Q1 Fiscal 2018 Investor Presentation June 14, 2018
2 Caution Regarding Forward-Looking Statements From time to time Concentra Bank ( Concentra ) makes written and verbal forward-looking statements. These are included in the MD&A, periodic reports to shareholders, regulatory filings, press releases, Concentra presentations and other Concentra communications. Forward-looking statements are made in connection with business objectives and targets, Concentra strategies, operations, anticipated financial results and the outlook for Concentra, its industry, and the Canadian economy. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, closing of transactions, performance or achievements of Concentra to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to capital markets and additional funding requirements, fluctuating interest rates and general economic conditions, legislative and regulatory developments, changes in accounting standards, the nature of our customers and rates of default, competition, and other. All material assumptions used in making forward-looking statements are based on management s knowledge of current business conditions and expectations of future business conditions and trends, including their knowledge of the current credit, interest rate and liquidity conditions affecting Concentra and the Canadian economy. Although Concentra believes the assumptions used to make such statements are reasonable at this time there may be other factors that cause results not to be as anticipated, estimated or intended. Certain material assumptions are applied by Concentra in making forward-looking statements, including without limitation, assumptions regarding its continued ability to fund its lending business, a continuation of the current level of economic uncertainty that affects market conditions, continued acceptance of its products in the marketplace, and the current tax regime. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Concentra does not undertake to update any forward-looking statements that are contained herein.
3 Speakers Don Coulter, Bsc, Msc, CPA, CA President and CEO Paul Masterson, CPA, CA, MBA EVP, CFO
Update from the President & CEO Don Coulter President & CEO
5 CEO Update Concentra Q1 Strong financial results YTD net income above business plan targets for the 5 th consecutive quarter Named one of Canada s 50 best managed companies as a platinum member CEO Update Concentra officially welcomes Don Coulter March 12 CRO Update Concentra officially welcomes Philippe Sarfati June 18
6 CEO Update Concentra Q1 Franchise Strength Wholesale bank and trust company for Canada s credit unions Continued credit strength within diversified asset portfolios Consistent profitability of core business Diversified funding sources support strong liquidity management Involvement with Fintech and traditional capital markets partners provides diversification benefits and enhances internal competencies Continue to further leverage existing partnerships and enhance origination channels
7 CEO Update Concentra Q1 Q1 Business Highlights Commercial Lending very strong results Alt A volumes continue to beat expectations Consumer Lending Business volumes outpaced expectations Credit quality of portfolio continues to improve translating into lower specific provisions Continued to build and diversify our funding sources Strong growth of credit union deposits Inclusion on the nominee deposit platform of an additional large Canadian bank
Q1 Fiscal 2018 Franchise Earnings Paul Masterson EVP, CFO
9 Improved results in Q1 Very strong ROE % in Q1 Revenues down slightly from Q4 PCL remain low; Q1 is reflective of the change for IFRS 9 Expenses down from Q4 Net Income improved from Q4 Business Highlights in Q1 Total Assets modest growth from Q4 Strong results in our Commercial Lending business Residential Mortgage & Securitization business continues to be impacted by slower market conditions, market opportunities emerging in Alt A Steady results in our Consumer Lending business Consistent results for our Trust and Leasing businesses $Millions Q1/F18 Q4/F17 Q1/F17 Net Revenue $26.5 $27.9 $26.0 PCL $(3.0) $(0.6) $(0.6) Expenses $18.8 $20.6 $18.1 Net Income $10.7 $7.9 $8.5 ROE% 11.1% 8.8% 9.1% Total Assets ($B) $9.2 $9.1 $9.7
10 Residential Loans Assets on Balance Sheet ($B) Loans Originated ($M) 5.9 6.1 6.1 6.1 6.1 537 211 319 231 189 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Lower Insured Mortgages available due to market headwinds Shift to conventional and Alt A growth in Q1
11 Commercial Lending Assets on Balance Sheet ($B) Loans Originated ($M) 1.3 1.2 1.2 1.2 1.2 92 103 73 45 54 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Stable first quarter originations
12 Consumer Loans Assets on Balance Sheet ($M) Loans Originated ($M) 366 370 369 365 364 36 52 42 44 14 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Stable production from consumer lending sources
13 Funding and Liquidity Total Deposit by Source (%) Total Liquid Assets ($B) 49% 50% 52% 50% 49% Securitized Capital Markets 1.5 1.5 1.5 1.4 1.3 15% 15% 14% 12% 13% Commerical Credit Union 29% 29% 28% 30% 31% Retail Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Stable diversification of funding
14 Strong Capital Ratios Capital Ratios remain stable CET1 RATIO Q1 F18 Ratio (1) Regulatory Minimum CET1 13.1% 7.0% Tier 1 Capital 17.6% 8.5% Total Capital 18.6% 10.5% Leverage Ratio 4.6% As prescribed by OSFI 11.0% 11.8% 13.0% 13.1% 13.1% Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 (1) As per OSFI s capital adequacy requirements
Questions?
16 Get in touch! Investor Relations Contact: Paul Masterson, CPA, CA, MBA EVP, Chief Financial Officer paul.masterson@concentra.ca 306.523.5026 Bruce Klassen, CFA Corporate Treasurer bruce.klassen@concentra.ca 306.566.1956 concentra.ca/investor
17 Concentra Bank, 2018 concentra.ca