Home Capital Group Inc.

Good morning. My name is Rob and I will be your conference operator today. At this time, I would like to welcome everyone to the Home Capital Group fourth quarter 2021 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you. Jill McCrae, Head of Investor Relations. You may begin your conference.

Thank you, Rob. Good morning, everyone, and thank you for joining us today. Our agenda for today's presentation is as follows. We'll begin the call with remarks from Yusri Basada, Homes President and CEO. Brad Kodesh, our CFO, will then review our financial performance, which will be followed by a question and answer period for participants. We have a few members of our senior management team with us on the call to help answer your questions. On behalf of those speaking today, I note that this call may contain forward-looking statements and that actual results could differ materially from forecasts, projections, or conclusions in these statements. Please refer to our advisory on forward-looking statements on page two of the presentation. I would also remind listeners that HOME uses non-GAAP financial measures to arrive at adjusted results, and the management will be referring to both reported and adjusted results in their remarks. And now I'd like to turn the call over to you, Srivastava.

Good morning, and thank you for joining us today for our 2021 fourth quarter and full year results conference call. In addition to our results, I'll also spend some time talking about what we see ahead of us in 2022. Let me start with what we announced today. We reported fully diluted net income per share of $4.78 in 2021, an increase of 44% over 2020. This is the second straight year that we've reported year-over-year earnings growth above 40%. We achieved a 15.1% return on equity. We are pleased to announce the initiation of a regular quarterly common share dividend in the amount of 15 cents per share. We grew our mortgage originations by 27% year-over-year to near as $8.9 billion. Of that, our ultimate mortgages were $6.3 billion, an all-time record. Brad will share more details on the above. Over the last four years, we have delivered consistent increases in our earnings and our return on equity as shown on slide four. Our share price performance during that time is the highest of any of the banks. On the capital front, we returned over $360 million to shareholders to our share repurchases, including our $300 million substantial issuer bid completed at the end of December. In total, we left back 8.9 million shares during the year or about one-sixth of all the shares that were outstanding at the beginning of 2021. Looking back, 2021 was an eventful year. Once again, we began the year faced with uncertainty due to COVID. But this time, informed and strengthened by our earlier experiences, we entered 2021 with confidence. This is because medical science has introduced vaccines that promise to make normal business operations possible. We had an even better understanding of the ways COVID has impacted the housing market. We knew how important it is for people to have the opportunity to buy and keep their homes. Our people have shown themselves to be capable and resilient in the face of constantly changing working conditions. Each of our business units rose to the challenge of a volatile year, starting with our sales and underwriting teams. They worked hard throughout the year and delivered impressive volume growth while staying within our risk appetite. That included a return to pre-pandemic underwriting conditions in all areas by mid-July. They delivered the quality of service that our broker partners have come to expect from us. At investor day, we shared information about how we value our broker partners and work with them. Our deposits and funding teams were equally active. Deposits to our open channel grew by more than 10% during the year and now make up over 31% of our overall total deposits. We returned to the RMBS market with two cross-border offerings totaling $765 million. We added a whole loan sale program for insured mortgages with a range of financial counterparties and participated in a bank-sponsored securitization conduit. Our IT team implemented the transformation of our core mortgage banking system. We launched a mobile banking app for our open customers and upgraded the functionality of our law platform for better engagement with our broker partners. We are continuing to find ways to use robotic process automation to perform repetitive tasks. The benefits of Ignite, our internal multi-system upgrades, are not just process efficiencies, but an improvement in the type of work we're able to perform, including the quality of engagement with our brokers and customers. Our HR team led us in adapting to a virtual work from home, to a hybrid work from the office, and back to virtual work from home. Pivoting in our work environment has become the new norm. Even with these challenges, We won a number of Best Workplace awards, including Best Place for Hybrid Work this week. We are proud of our home and of our culture. And we welcomed Betty DeVita as a new director. Betty's years of experience in banking and payments make her a valuable asset to our board. On our leadership fronts, we added Ben Strick. In January of this year, we welcomed Brian Leland as EVP underwriter. Brian comes to us with over 20 years experience in all aspects of building and growing residential mortgage teams. He started his career at HomeTrust and we're pleased to welcome him back. We also welcome Mike Henry as our EVP of digital and strategy. As a senior executive with more than 25 years at a major bank, might bring strategic and deep financial service experience to our team. As we look ahead, we have reasons for optimism in 2022 as well. The housing market is starting 2022 the way it ended in 2021, with strong demand supported by low interest rates, growing consumer savings, and intergenerational support. Interest rates are still low but are rising and expected to increase through the year. We're not too concerned at this point about the impact on credit quality from rising rates because of the cushion from the B20 stress test along with our own prudent underwriting criteria. It is likely that higher rates will reduce but not eliminate demand for home ownership. The impact of rising rates on affordability can also be mitigated by buyers changing the location or the size of their home purchase. We believe that the mortgage broker community is best suited to help Canadians understand the impact of these changes. Demand for home ownership is still strong, and it will be supported by growing immigration numbers, a growing cohort of millennials buying their first homes, and a return to employment growth. As working conditions evolve, we can see more transactions driven by changing housing needs. Our funding teams expanded our funding capabilities and have just issued our latest RMBS offering, benefiting from growing investor interest in this attractive instrument. On our capital strategy, we are on track. Following the completion of our SIP in December, we're announcing today that the TSX has approved our application for normal course issuer bid. This will make strategic share repurchases throughout the year as we work towards our stated target CDT1 capital ratio of 14% to 15%. We have a track record of success in this method of delivering value to our shareholders. In mid-2017, the company had over 80 million shares outstanding. As of December 31, 2021, we have backed back more than $37 million, or over 45% of shares outstanding. Together with our strong operating performance, buybacks have been a key component of our shareholder value proposition. 2021 was a year in which Canadians continued to show how much they value home ownership. And here at home, we're dedicated to helping them achieve it. Despite the changes in working conditions brought about by the path of the variants, we were consistent in our focus of serving our business partners, responding to the needs of our customers, and meeting our financial objectives and supporting our employees. In 2022, we are starting the year with a strong market, a strong capital base, an engaged group of employees, and a strong leadership team. We are ready to convey meaningful benefits to all our stakeholders while delivering value to our shareholders. I'll now invite Brad to discuss our financial results.