Laurentian Bank of Canada

Welcome to the Laurentian Bank Quarterly Financial Results Call. Please note that this call is being recorded. I would now like to turn the meeting over to Raphael Ambeau, Vice President, Finance and Investor Relations. Please go ahead, Raphael.

Bonjour à tous. Good morning and thank you for joining us. Today's opening remarks will be delivered by Eric Provost, President and CEO, and the review of the third quarter financial results will be presented by Yvan Deschamps, Executive Vice President and CFO. after which we'll invite questions from the phone. Also joining us for the question period is Christian Debroux, Executive Vice President and CRO. All documents pertaining to the quarter can be found on our website in the Investor Relations section. I'd like to remind you that during this conference call, forward-looking statements may be made, and it is possible that actual results may differ materially from those projected in such statements. For the complete cautionary note regarding forward-looking statements, please refer to our press release or to slide two of the presentation. I would also like to remind listeners that the bank assesses its performance on a reported and adjusted basis and considers both to be useful in assessing underlying business performance. Eric and Yvan will be referring to adjusted results in their remarks unless otherwise noted as reported. I will now turn the call over to Eric.

Merci Raphaël. Bonjour à tous et bienvenue à notre conférence téléphonique pour le troisième trimestre de l'année 2025. Good morning. Thanks for being with us today. Today, we're pleased to report a strong quarter reflecting our continued focus and disciplined execution. These efforts have enabled us to effectively manage the challenges of a volatile economic landscape. Our performance this quarter reaffirms the strength of our market positioning and the value of our commercial specialization, all supported by a solid foundation of liquidity and capital. Our strategic priority remains clear, to simplify, strengthen, and future-proof our operations. We are taking deliberate steps to reduce complexity across the organization, enhance system redundancy, and improve overall resilience. A key part of this involves streamlining our distribution channels and simplifying our technology stack efforts that will continue into 2026. I'm proud to share that our teams remain highly engaged and committed to executing our strategy. This was clearly reflected in the results of our most recent engagement survey transpiring to our culture, and the support that the team is dedicating to transform our organization. Such a high level of engagement is especially important in today's economic environment. We are actively monitoring a range of factors, including market trends, policy developments, and broader macroeconomic conditions that may impact our customers. As always, we remain ready to adapt as needed. Looking at loan performance, commercial loans remain stable this quarter, supported by growth in our commercial real estate portfolio, which offset the usual seasonal decline in our inventory financing segments. Mainly as a result of this shift in business mix, our net interest margin was slightly down to 1.82%. In inventory financing, Utilization declined to 41% at the end of July, fully aligned with our expectations, and continues to reflect steady LT demand for the products offered by our dealers. Our dealer base is also continued to expand at a steady pace this quarter, bringing the year-to-date growth to 4%. This momentum was primarily driven by the agriculture and power sports segments, both of which are part of our diversification strategy in inventory financing. Looking ahead, we remain encouraged by the sustained demand our dealer network is experiencing this season. Should interest rates begin to ease in the U.S. in the upcoming quarters, we believe this could act as a lever for renewed restocking activity, particularly as dealers prepare for the summer 2026 season. In our commercial real estate portfolio, loan volumes increased by 5% during the quarter, reflecting the strength of our market positioning and deep expertise of our teams. Their ability to identify and seize opportunities has been instrumental in driving this growth. At the same time, we maintain a stable unfunded pipeline with potential to convert in the coming quarters. That said, we remain cautious in our outlook for Q4 given the current market environment. On the personal banking side, our sustained engagement with our customers enabled us to maintain a stable deposit base within our retail segment while also continuing to build positive momentum in broker source deposits. As emphasized during our investor day, we remain actively focused on pursuing strategic partnerships to accelerate our specialization strategy. We believe that forging the right partnerships will be a key driver in unlocking future growth and further elevating our market position. During the quarter, we also maintain focus on investing in our key strategic priorities, resulting in an adjusted efficiency ratio of 75.7%. While we expect these elevated expense levels to persist over the coming months, these investments, particularly in technology, are critical to executing our strategic plan. I'd also like to highlight that our provision for credit losses stood at 12th basis point this quarter, reflecting the strength of our specialized underwriting, consistent education, and robust portfolio management. We remain confident that our current level of provisions is prudent and aligned with the quality of our portfolio. While the economy has shown resilience so far, we remain vigilant and prepared to adjust. Finally, we continue to maintain a solid position in both liquidity and capital, providing us with the financial stability to manage the current macroeconomic environment while remaining focused on executing our strategic priorities. With that, I'll turn it over to Yvan.