goeasy Ltd.

Good day and thank you for standing by. Welcome to the third quarter 2021 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0 I would now like to hand the conference over to your speaker today. Farhan Ali Khan, please go ahead.

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 third quarter ended September 30, 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 third 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 poll for questions and will provide instructions at the appropriate time. Business media are welcome to listen to this call and to use management's comments and responses to questions in 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 However, we would ask that they do not quote callers unless that individual has granted their consent.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 will direct you to the caution regarding forward-looking statements included in the NDNA. I will not turn the call over to Jason Mullins.

Thanks, Farhan, and welcome to today's call, everyone. During the third quarter, we continued to execute on our strategy to become Canada's leading non-prime consumer lender by developing a range of products and channels that position us to become the single trusted source of credit for those unable to borrow from traditional banks. Our integration with LendCare is going well, and we are on track to produce the synergies and accretion forecast during our acquisition. As consumer demand began to gradually improve with the reduction of economic lockdowns throughout the summer months, we began to ramp up marketing efforts, investing $7.7 million in an integrated media campaign, including TV, radio, digital, and out of home. The improved demand and increased marketing spend led to a lift in direct lending activity through our retail branch network and digital platforms, with a corresponding reduction in the cost per direct new customer acquisition by over 35% compared to the same quarter last year. In August, we also launched the next generation of our Easy Financial website, which will experience further enhancements over the coming months. The new site has helped to reduce bounce rates, increase the average time our consumers spend navigating and educating themselves on our site, and lifting traffic conversion rates. With the increased ad spend aided by these digital improvements, we saw a record level of web traffic in the quarter, translating into record application volumes. Our branch network also expanded to 285 locations with 10 new branches open in the quarter. We also continued to experience continued growth in indirect lending led by the expansion of our fastest growing channel, our point of sale financing network. During the quarter, 25% of all new loans we issued were to finance the purchase of goods and services such as retail items, power sports equipment, healthcare procedures, or home renovations under either the Easy Financial or LendCare brand, up from 18% in the same quarter the prior year. As of this week, we also completed the integration of our Easy Financial credit models into the LendCare point-of-sale platform frontline. By building a credit waterfall and merging into one platform, We can now offer our merchant network a higher approval rate while providing consumers with a wider range of rates and terms to match their credit profile. Lastly, we were pleased to complete partnerships with Heisen Motors and GBA brands, providers of power sports products and e-bikes. We also made great progress building our position in the non-prime automotive lending market. Through our investment in LendCare, we acquired a platform upon which we could grow the auto finance program through the dealer channel aided by a logistics and business development capability that did not previously exist. With a growing network of over 1,500 dealers, combined with the recently launched direct-to-consumer offering, we are confident we can be a leading provider of non-prime auto financing in Canada. Together, auto financing represented over 4% of the new loans we issued in the quarter, an entirely new category for the company. All combined, total loan originations during the quarter were a record 436 million, up 52% over the 286 million produced in the third quarter of 2020, and a sequential increase of over 15% from the 379 million in total loan originations in the second quarter of this year. The lift in originations led to record organic loan growth of 101 million during the quarter. resulting in the consumer loan portfolio finishing at $1.9 billion, up 60% from $1.18 billion at the end of the third quarter in 2020. Through the use of graduating consumers to lower-tier pricing and the continuing shift in product mix, we continue to bring down the weighted average interest rate in our portfolio, albeit the rate of decline has begun to slow as we inch closer toward the optimal portfolio yields. During the quarter, the weighted average interest rate on the portfolio declined slightly from 33.7 to 33.6%. Combined with ancillary revenue sources, the total portfolio yield finished within our forecasted range at 40.8%. Total revenue in the quarter was a record $220 million, up 36% over the same period in 2020. We also continued to experience stable credit performance within the portfolio. while the economic reopening that is now driving demand and growth will result in credit performance normalizing to within our guided and optimal range. During the quarter, the annualized net charge-off rate was 8.3%, slightly below our target and up from the pandemic-related low point experienced in the third quarter of 2020. During the quarter, we also decreased our loan loss provision slightly from 7.9% to 7.83%, reflecting the new structural credit risk of the portfolio and the overall economic environment. We believe our provision rate now fairly accounts for how we expect our credit to perform over the coming year. After adjusting for non-recurring and unusual items, adjusted operating income was a record $85.8 million, an increase of 51% over the third quarter of 2020. While we continue to invest in the business, specifically our technology platforms, data infrastructure, new product research, and tools that improve the productivity and performance of our teams, we also continued to experience the operating leverage from scale. Adjusted operating margin for the second quarter was 39.1%, up from 35.2% in the prior year. During the quarter, we also recorded another $23.2 million before-tax fair value gain on our investments, primarily due to the increase in the value of common shares of a firm and our expectation of vesting. Finally, net income in the third quarter was $63.5 million compared to $33.1 million in the same period of 2020, which resulted in diluted earnings per share of $3.66 of 75% compared to $2.09 in the third quarter of 2020. After adjusting for non-recurring and unusual items on an after-tax basis, including the fair value gain on those investments, adjusted net income was a record $46.7 million 48% from $31.6 million in 2020, while adjusted diluted earnings per share was a record $2.70, up 35% from $2 in the third quarter of 2020. Return on assets was a healthy 7.6% on an adjusted basis, producing an adjusted return on equity of 24% above our targeted level of 22% plus, while return on tangible common equity lifted to 42.9% in the quarter. I'll now pass it over to Hal to discuss our balance sheet and capital position before providing some comments on our outlook.