Good morning. My name is Ludi and I will be your conference operator today. At this time, I would like to welcome everyone to CWB's First Quarter 2024 Financial Results Conference Call and Webcast. 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 the star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, please press the star followed by the number 2. Thank you. I will now turn the call over to Chris Williams, Assistant Vice President of Investor Relations. Please go ahead, Chris. Good morning and welcome to our First Quarter 2024 Financial Results Conference Call. We'll begin this morning's presentation with opening remarks from Chris Fowler, President and Chief Executive Officer, followed by Matt Rudd, Chief Financial Officer, and Carolina Parra, Chief Risk Officer. Also present today are Stephen Murphy, Group Head, Commercial, Personal, and Wealth, and Jeff Wright, Group Head, Client Solutions and Specialty Businesses. After our prepared remarks, they will all be available to take your questions. As noted on slide 2, statements may be made on this call that are forward-looking in nature, which involve assumptions that have inherent risks and uncertainties. Actual results could differ materially from these statements. I would also remind listeners that the bank uses non-GAAP financial measures to arrive at adjusted results. Management measures performance on a reported and adjusted basis and considers both to be useful in assessing underlying business performance. I will now turn the call over to Chris Fowler, who will begin his discussion on slide 4. Thank you, Chris, and good morning, everyone. CWB's focused performance continued in the first quarter with positive operating leverage driven by disciplined expense management while targeting new lending opportunities that met our risk-adjusted return expectations. As expected, growth in the Canadian economy remained muted as elevated interest rates continued to slow consumer spending and reduce inflation. In this environment, our team's focus remained on executing our strategy and winning full-service clients within our disciplined risk-adjusted pricing criteria while providing exceptional service to our clients. Our people take the time to understand our clients and their businesses, and we work as a united team to provide holistic solutions and advice for them. This differentiates us from the competition and, along with our strong balance sheet, has us well-positioned to capitalize on the growth opportunities in front of us with an economy that we expect to gradually strengthen in the back half of the year. As shown on slide five, our loan growth has been strategically targeted in the general commercial portfolio. Clients in this category include a broad section of the Canadian economy that's underserved by the other banks, and they represent a significant opportunity for CWB to provide a full suite of lending and business banking services, deepening our relationship with the client and our returns for our investors. In the last year, we delivered 8% general commercial loan growth. We've taken a highly disciplined approach to lending in the current environment, focused on appropriate financial returns relative to the underlying risk in a higher interest rate environment. This has lowered origination volumes across our commercial real estate portfolios. The credit performance of these portfolios has been strong, and our overall balance of commercial real estate exposures has been reduced by scheduled repayments and payouts at project completions. Our prudent risk appetite and underwriting standards reflect our consistent and long history of strong credit performance. We remain comfortable with our current exposures while weakening while the economy has returned us to historic provisioning levels. We've driven strong growth in Ontario with support from Mississauga and Markham banking centers, especially in the strategically targeted general commercial portfolio, which we've grown by 11% over the last year. The grand opening of our new banking centers in Toronto's Financial District in January is creating greater awareness of CWB in the GTA, and we look forward to continued growth momentum with the opening of our Kitchener branch later this year. I'll now turn the call over to Matt, who will provide greater detail on our First Quarter financial performance. Thanks, Chris. Good morning, everyone. I'm starting on slide 7. We delivered stronger growth in franchise deposits than we expected this quarter, and that was especially in demand and notice deposits, which increased 2% sequentially. That reflected growth from both new and existing clients. We also delivered growth in term deposits of 4% compared to last quarter, reflecting a continued preference for term deposits in the current interest rate environment. Stronger than expected franchise deposit growth has resulted in a temporary bulge in our liquidity levels, and we expect liquidity to normalize over the next quarter as we'll deploy it to new lending opportunities that meet our risk-adjusted return expectations. Compared to the prior year, franchise deposits increased 3%, as a 12% increase in fixed-term franchise deposits was partially offset by a 2% decline in demand and notice. Lower demand and notice deposits primarily reflected a reduction in account balances as clients utilized excess savings over the past year and also converted into term deposits. We commenced the initial launch of our new commercial digital banking and cash management platform and plan to roll it out to customers in a phased approach starting next quarter. We expect the rollout to dampen franchise deposit growth in the near term as we focus on transitioning existing commercial clients onto the new platform before mobilizing our sales force to onboard new clients. We expect positive momentum in franchise deposit growth in the back half of the year and continue to expect to deliver mid-single-digit% growth on an annual basis. Our performance compared to the same quarter last year is shown on slide 8. In Q1 of last year, we recognized a large impaired loan recovery that provided a boost to net interest income and drove the unusual outcome of our provision for credit losses being in a recovery rather than an expense position. Our provision for credit losses returned into normal within our normal range this year. Our common shareholders' net income decreased by 7% and diluted EPS decreased by CAD 0.08 compared to last year. Our focused operating performance delivered pre-tax, pre-provision income growth of 14% compared to last year. Adjusted EPS decreased by CAD 0.09 from the same quarter last year. In the prior year, we benefited CAD 0.13 from the reversal of a previously recognized impaired loan write-off, which reflected the combined impacts of a reduction in the impaired loan provision for credit losses of CAD 0.10 and increased net interest income of CAD 0.03. Excluding these impacts, higher net interest income increased EPS by CAD 0.16, primarily reflecting the benefit of an 8 basis point increase in net interest margin. Higher provision for credit losses decreased EPS by CAD 0.11 as our provision for credit losses has now returned to being within our normal historical range from the unusually low levels in the prior year. As shown on slide 9, our common shareholders' net income increased 14% and diluted EPS increased CAD 0.11 compared to Q4. Pre-tax, pre-provision income increased 3% on a sequential basis. We incurred reorganization costs primarily in the prior quarter that reduced EPS by CAD 0.12 compared to the current quarter. Our reorganization activities are now complete, and these costs have been removed from our adjusted performance metrics in bulk periods. Adjusted EPS decreased by CAD 0.01 from the prior quarter. Lower adjusted non-interest expenses contributed CAD 0.05 to EPS, primarily due to lower people costs and lower spend due to the timing of ongoing strategic activities. Higher net interest income increased EPS by CAD 0.02, and a decrease in non-interest income reduced EPS by CAD 0.04. The provision for credit losses this quarter reduced EPS by CAD 0.06, reflecting a return to within our normal historical range as expected. As shown on slide 10, total revenue decreased 1% on a sequential basis. Net interest income increased 1%, primarily driven by an increase in average interest-bearing assets. The 13% decrease in non-interest income was primarily due to lower foreign exchange revenue due to a weakening US dollar this quarter compared to a strengthening US dollar in the prior quarter. Turning to slide 11, our NIM was consistent with the prior quarter. Profitability of our assets grew as expected as the growth in asset yields strongly outpaced the increase in funding costs, which drove 7 basis points of NIM benefit. Stronger than expected franchise deposit growth caused a bulge in liquidity that reduced NIM by 5 basis points, and our funding mix reduced NIM by 2 basis points from last quarter. We continue to anticipate a relatively stable policy interest rate in fiscal 2024, with the potential for interest rate reductions in the latter part of the year. We continue to expect our net interest margin to gradually increase over the remainder of the year and reflect the benefits of normalized liquidity levels, growth in fixed-term asset yields continuing to outpace growth in funding costs, and loan growth that's targeted to optimize risk-adjusted returns. Our capital ratios and the drivers of our CET1 improvement are shown on slide 12. Our CET1 ratio increased 30 basis points to 10% this quarter, primarily reflecting retained earnings growth, a reduction in accumulated other comprehensive losses associated with an increase in the fair value of our debt securities, and a decrease in risk-weighted assets. No common shares were issued under the ATM program again this quarter, and we do not expect any further issuances under our ATM program. Our board declared a common share dividend yesterday of CAD 0.34 per share, which is consistent with the dividend declared last quarter and up CAD 0.02 from the dividend declared last year. I'll now turn the call over to Carolina. We'll speak further on our credit performance. Thank you, Matt, and good morning, everyone. Turning to slide 15, total gross impaired loans increased CAD 43 million or 16% from prior year and represented 86 basis points of gross loans, 11 basis points higher than prior year. As you know, gross impaired loans can fluctuate, and this quarter they increased 19% sequentially after declining 6% sequentially last quarter. The increase in gross impaired loans this quarter was in line with our expectations given the economic backdrop and reflects the impact of higher interest rates pressuring the cash flow of our general commercial borrowers, partially offset by resolutions. Impaired commercial real estate loans were relatively stable compared to the previous quarter. Our strong credit risk management framework, including well-established underwriting standards, the secured nature of our lending portfolio with conservative loan-to-value ratios, and a proactive approach to working with our clients through difficult periods continues to be effective in minimizing realized losses on the resolution of impaired loans. This is demonstrated by a history of low write-offs as a percentage of total loans, including through past periods of economic volatility. We also continue to have minimal exposure to unsecured personal lending or credit cards. We expect the total balance of gross impaired loans to continue to fluctuate as the overall loan portfolios reviewed regularly, with credit decisions undertaken on a case-by-case basis to provide early identification of possible adverse trends. As shown on slide 16, the performing loan allowance was relatively consistent with the prior quarters as increased downside risk reflected in our economic outlook was offset by a decline in total loans. Our performing loan provision was 3 basis points lower than last quarter. Our provision for credit losses on impaired loans increased to CAD 17 million or 19 basis points compared to a charge of CAD 7 million last quarter and a large recovery last year. Looking forward, the sustained impact of higher interest rates is expected to continue to result in elevated borrower default rates and impaired loans over the remainder of the year. Consistent with our experience in prior periods of economic volatility, our prudent lending approach supports our expectations that our provision for credit losses will remain within our historical normal range of 18-23 basis points on an annual basis. I will turn the call back to Chris Fowler for his closing remarks and outlook. Thank you, Carolina. Turning to slide 16, we've maintained our focus to open the year with solid results supported by large positive operating leverage. Our balance sheet is strong, and the differentiated client experience that our teams provide supports the continued delivery of solid results. Our teams remain focused on executing our strategy and winning full-service clients within our risk-adjusted pricing criteria, and we anticipate our momentum will build as the year progresses. While we continue to execute our strategic priorities as planned, we will carefully monitor and manage our expenditures and deliver a differentiated experience to Canadian business owners. Our financial outlook for 2024 is unchanged, and we're well-positioned to create value for our investors in the year ahead. With that, operator, let's open the line for Q&A. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number 1 on your cell phone keypad. You will hear a 3-tone prompt acknowledging your request. Should you wish to decline from the following process, please press the star followed by the number 2. If you're using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from the line of Doug Young from Desjardins Capital Markets. Your line is open. Hi. Good morning. Maybe we can just start on credit, and I guess two questions. The increase in new impaired loan formations, and I get they can be volatile and maybe not lead to actual losses, but can you provide detail in which buckets where you're seeing that impairment or those impairments come through? Absolutely. Good morning. Yes. The new formations were mostly in our general commercial portfolio, and we're not seeing any impact on specific industries. It was well-diversified, and we're not really concerned with any specific bucket, but overall, the general commercial with the pressure from the interest rate increases. Was it in any particular geography, or? No. We don't have any significant geography. We saw a little bit of an increase in Alberta, as you saw, but it was a very particular borrower, very idiosyncratic case that does not really cause any impact or any concern from the Alberta market either. Okay. And then just on, I just want to confirm the provision for credit loss range of 18-23 basis points. Is that on an impaired or total, and has that changed? It was on a total basis. Again, primarily weighted more to the impaired loan rather than performing, and we have not changed our outlook on either. Okay. I just want to confirm that. Okay. And Matt, well, I guess I have you. NIMS is the topic du jour. And I just want to get an idea of the evolution of NIMS. And again, it's one metric, but it's one that people are absolutely focused on. Is this more you see a gradual improvement coming through? Is it more back-end weighted? Can you talk about what you're seeing so far in the second quarter? And you did have a decline sequentially in capital market deposits by a decent amount. I assume those are higher-cost deposits, but there didn't really seem like there was a big impact on NIMS this quarter. Or is that more of a second-quarter item that would come through? Yeah. Actually, so NIM, the primary driver there would be the spreads we're getting on our assets. And we actually saw a pretty good kick upwards this quarter in that. So what we saw in loan profitability, what we saw in our securities portfolio just rolling over and issuing new securities at the higher rates, everything there was as expected. Overall cost of deposits, a bit lower than what we were expecting, actually. So that seven basis points I highlighted of just asset yields relative to funding costs, that would have exceeded the forecast I would have had last quarter. A couple of reasons for that. I think we were very selective on the deposits we originated. You're right. We did have a decline in capital market deposits, but we did do an issuance. It was a smaller issuance to offset a larger maturity. The reason why we did it, it was at a time where it was basically at parity, in fact, maybe even a little bit cheaper than broker deposits at the time. It was just a very opportunistic trade, and I think you'll see us be very disciplined on deposits and managing that cost. So happy with the torque we're seeing in asset spreads where I'd say we had the pressure on NIM this quarter that brought us back to neutral. I mean, that was a liquidity story. It was a good news, bad news. The good news is that we had more franchise deposit growth than what we expected. And where we were surprised there, which would be a reversion of the trend we've been seeing, is that demand and notice deposits grew, and it grew from existing clients in addition to new. That's not something we were expecting. On new liquidity coming in, you'll look at our financial disclosure from year-end and see when we bring in liquidity and we invest it in securities temporarily before it gets into loan growth. Securities yield quite a bit less than loans. We don't take on any credit risk in that securities portfolio. It's basically federal and provincial bonds. So when we reinvest that into loan growth, it's a pretty significant amount of yield increase, and that gives us torque to the NIM. So that's why we're very constructive on net interest margin into the second quarter. I'd expect growth there, likely more growth in the second quarter than what we'd see maybe in Q3 and Q4. But we'd expect to see continued growth through the year. But I'd look at Q2, and I'm quite constructive. Are you seeing that so far? I don't know if you want to comment on that, but you've got good visibility, I would say, daily, weekly on that particular metric. Is that fair to say? Yeah. I guess the catalyst of do we see more significant NIM expansion, or is it in the neighborhood of something smaller in a couple of basis points? The big driver of that's going to be the strength of our loan growth and bringing down that liquidity level and redeploying it to loans. With loans, my plan looks good and strong in second quarter. So if we execute well and deliver the growth that we believe is in front of us and achievable, then NIM will be a positive story in Q2. I guess that's where I was going next, is what are you seeing in terms of loan growth? Is it similar to what you saw in what you had in Q1? And how is that deposit-to-loan growth ratio kind of unfolding so far in Q2? Do you want to touch on growth and what you're seeing? I'll circle back to loan-to-deposit ratio. Sure. We're pretty much seeing what we expected to see. So we had talked about that it was going to be a gradual build through the year. And what we see through the activity to date and in the pipeline, that's what we're seeing. So we knew it was going to build throughout the year and that the growth was going to start in the second quarter. And that's consistent with what we're seeing. So as we look at it was probably a little bit slower start to the year than we were expecting on the lending side, but we expect to be in line with the guidance that we have previously issued. Yeah. And then on loan-to-deposit ratio, I mean, this quarter, we saw a notch downwards, again, that we wouldn't have expected and we weren't necessarily structurally planning for. So I wouldn't expect the ratio you compute this quarter to be a running range. We'd expect for next quarter, stronger loan growth and lower deposit growth than this quarter would be our base case expectation. Appreciate the comments. Thank you. Your next question comes from the line of Lemar Persaud from Cormark. Your line is open. Yeah. Thanks. I want to start off with an answer on the previous set of questions there just on credit. Matt or Carolina, maybe you could clarify. Maybe I heard this wrong, but the PCL guidance, that 18-23 basis point guidance, did you say that's total or impaired? I guess your slide 15 suggests that's impaired, but then your slide 16 seems like it could be total. So just want to make sure. Yeah. Just for absolute clarity, it's total. But I guess the majority of it, we expect to be impaired. Okay. And then performing, would that kind of follow balanced growth? Is that kind of the way we should think about that? All else being equal, yes, barring some future shift in economic forecast. Okay. And then one of the things that some of the banks have been suggesting throughout this earnings season on credit is that you could possibly see PCLs kind of bump up in the first half of the year and then some relief in the second half of the year. So is it possible, just given the step-up in impaireds that we saw this quarter, it sounds like they could probably move up in the near term, and then maybe that could drive PCLs even above that 18-23 and then relief in the back half of the year. So maybe, Carolina, talk about the path of how you get to that 18-23. That'd be helpful. Absolutely. So we expect to continue to see a trend as we're seeing as we continue to work with our clients. The PCLs, of course, are lagging from when we get the impaireds and as they reflect the impact of the interest rates and inflation. So we do think the first half of the year would be where we start to see a little bit of an increase. But we're getting resolutions at the same time as we're putting in the PCLs. So I think the net effect will be definitely lower, and we do not expect to just go well outside of that range where we're seeing. And overall, at the end of the year, we are very confident we will be within the thresholds that we're mentioning. Okay. So it's not that we should expect something like 25 and then a move down, nothing like that? Okay. We don't expect that. Okay. Okay. No, that's fair. And then I guess I've covered this stock for a couple of years, and I know you guys typically have better insights into the loan growth outlook. What gives you the confidence in the ramp up of that loan growth starting in Q2 and for the balance of the year, how you guys meet that mid-single-digit% growth? Yep. Well, we have pretty good line of sight into our loan pipeline. And also, when you look at the numbers, we have pretty good forecasting. If you look at the net effect of growth in the quarter, you've got to look at the commercial real estate side and some of the repositioning we've had in that portfolio as we've been selective on that side. And so we can predict, as things renew or projects are in the pipeline on the construction side, where those because that's been a drag on the net growth. And then we can see all of the new activity that's in there and that we're booking for funding looking out. So we've got pretty good line of sight on that. It can kind of in a particular month, you might have things move around a bit depending on what's happening in the market, but we can see the trend line, and we feel good about our expectations playing out the way that we thought for the year and the way we've previously talked about it. Okay. And are some of your commercial borrowers, I'm thinking more on the commercial side, are they just kind of waiting to see how rates evolve? Is that why there's some hesitation right now, or is it just more so when these projects come online? So just timing rather than concern around the path of rates. Yeah. Particularly if you look at construction lending, that's absolutely happening. And generally, I'd say overall, there's probably a little bit of a slower start to the year because of that point. But we also still see activity happening, and we see that, as we look forward to the rest of the year, things playing out the way that we thought. But that's a fair point. Okay. Thanks. And then the final one for me, just on expenses. I'm okay when I see the bank's slow expense growth to even the low to mid-single-digit range. But when it tips into negative territory, I start to ask myself the question, "Is the bank underinvesting in growth and basically trading off the future to put up good earnings today?" I suspect you're going to tell me that's not what's going on here at CWB. So just tell me why that's not the right way to look at this very low expense growth. So a couple of things. When we talked about expense trajectory last quarter and the reorganization we did, I mean, it really was to give us a lot of optionality. It was first the reduction of the expense run rate, but it absolutely was meant to be predominantly a reinvestment of those costs. But the timing of when we make those investments is within our control and something we wanted to time with when we wanted to start really driving the revenue growth and make sure that we made good on our commitment to positive operating leverage. So just structurally, that's how we thought about the year. We talked about mid-single-digit growth of expenses, and I'd say that outlook remains consistent. And the weird thing about first quarter, typically for us, perhaps with others too, it's a lower level of expenses usually relative to the rest of the year. A lot of you don't have CPP/EI on your employees, just activity levels usually a bit lower. When you look back at our historical trend from Q1 to Q2 in terms of structural expense growth, you can always see a bit of an uptick. Last year was a bit of an anomaly. If you looked at Q1 NIEs last year, we would have had double-digit NIE growth. In the second quarter, that is when we started talking about and enacting expense containment actions because the growth outlook started to soften. We took early action there. Our trajectory pretty rapidly went from double-digit expense growth to mid-single-digit. That's what we're lapping in Q2. It's a bit of an easier comp here in Q1 as well to deliver the reduction. So I would not expect us to continue to reduce NIEs as tempting as it is if you've put my accountant's hat on. It's not realistic and not how we want to run the business. And we'll be back, I'd say, on that mid-single-digit expense trajectory next quarter. Thanks, guys. Your next question comes from the line of Gabriel Dechaine from National Bank Financial. Your line is open. Thank you. And good morning. What are we going to say here? Capital, I'll start with that one. The silver lining to flat or negative loan growth is your CET1 ratio goes up, and you're at 10% now. I know you're not a big buyback story, whatever you want to call it. But given your excess capital position and given the loan growth picture, which you sound optimistic, but it's probably going to be weaker than the typical years you target, why wouldn't you consider buying back some stock here, especially trading below book value? Yeah. Again, if I put on my financial hat, it's awfully tempting. The economics on that look very compelling, actually. Our preference in deploying capital, if we get to the point where it's time to start deploying and we have a good look through the economic cycle, our preference, and we've been consistent on this, it's to grow the franchise organic, and we've got lots of opportunity in front of us. And coming out of cycles, you can look back historically and see we do quite well. When it's time to put the foot on the gas and grow, we generally outperform in those sorts of environments. So having the dry powder to support that, we like that optionality. Inorganics an option too. And I mean, obviously, we continue to look at things, but that would be our second preference. And then, yeah, you're right, Gabe. If we don't have compelling, good risk-adjusted return opportunities on those first two, then we're looking at other ways to engineer returns for our shareholders. But our preference is obviously grow and support the franchise first. No, I get it. I know the ATM was a bit of a sore spot for some investors a while ago. It's no longer the case. But where we are sitting today might be a good opportunity to go in the other direction. That's just my two cents. But yeah, next question would be on loan growth. And I do want to delve into that a little bit more. You do sound more optimistic. What was holding back loan growth? Because I've seen this from the bank before where you load up on excess liquidity, and then there's just a timing issue that the loans didn't actually get advanced and might be just the next day into the new quarter, and things are back to normal spreads, if you will. What was the factor holding back loan growth just from a timing standpoint, or was there something else going on? Underlying that question too, how much are rates depressing loan growth? I got to imagine there's some borrowers that are just sitting on the sidelines expecting, like many of us, that rates are going to be lower by the end of the year. Yeah. So I'll start and then throw to Stephen. I guess maybe the difference this quarter compared to other previous times where we found ourselves on excess liquidity, loans weren't necessarily the largest component of that. I mean, we went into this quarter, we weren't expecting robust loan growth for a number of reasons, economic backdrop, just what we're seeing in commercial real estate and our focus there. It was a branch-raised deposit story where we just had more growth there than what we were expecting. So that's the one difference I wanted to highlight. I think that's important. But then just for loan growth and more commentary there, I'll throw to Stephen. Yeah. I think typically, the first quarter is a slower quarter for us anyway. But I think, as Matt said, there's a lot of other factors going on impacting that. But we had expected it to be kind of a curve of growth through the year, kind of getting us to our full-year guidance. And we're seeing what we see in our pipeline is consistent with that kind of building growth throughout the year. Okay. Then PCL, I just want to revisit that one. You said the big driver of the impaired was one specific account. You can't tell us the industry. I know there was a transportation sector trend, if you will, across that hit a few banks. Is it related to that at all, or just something else entirely? No, I just want to make sure. So it was not one specific account, like what I said. It was idiosyncratic things, not just general things happening in specific industry. I think it's quite diversified. And so it's not just one account that caused the big increase. I think it's just quite diversified. It caused various industries. Okay. Then lastly yeah, sorry. Go ahead. General commercial. Sorry. Okay. Then lastly, on expenses, I don't know. I think all of us are going to be kind of thinking the same thing here. And I say us, the people asking the questions today. You have negative growth in the first quarter, year-over-year. You're targeting mid-single digits over the course of the year. That's a fairly broad term or range. But the thinking kind of goes in the direction, while there's going to be a bit of a ramp-up over the next three quarters, that gets you to the mid-single digits, sort of to make up for the drop we saw in Q1. So we could be upper end the mid-single digits or something like that? Yeah. If we see the growth in revenue that we expect, then we'll do it. If we do not and something knocks the revenue off that track, then you would see us be a bit tighter with expenses. So that's the way we wanted to manage the year. I mean, we made a commitment to positive operating leverage. We've left ourselves a lot of levers to pull to make good on that commitment. Well, okay. Great. Have a good weekend, everyone. Thank you. Your next question comes from the line of Sohrab Movahedi from BMO Capital Markets. Your line is open. Okay. Thank you for taking my questions. Maybe I can just start on that op-lev commentary. I assume as a management team, when you say we're committed to op-lev, you're thinking about it on a, I don't know, full-year basis, not necessarily quarter in, quarter out. Is that accurate, what I'm saying? Correct. You definitely can have a bit of ebbs and flows in a quarter. The 7% we put up this quarter, I would not look at that as sustainable, obviously, for reasons we discussed today. But I mean, that's our goal going into a quarter, is we want to structurally going into it have really a high degree of confidence that we're structured for positive leverage. And then whether you end up neutral to moderately positive or significantly positive, it depends on how the quarter plays out. But on a full-year basis, you're right. I mean, that's structurally the way we set up the year. And I guess for abundant clarity, it was not to deliver 7% operating leverage, but just good, solid, positive operating leverage with a lot of different ways we can deliver it. Yeah. No, I understand. I mean, I think operating leverage is probably more of a full-year target anyway because of the seasonality and expenses and revenue recognition and the like. On the loan growth, I just wanted to better understand, is the environment such that growth is available but not fitting your risk appetite, or is that a governor on the kind of growth rates we're looking at, or was it there was just nothing available, period? Well, I'll start that. Thanks, Sohrab. I would say that what we've done is look at, in the different buckets, we've got, say, our commercial mortgage portfolio, which is still very competitive with other FIs. And what we've chosen to do there is be very specific on which loans we choose to renew or look to underwrite based on risk-adjusted returns. So that book then has declined slightly. The real estate project lending success there is that loans pay out. And we did see payouts occur there. What we're not seeing is a big rush to the table with new projects, but we are seeing some. So we do see that happening as the interest rate environment is evaluated, housing supply is being tested in terms of different markets. So more product we expect to come online there. And then on the general commercial side, that's our opportunity, really, for capturing market share. And we do look to cherry-pick clients from the large banks as being ones that really meet our risk appetite, meet our industries that we're looking to focus on. And so that, again, is an open opportunity for us as we look to the future. And equipment finance typically has a bit of a seasonal slowdown in the Q1 and picks up in Q2, Q3. So as we think about loan growth, we are focused. That's the big driver of our business. And we make sure that we think about a very disciplined approach to underwriting and focused on those markets that we know very well. Okay. I mean, maybe if I come at it a little bit differently, can anyone talk a little bit about what the competitive dynamics are like and when the growth you pick the sector, general commercial, commercial real estate, whatever, when those types of opportunities are present, are you finding it as competitive as ever, even more competitive? And I just want to get a feel for when we think about the net interest margin outlook, are we factoring in asset yields that are likely to come down? That's what I'm just trying to kind of get a sense for. Yeah. I would say the market is a little bit slower. That would create more competitiveness, particularly in the stronger risks. Of course, we're looking to be selective. I'd say in our model, people that are choosing us are generally choosing us as an alternative to the other banks for how we bring our service and advice to them. In cases like that, it's not necessarily a bidding war kind of situation. We see, depending on how much activity is happening out there, you can see competitive dynamics. I don't think in our model at our size and as we project growth out, kind of looking to take business away from our competitors, we're not quite as sensitive to that and the kinds of business that we're taking on. Okay. And so, I mean, Chris, in the years that I've paid attention to your stock and your business, I can't think of any time you would have compromised on your underwriting standards for growth. Is there any reason why that may be different this time around? Well, we have no intention of compromising on our underwriting standards for growth. I mean, we like the markets we operate in. We've generated great expertise in the different verticals. And our view is just to continue to execute in our varied, structured approach for underwriting, loan management, and stress testing. Continue to secure the underwriting such that, like any other previous cycle, gross impaireds may look large, but net impaireds will be de minimis. 100%. That is our focus. Yes. Thank you very much. That's all my questions. Your next question comes from the line of Paul Holden from CIBC. Your line is open. Thank you. Good morning. I want to ask a couple more questions on the impaired loans, I guess, to give people more comfort around the risk there. So first question is, can you give us a sense of provisions and asset recovery expectations around the loans that went impaired this quarter? So yeah, from a provision perspective, so in the new formation we had, we had certain loans in which we had provisions come in. However, we manage, in general terms, very strong loan-to-value. So when we look at our asset valuations, the provisions are not significantly. At the same time, there were quite a few important recoveries as we work with our clients, every payment that also support the work that we're doing and the management and collateral management we have of our impaired portfolio. Okay. So I think that's an important point with respect to an offset specific to this quarter. You're seeing some recoveries on previously impaired loans that helped offset the need to increase provisions for the Q1 impaired loans, correct? That's correct. Yeah. Okay. Okay. That's helpful. And then continuous line of questioning. I mean, you mentioned that impaired loans are expected to be volatile from quarter to quarter. Understand that. Maybe you can help give us sort of a near-term feel on what you think GILs might do next quarter or two. Again, just to avoid any negative surprises like we saw this quarter. And you did mention that you expected impaired to go higher this quarter. So what do you expect, again, next quarter, next couple of quarters? Is there any visibility there? Well, I think given the economic backdrop, we do expect impairments to continue to increase. I don't think we have reached the peak. Of course, because it's lagging from when the impacts take place. We expect impaired loans in the next quarter or two to continue to increase before we start seeing some of it tilt down again. Okay. Given that's within your expectations, I'm assuming you've already provisioned or partly provisioned for that expectation. Correct. So as you've seen over the last seven quarters, we've increased our performing loan allowance, just understanding what we expect the portfolio to perform. And so even though this quarter the performing loan allowance did not increase significantly, the last six quarters we had built quite a bit of it. And we think we have good coverage as well as those loans becoming impaired to just transition that into impaired provisions as well. Yeah. The only unusual thing we saw relative to what our models would have otherwise predicted was really through last year, impaired loans remaining so benign and credit losses remaining so benign relative to economic conditions and what we would have expected. That was the unusual piece. Whereas now, it's looking a lot more aligned with what our models might have predicted for this sort of an environment. So nothing here we're seeing is. Yeah. Understood. That's also very helpful. Thank you for that. And last question, Matt, I'm going to let you jump in. I'll continue with you. Going back to sort of Gabe's line of questioning on share buybacks versus organic growth, I think we can all do the math based on current ROE and price-to-book, sort of what the economics look like on a buyback. Maybe you can help us with the economics on organic growth. And obviously, it implies something higher than your current ROE. What are sort of your ROE expectations as you layer on organic growth? Thank you. Yeah. So if you're thinking what sort of return relative to the risk do we need to see to put the foot down and really accelerate growth, we're looking for things that are accretive to ROE relative to current levels. So if you're seeing us accelerate growth and really start consuming capital and throwing capital against growth, we want to do that on the basis of expanding our ROE. And we laid out a path that obviously, there was a different backdrop. But at our investor Day, we laid out all sorts of ways that we could contribute to higher ROE. Loan growth in the right portfolios with the right capital against it and spreads returning back to more normal levels was a key ingredient in that recipe. And we think there's more torque in doing that than buybacks on pound-for-pound, dollar-for-dollar capital basis. Got it. Thank you. That's it from me. Thanks for your time. Your next question comes from the line of Darko Mihelic from RBC Capital Markets. Your line is open. Hi. Thank you. Good morning. I hate to be that guy, but I'm going to ask a bunch of detailed sort of individual questions, Matt. I hope you don't mind. But before I get there, just following up on the question, Carolina, with respect to your response in terms of sort of near-term visibility, you mentioned economic backdrop. You spoke about models. But I'm more curious about what is the watchlist telling you? And did anything sort of get impaired this quarter that wasn't on your watchlist last quarter? As expected, our watchlist has been increasing. We've managed it, actually, to maintain it flat. New coming in, but a lot of resolutions coming out as well, both going back into the business with good restructurings. Anything that came into impaired outside of watchlist, there's very little. We tried to keep a very tight outlook. I look into our portfolio with a lot of conversation with the business line to just make sure loans are moved into watchlist and into our SAMU, our Special Asset Management Unit, to be managed properly. That transition and that communication, it's really strong in the back. That's what helped us really to move ahead and be able to manage the accounts promptly. That helps, of course, with resolutions and recovery. Okay. Okay. That's helpful. But I did hear in there that your watchlist is growing. Is that a fair characterization? So we got new accounts coming in, but we also have a good chunk of accounts coming out. So relatively flat, I would say. But of course, new formations into watch are happening. Okay. Okay. Thank you. And then just with respect to recoveries, are there any surprises there with respect to, I don't know, the value of assets backing loans, a process? Is there anything happening on that end that would lead to maybe a thought that the loss on impaired might change going forward? So far, we've seen really good trend on recoveries, very similar to what we've had in the past. When we look at some of the valuations, while some values might be coming down, it's not a significant impact on what we're seeing. We have pretty strong loan-to-value when we originate. As we manage through them, we're not seeing that really reflected in shortfalls when we look at security coverage. Overall, the story is still positive. We continue to manage it like that. I think prompt movement into dealing with our clients is what really helped us get the best out in the recoveries. Okay. Thank you. That's very helpful. Thank you. So just now getting to my little detail questions. Sorry for Matt for these, but I want to dive into it a little bit. When I look at you mentioned that the quarter had elevated or sorry, a drop in FX. Prior quarter had an elevated sort of FX. And so when I look at your supplemental and I'm looking specifically at page 5 or it's the 5 on the bottom of the page, I guess 6 in the PDF file. Is that in the other line there? Is that where the FX is rolling through? Yeah, exactly. It's in the other category of non-interest income. What you should see in that each quarter, if you had no change in US dollar exchange rate, you should see somewhere between CAD 0.5 million-CAD 1 million of kind of other fees in there. It's the foreign exchange on our we have a net asset position in the US dollar balance sheet, not a big one. But that's why you've seen that shift from last quarter to this quarter. You went from strengthening US dollar to weakening US dollar, and that's what drove the swing. And so all that bouncing around that I see in that line item from quarter to quarter is all FX. Would that be a fair characterization? Yeah, it is predominantly FX. Okay. And so then following along that line where you mentioned the balance sheet, if I go up one page, so looking at now page 4, the interest-rate-sensitive gap reversed in the quarter, what does that practically mean? And how should we think about that with respect to your interest-rate positioning? Yeah, I wouldn't look too far into that. It's nothing structural we were trying to do. We weren't trying to make a big bet on interest rates decreasing. Really, we had an increase we weren't expecting in notice and demand deposits. Those are predominantly time-linked, so directly 100% interest-rate sensitive. And that's what caused that positioning to change. I'd expect that to revert back, looking a bit more like normal as early as next quarter. Okay. Okay. Sticking with that discussion on deposits, I'm going to ask you a weird question. In your slide deck, it seems as though you're now referring to them as franchise deposits. In the past, I think you called them—is there actually a difference? So have you maybe expanded conceptually the type of deposits that you're targeting so you're now calling them franchise? Or is the new wording just, I don't know, cooler sounding or something? Can you give me an idea? It'd be the first time in my professional career I've been accused of making something sound cooler. No change in what's in it. It was a complete wording change only. Two reasons for it. One, we don't call them branches anymore. They're banking centers. And two, with the launch of the digital cash management platform, we'll have clients that may not necessarily be clients of a banking centers or have a banking centers accumulate the deposit. It may come through that platform in a geography outside of our banking centers footprint. So it was just time to broaden out the definition, but it was a pure wording change, and that's why. Okay. Great. Thank you. And then last question, again, one of these pesky ones. Just looking back at your supplemental and again, sticking with page, well, I'm going to flip you back and forth. Page 4, when I look at the wealth management assets under admin, assets under advisement, they're showing good growth. But then when I look at the actual underlying revenues, it's not tied. It's not growing at the same pace. Is there any, I mean, I realize it's not a huge part of the income statement. I'm just curious as to what's going on there. Yeah. Sometimes a bit of a lag there. So you'll have the asset growth one month, and then the fees come the next month. And a big chunk of the asset growth was market-driven. And on that, where you have clients with larger positions, it does attract a lower fee intensity than someone with a smaller balance too. So it's a bit of a mixed story as well. But it puts us with a bit of wind in our sails looking to next quarter on growth in that fee line, for sure. Okay. Great. Thanks for entertaining my questions. Have a great weekend. That's all. Your next question comes from the line of Meny Grauman from Scotiabank. Your line is open. Hi. Good morning. Just wanted to go back to credit, which is a popular topic this morning. The guidance range you're providing of 18-23 basis points. So that's a historic normal range. So really, the question is, what gives you confidence that we're in this normalized range and not something more negative, I would say, given the speed of the ramp-up in the impairments quarter-over-quarter? What are you seeing beyond maybe obviously, we have rate-cut expectations still built into some extent. But anything in your business that you're seeing that you could highlight that gives you confidence that really what we're seeing here is normalization and not something more negative, potentially? Thanks so much, Meny. The approach that we've always taken in underwriting is to have a very disciplined structure in which we can assess cash flow, value, or assets we understand. And really, if we think about what we were before, it was unusually low. It makes the numbers look more pronounced than the reality of it is. So as we look at our macro environment on our clients, we do see a return to what we believe the 18-23 basis points would drive compared and potentially where the losses might lie. So it's really just coming from the view of the underwriting structures into the mix of assets and where the economy's going. I think you've covered it, Chris. I think it's the matter of just our prudent risk selection, but also it's the good security coverage we have. Coming from a very, very low base of both impaired and PCL. I think we're very comfortable with that range as an outlook. It sounds like it's I mean, it's more a function, really, of your underwriting and how you make your loans and the type of loans you make rather than really a commentary about the macro environment. And so maybe there, what I'm wondering is, as you speak to your clients and what you're seeing more broadly, is that consistent with a recession? What are you hearing on the ground in terms of just how significant the pressure is on clients, even if it maybe doesn't necessarily lead to losses in your book? If you could comment on that, give us some perspective from what you're seeing. I think the macro environment is always a factor, of course, right, in terms of generation of sales, maintenance of costs. And then, of course, of course, they're impacted by the higher interest-rate environment we're in. So when we look at our accounts that we have seen more challenges with, we're not seeing anything systemic. So it's not like focused in one particular area. It's just a number of different issues that have arisen. So to what Carolina said, it's very idiosyncratic to individual business models and individual clients. And we will continue to work on that. But as I say, we have come into these credits with the very disciplined underwriting structure that we have in place with secured lending. So we look to find ways to resolve. We've got a very strong team that works on that. Our goal is to be very active in that resolution structure. As Carolina also said, we are seeing a lot of resolutions occurring, both as loans that have come in through the watch list, but also on the impaired loan side. It's an ongoing, highly managed process that we undertake to make sure that we manage this very effectively. All right. Thank you. And your next question comes from the line of Nigel D'Souza from Veritas Investment Research. Your line is open. Good morning. Thank you for taking my question. Two quick ones for you. First, your comment on an expectation for liquidity normalization next quarter. Just want to confirm. Does that imply that you're expecting that buildup that you saw in deposits this quarter to reverse next quarter, or is it purely an asset-side function where you expect loan growth to increase next quarter? Yeah, it's loan growth-driven. It's how we want to use that liquidity. That's our intent. That's what it's there for. But I think on franchise deposit growth, for all the reasons we mentioned, we do see that moderating next quarter as well. So it's really the combination of those two things. And I think the other thing, if we're going into a quarter with an excess liquidity position, I mean, outside of our branches as well as our lending opportunities, we have other external sources of funding that we'll manage appropriately as well. So you may see us, for instance, take down broker deposits quarter-over-quarter as well, again, as a way to reduce deposits if we do see another quarter of unexpected strength in deposit growth from our franchise. Okay. That makes sense. The last question I had was on the CEBA repayments that we saw, the deadline coming to force this year. Did that have any impact on credit experience for your portfolio? Do you expect it to have any impact on credit experience, or are CEBA repayments really not an issue here? No, Nigel. We haven't had any impact from CEBA repayments on our portfolio. Okay. That's it. Thank you. Thank you. Ladies and gentlemen, our Q&A session has now ended. I will now turn the call back to Chris Fowler, President and Chief Executive Officer, for closing comments. Thank you, Lydie. Thank you all for joining us today and to our shareholders for their continued commitment and support. We look forward to reporting our second quarter financial results in May. Have a great day. Thank you. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.