Thank you, Chelsea. Good morning, everyone, and thank you for joining us today.

Our agenda for today's investor presentation is as follows: We'll begin the call with remarks from Yousry Bissada, Home's CEO. Our CFO, Brad Kotush, will then review our financial performance, which will be followed by a question-and-answer period for all participants.

We have a number of members of our senior management team with us on the call to help answer your questions. On behalf of those speaking today, I note that this call may contain forward-looking statements and that actual results could differ materially from forecast, projections or conclusions in these statements.

Please refer to our advisory on forward-looking statements on slide 2 of the presentation. I would also remind listeners that Home uses non-GAAP financial measures to arrive at adjusted results, and that management will be referring to both reported and adjusted results in their remarks.

And now, I'd like to turn the call over to Yousry Bissada.

Good morning. And thank you for joining us for our first quarter conference call.

Today, I will discuss the results for the quarter and some of our strategic objectives for the remainder of 2021 relating to underwriting, funding, update on our Ignite Program, and capital optimization. We had a good start to the year.

We continue to see the effects of strong housing demand in our major markets. Sales figures and transaction prices are significantly higher than in 2020.

We expect this trend to continue in the near term as early indications of a healthy spring housing market will be compared to April and May of 2020 when the economy first went into lockdown. At that time, there was early evidence of uncertainty around the progress of COVID-19 and the direction the economy.

Home responded with a number of strategic decisions to prepare the company for this uncertain future. The first decision was to move to a work from home model.

This was accomplished quickly and seamlessly, with our primary concerns being for employee health, health and safety, and for customer service and data security. The second was a shift to what we call pandemic underwriting conditions.

This meant a change in our risk appetite for both residential and commercial loans. On the residential side, we reduced our maximum loan to value criteria in certain geographic areas.

In other geographic areas, we stopped underwriting altogether. We used extra due diligence in the income verification efforts for our small business customers that were working in a location-based people gathering industries.

In our commercial underwriting, we pulled back significantly from properties in areas like hotel, restaurant and retail. We did this consistent with our sustainable risk culture and to ensure Home's resilience in the face of the pandemic.

The third decision was to build our reserves for future credit losses. This led to significant additions to our loan loss allowances in the first and second quarter of last year.

Now, let me update you on where we stand with each of these decisions today, and our outlook for the rest of 2021. First, with the exception of a few essential workers, we're still working from home.

We have learned a lot about our employees, their capabilities and concerns, and how they're all balancing work with family obligations. In spite of this, our employee organization health surveys continue to go up.

Our team wants to know when we will be back in the office and whether we will require everyone to come back full time. Right now, we don't have all the answers to these important questions, except to say that we will follow public health guidelines and also consider our experiences from the past year, input from our business leaders, and ongoing support for mental health.

We believe that some form of new hybrid model of a mix of work from home and the office will be the way back, and that it will likely take some time to settle into the new normal. Second, our pandemic underwriting guidelines are still in place, but are currently under review.

We will determine as to when to relax these standards in stages to get back to our normal guidelines over time, commencing this year. The economy has posted an impressive recovery in the last 12 months.

While there's still uncertainty about the presence of the variants of concern, we have reason to be optimistic about the progress of vaccinations and the effectiveness of public health measures. In addition, we continue to manage the fast rise of home values with prudent guidelines around maximum loan to value.

Even under pandemic underwriting conditions, Home is still the leader in alternative mortgage lending originations due to our commitment to excellent service and the engagement of our broker partners. We believe we have a compelling opportunity for even more growth in this market through the rest of 2021.

Looking beyond this year, there is a growing pool of consumer saving and higher employment and immigration targets for the next three years are the highest in history. We believe this will lead to a healthy market in mortgages and specifically strong growth in the Alt-A segment of mortgages.

Finally, we're reversing some of the earlier provisions we took against future credit losses as the expectations arising from our third-party economic models continue to improve. Brad will discuss this in more detail in his presentation.

I will point out, we continue to see our loan book as well secured and well provisioned. We continue to be conservative in our provisioning.

Our loan loss allowance after this recovery still offers a cushion of CAD 19.4 million compared to what it would be under the model-driven base case scenario. Looking at the results of this quarter, we have a lot to be pleased about.

Home reported net earnings of CAD 64.5 million or CAD 1.24 per share compared with CAD 27.7 million last year. This game as our single family loan book grew by 27% compared with last year, even under restrictive academic underwriting conditions.

Our focus on excellent service and relationship with our brokers is one of our key strategic priorities, and we expect the easing of our pandemic underwriting restrictions will contribute to opportunities for growth for the rest of 2021. Another of our strategic priorities is diversifying our funding sources.

This quarter, deposits through our open financial business surpassed CAD 4 billion or 29.5% of our total deposits. Even with the temporary closure of our Toronto store and limiting our other locations to visit by appointment, we continue to draw customers with our value proposition of attractive rates, flexible range of saving options, and top level customer service.

Later this year, we'll be delivering an enhanced digital experience to our Oaken depositors with the launch of our new apps for iOS and Android. This will both improve the Oaken offering for existing customers and widen the appeal of Oaken platform to younger customers.

This is one example of how our Ignite Program is continuing to enhance our service offerings. We look forward to sharing more details with you in future calls.

In addition, later this quarter, we expect we will be coming to market with the next offering of our residential mortgage-backed securities. Investors were pleased with the market performance and credit performance of our inaugural RMBS offering, and we believe conditions are favorable to continue with our strategy of being a programmatic issuer in this market.

We also sold mortgages under our whole loan sales program initiated in Q4 of 2020. We expect this program to develop throughout 2021, providing with another attractive option for funding diversification.

We continue to move forward on our Ignite project. The replatforming of our banking system earlier in the year is stabilizing well and no disruption to our customers, brokers and financial reporting functions.

This involved a long process of data migration and training for hundreds of employees. While this was happening, other Ignite projects were able to go live concurrently, including an update of our document storage platform, the rollout of more robotic process automation bots, and the development of our data analytics capability.

Another operational benefit from our work on Ignite is a change to our way of doing things. For every Ignite project that finishes, we leave behind an agile development team that continues to operate.

This process this process ensures we will go on sustaining innovation once the heavy lifting is over. Another of Home's priorities is optimizing our capital base.

While we delivered a return on equity in the mid-teens for the third quarter in a row, we recognize that we will do even better on this measure with a more efficient capital level. As you know, in March of 2020, OSFI announced its expectation that all federally regulated financial institutions halt dividend increases and share buybacks.

The company continues to be focused on its capital base. And for so long as OSFI's expectations remain unchanged, we expect our capital levels to remain higher than we would otherwise target.

Once OSFI modifies or removes its expectations with respect to dividends and share buybacks, we intend to consider appropriate mechanisms to optimize our capital levels, including share repurchases and dividends. Balancing business opportunities against returns of capital and subject to prevailing market conditions, we intend to sustainably managed towards a target CET1 range of 14% to 15%.

Finally, one of our key strategic objectives is to attract, develop and retain top talent. We're focused on building a culture that prioritizes inclusion and engagement, in line with our Home values.

Our efforts were recognized this year when home was named a Great Place to Work and a Best Mortgage Employer in 2021. Our cultures and values are critically important to the success of our operations and the achievement of our strategic objectives.

It is one of the material issues we identified in our inaugural ESG report, which we published earlier this year. I encourage you to read the report which is available on the governance section of the website.

This represents the first step in our sustainability reporting journey and we look forward to feedback from the investment community as we develop and expand our communication in this area. I'll now turn the call over to Brad who will provide greater detail on our financial results.

Good morning, everyone. My presentation begins on slide 6, with highlights of our first quarter financial performance.

We have a lot to be pleased about and our Q1 2021 results. We reported first quarter net income of CAD 64.5 million.

This represents growth of 133% in net income over the first quarter of 2020. Adjusted net income was CAD 65.7 million or 120% above the comparable quarter.

On a per share basis, net income was CAD 1.24 compared to CAD 0.52 in the first quarter of 2020, up 138%. Our book value grew by 15% year-over-year to CAD 33.85 per share and our annualized return on equity was 15.2% for the quarter or 15.5% on an adjusted basis.

I note that we generated that return on equity while holding a significant amount of excess capital, ending the quarter with just over 21% CET1. If our CET1 level had been at 15% throughout the quarter, our pro forma annualized return on equity would have been over 20%.

Slide 7 shows the factors contributing to the year-over-year quarterly earnings per share growth. The largest contribution came from the relevant change in credit provisions.

We took substantial credit provisions in the first quarter of 2020. at the onset of the pandemic.

And taking into account updated forward-looking information and our credit performance, released provisions in the first quarter of 2021. I will discuss credit provisions in more detail later in the call.

The EPS change from taking provisions last year to releasing them this year accounted for CAD 0.58 of the year-over-year quarterly growth in EPS. Our total revenue grew by nearly 10% during the quarter, while non-interest expenses grew by 8%, producing positive operating leverage and year-over-year quarterly growth of over 11% in our pre-tax pre-provision income.

CAD 0.16 of earnings growth was due to an improvement in our net interest income as our net interest margin expanded from 2.38% in the first quarter of last year to 2.61% this year. Our net interest margin continues to benefit from a reduction in our funding costs from a decline in interest rates.

We expect our net interest margin to stay in this range for the balance of 2021 based on our current expectations of the interest rate environment. A reduction in the number of average shares outstanding resulted in a modest benefit of CAD 0.03.

Offsetting these increases was a drag of CAD 0.06 from higher non-interest expenses. Slide 8 shows our originations for this quarter compared with last year.

Total single family originations grew by 27%, led by our Accelerator business. This is particularly gratifying because, as Yousry discussed earlier, pandemic underwriting guidelines in our classic mortgages were instituted in the middle of March last year and remained in place for the entire first quarter of 2021.

The fact that we grew our classic originations while operating under a more restrictive risk appetite gives us confidence in the opportunity for growth in the rest of this year as those restrictions are relaxed. In our commercial business, we had a strong quarter last year when a number of lenders exited the market, giving us a good pipeline of high quality projects.

This year, our volume of insured residential loans declined primarily due to a change in our allocation of CMHC insured volumes. Our non-residential commercial originations declined due to changing risk appetite that was in effect for all of Q1 2021 compared to only the last two weeks of Q1 2020.

We expect that the easing of pandemic underwriting restrictions will drag growth in this business for the balance of the year. Turning to our funding.

Slide 9 shows the deposits to our Oaken direct-to-consumer grew by 17% year-over-year. Oaken continues to attract customers with its attractive rates, flexible solutions and customer centric service and makes up 30% of our total deposit funding compared to 25% at the end of Q1 last year.

As Yousry mentioned, we are planning to launch another RMBS issue in the second quarter, following on our inaugural 2019 offering. It is our intention to be a programmatic issuer in this channel, subject to market conditions.

Moving on to a discussion of our credit provisioning and write-offs this quarter as shown on slide 10. We booked at CAD 12.1 million recovery this quarter compared with provision of CAD 30.2 million in Q1 of 2020.

Write-offs as a percentage of gross loans were 1 basis point. This was consistent with our historical experience and is evidence of our prudent underwriting practices, high credit quality of our borrowers, the level of security provided by the assets backing our loans, the overall motivation of our borrowers to pay their mortgages and protect the value of their most important asset.

Last year, our provisioning was affected by a sharp downward revision in the inputs to our forward-looking economic models of employment levels and housing prices, as well as a management overlay to model driven results. As a forward-looking information in those models of change, we have adjusted the level of credit provisions accordingly.

Slide 11 shows the distribution of credit provisions by line of business. Of the CAD 12 million released this quarter, nearly CAD 11 million is attributable to our commercial segment.

This includes allowance that was attributable to loans that were later repaid. Slide 12 shows the economic scenarios underlying this quarter's credit provision, as well as the total loan loss allowance.

The base case assumption for future housing prices has changed from deterioration to slight appreciation, and the outlook for employment has improved in all scenarios. The total probability weighted allowance for loan losses sit at CAD 58.3 million at the end of the quarter.

Our use of multiple scenarios adds CAD 19.4 million to what the allowance would be used in just the base case. The segmentation of our allowance for credit losses by line of business and by loan stage is shown on slide 13.

The chart on the right shows that 78% of the allowance for credit losses is attributable to loans classified as either stage one or stage two, which are considered performing under IFRS. We consider our loan portfolio to be well provisioned.

On slide 14, you can see that net non-performing loans are down to 38 basis points of gross loans at the end of Q1 compared with 57 basis points at the end of q4 2020. On an absolute basis, non-performing loans are at their lowest level since the beginning of the pandemic and allowance for credit losses expressed as a percentage has increased from last quarter to 16.5% of total stage three loans.

Turning to slide 15 for Home's liquidity and capital metrics. We're holding nearly CAD 1.3 billion of high quality liquid assets at the end of the quarter.

Based on an assessment of our future liquidity needs and liquidity risk management framework, we have determined that there is no longer a requirement to maintain a standby credit facility and we have arranged to terminate this facility prior to its scheduled expiry at the end of June 2021. Our CET1 capital ratio at 21.01% increased by 119 basis points in the first quarter from internally generated capital.

It is well above the level needed to fund organic growth. While we're currently restricted from returning capital out of our regulatory entities due to industrywide regulatory expectations, we were able to repurchase shares as part of our normal course issuer bid using funds at the holding company level.

In the first quarter, we bought back 1,105,500 shares at an average price of CAD 31.08 per share, representing a total outlay of CAD 34.4 million. This price represents a discount of 8% to the book value at the end of Q1.

We recognize that we are holding significant levels of capital in excess of our current business requirements and growth plans. Our first priority for utilizing that capital is to invest for growth in our core businesses, and Yousry has described a number of opportunities for us to do that for the balance of 2021.

Home has created value for shareholders through strategic returns of capital in the form of normal course issuer bids as well as by completing two substantial issuer bids since December 2018. When we're able to do so, we intend to use the most effective and efficient methods to achieve our targeted percentage range of CET1.

As always, decisions around our capital deployment options will be governed by our view on current and expected market conditions. And now, I'll turn the call back to Yousry for closing remarks.

Thanks, Brad. To summarize our discussion this morning, we're pleased with the results we're reporting today.

Home is reporting good growth, as well as visibility into growth potential for the balance of the year. We believe we have opportunities for further value creation through funding diversification, asset growth, and capital deployment, which we will execute strategically when conditions warrant.

I thank our customers and our partners for their loyalty through this period. I thank all our employees for their perseverance and dedication to our purpose.

Every day, you make me proud. Finally, our annual meeting takes place virtually this year at 10am on May 18.

We invite all shareholders and interested parties to attend. And I thank you all for participating in today's call.

I'll now ask our operator, Chelsea, to poll for questions.

Yousry, I guess I'm trying to understand – I know the pandemic restrictions in terms of originations. Maybe the trigger has been – it's already happened, but what's the trigger to release that?

Like, what are you looking forward to resume growth in not only classic, but commercial, I guess all the business lines? What are you looking for in terms of the economy or the pandemic to get that going?

To just answer the big picture first, it's the right economic conditions, which all the signals are, things are getting better, vaccines are working, there's indications that employment is going to go up, so we're seeing all the signals that it's getting better. And as I said in my comments, we wouldn't go from pandemic restrictions to exactly where we were overnight.

We ease into it. So, we'd increase loan to values in certain areas slowly and then eventually get back to our normal levels across.

We would stay still cautious with certain employment industries. Social gathering looks like it's going to still be here for a while.

So, we ease that when we saw that that has come out and it looks sustainable. It is just looking at the various things and just ensure that we are continuing to build a strong balance sheet and not choosing growth and have to pay for it in losses down the road.

And we're feeling quite good as we sit here today, what looks like the potential for Canada in 2021.

Maybe just a quick follow-up. In terms of the relationship with the broker community, because certainly other lenders, your competitors, I presume, you can see the numbers have opened up, what's the – is there a growing frustration with brokers that are sending you applications?

Or do they understand that these are unusual times? I'm just trying to gauge – like, are you missing a window here, I guess, in terms of restarting your growth?

I think it's a little of both, Stephen. The brokers that we deal with are – as you know, we don't deal with the entire broker community.

We deal with a subsection that really understand Alt-A. I think they understand.

They would of course like us to relax our underwriting more because they think there's value to placing mortgages with Home, but they understand and our team – our mortgage team is in constant communication with them and advising them of where we're seeing the world. And we get a lot of feedback on how the industry is shaping from them.

So, yes, some would like us to open up tomorrow morning, but I think they understand and they continue to be very loyal to Home, which pleases us.

So, strong operating efficiency in the quarter. And great to hear about the initiatives at Oaken, such as the new application.

Can you talk a bit more about this initiative and what's next for the Ignite Program in 2021?

I will ask Benjy to make a few comments who's on the line. Benjy, among his many responsibilities, is in charge of our Oaken brand.

But I will just talk a little bit about 2021. We embarked on a mission about two years ago to upgrade our core SAP system.

And with that allow us to get more ability with digital, more ability with CRM, more ability with database management. We have really seen the fruits of that labor.

There's a lot in place now in database and CRM. And we think we are going to continue to use that and continue to grow in that.

I also mentioned robotic processing. There's lots more opportunity for us.

So, it's a wave that's going to hit every part of our business where we understand our client and all the various sectors a lot better and how to serve them better, how to ensure that we've got the right solutions for them, how to ensure that we have the right answers for when they want to renew their mortgage. So, all of that has progressed us.

We are also going to be big users of AI. That journey has also started as we understand more and more about our clients.

But I just want to pause and let Benjy talk specifically to Oaken.

With respect to Oaken, the big plan for this year is the replatforming of digital banking that Oaken is run on. We launched that seven years ago.

We're moving to a more modern platform for online. But with that, we're also introducing our iOS and Android apps.

That's going to allow us to serve our existing customers on the Oaken platform better. In addition, it's going to widen the appeal of the Oaken offering to a new generation of customers.

As you know, we've been very GIC focused, which tend to be a slightly older consumer. We have a lot of younger consumers as well.

But obviously, to be with the times, we've got to get on to the App Store for Android and iOS. In addition to that, our historic ways of communicating with customers were primarily by email.

This opens up a number of customer experience initiatives with email, SMS, app alerts, et cetera, among a number of other things.

Would you have an updated comfort range for your efficiency ratio in 2021? Because I understand previously, I think you were kind of comfortable below 50%.

So, any update on that front would be great.

That continues to be what our range is. Certainly, we're not anticipating probably more than plus or minus a couple of percentage points around what we reported in Q1.

Also, great to see progress on your whole loan sales program. Could you share how meaningful this funding source could become over time?

And how did the economics compare to securitization alternatives, for example?

Just for everybody. Brad and I are in different locations.

So, we just have to make sure we're cueing each other. Brad, maybe you can answer that one.

We think the whole loan sales are relatively comparable to any of the other securitization income processes that we would do. We're still negotiating a number of agreements in that area, but we would hope to get close to or at least in the range of CAD 300 million for the year, if not more.

Just want to expand on one of I think Steve's questions earlier. You have a lot of excess capital, and we think you'd want to deploy it in a prudent manner to grow the loan book.

But just wanted to get your sense around just the overall appetite on increasing loan growth and which loan categories, in particular, you believe you should be able to increase loan growth over the next year?

Yes, all three categories, which is our classic business, alternative business where there's a lot of fundamentals, as I did in my comments, that look like it is going to continue to grow. We are still – while we're the largest originator of that, there's still lots and lots of opportunity in that area.

In the A business, if you look back in over the last year, we have been growing every quarter our A business. We think that there's still lots of opportunity there.

The market has got lots of volume. Very competitive, but we're able to get volume share because we have a very, very good relationship with brokers.

And we see it, in the future, as Alt-A mortgage clients graduate to A, it'll improve our potential offering to our own clients upon renewal. And finally, in the commercial side, as Brad mentioned in his comments, we see that the market is waking up, for lack of a better word.

There's a lot more volume coming in. CMHC has introduced new programs that we would like to figure out how to get involved in them.

It's the affordability category of multi-mortgages. And so, all three of our major mortgage categories, we see opportunity, and we see that the – it's all in our hands and how fast we want to go and when we think it is a good time to go and get more aggressive for growth.

Within the three buckets, is there one or maybe two that you think would grow? Or you would like to grow faster than the other or others?

Our core, Geoff, as you know, is Alt-A. That's the business we understand.

We think very, very well. We know how to risk price it.

We understand the market. That is why we can be very sophisticated when we're doing our pandemic underwriting.

We could buy postal codes, say we're going to be okay here, we're going to be more reserved here. We understand that deeply in terms of the fast rising real estate prices and how to how to do that.

So, that's the one that is, A, our core and, B, our most profitable. A is a wonderful business as well.

But there's a ton more competitors, including the big banks. So, that is more a commodity, if you will.

We have great service, which helps us. But in terms of getting more business, we have to keep giving the great service, but it's more of a commodity.

And commercial is always something we want to grow. We're targeting over the long run, as I think you've heard me mention before, that [indiscernible] to be about 15% of our book.

As our book grows, that means commercial's portion grows, and we haven't hit the 15% portion. So, that's a kind of summarize.

It's Alt-A for sure, but we think opportunities in the others.

My second question was around just how you're seeing activity on the mortgage or the broader housing front so far in Q2, and if there's parts of the market that that have you maybe a little bit more concerned than others?

No. The market continues to be very active.

Still, supply is a little low. Still homes are going quickly.

At the higher end, it's kind of stabilizing a little bit. But in the core, mortgage is still very good.

Nothing worries us. We're just adding a lot more prudence in terms of, if we get an application of a home that sold 15% or more than listing, we have a team that looks at that a lot closer.

We have very dedicated appraisals management where we deal with the same people. They understand what we want to look at.

So, we take more thorough looks. We make sure we've got the best team looking at it to understand, first of all, and most importantly, can the person pay?

And if the person can't pay, then it kind of discounts us. But if they can pay, and just to understand values and to go with it, so nothing worries us.

We think we have the expertise. Of course, we've got to be careful.

As any time I talk about this, we deal with mortgages one at a time. Every single one has a story, every single one has circumstances and risks related to it.

And we deal with that one at a time. And I believe we're very well staffed to understand that.

I wanted to touch on your PCL reversals this quarter. And if I dig a little deeper into the reversals by stage, I noticed you had stage three reversals for single family residential and commercial mortgages.

And it looks like those are driven by transfers out of stage three. And you mentioned loan repayments, but I was hoping you could just provide some more color on what's driving those trends there?

I'll start. We had concluded that those items would be in stage three, and then the performance of those loans resulted in them coming out of as well as some of our assessments in relation to levels of – I think as we talked about in overall provisioning, some of the levels of unemployment also migrated things from stage two, although that wasn't your question, but I think that's the easiest way to respond to your question.

Okay. I guess what I was getting at is, is it just a specific – kind of specific improvements for their financial conditions, is that government support measures that have helped them out, any underlying trends that you could point to that's helped those impaired loans or previously impaired loans?

They potentially had a larger increase as well as some pay-downs that just created that opportunity. We did have kind of a rapid increase in the previous quarters as a result of the pandemic, and a lot of those issues ended up being resolved.

And I noticed in your outlook for the press release, you commented that forecasts for ECL model since the end of the quarter at March 31, obviously, changed with the rapidly dynamic environment. And I was wondering, does that signal that you are confident that the excess reserves you currently have for performing loans are more likely to be released sooner rather than later?

Is that the right way to think about it?

Well, that's one that we would probably prefer, but we use a third party to provide our forward-looking information and that can vary. We get it monthly.

And if you were to look back through the past few quarters, we've seen ups and downs in both their housing price index and unemployment forecasts. So, the only thing we can say it's volatile.

And looking – or has been volatile. And looking forward to the extent that there's some sort of normalization in the housing markets and that'll probably lead to more stable outlook in terms of HPI.

And certainly, government programs have helped in the overall level of unemployment and expectation. So, that's probably not the answer you're looking for.

But that's the answer. It's volatile.

We'd certainly prefer and I think everyone would prefer large improvements in the forward-looking information. But we take it as it comes.

And overall, we consider ourselves to be well provided.

And if I could just finish with a broader question, with recent froth and concerns about real estate, there's pressure for more macro prudential tools to be implemented. And I was wondering if you could just speak to what your outlook is for the near prime space?

Do you think that any macro prudential measures that make it more difficult to qualify in the prime space, do you see that as a net benefit for Home Capital over the medium term?

It's hard to say really because it depends what those conditions are. Historically, though, you're right.

When there have been prudential measures on A mortgages, it has helped the Alt-A. So, generally speaking, I think you're right, but it also depends what it is [indiscernible].

If I could just start on the PCL side, even after the large release this quarter, it looks like the difference between your base case allowances and allowances on your balance sheet, that has widened out. Just wondering what that difference would have looked like before the pandemic?

And will it be reasonable to assume that you will always continue to carry an ECL balance in excess of your base case forecast?

In reverse order. We will always have – or we fully expect to have a difference between the base case as we weight different probabilities.

I think you can expect that there will continue to be a difference. It was a larger difference this quarter previously and it was generally smaller pre-pandemic.

And then if I can shift to your capital side. Correct me if I'm wrong, but it looks like you've lowered the target CET1 range to 14% to 15%.

I think it was 15% to 17% before. If this is accurate, can you provide any color on the change in the target range over here?

As we continue to analyze some of our business mix and the forward-looking balance sheet, the overall credit performance and other things that we would try and maintain capital for, we have – you're right. We have changed those levels and it just is reflective of some increased overall confidence in our business.

Nothing more to add, except that we look at this all the time and have come to the conclusions of what we're saying our new targets are based on a lot of months and years of data analysis and understanding what makes sense for from a risk perspective as well as from a shareholder perspective. And that would be the right number.

And I just had two quick questions on your NIM outlook. Did you share the expected savings from – so, first, removing the standby credit facility?

And second, with the RMBS issue that you're on track for, could you share the NIM impact from both of those initiatives?

We haven't really shared the impact of what I think we did. Probably back when we implement – or started the standby facility, by memory, it was around 3 basis points.

We have not provided any further NIM impact. One of the things that has impacted our NIM in relation to our RMBS recently was some of the increases or the rapid change in the pandemic that caused us to take some modified loans out of the current RMBS.

And that's put pressure on spreads as there's been a lower base of loans to cover some of the fixed costs related to that offer. But in Q4 of 2019, when that RMBS was first implemented, the spreads are close to what we think in our Oaken funding and – it looking was around 174 basis points in Q4 2019 for our RMBS – sorry, Q1 2020.

First question is on the new CET1 ratio target of 14% to 15%. Is it safe to assume that since it's in print, this has sort of been checked or run through OSFI?

I was going to say everything – I think any financial institution with respect to capital and so on would include a discussion with OSFI.

The net interest spread continues to trend higher quarter-over-quarter for the last several quarters. So, I was just curious if you could give us a bit of an update as to how Q2 is progressing from a net interest spread standpoint with deposit costs seemingly backing up a little bit.

I'm just wondering if the asset yields are also reflecting a similar increase.

Jaeme, we're expecting – and I don't think we said that we'll be consistent through the course of the year, and that's both a mix of trying to improve the yield on our assets, as well as the broker deposit boards and you can see the published rates. They've been going up and down.

And averaging still lower and we're having – we're still having some higher cost deposits roll off, and then come back in as lower cost deposits. So, that's been one of the trends that we've been seeing over time here.

So, still some favorable tolerance [ph] for the net interest spread, not necessarily speaking about the net interest margin. Next question is on the commercial reserve releases And I think a question before was trying to maybe get at this a little bit.

But, first off, are these commercial reserve releases broad based or were there any sort of one loan or a couple loan items that drove the big decline?

It's a mix of both. There's a big decrease in stage three, relatively speaking.

And then the rest was really across the pieces of changing some model inputs.

Okay, so there wasn't one or two specific loans to call out in the commercial book?

Well, as I said, there were a couple that has had an impact. But again, one of the bigger changes was some of the movements from stage two to stage one and some of the economic indicators, in particular, the level of unemployment.

In single family, the assets you recognized or repaid, in terms of repayment, does that imply that the borrower just brought the loan current and it moved from stage three somewhere else? Or does that imply that the house was sold and the loan was fully repaid?

[indiscernible].

Okay. Maybe the last one, and this might be a little bit – in terms of thinking about the potential for future reserve releases for – if I'm looking at the allowance for credit losses as a percentage of gross loans, it's been declining pretty steadily here quarter-over-quarter for since Q2 2020.

And that stands about 34 basis points. What would you say is an appropriate level that you would be comfortable operating that from an allowance for credit losses standpoint?

Are we there now at about 34 basis points or do you think that could trend lower for any number of reasons?

I'll start with that one, Jaeme. I think we look and it's really – some of those things are driven by the models.

So, to the extent that that improves, you'll see lower percentages and we'll review that over time. The economic environment improves, we'll see where we get to over time.

It's hard to speculate given the volatility. But the overall expectation as the economy improves, that'll probably come down.

Well, thank you for joining us today. And we hope you will join us at our annual meeting on Tuesday – again, to remind you – at 10am.

Stay safe. And have a good day.