The conference will begin shortly. Thank you for standing by, and welcome to the goeasy third quarter 2022 conference call. At this time, all participants are in a listen only mode. After the speaker's presentations, there'll be a question and answer session. To ask a question at that time, please press star one one on your touchtone telephone. As a reminder, today's conference call is being recorded. I will now turn the conference to your host, Mr. Farhan Ali Khan. Sir, you may begin. Thank you, operator, and good morning, everyone. My name is Farhan Ali Khan, the company's Senior Vice President and Chief Corporate Development Officer. Thank you for joining us to discuss goeasy Ltd.'s results for the third quarter ended September 30, 2022. The news release, which was issued yesterday after the close of market, is available on GlobeNewswire and on the goeasy website. Today, Jason Mullins, goeasy's President and CEO, will review the results for the third quarter and provide an outlook for the business. Hal Khouri, 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 lines 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 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 their prepared remarks. The operator will poll for questions and will provide instructions at the appropriate time. Business media are welcome to listen on this call and to use management's comments and responses to answer any 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 However, we would ask that they do not quote callers unless that individual has granted their consent.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 MD&As. I will now turn the call over to Jason Mullins. Thanks, Farhan. Good morning, everyone, and thank you for joining the call today. Before we get started on this Canadian Remembrance Day, I would like to take a moment to remember those who have served, sacrificed, fought, and lost their lives for our freedom and all of those in active service today. We thank you, and we salute those who made the ultimate sacrifice to serve our country, lest we forget. In honor of those who fight for our freedom, we will take a brief moment of silence before we start the call. Thank you for observing that moment of silence. During the third quarter, our team produced record loan growth complemented by stable credit performance, which led to record financial results. The quarter business initiatives, combined with favorable competitive dynamics, resulted in a record level of applications for credit at over 400,000, up 44% year-over-year, along with a record number of visitors to our easyfinancial brand site at nearly 700,000 in the quarter. Despite spending 7% less in marketing and advertising during the quarter compared to the third quarter last year, new customer volume increased, effectively reducing our cost of customer acquisition. Once again, the elevated level of applications led to record loan originations and organic loan growth. Originations in the quarter were CAD 641 million, up 47% over the third quarter of 2021. Organic loan growth in the quarter was CAD 219 million, an increase of 117% over the same period last year and above our original expectations for the quarter. At September 30th, our portfolio finished at CAD 2.59 billion, up 37% from the prior year. We continue to experience strong performance from our omni-channel and multi-product strategy. During the quarter, we produced healthy growth in unsecured lending, which was up 34% year-over-year. In particular, our strategy to acquire new customers and then use a combination of credit and payment data to make targeted pre-approved loan offers continues to improve. The enhanced data and benefit of an existing relationship dramatically enhances the quality of our lending decisions, reducing the risk of default compared to an equivalent loan given to a new customer by approximately 30%. That relationship would not be nearly as powerful if it were not for the passionate work of the nearly 1,000 staff in our retail branches, where we still originate and service nearly 2/3 of all our lending volume. Our business development and partner support teams also continue to execute on our plan to becoming the leading provider of non-prime automotive financing in Canada, with originations in this category up 144% year-over-year. In addition to standing up our strategic digital partnership with Canada Drives, which is currently performing well, we were pleased to officially achieve the milestone that was originally set for year-end. Crossing over 2,200 active auto dealer partners in the quarter. In addition to the expansion of our distribution network, we also continue to invest in providing our dealers with a superior product, service, and technology. During the quarter, 75% of our automotive financing volume came from dealer partners that we acquired prior to 2022, which is strong evidence that we are continuing to win more market share and highlights the growth potential that still lies ahead. As banks tighten lending criteria, we also remain the beneficiary of good quality borrowers that are unable to access traditional financial products. We believe our home equity lending program is an example of this, with 48% of loans in the quarter being issued to new borrowers, up from 37% the prior year, and originations up 125% year- over- year. While the average property value has declined from peak levels, the loan-to-value ratios, including our loan, remain below 60% on new originations, signaling the high quality of customers and business we are underwriting. Lastly, we continue to make progress in growing our point-of-sale lending platform. With our power sports vertical performing well, which experienced a 37% increase in loan originations in the quarter, we were also pleased to gain positive traction in the development of our healthcare financing vertical. While still only a small portion of our overall lending volume, healthcare grew to CAD several million in loan originations during the quarter, and we were pleased to announce a partnership with Eye Recommend, a Canadian-based cooperative with a network of over 1,300 optometrists from coast to coast. This new early-stage financing vertical aims to help Canadians afford everyday dental, cosmetic, healthcare, and veterinary expenses that they do not have sufficient insurance coverage for. We look forward to providing updates going forward as our business development and partner support teams continue to work building and supporting our network of merchants, which now exceeds 6,000 partners across all our financing verticals. As we continue to travel into more challenging economic conditions, the quality of our lending activity actually assists in strengthening the overall performance of our portfolio, helping to shelter against risk caused by deterioration of the macro environment. During the quarter, we issued the highest proportion of low-risk category originations in our history, and for the second quarter in a row, the weighted average credit score of our loan originations exceeded 600, nearly 20 points above the existing portfolio. In our automotive and home equity products, we have seen sequential growth in the proportion of originations in our highest credit tier. Lastly, the proportion of our portfolio now secured by hard assets, such as real estate or automotive and power sports equipment, is at an all-time high of 37.6%, up from 33.2% in the prior year. We also continue to pass along the benefits of scale through gradually reducing the average rate for our borrowers. Through our interest rate reduction programs and the gradual shift in the overall product mix of our portfolio, the weighted average interest rate charged to our customers declined to 31%, down from 33.6% at the end of the third quarter last year. Combined with ancillary revenue sources, the total portfolio yield finished within our forecasted range at 37.4%. Total revenue in the quarter was a record CAD 262 million, up 19% over the same period in 2021. In addition to the benefits of the evolving product mix, which serves to improve the credit quality of our portfolio, we have continued to make proactive, targeted, and methodical credit model enhancements each quarter since the fourth quarter of 2021. These adjustments include modifying credit tolerance levels, adjusting our affordability calculations to account for a greater level of expenses brought on by higher inflation, and limiting our lending amounts to borrowers in higher-risk credit tiers. We are also implementing another generation of credit models featuring new statistical techniques and data sources, which are projected to be 200% stronger at predicting risk than a generic credit score in Q4. By increasing the accuracy of the credit model, we can preserve a similar level of lending volume while taking the model's improvements in the form of lower credit risk. Together, the disciplined approach to managing credit risk by focusing on the quality of our originations and underwriting standards has further strengthened the resilience of our portfolio. The annualized net charge-off rate in the quarter remained stable at 9.3%, comfortably within our target range of 8.5%-10.5% and meaningfully lower than pre-pandemic levels of 13.2% in Q3 of 2019. With credit performance trending well, our loan loss provision rate reduced slightly to 7.58% from 7.68%, primarily due to the improved product and credit mix of the loan portfolio. We believe this level of provisioning reflects the appropriate level of credit risk of the business moving forward given the growing proportion of secured lending. As the operating environment becomes more uncertain, we're also employing a disciplined approach to managing expenses to ensure that our operating leverage can continue to outrun the compression in our risk-adjusted margin and elevated borrowing costs. During the quarter, our efficiency ratio, specifically operating expenses as a percentage of revenue, reduced to 32.6%, down nearly 400 basis points from 36.3% in the third quarter of last year. Operating income for the third quarter of 2022 was CAD 91.4 million, up 12% from CAD 81.4 million in the third quarter of 2021. Operating margin for the first quarter was 34.8%, down from 37% in the prior year. After adjusting for non-recurring items, we reported adjusted operating income of CAD 94.8 million, an increase of 11% over the CAD 85.8 million in the third quarter of 2021. Adjusted operating margin for the third quarter was 36.2%, down from 39.1% in the prior year, due primarily to the increase in loan growth related to loan loss provisions that need to be recorded on our net receivables growth. Net income in the third quarter was CAD 47.2 million, which resulted in diluted earnings per share of CAD 2.86 compared to CAD 3.66 in the third quarter of 2021, a period which included unrealized gains related to investments. After adjusting for these non-recurring unusual items on an after-tax basis, adjusted net income was CAD 48.6 million, up 4% from CAD 46.7 million in 2021. Adjusted diluted earnings per share was CAD 2.95, up 9.3% from CAD 2.70 in the third quarter of 2021. As highlighted earlier, we experienced another quarter of accelerated organic growth at CAD 219 million or CAD 118 million above the same quarter last year. As such, we incurred an additional loan loss provision expense related to the growth in our receivables. At a provision rate of 7.58%, the additional CAD 118 million in growth year-over-year resulted in approximately CAD 0.40 of incremental provision expense on an after-tax per share basis. However, the incremental growth is highly accretive to the long-term earnings of the business. With that, I'll now pass it over to Hal to discuss our balance sheet capital position before providing some comments on our outlook. Thanks, Jason. In connection with our earnings release yesterday, we also announced other meaningful enhancements to our balance sheet with a new CAD 200 million securitization facility to fund the growth of our automotive financing program. This new facility will be secured by automotive consumer loans with an initial term of two years and interest on advances payable priced at the rate of one-month Canadian Dollar Offered Rate plus 185 basis points. Based on the current one-month CDOR rate of 4.23% as of November eighth, 2022, the interest rate on draws would be 6.08%. This new facility complements our existing CAD 1.4 billion revolving securitization warehouse facility and CAD 270 million revolving credit facility, bringing the total debt capital provided by our bank syndicate partners to CAD 1.9 billion. As with our existing securitization facility, we will also be establishing an interest rate swap agreement to generate fixed rate payments on the amounts drawn to assist in mitigating the impact of increases in interest rates. As at the end of September, 95% of our drawn debt facilities were fully hedged, though we do continue to be exposed to rising rates on incremental draws in the future. Inclusive of these recent enhancements, we had approximately CAD 1.12 billion in total debt capacity and our fully drawn weighted average cost of borrowing sat at 5.2%. Free cash flow from operations before the net change in gross consumer loans receivable in the quarter was CAD 95.6 million, up 7% from CAD 89.2 million in the third quarter of 2021. To highlight the cash-generating capability of the business, we estimate that we can currently grow the consumer loan portfolio by approximately CAD 250 million per year solely from internal cash flows without utilizing external debt. Of course, the current level of growth in the business far exceeds this level, thus we are a net cash user. We also estimate that once our existing sources of debt are fully utilized in the future, we can continue to grow the loan portfolio by approximately CAD 400 million per year from internal cash flows. In addition, if we were to run off the consumer loan and leasing portfolios, the value of the total cash repayments over the remaining life of our contracts would be approximately CAD 3.4 billion. If during such a run-off scenario with reasonable cost reductions, all excess cash flows were applied directly to debt, we estimate we could extinguish all external debt within 15 months. We finished the quarter with a net debt to net capitalization ratio of 72% as a result of the strong organic growth of the portfolio. The healthy cash-generating capabilities of the business will result in a gradual de-leveraging over time. Given we generate the greatest return on deploying capital toward organic growth, we continue to make that our highest priority use of the company's financial resources. I'll now pass it back over to Jason. Thanks, Hal. While the current macroeconomic environment does present challenges, it is also a time where opportunities can be found. We continue to experience strong growth fueled by both our business initiatives and favorable competitive dynamics. The headwinds we face create even greater difficulty for many of our smaller scale competitors. For example, in the last 12 months, the top 5 companies competing for the most popular loan search terms on Google have cut their online marketing presence in half. Furthermore, several direct competitors have seemingly held origination volumes flat or begun to reduce their volumes as they struggle with rising costs, higher cost of capital, and rising concerns about future credit risk. While we are approaching this environment cautiously by making regular proactive credit adjustments and tightening our expense controls, we are also confident that the business is well-positioned to grow responsibly and navigate through the current economic conditions. Over the next few months, we are excited to be finishing up development and testing of our new consumer mobile app, goeasy Connect. Through this new digital portal, customers and prospects will, over time, be able to complete account management functions, view and apply for our entire suite of lending products, receive personalized loan offers, access their credit score, and connect directly to an agent for support. We remain on track to launch version 1.0 in the first quarter of 2023 and believe it will truly empower non-prime Canadians, enabling them to effectively carry credit in their pocket, removing the barriers, stress, and inconvenience of the typical borrowing experience. In our disclosures yesterday, we have also reaffirmed our three-year commercial forecast. We now expect to finish at the high end of our range for loan book growth in 2022 and near the midpoint of the ranges for portfolio yield and credit losses. Moreover, we remain on track and committed to growing the consumer loan portfolio by approximately 54% to nearly CAD 4 billion by the end of 2024. Turning specifically to the upcoming quarter, we expect the loan portfolio to grow between CAD 175 million and CAD 200 million. As our portfolio continues to evolve and our consumers' average APRs gradually reduce, we expect the total yield generated on the consumer loan book to decline to between 36% and 37% in the quarter. We also continue to expect stable credit performance with the annualized net charge-off rate remaining between 9% and 10%. As we highlighted for the last few quarters, there are numerous reasons why non-prime consumers generally fare well during periods of economic weakness. However, as noted in my earlier remarks, we are also leveraging both product mix and targeted credit and underwriting enhancements to ensure we safely navigate our portfolio through periods of turbulence. As suggested earlier, the tightening of credit criteria and favorable competitive dynamics only serve to assist in helping produce healthy and high-quality receivables growth. In closing, I want to thank our entire team for their relentless pursuit of excellence. As a business with ambitious goals, we strive daily to deliver on our commitments and consistently achieve our targets while providing our customers and merchants with respect, support, and exceptional service. More importantly, our team is dedicated to helping our customers to fill their borrowing needs today while improving their credit and reducing their future interest costs. No matter the headwinds we face, the goeasy team is dedicated to our journey to build Canada's leading non-prime consumer lending platform. With those comments complete, we will now open the call for questions. Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star one one on your touchtone telephone. One moment, please. Our first question comes from the line of Etienne Ricard of BMO. Your line is open. Oh, good morning. I presume it's me. First on credit performance. Industry consumer insolvencies have been rising in recent months and normalizing towards pre-pandemic levels. Now, at the same time, your net charge-off ratio has been fairly stable in 2022. Now, I understand the mix shift dynamic, but I'd like to get more visibility into how your unsecured portfolio is performing and what explains the discrepancy with insolvency trends we're seeing. Hey, it's Jason Appel here. I'll provide some commentary, and then Jason Mullins can tack on if he feels it's necessary. I think your comment around insolvency is a good one. The one point I would have you take into consideration is while insolvencies are certainly rising, they remain about 20% below pre-pandemic levels, overall. I think one first has to contextualize the level of insolvency. It certainly is up, but it's not nearly where it was, 2-3 years ago. I think the other thing to keep in mind is a number of the credit adjustments that we've made over the course of the last several quarters, dating all the way back to Q4 2021, have specifically been designed to allow us to better target at-risk customers who are at risk of going insolvent while being with us as customers. While the insolvency risk is certainly rising, our experience in necessarily taking a higher level of insolvency has not fundamentally moved over the last several quarters. It's that combination of proactive credit adjustments where we're trying to target those populations more effectively before they decide to approach a trustee in bankruptcy and instead choose to work with us on favorable terms. That generally has helped keep our portfolio in good stead, in addition to all of the other product-related and credit-related changes we've made on non-insolvent type customers. That tends to defy what you might think is the trend of the marketplace. It is something that we have collectively engineered over the last number of quarters since insolvencies started to rise back in the latter half of 2021. I'd say I would just add a point that we touched on last quarter as well and the one prior. When we develop our commercial forecasts and the target loss rate range, we do so contemplating a series of stress scenarios, which in our most recent set contemplates going into a mild to moderate recession, insolvencies rising back to and potentially above pre-pandemic levels, and unemployment rising to traditional mild to moderate recession levels. Those things are already factored into and taken into consideration when we make those proactive credit adjustments. We have to make the right tolerance level of modifications to anticipate that type of macro environment. We think about those as being essentially embedded into our results and embedded into our decision-making with respect to credit. Thanks for sharing. On the new mobile application, what benefits to customer lifetime value and cross-selling rates are you expecting, I guess, first of all, with existing customers? Then how do you think about this application as a new customer acquisition channel? Yeah. This will be obviously a multi-year journey for us to really see and unlock its potential. I guess the way to think about it today is our multi-product business model is built on the assumption and the data experience we've gathered to date, which suggests that because of that wide range of products and the range of rates we offer, customers are likely to spend numerous years with us as active borrowers and take multiple products and multiple loans. Creating a mechanism through which they can conveniently see all of what's available and then request to pursue credit in an additional product or a convenient way to push them pre-approved, customized, personalized loan offers is really important. While to date, we've been able to do that through text and phone and email, you know, we're now at a point where that idea of a mobile app and a digital portal becomes the most commonly expected tool to be able to do that. As we've shared a few times before, we have still not yet begun to cross-sell all of our products to all of our customers. We are only cross-selling a subset of products to a subset of customers. At the moment, we're seeing a conversion rate of between 10% and 30% after one year when cross-selling customers from one product to another. We had hoped that the mobile app, being a more convenient tool, will only increase that propensity as then leading to extending the lifetime value. To your other point, yes, it could definitely become valuable from a new customer acquisition perspective as well. Today, if you think about it, when we are trying to capture a consumer, we're really trying to capture a consumer right now only at the moment that they need credit. They're actively searching for credit, or they're at one of our merchants there to buy something and need credit to finance it. Eventually, the idea should be that we can promote the mobile app as being a single source of access to credit for a wide range of products so that passive individuals that are perhaps just perusing online, or on social media become aware of this mobile app as being a great new tool for access to credit, download it, and then start to expose them to all of our products. I think it's more likely to be something that focuses on existing customers first, but as you get into the future, absolutely, it could be a tool for new customer acquisition as well. Thank you very much. Thank you. One moment, please. Our next question comes from the line of Gary Ho of Desjardins. Your line is open. Okay, Gary Ho of Desjardins, your line is open. Okay, great. Thanks. First question, just wondering if you can elaborate on the new credit model you plan to put through in this quarter. What gives you confidence this new version will give you greater predictive power and ability to reduce the default rates? Maybe walk us through. That'll be helpful. Sure, Gary, it's Jason Appel again. A couple of thoughts on that one. As far as the new models we're deploying later this month, there are several of them. A couple of things sort of stand out in my mind that make them, let's say, better than their predecessors in the past. One would be, obviously, they're built on much larger amounts of data, which you can appreciate as we scale the business. The more data that we can accumulate on our own experience proves very helpful when building those models. These new models also contain new attributes that we acquire from our partners at TransUnion, our primary credit bureau provider. They supply us that information which we then test out and analyze to see their predictive power. These new generations of models have new variables that our older generation does not. These models were also built using more advanced statistical modeling techniques, so they're able to give us a much better level of predictive power when it comes to being able to confidently identify customers at risk of default over various periods. What that effectively allows us to do is, either, if we choose to, hold our current level of originations at or near where they are today and either accept a lower level of credit risk because these models better diversify our risk, or we could conceivably choose to take up our level of originations and not take on any level of incremental risk. In essence, they give us more flexibility to toggle whether or not we need to solve for a specific loss rate target we identify or whether or not we wanna take advantage of a market situation where we want to actively be more aggressive in a known area of our business where the returns are quite high and quite profitable. I'd say the last comment that gives us that confidence is we put in place some pretty robust monitoring and reporting that effectively increase the speed of the feedback loops that allow us to see how effective the models are performing in pretty quick time periods. As opposed to having to wait months on end to know whether or not our models are generating the expected level of performance, these new levels of models, combined with the reporting we built around them, give us a greater degree of understanding over a much shorter duration, such that if we need to further adjust them or toggle them, we don't have to wait as long as we would have in the past. Those are the major reasons I would say the models give us a higher degree of confidence in their power to be predicted going forward. Okay. No, thanks. Thanks for that. Maybe, while I have you, related question, also on the credit side. You know, everyone's talking about the lag effect of all the rate increases has on the consumer economy. Wouldn't say we're in a normal environment today, but, you know, how do you factor this lag impact into your underwriting or modeling? Not sure using historical data now will be a perfect predictor of what's to come. No, I think that's a fair comment. You know, if I look back over the series of credit adjustments we've been making since Q4 of 2021, most of those quarters have involved a resetting of the affordability levels we use to determine how customers qualify for borrowing. I think as Jason mentioned in the remarks of the call, we typically don't keep our customers' affordability levels flat. We've actually been proactively reducing them over the last several quarters, given the fact that, as anyone would know who's out there, consumer expenses are rising, especially on basic staples like food, gasoline, and heating. We've been progressively reducing those affordability levels and in so doing, taking into consideration those events that just simply can't be predicted, as you correctly pointed out, by the history for the past. It requires us to be pretty on track with respect to monitoring the behaviors in the overall economy and then looking at our current affordability levels literally on a monthly basis to decide whether or not we wanna make any tweaks or adjustments going forward. Because the portfolio does churn relatively significantly even within a one-year period, making those changes on a repeated basis can have fairly significant impacts over relatively short time periods because you're writing new originations every quarter on the quarter. If those originations are being written more conservatively or taking into consideration lower affordability levels, they tend to produce higher quality originations in a pretty fast manner. That's the way in which we've been tackling it till the last number of quarters. Gary, I'll just add one thing to that. You know, we've mentioned before how the rising rate environment primarily impacts homeowners, of which that's of course a smaller proportion of our business at around 20%. For the 80% that carry fixed rate credit products and have on average lower debt than the prime borrower, about half as much, their impact from a rising rate environment is much less significant. Interestingly, on our homeowner portfolio, specifically the home equity product, we, at the time of origination, capture the information about the customer's original primary mortgage, and the renewal date of that mortgage. What that's allowed us to do is bifurcate our home equity portfolio into two subsets. Those consumers who have had to renew their first mortgage since June first of this year when rates start to rise meaningfully, and those that have not, to be able to compare the delinquency levels of the individuals who have since increased the rate of their primary mortgage and presumably had to take on a higher payment size. While we're only of course five months in post that cycle, at the moment the delinquency rate of that subset of people sits at or below the subset of those who have not yet experienced a renewal of that primary mortgage. Again, early five months in, it's only a small proportion of the customers so far, but we're monitoring that literally every week. We think it's a great way to be able to gauge for those customers who are exposed to rising rates, which are the homeowner subset, how are they doing in absorbing that extra payment size. So far, we've seen zero deterioration in that respect. Okay. Perfect. Thanks for sharing that. Then, my last question on slide 10, maybe this is a question for either Hal or Jason Mullins. You show the efficiency ratio down 370 basis points year-over-year. When you look out to 2023 and 2024, I imagine, you know, decline wouldn't be as steep. Can you walk me through where you think you can take that efficiency ratio to if you hit your three-year commercial targets? Yeah. I think while we haven't provided efficiency ratio guidance, we have provided operating margin guidance. That, of course, is going to be the net effect of a decline in the risk-adjusted margin, increased borrowing costs, and improved efficiency ratio all blended together to produce operating margin. As you'll recall from our forecast, which we've reaffirmed, we expect the operating margin to expand by 100 basis points approximately each year, next year and the year after. Again, that expansion is net of the fact that our risk-adjusted margin is compressing because we're bringing down average APRs and our cost of borrowing has, of course, slowly incrementally increased with the rising rate. You can factor in with a certain compression of the risk-adjusted margin and a certain assumption for the increased cost of borrowing being gradually baked in, how much our efficiency ratio therefore needs to improve if our total operating margin as a company is still going to gradually expand. We're very fortunate that because of the stage we're at in our business cycle, that leverage, that operating leverage and the benefits of scale on the OpEx are today absorbing and offsetting compression of the risk-adjusted margin and higher borrowing costs. A lot of businesses, obviously, in today's environment, cost of capital goes up. That pinches the bottom line and compresses net income margins. We expect our net income margin to remain and/or improve over the next couple of years, barring any major unforeseen circumstance. Okay. Got it. That's helpful. I'll do that calculation. Thanks very much. That's it for me. Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star one one on your touch-tone telephone. One moment, please. Our next question comes from Marcel McLean of TD Cowen. Your line is open. Okay. Good morning. Thanks for taking my question today. I'm gonna go back to credit. I really don't wanna belabor the point too much, but there still seems to be a bit of a disconnect to me. You referenced that at these levels, your charge-off ratio is relatively normalized. In the macro environment, we're seeing insolvency still, even though they're rising, still well below pre-pandemic levels. The larger financial institutions, you know, that deal mainly with prime borrowers, they're seeing that lagged effect where credit's still very favorable for them. You know, your portfolio has changed a lot over the last few years, it's tougher to compare to pre-pandemic levels in that sense. How can we get increased comfort that these are in fact normalized levels for you if we're still well below pre-pandemic levels in terms of insolvencies in those types of macro inputs? Yeah. I mean, I'll cover it again, and I don't mean to kind of hammer on the same points, but they are the critical points that need to be emphasized. If we were in a normal economic environment, not deteriorating, no high inflation, no expectation of rising unemployment, no increases in insolvency, we were just in a steady as she goes environment. The combination of the credit model adjustments that we've proactively made and the material shift in product mix towards secured loans would result in a gradual decline in our loss rate. In fact, if you recall, prior to the last set of commercial numbers we provided, we had previously, before we revised them under the current economic outlook, expected the charge-off range that we experienced to step down both the upper and lower bound by 50 full basis points. We've of course since revised that earlier this year and now said we expect credit to remain stable. For us, when you think about the fact that we've done credit model adjustments and we've got a shifting product mix, stable is the equivalent to acting as the offset to deterioration in the macro environment. Make no mistake about it, we're not any less susceptible to the pressures of that macro environment than anyone else is. It's just that those two factors, when accounted for at our total portfolio level, are allowing us to run with a very stable credit performance. We're able to essentially absorb those increases in insolvencies, absorb those higher inflationary expenses, absorb an expectation that unemployment is going to rise and still be able to operate within our target loss rate range. If the other way to maybe think about it is just to emphasize the product mix. The categories where we've talked about experiencing more significant growth, but over-indexing or higher proportion of growth, home equity, automotive, and powersports. All three of those products have loss rates that sit well below our current portfolio average. As they represent a larger and larger share of our book, we would otherwise, in a normal environment, see those loss rates begin to gradually drift down. The stable loss rate is a reflection of having accounted for a series of stressed scenarios in the macro environment. Hopefully that's that kind of really, you know, adds a bit more color. Yeah. The only other point I would add is, as we pointed out, with almost 38% of the portfolio now sitting and being secured by hard assets, not only do those portfolios enjoy the low average loss rates, as Jason mentioned, they also have very, very low bankruptcy and insolvency rates. Because the individuals who generally pledge those assets as security are loathe to give them up in periods of economic stress, and they'll often prioritize repayment of those assets over certain types of unsecured debt. As a result of that portfolio mix continuing to rise, the proportion of the bankruptcy and insolvency that sits within that book actually declines overall. That's why you have to look at bankruptcy and insolvency within the context of the shifts that are taking place within the portfolio and not necessarily what's going on just within the broader market. Okay. Thanks, thanks for that additional color. Yep. I'll just add one more quick comment on insolvencies because we've touched on this topic in the past. You know, the total number of insolvencies in Canada as a representation of the total population is still less than 1%. Sometimes it's kind of one of those things where the numbers can be a bit tricky. Insolvency is up 20% year-over-year in this most recent month. You know, when you quantify that, it's about 1,000 people increase year-over-year. The 20% I know can sometimes sound alarming, but when you look at the underlying data, that really only represents just over 1,000 Canadians more year-over-year. Given we, you know, are still a fairly small business in the context of the size of the Canadian population, it maybe doesn't have the same effect it might sound like on the pure headline. Just to add a bit more context as well. Okay. I think that's a good point. In a similar vein, on demand, I think at the start of the call I heard you say applications are up 44% year-over-year and we're at another record level. Again, going back to the larger financial institutions, we're starting to see borrower demand slow in that cohort at least as these rising interest rates start to impact consumers. It sounds like within the subprime segment, you know, you're not seeing that, but your comment as well was that some of your peers that their origination levels have remained flat or their loan book levels. Just wondering kind of how you think about things going forward from here. Do you see any slowdown in demand or do you expect it to pick up? How do you think about kind of the competing market dynamics right now? Yeah. A couple things on that. One of the ways that our business is currently different than some of the peers within our industry is we are amidst a growth strategy benefiting from numerous business initiatives that are effectively expanding our amount of distribution. We, as I mentioned earlier, have added several hundred more automotive dealer partners. This last quarter, we did our partnership with Canada Drives, Canada's largest online car retailer. We have added 12 branches year-to-date. We have continued our expansion to Quebec. I mentioned earlier some of our point of sale traction in power sports and healthcare. If you are a business that has a single product and a single channel, then your growth trajectory is going to be in large part influenced by just the sheer environment. What's going on with consumer demand and what's going on with competition? In our case, we have expansion from numerous products and channels that is also aiding and contributing to our rate of growth. That would be. That's net of the credit changes that we've made. That would be one point. Secondly, I mentioned in our comments about the competitive dynamics. You know, I don't wanna speak about any specific competitor, it's not necessary, but it does appear like as we look at the competitive landscape, that some of the companies who perhaps have less scale in particular, whether it's because of rising operating costs, rising cost of capital, concerns about credit risk, funding capacity, all the things we know that businesses, you know, struggle with at times like this, smaller scale competitors are only going to struggle to a greater level. It does appear as a result, they've had to moderate their level of investment, their level of spend, pull back on origination growth, and that's creating good competitive dynamic for us as well. Lastly, we mentioned in our comments, we do see what we think are signs and signals of prime lenders and banks tightening credit criteria. To your point, they have not yet seen and experienced that in their actual loss performance. But that doesn't mean that it might not be because of credit tightening, and it doesn't necessarily mean that they wouldn't be proactively tightening credit. That does push some customers down into our segment. We think the home equity products and on the automotive products, because those are the two most near-prime products, the ones that sit most on the doorstep of prime for us, are the best products to be able to monitor that effect. As I said earlier, those two we've seen sequential increases in the proportion of those originations in that highest credit tier. You know, no way to know for certain, but certainly a strong signal it's pushed credit down from banks. Very happy with the current growth trajectory. Feel good about the current kind of competitive and consumer demand levels. We're just making sure we take advantage of that to make those appropriate credit adjustments so that we can grow confidently and responsibly. Okay. All right. Thank you. I appreciate the color. Thank you. One moment, please. Our next question comes from the line of Jaeme Gloyn of National Bank Financial. Your line is open. Hey, Jaeme. Might be on mute. Oh, hey. Yeah. There we go. Perfect. I actually didn't hear that it was my turn. Yeah, a few more questions on the next-gen credit models. Hoping you can give us a little bit more color as to the history of its development, some of the test and learn outcomes over that timeline. Is the expected rollout to apply to all future loan originations and existing loans, or is it a measured rollout? Hey, Jaeme, it's Jason. I'll answer your second question first, and then I'll just talk about the development. As you would know, we very much embrace and have supported a strong test and learn philosophy when it comes to our credit model deployments. The new models that are set to go in in about a month's time are very much being tested on only a portion of the portfolio, both new customers and existing customers. Much in the way as we've always operated, we usually have between three and four credit models operating, if you will, behind the scenes that are in some form of test and learn mode. That allows us, as you know, to inform the sort of the champion model that starts to give us the most confidence while we test challengers around the periphery. We do that on a randomized basis so that we don't prejudice or bias the populations that we put in them. As it relates to the development, you know, credit model building, if you will, is both an art and a science is something that we've been engaging in now sort of well beyond a decade. Our mechanisms for building it have continued to get more sophisticated in two ways. One, you know, the sheer software power, the muscle power of newer techniques that are out there and the analytical platforms that you can use to service them really cut down on the timeframes within which you need to build these models. While they incorporate, you know, months, in some cases, years of data history, what's really interesting about where the power of these models go is how quickly we're able to distill the variables that have the biggest impact. It's not that we find that out overnight, but we're able to get to those conclusions much quicker over time. Then we're able to simulate exercises with various competing models in an effort to figure out which of those attributes that go into them are likely to be more predictive before we put them into an actual simulation in our production environment, where, as I said before, we'll only give a small portion of the portfolio exposure to it. Once we see how that performance goes. We can either ratchet up or ratchet down the level of exposure, or in some instances, we can tweak. What I mean by tweak is we can change the composition of how those models are built. A great example of where we've done that has been in our experience with Quebec. You know, we've been in the Quebec market now for almost six years, and over that time, we have deployed four different generations of credit model, including the one that's going in in December. Over that time, we've, you know, we've gained a tremendous amount of learning about the differences within the Quebec market, and that's helped us form our development. It's also helped us to form the kind of data we need to put in. All along the way, we continue to test and challenge additional models along the way. Even though we may have only had four generations of credit models that we've used, we've actually built far more. We've just chosen not to deploy them because when we simulate their activities, they just don't make the grade. Those are a couple of ways in which we're able to build those models out in pretty robust time frames and with a pretty decent degree of confidence in how we're gonna roll them out. As always, these are measured rollouts that we carefully plan well ahead of time, so as not to put the portfolio overall at risk. Okay. If I understand correctly, then in December all new loan originations will be on this next gen model that has been, of course tested and worked on for the last several quarters or even longer. Is that fair? I would say, yeah, a portion of all new loan originations and a portion of existing loan originations will be on the new models because as you know, we use different models to adjudicate existing borrowers versus new borrowers. It's very much a very minor percentage of the total number of applicants, but enough to give us a statistical read on how those models are likely to perform. Okay, great. One more follow-up on that. Has the experience of U.S. peers that have gone down this path of using AI and next gen credit models, have you talked with them? Have you learned from those experiences? What have you maybe taken from their performance and applied to your modeling? Especially as we see some of those models kinda missing the mark a little bit in the U.S. Yeah, I think the one thing to think about when we look at our US peers. I mean, these folks have been in the credit modeling business as long as we have. I, you know, I'm not here to comment whether or not the models are better or worse or are sophisticated or not, because I think a number of them are quite frankly quite good at what they do. I think the difference you have to keep in mind around why some of our US comps may not be enjoying the stability of the credit performance that we've had is I think we've been very fortunate in two ways. One, obviously, we've been able to consciously shift our product mix over the last three years, which has offered us additional offset protection in a worsening credit environment, if you will, in general. The second thing would be is I think we've done a fairly effective job of being able to read the performance of our models, and we've proven over the past and continue to do so, that we're not afraid to make those changes prospectively. Now, the danger that a lot of lenders can sometimes run into is when they realize the ship has already left the yard, they've got to make fairly substantial changes in their credit, which has the dual impact of cutting their originations and actually worsening their performance in the short term because their overall portfolios slow down their rate of growth. You know, over a 10-year history, we've learned over many years on how to navigate those waters very carefully so that we're not making all of our credit changes in one swoop. We're doing it bit by bit, quarter by quarter. In doing so, we're not necessarily relying on just one set of changes. That in and of itself allows us to diversify our risk more effectively, because we can always come back and tweak and make adjustments that we would have made before. The difference is we're making them sooner rather than later, and we're prepared to sacrifice the impact that might have on origination, but not in such a way as we have to absolutely slow down our rate of growth. We're able to continue to drive our rate of growth as we're also making tweaks along the way and continuing to build that learning as we get more informed about the impact of those tweaks. I would say our credit modeling capabilities are as good as our peers. I think where we might have a bit of a leg up, in addition to the fact of how we steer the business from a product composition point of view, is being able to make those changes more frequently without necessarily putting the overall business at risk. Jim, I'll just add to that. Like, the idea of creating and developing new models to challenge the existing incumbent models is something we've been doing every year for a decade. This is not new or different in that way. Nothing here has changed in terms of the typical cadence with which we develop models that are attempting to use more data or new modeling techniques to be more predictive. That's just what we do. The reason we highlighted it here is just that when a new model is being implemented, if it is more predictive, you have the option to hold the loss rate flat and receive additional volume by way of its more accurate nature or to hold the volume flat and benefit from an improved expectation of loss savings. Given the environment, we're choosing the latter. As Jason said, we implement it on only a small subset of business. We monitor it closely, and if it's not performing to that level, we can quickly switch back to the other existing incumbents. To date, in 90% of all the instances we've put in enhanced models, it's proven to deliver us the lifted performance we expected. This is from our perspective, just a continuation of our strategy, and we're very happy with the history that we've had in navigating credit risk. Okay. Thanks for the color. Thank you. One moment, please. Our next question comes from the line of Stephen Boland. Your line is open. Sorry, was that Stephen Boland? Yes, sir. Your line is open. Okay. All right, thank you. Sorry, first question. Just looking at your consolidated leverage ratio, it is ticking up, you know, quarter by quarter. It's at your kind of, I guess, your maximum 4.5 x. Can you maybe just talk about where do you see that going, or, you know, does it stabilize here? Yeah, Steve, I can touch on that and then Hal can chime in as well. You know, leverage is essentially one major variable in our business model. Our job is to manage the capital and the growth rate in a manner in which we manage leverage to a level we're comfortable with, and that keeps us on track with all of our covenants and constraints. That's what we've always done, and that's what we'll continue to do. Clearly the strong organic growth means that leverage sits at or just beneath the level that you noted in our current covenant package. Rest assured, we are very aware and carefully manage that level of leverage. We always have numerous tools, primarily managing the rate of organic growth, to be able to manage leverage. We're very comfortable with the tool set to be able to do that. Okay. Just to basically your guidance that you've provided takes that into account in terms of your leverage. I guess is a way to look at it. Yeah. The range we provided to the market, yes, contemplates managing the business to within our leverage objective, yeah. Okay. My second question, just the new securitization facility, I haven't calculated this, apologies, but I think the effective rate is around 6%. Is that comparable to your other facilities? Will this be taking all the auto loans, or will it just be a certain segment that will be going into that facility? Yeah. It's Hal here. Yes, the rate would be comparable to our current securitization warehouse. That's the one-month CDOR rate plus 185 basis points. In terms of the assets that we'll actually look to securitize, would be based on eligibility and reinvestment criteria. We'll filter through those qualified assets. Okay. I'll take that as maybe better quality, you know, better borrower, et cetera, et cetera, 'cause just to go into that facility. Is that a fair way to look at it? Yeah, similar to what we would do on our other securitization facility. You know, obviously, accounts that you know have a high credit risk or a deterioration wouldn't qualify for inclusion in that facility. Yes, we tend to want lean towards high-quality assets. Okay. Thanks, guys. Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to Jason Mullins for any closing remarks. Great. Thank you, everyone for taking the time to join today's call. We appreciate your attendance, and we look forward to updating you again on our next quarterly earnings. Have a fantastic day. Thank you. Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.