during the quarter were $272 million, up nearly 13% compared to the first quarter of 2020, and our strongest ever first quarter origination volume. Loan growth was $30.5 million, bringing our portfolio at quarter end to $1.28 billion in consumer loans. With the second and third waves of COVID continuing to impact our communities and moderate demand for our traditional direct-to-consumer lending channels, our point-of-sale financing channel has continued to perform well. As we highlighted last quarter, we have experienced continued growth in the proportion of new customers being acquired through our frictionless full credit spectrum offering with the firm or directly through our merchant platform. The portion of new customers we acquired in the first quarter from this channel lifted to 28%. We also continue to execute on our strategy of focusing on lifetime value. by offering an expanded range of lower-priced products while graduating customers to progressively better rates, collectively bringing down their overall cost of borrowing. The weighted average interest rate on our portfolio declined by 35 basis points in the quarter to 37.5%, with the total portfolio yield including all ancillary product revenue finishing at 44.3%. Combined with another stable performance from our leasing portfolio, revenue for the first quarter was $170 million, an increase of 2% over 2020. As closures and restrictions continue to come and grow across various regions and industry sectors, we continue to dynamically adjust our credit tolerance and underwriting practices. The improving credit quality of our portfolio and the continued reduction in the overall discretionary expenses for the average Canadian contributed to another quarter of strong credit performance. The net charge-off rate for the first quarter was 9.1%, down from 13.2% in the first quarter of 2020. We are also proud that our loan protection product continues to provide a reliable source of insurance for those remaining customers who have been displaced from their employment due to the recent pandemic-related business closures. During the first quarter, the product paid out approximately $7 million in claim payments on behalf of our customers. With over $50 million in payments made in 2020, the product continues to provide customers with meaningful value during a period of economic disruption. While we expect the credit performance of our existing Easy Financial portfolio to trend back toward our optimal range in the coming quarters, the underlying credit trends of the portfolio remain healthy, and we are confident in long-term performance and stability of our loan book. As the broader economic environment has begun to show signs of recovery, And as the timing of a return to more normal conditions is gradually becoming more clear, we have updated the probability-weighted economic scenarios used to determine the appropriate loan loss allowance that would barely account for the future expected credit losses. As a result, our allowance for future credit losses reduced slightly from 10.08% to 9.88%, a reduction of 20 basis points from the previous quarter, while still providing ample coverage to account for unforeseen changes in the current economic environment. Improved operating leverage and lower credit losses led to record operating income of $63.9 million, up 45% from $44.2 million in the first quarter of 2020, while the operating margin expanded to a record 37.6%, up from 26.4% in the prior year. During the quarter, our retail point-of-sale financing partner, Affirm, formerly Paybrite, completed an initial public offering, with shares beginning to trade on the NASDAQ Global Select Market. Through the sale of Paybrite to Affirm, which closed in early January, we received consideration of $23 million in cash, 655,000 common shares in a firm, subject to a customary lockup agreement, and 468,000 common shares held in escrow, subject to revenue performance achieved in 21 and 2022. Shortly after the public listing, we entered into a six-month total return swap agreement to substantively hedge our market exposure related to the non-contingent 655,000 common shares. The total return swap effectively results in an economic value of our non-contingent shares in a firm being settled in cash at maturity for a price of $108.87 USD per share, net of applicable fees. After considering the impact of the hedging arrangement and the likelihood of achieving the contingent equity, during the quarter we recorded a pre-tax, unrealized fair value gain of $87.3 million, bringing the total value derived from our original $34 million investment to to an excess of $140 million. Through our ongoing partnership with the firm, we continue to offer a market-leading full-spectrum point-of-sale financing solution to major retail brands such as Wayfair, Samsung, and Casper, and look forward to working together for many years to come. During the quarter, we also invested $6.5 million to acquire a strategic minority equity interest in Brim Financial, an early-stage private Canadian fintech platform. Brim offers a turnkey suite of consumer and business card products, a white-label digital banking platform, and a globally open rewards and loyalty ecosystem. With a future roadmap to launch new products, enhance our mobile and digital platform for consumers, and eventually increase the rewards for our customers, Brim can help augment and accelerate our product, digital, and loyalty and rewards roadmap. We also believe that BRIM offers one of the best cards, mobile banking, and loyalty rewards solution on the market, presenting a unique investment opportunity. In connection with our investment, we are also entitled to preferential commercial terms for use of the BRIM platform in the future. Including the gain associated with our investment in Affirm, net income in the first quarter was a record $112 million, up from $22 million in the same period of 2020, which resulted in diluted earnings per share of $7.14, up from $1.41 in the first quarter of 2020. After adjusting for the $78.5 million after-tax fair value gain related to the appreciation of our investment in Affirm, adjusted net income was a record $36.7 million, up 67% from the first quarter of 2020, and adjusted diluted earnings per share was $2.34, up 66%. Adjusted return on equity was 29.5% in the quarter, up from 25.8% in the first quarter of 2020. I'll now pass the call over to Hal to discuss our balance sheet and capital position before providing some comments on our outlook.