Gerald Soloway - Chief Executive Officer Robert Morton - Executive Vice President and Chief Financial Officer Pino Decina - Executive Vice President, Residential Mortgage Lending Martin Reid - President Gary Wilson - Executive Vice President, Underwriting

Geoff Kwan - RBC Capital Markets Dylan Stewart - Industrial Alliance Stephen Boland - GMP Securities Edward Friedman - McLean & Partners Graham Ryding - TD Securities Shubha Khan - National Bank Dan Furtado - Philadelphia Financial

Thank you, operator. Good morning, fellow shareholders, ladies and gentlemen.

Thank you for joining us this morning to talk about Home Capital’s third quarter results, which I am pleased to say are positive and showcase the strength and increasing breadth of our business here at Home Capital. We reported another quarter of stable net income and again demonstrated excellent credit performance.

Our balance sheet remains rock solid. We made progress in driving renewed growth in originations in our core business of single-family residential mortgages and we generated significant growth in other areas of our business.

The present is very good and there are many reasons to be excited about the future. Net income was $72.4 million for the quarter and $217 million for the first nine months of 2015.

This is down slightly from the third quarter 2014 with net income of $73.8 million and flat compared to the $217.2 million in the first nine months of 2014. Diluted earnings per share were similar.

Diluted earnings per share were at $1.03 for the quarter and $3.09 for the first nine months of 2015 compared to $1.05 and $3.09 earned in the comparable period of 2014. And the Q3 2015 diluted earnings per share was flat compared to Q2.

So, we are flat quarter-over-quarter and very similar year-over-year. The return on common shareholders’ equity was 18.7% during Q3 2015 and 19.2% for the first nine months of 2015, a level that is excellent by any measure.

And the non-performing loans as a percentage of gross loans was 0.30%, under a third of 1%, at the end of third quarter, compared to 0.33% at the end of Q2. So, it’s down slightly over Q2 and 0.30%, same at the end of Q4 2014, so continuing very strong credit performance.

Total write-offs and this is even more significant, total write-offs during the third quarter of our portfolio of over $18.3 billion and on balance sheet loans were 4 basis points, unchanged from the same quarter last year, but year-over-year, total write-offs during the first nine months of 2015 were only 3 basis points compared to 5 basis points last year, both numbers on an annualized basis. We are seeing good growth in all of our lending products.

Total originations, including residential and commercial mortgages, Visa credit cards and retail credit were $2.6 billion in the third quarter compared to $2.1 billion in the second quarter, an increase of 23.6% quarter-over-quarter, but it’s down slightly from the $2.66 billion reported one year ago. We are called Home Capital for a reason and we are first and foremost, a company that makes home loans to individuals and families, but we are more than that and our results this quarter demonstrate that diversification.

And in light of this performance, the Board of Directors approved a quarterly dividend of $0.22 per common share payable on December 1, 2015. We also renewed our normal course issuer bid and purchased for cancellation, 107,000 shares in the quarter and we plan to make additional purchases when appropriate going forward.

Although 2015 will be a year of flat to modest growth over 2014, we continue to expect that Home will enjoy solid growth next year, which will reflect the strength of our overall businesses, our diversified sources of growth, the company’s expectation of improving origination volume for the remainder of the year and the momentum we are building for next year and the future. In late 2014 and during the first six months of 2015, the company reviewed its mortgage broker relationships.

By July 2015, we had suspended approximately 45 brokers out of the total of over 4,200 brokers that were on our books when we started the process. We suspended these brokers, because we were concerned about the quality of the income documentation for mortgages that they originated.

I will just pause there. There never was a concern about the credit quality or the valuation of the properties.

It was only relating to the income documentation. We also changed our underwriting processes to separate sales and underwriting of mortgage products.

While it’s simple to say, it’s a very difficult process to change the culture of a company and do that separation effectively. While we had some growing pains during the second quarter, we now see very promising signs that our efforts to change our processes and grow our mortgage broker network are working and the third quarter results bear that out.

We reported traditional residential mortgage originations of $1.51 billion in Q3, an increase of 17% from the $1.29 billion in Q2. Accelerator originations for Q3 2015 were up 48.9% to $416.3 million over the last quarter.

We clearly have more work to do. Compared to the third quarter of 2014, traditional originations were down 14.7% and accelerator originations declined some 20%.

However, overall total originations are down only slightly due to strength in commercial mortgages, Visa products and retail credit. Maybe this is a good time to pause and talk a bit more about the loans originated by the suspended mortgage brokers.

Many of you have asked how much of our portfolio came from those brokers. In Q2 2015, we stated that the amount originated only in 2014 from the suspended brokers was $960 million.

The total value of the loans that they originated from the time that the brokers first started doing business with Home which in some cases was several years ago and that were outstanding on September 30 was $1.72 billion, out of a total mortgage portfolio of $23.4 billion. That is down from the $1.93 billion as of June 30.

I want to point out that the $200 million decrease in the quarter was due to normal run-off and there were no losses involved in the $200 million run-off. I would like to stress some key points about that $1.72 billion outstanding.

The first is that it is not the value of loans based on sub-standard documentation. Those represent a much smaller subset of about $1.72 billion.

As we have disclosed, we are reviewing and revalidating where appropriate the income documentation related to all of the loans from the suspended brokers. We are approximately one quarter of the way through the review of the loans and we plan to complete it sometime in 2016.

So far, more than 90% of the mortgages renewed are eligible for renewal on our books, either because we are comfortable with the original documentation or we have sought and received updated income documentation. That means our new standards.

As for the remainder, which is less than 10% and actually around 7% or 8% of the present time of what we have reviewed so far, either the customer wasn’t cooperative or has not provided adequate income documentation to-date. We will deal with this group on renewal accordingly.

So far, they are all paying and we will honor the mortgage until the renewal date and deal with it at that time. And this is the key point.

These mortgages are performing very well, in line with or better than our broader mortgage portfolio. I emphasize that there have been no unusual credit issues.

And I repeat, for the first nine months of 2015, total credit write-offs on our entire portfolio were only three basis points compared to five basis points last year. And I emphasize our credit quality on our whole portfolio is strong and not a concern for the company.

So from our perspective, as we start to put this issue in the rear view mirror, the key is to remain vigilant, to keep in mind the lessons we learned and to keep improving the way we do business. To that end, we have added some important expertise with the hiring of Gary Wilson, our new Executive Vice President of Underwriting.

Gary brings significant experience from his most recent role as Head of Retail Credit Adjudication at one of the Big Five banks and from his work prior to that with OSFI. Turning to the road ahead, we expect to see continued progress in driving improved single-family originations for the remainder of this year, keeping in mind that the fourth quarter is seasonally slower than the third quarter.

And that optimism is based on the results we are seeing, the quarter-over-quarter increase and the momentum we are seeing as well as the measures that have yet to come. For instance, we are rolling out our new broker portal and our broker partnership program later this month at the National Mortgage Broker Conference.

We continued to build new broker relationships. Over the past year, we have added more than 600 new brokers to the list of active brokers, so that the total number of active brokers who have completed at least one transaction with Home in the last 12 months is now approximately 4,800 and that number is continuing to grow.

We are also optimistic about our other sources of growth. We have already talked about the significant increase in our other mortgage lending businesses.

In our consumer and credit card business, we previously announced the launch of two new Visa credit card programs, Union Plus Canada Visa card and the Optimax Visa card on behalf of Union Plus Canada and Optimax Credit, respectively. We like the returns from these businesses.

Our other lending segment which comprises credit cards and other consumer retail loans represents about 3.3% of our total on balance sheet portfolio, but generates 6.4% of the net interest income this quarter. Perhaps the biggest news after the quarter end is the closing of our purchase of CFF Bank for approximately $17.80 million subject to final adjustments.

Within the first 30 days of closing, i.e. by November 1, we have permanently reduced the ongoing non-interest expenses at CFF by more than 50% and we anticipate further substantial cost savings and efficiencies going forward.

We have also injected an additional $35 million of capital to stabilize the CFF Bank and to have sufficient capital for future profitable growth. As many of you are aware, CFF Bank had a substantial tax loss carry-forward and we hope to benefit from that tax loss credit as CFF Bank returns to profitability.

This is a relatively small investment for us but it accomplishes a number of very important things. First and foremost, it obtains a wholly-owned bank as a subsidiary of Home Trust, which has been a strategic priority for us.

This will help us in our efforts to further diversify our deposit taking and funding base. CFF also gives us a distribution agreement with a network of more than 30 Canadian First Financial Centers located across Canada.

This is another channel for originations and since closing on October 1, little over a month ago, we have received a positive response from the CFF broker network regarding CFF and the whole mortgage products. So we are quite excited about that.

To sum up, I think this was very positive quarter. We made good progress on ramping up our single-family originations and we see more to come.

We have demonstrated that we have lots of ways to grow in other areas of the business as well. Finally, I would like to extend a welcome to William Walker, who we announced will be joining our board, bringing a wealth of experience in the area of banking law with emphasis on the rights and remedies of mortgage lenders.

Now, we will be pleased to take your questions.

Hi, good morning.

Good morning, Geoff. How are things in Vancouver?

Well, it’s overcast at the moment. So, I don’t know.

The first question I had for you was just about the process you are doing in terms of reviewing the loans from the affected brokers. I just wanted to get a better understanding of what exactly you are doing like was it kind of full re-underwriting, was it just looking for income verification, was it looking for just where there were some sort of irregularity versus what you would normally do in your underwriting?

All of the above. We looked at them with increased scrutiny.

The file was there, we went through every piece of documentation. We re-verified income proof.

We confirmed property valuations. Every part of the file, we wanted to know exactly where we stood.

So, basically it was not – that’s why it’s taking a bit of time. We put a whole team and have hired some additional expertise and there is a whole team working their way through that portfolio and we are highly confident that when we are finished we have what comes out of the process is a very pristine group of loans.

Okay. And then thanks for the disclosure in terms of kind of that 90% and 10%, what those examples are.

I guess my question is for that 10% there, I mean, what would your options be if at the term renewal, you guys don’t extend them, but they have difficultly or are unable to get a loan with another lender?

Well, first of all, what’s been happening so far, when they come back to us and if they are among any of them that we can’t be completely satisfied, we have said no, some come back and ask for more money, some are able to convert to being insured, some sell their house, but there is a normal turnover with our normal portfolio. It’s always – a lot of them are one and two-year mortgages.

So, there is a certain amount of turnover. Now, they had to-date have had no problem getting loans both from other regulated companies.

They also have been able to go to the non-prime market. There are number of situations out there, companies, mortgage investment corporations, etcetera and they have been able to get financed.

Up to this point, there has been absolutely no problem and but I think we can – the ones that we can’t get documentation to our satisfaction, I think if we handle them gently, but firmly, we will be able to de-market them. We are not prepared to renew any of the people who don’t have proper documentation and we have a very experienced collection group who have dealt with people in the past that need to be de-marketed and there is a way of doing it, it’s not just throwing them out on the cold.

You work with them, you tell them who other sources in the marketplace may assist them, but so far, they have rolled off with really no problems.

And sorry, the 10%, would that be more of prime borrowers or would they be more of your traditional borrowers?

They are the traditional. They are mixture of both.

They are both the insured product and the traditional.

Mostly traditional at this point, Geoff.

Okay. And just the last question before I hop back in the queue, on that kind of the $1.93 billion going down to $1.72 billion quarter-over-quarter.

I mean, I think that would imply on an annualized basis about a 40% run-off, which I guess it would maybe runoff a full book in the little over two years, is that kind of the way to think about it?

I would think so. I think it will substantially be all gone, but well before the end of next year, we will have fully reviewed and at least have a circle around those files that we could not get full documentation.

And since many of those loans are one and two year loans that are not the insured loans, we expect to be seeing them on renewal all before the end of next year.

It’s Morton here. The run-off is a little bit quicker at this point, because a lot of it is the traditional portfolio, but as you get down to the insured piece that will extend a little bit.

So, it won’t run off quite as quickly.

Got it. Okay, thank you.

Good morning, Gerald.

Good morning.

Just a quick question on the 90% renewals that you have seen so far, do you see a big increase in the interest rate or an increase in the terms that you have had to provide these guys as they renew?

No, because we are not renewing those who may have any impairments on their proof of income. We have just taken a very strict line.

If they can’t confirm their income, we haven’t increased the rate. We have just told them that we are de-marketing them, if they can’t prove their income to proper standards.

So, we are not renewing them at an increased rate, but there it exist a very large non-regulated market out there, that’s happy to do them, because they have good credit records. If they look at their payment history, they are very good and there is a market, there is a lending capacity in the marketplace that will happily lend them probably at a premium to what we were charging, but they are not going to be thrown out in the cold.

Okay, great. And maybe if you can just provide a bit more color on process, I know you have done a lot of work to improve the turnaround times on your underwriting, particularly on the prime side.

We saw originations bounced back a little bit quarter-over-quarter, maybe just an update how things are looking through even in Q4 beginning of the first month here?

Yes. We are going to turn this over to Pino Decina, Head of Mortgages and he will describe what we are doing.

Hi, Dylan. So really, as Gerry mentioned, the first six months was really revaluating relationships that we currently dealt with in the past and happy to say that we have gone through that process.

And as Gerry mentioned, we have added some 600 plus new brokers to our relationships. Those amount to just over 100 actual brokerages across the country, the majority being obviously in Southern Ontario.

And so we are starting to see the fruits of all that labor. Towards the tail end of Q3, we started to see a pipeline, which tells us that the response from our broker partners is bad, the first month of the quarter looked good.

The pipeline continues to be strong for the end of the year. We have got some really good announcements coming out in a couple of weeks as Gerry mentioned at the National Trade Show.

Our broker partners are aware of what’s coming. They are very excited about not only the portal, but also becoming members of our new loyalty/partnership program which takes effect the January 1 of New Year.

So, all-in-all, it’s been lot of efforts to reengage not only the sales force here internally, but also bring onboard some new partners that we want to continue doing business with not only in the short-term, but be partners with us in the long-term, so…

And just to add on to what Pino said, let me just indicate one of the key expertise is that Gary Wilson who we brought on as Head of Underwriting is job one for him was streamlining the processes that we have in the insured product. Now, the insured loans are to a large extent a commodity, there is not a lot of discretion, the people either qualify or they don’t qualify.

There is not a lot of further explanation and documentation and Gary brings the expertise of having seen how it was done at the Big Five banks with a proper credit adjudication. And so that all the requirements as required by the insurers and the regulator are carried out in the proper efficient line where the underwriting team has proper objectives and they are pulling all of the requirements.

And I think as we roll through that and bring – make those changes, I think the whole underwriting process on the accelerator will be smoother. It will enable us to do and increased volume and as we are starting to see some volume coming out of CFF which is very encouraging, we want to be able to do it and do it smoothly and not have any problems where documentation slips through that’s not really up to standards.

So I think we will be having more to say to you about it in future quarters, but we are working hard at it, we are running as fast as we can. Okay?

No. That’s much appreciated guys.

Thanks very much.

Thanks Dylan.

Good morning Stephen.

Good morning. Just I would like to go back to the – and you are certainly going to get asked this by the shorts community and obviously you have been under a little scrutiny, but I guess the review time is something that’s going to be a question in terms of going into late next year.

If you have got a dedicated team, it almost seems like a bit of a horse race, the book is rolling off with real more credit issues, while you are doing this review. So what would you say to that in terms of, it’s still taking another year for you to get through this book of business?

I think Martin is very close to it and he will answer the question.

Hi Stephen, it’s Martin. So it’s not just reviewing the documentation.

So it is calling the employer and that doesn’t always happen in a timely fashion, by the time you get the right person at the company to verify the income. So it is a very manual process and it is on every file.

So, it does take a long time to go through that. We do have a dedicated team addressing the affected portfolio.

We are also doing it on a go-forward basis in all our new businesses. So it is adding a lot more work both to the underwriting of new business, but also the remediation of this portfolio.

It just takes time to do it properly.

And as I have said before, the shorts will do what they want to do. But every short is a future buyer.

Okay. Second question is just on the CFF Bank, I am trying to figure out how the strategy now that you said it’s a subsidiary of the trust, I know a lot of American investors don’t realize how valuable the bank license is on getting cheaper funding.

So you pump $35 million of capital into it, why not a couple of hundred million if it’s going to allow you to get cheaper deposits, like how does that fit into the broader strategy over time?

Steve, you have known us a long time, we are great believers as we don’t jump in the lake. We like to walk in a toe at a time, a foot at a time.

Let’s get started slowly. As you know, the amount we paid was not that significant, we wanted to capitalize it for all the present activities.

As it rolls forward, we built it out, we get our strategy. The capital is not bringing a hole in our pocket at Home Trust, so we can always move it over.

So if the demand for more credit is there, more capital is there, we will utilize it. But let’s go step by step, roll out our strategy.

First of all, the first strategy is really to reach out to the existing mortgage broker network and get them to respond to which they have. We are going to have a – we are going to emphasize the CFF’s deposits to the public and that will roll out over the next period of time.

And CFF will also have some other lending products, but we have only closed the month. We are still integrating the premises.

We have moved out – or moving out in the next few days out of the space that they had in Calgary to our premises that we already have. We are moving the Oakville office that they had into Toronto office.

So there is a juggling of people, we are integrating the teams. It’s all happening, but again we are running as fast as we can, but you don’t want to run so fast that your start tripping.

And Stephen, you are right that eventually more capital will go in there, but we will push capital into CFF as the deposit base grows. So the $35 million was sort of an initial to stabilize the entity and get it off the ground, but over time as that deposit base grows, we will push [ph] more capital into it.

Okay. And I guess last question, just there was some expectation maybe of dividend increase, but you have got a lot going on with the new bank, capital injection there and obviously the thought of buying back more shares.

So what is your thought on capital allocation here over the next three months to six months, is buying back shares kind of your first priority?

Stephen, our priority is to utilize the capital effectively. So we have increased our buyback as was noted in Q3, the acquisition of CFF, so in terms of M&A activity, although it’s a small one.

We don’t want – you know in 28 years we have done two acquisitions, very limited on the buyback, we don’t spend or give away our capital very easily. But the dividends, we are still up 22% year-over-year in terms of the dividends.

So that will continue to be part of the plan going forward is increasing dividends, but we tend to be a little bit more patient with the dividend increases.

Yes. We will look at it very carefully at year end and see where we are standing with everything.

We haven’t forgotten about it.

We do recognize though that we do have a lot of capital, but we want to make sure we spend it wisely.

Okay, that’s great. Thanks guys.

Thanks Steve.

Hello.

Good morning Edward.

Good morning, how are you?

Good.

I am sorry, I was wondering if you can just explain why it’s – like you have explained basically why it takes long to adjudicate these mortgages, but I agree with the other caller that it seems like it’s very, very long to approve them and like the other one stated, the run rate is fairly, these mortgages will probably settle by end of next year. So by the time it will be sort of a useless process.

And the other one is of the originations that you have put $2.5 billion, I was wondering how many of these are new mortgages, new loans, not renewals and how did that change quarter-over-quarter and year-over-year. And the last one, it seems like the Bank – the Home Trust is still struggling for growth a little bit, because the loan growth – the loans have not grown by much in the last year or so, I was wondering if there is any problems that you see in terms of marketing your products or do you see any problem in the market that’s a result from that?

Thank you.

Yes. So maybe working backwards in terms of the growth and lot of this we have talked about in Q2 and continue to talk about and that was the lot of the loosing of the originations of those 45 brokers as well as change in processes.

So as mentioned earlier, the change in the processes were well on our way, there is still a lot of work to be done to really sort of get to the surface level that the brokers are anticipating in particular on the insurance space, but we are pretty comfortable that we will be well positioned here prior to [ph] 2016 for that. In terms of the time or the files, it is a manual process.

So on any individual file, you have got to call the employer, you don’t always get the person. He is not always willing right away to provide you the information.

So it does take quite a while and it is going to every file. So it’s not just getting the documentation and then putting it through.

It’s making that physical phone call that’s taking the time.

Okay.

And we would rather do it thoroughly Edward than sort of we could go through it and not do a slower job, but I think we are getting our maximum benefit out of very carefully reviewing. We are now sort of disclosing – not now but this is actually we have now gone through a quarter of all the historic loans, we are not finding a credit problem.

If there was anything on the file where there were non-performing or there were any issues, we jump on that file right away, because no non-performing issues, there are some as we said are running off just at the end of the term. So, we are quite confident that we have seen the worst of it, but the worst of this what we are going to see at our portfolio that it will continue on a similar trend and we will keep you posted, but it’s not something that you can do overnight.

There is a process to get it done properly.

Yes. The first time we are approaching, we are dealing with the ones that are maturing sooner first, but that’s the approach that we are taking.

So, we are not just letting them mature and renew. We are dealing with them first to deal with them first and that’s why it’s a lot of the classic portfolio that’s being dealt with first versus the insurance portfolios.

On your other question with regard to originations, all of the originations is new business either refinance or newly originated business. So, it does not include any of the renewal.

But a refinance is not in terms of a renewal?

No, refinance would be somebody taking more money out.

Okay. Also in terms of these brokers, it seems like these brokers are only 45 people, but they generated like about 70% of your loan books today.

As far as I know at least from previous statements, you seem to be working on like 4,000 brokers. These brokers seem to be very, very prolific.

Any thoughts on how you are replacing these 45 highly prolific brokers?

We are replacing those brokers as Gerry mentioned over 600 new brokers, but the volume takes a while to build up for a new broker. They don’t necessarily give you all the business upfront versus when you cutoff a broker and they are generating a lot of volume, you lose that right away.

So, it doesn’t take time for that volume to pick up, but that’s where the addition of new brokers, the addition of the CFF network, these things we think over time not only replace that business, but replace it with better quality business.

So, from what I understand, the brokers issue is mainly the reason why your growth this year and probably even last year understandably was stalling and next year, do you expect it to be better?

Yes, it was a big impact on the growth as well as the change in process. So, there were changes in processes as well, which as we have talked about are being refined.

Okay, thank you very much.

We are pretty comfortable with next year.

Thank you.

You are welcome.

Good morning, Graham.

Good morning. I know there has been – it’s kind of common question, but maybe I could just go at it a different way.

I think everybody is scratching their head a little bit as to why it’s taking so long to get through this $1.9 billion or $1.7 billion in mortgages. And I guess in context, you did almost $2 billion this quarter in new originations.

So, I guess there must be a much more manual review and underwriting process going on with these mortgages associated with the 45 brokers than what would be associated with originating new mortgages. Is that why it’s taking so long?

Yes. So, I mean, going back to the documentation, then getting the updated documentation, then verifying that documentation.

So, it is a much more tedious process than on new originations, where we can manage that as that business comes through the door.

Yes, if I could just add one thing to that. Graham, you are absolutely right, a lot of the processes and due diligence that we put in place this year obviously do take time and lot of the things we put in place obviously were emergency measures, stop gap, we don’t apologize for the processes that we put in place in 2015.

I think going forward though, as Martin mentioned, we can now start to review our existing process and tweak it a bit. That doesn’t mean we jeopardize all the things we have put in place.

We are going to continue to call 100% of all employers. Job letters verify income the same way we have been doing this year, but I can say that, that is different than maybe what’s out in the marketplace.

We are taking this approach on 100% of the files whether it be at renewal, whether it be as part of our review or whether it be at ingestion as part of originations and underwriting. I think going forward over the course of the next three months, we have got plans to do a better job of that from a turn time standpoint, but it doesn’t take away from the due diligence that we have put in place and we will continue to put in place going forward.

Yes. And the marketplace tends to take a risk-based approach versus what we are doing, which is 100% of the cases.

And how many people would you have? You said you have a team reviewing this.

So, how many people would you have dedicated to this $1.7 billion of oranges?

Yes, it’s quite a few and it’s in the renewal group, it’s in the underwriting, it’s in the compliance group that are working together to do that.

Okay. Jumping to the CFF Bank, it sounds like you have been very quick to adjust the cost base out of the gate.

Can you give us some color around what sort of overhang or operating losses you expect or maybe a timeframe before this platform breaks even and then starts to make money?

Yes. As Gerry mentioned, the cost structure has been cut in half in the first 30 days.

We anticipate that we get that down to a little more than a quarter by the end of the year. And by the end of the year, the remaining pieces are really around technology and transferring the business from their technology platforms into ours, where we will be able to reduce the cost base further.

Once that’s done, then it becomes easier to sort of ramp up that business. We didn’t want to start ramping up the business within CFF until we have lot of that transition out of the way.

So, it will be sometime middle of 2016 or so.

Yes. They do have a portfolio and it does generate some income and they had a good month of originations in the month of October.

So, we are quite optimistic and we will give you guidance on this next year. It’s a bit early for us, but we are quite comfortable that in a very short period of time, the bank will be running profitably.

Well, hopefully it will be next year, but I can’t give you guidance on that, because we have got to see everything kind of runoff and cleaned up, but some of this stuff is covered by certain escrow accounts, but we are very pleased. We have the bank.

We have the broker relationships. We have a tax loss carry forward.

We are in quite good shape. And I don’t know if you have had much experience with mergers, where we haven’t done a lot of purchases and mergers, but I know from historically anytime you buy something even though they had a Big Four accounting firm, we had our firm, Ernst & Young go in, we had our own group go in.

We did the closing, but sometimes there is some monsters in the cupboard that nobody has found, but I got to tell you we are delighted. If anything, there is a few cookies in the cupboard, but there is not any monsters and all we found so far are a few cookies and they are not sale data.

And so we are very pleased and we are pleased with the purchase and we might be able to next quarter give a little more color on it, but it seems to be off to a terrific start.

Great. And is there any plan yet or how do you plan on connecting CFF Bank with your Oaken brand?

Yes. So, we have aware we had an application in for a bank back in November and that was part of the strategy was it might [indiscernible].

So, again that’s going to be a function of how quickly we can transition on to our platform and it will be a dual – if you are a dual entity dual issuer model that will be running with to generate those deposits. So, it’s really going to be a function of when we will get them on to our platform, but that is the game plan.

So, our priority is really to get the cost structure down. So, we can reduce the bleeding and then to shift that business model with the technology in place to better serve the CFF centers as well as drive our deposit business.

And as I say we are only in 30 days in and we are delighted with the progress to-date. We will give you a better report when we talk to you in January – at the end of January, early February.

Okay, great.

Okay, go on.

Thanks.

Okay, thanks.

Good morning, Shubha.

Good morning. Just a question on the efficiency ratio this quarter, so it was less than 31% and I guess it was down because of share-based compensation which makes sense, but you are also investing in a number of initiatives, direct deposit loan originations, CFF Bank, whole bunch of things.

Just I am wondering are the associated costs largely reflected in the 31% efficiency ratio for the quarter or will it ultimately trend higher?

Yes. We are pretty comfortable with where it is.

There is a little bit of dip in this quarter just with the compensation side of it. But if you would adjust it for that, we are pretty comfortable with the efficiency ratio running there.

What’s really elevated that over the last little while has been less about the expenses and more about the drop in revenue.

Got it. And then, I noticed that you purchased insured mortgages from a third party in the quarter, I guess the question is why did you see fit to I guess augment your – accelerate your originations this way and I am not sure whether you have done so in the past, is it something which you intend to do on a regular basis going forward and are the economics of this type of transaction significantly different from sourcing accelerator mortgages directly from brokers?

No, it was – we were quite pleased with the purchase terms. It was an entity that was broker driven type of loans, that wasn’t – we just found it economically feasible to make the purchase.

We may well make further purchases depending on the market conditions.

And we have bought loans previously, Shubha. We haven’t done it on what I would say a regular basis, but we have done this opportunistically.

Okay. Okay.

Final question just on the origination outlook, I appreciate all the color you gave us on the call so far, but I guess what I am trying to get a sense of is, whether – despite the efforts that you have made in I guess on-boarding new brokers and other measures you have taken to boost the pipeline, it still sounds like originations will be down in the final quarter relative to last year at least and whether you think…?

I wouldn’t agree.

Okay.

Not on what we are seeing to-date.

Okay. So you expect Q4 originations to actually turn higher than last year?

You know what, I have learned that in this predicting business, we are better off not getting to say too much because all I do is get beaten to where they specked up they would. But I am telling I am confident that we are having and I have a good fourth quarter, the first month was good, the pipeline is good.

If we don’t get hit with a satellite or some crazy thing happens, I think we will be very pleased. You will see the momentum that started third quarter over second quarter we had a nice boost.

I think you will see that momentum is continuing, we have got our processes, we have got our brokers, we have got our credit quality. I think everybody is marching together.

We are pretty dedicated. We have added some new people.

We have got a stream of additional business coming out of this CFF Bank. I think the numbers are going to be quite good, but to give you the exact number, I don’t know how much.

I mean Shubha, it is seasonally it is typically a little bit lower, but we are making good progress and we think that should help us to factor where we were in terms of market share and business with brokers both on the accelerator side as well as the classic side.

Pino, I would just explain the one index we moved up in the quarter, what was – who was that?

Actually very good point Gerry, the broker lender market share which is distributed through Davis & Henderson-Filogix, which basically in just over 90% of all deals to broker lenders across the country, tracks market share for the lenders and we have moved up from sixth place to fifth last month in that market share report. So, as Jerry says, all the trends continue to be strong and we see that obviously continuing next quarter and into next year.

Yes. We would like to move up another notch which we are running hard to make it happen.

But stay tuned, I think the news will be good. But that’s just my opinion.

Alright, thank you.

I am sorry hold-on. Last call, okay.

Thank you very much. One more call.

Good morning.

Most of my questions have been answered. Just a couple of things, on the CFF, what is the asset size at this point?

I am going to turn you over to our CFO.

Its $237 million on balance sheet right now.

Okay. And is there a reason to think that, that bank could earn not next year, but in a year or 2 years 1% to 1.5% return on assets – or 1% to 1.25% probably more likely?

It’s hard to say this. But the way we look at it is we are managing it on a consolidated basis.

So the bank really facilitates the funding piece and gives us, it’s hard to say at this stage of the game.

It will be a little bit of how we allocate the total assets in part, but it will definitely add to our asset base and will definitely add to our profitability.

And we will look to put the assets in the entity where it makes sense to put the assets. So it could be some shifting of assets between one entity versus the other that…

And as I pointed out earlier, we do have a tax loss carry forward there. So it’s we will be motivated to ramp that up and get some good profitable assets in there.

Okay. Let me look at it the other way, what do you think if you start looking at ‘17 and beyond that the addition of this bank will add to your growth rate?

I am sorry, can you go through that slowly, we didn’t get it at all, Dan.

Sure. If you look at 2017 and beyond, what do you think the addition of this bank will add to your growth rate, in other words, if your initial growth rate would have been X, it will be X plus, what now?

Yes. I am not sure there would be much of an increase in the growth rate.

It’s really to facilitate the deposit financing. On the growth, that’s [Technical Difficulty] networks it’s mainly on originations you get an extra…

10% to 15%.

Yes. I think that’s a good conservative number.

10% on originations.

That’s exactly what I was hoping to get. And my last question on this is this didn’t close until this quarter if I remember correctly.

But I would assume that if there was a problem with underwriting concern by the government, they wouldn’t have let you close this bank, correct?

We cannot speak on behalf of the government, but I think that’s a fair assumption.

Yes. We went in and did a file review, we were comfortable, we provided all the supporting information to the regulators.

We got all the approvals quite expeditiously after we had done our due diligence.

Perfect. Thank you very much guys.

Congratulations on a good quarter.

Thank you.

Okay. So thank you everyone.

Thank you very much for joining us. As I said, I think we have a good solid quarter.

We have got momentum going. I think there is a lot of items that got closed off.

I think the problem with these problem loans and the problem brokers I think will be in our rear-view mirror on a going forward basis and we will concentrate on trying to deliver the increased profitability for the future. So thanks for joining us and I look forward to chatting with you again in February when we announce our year end numbers.

Thank you.