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Good morning. My name is Amy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Home Capital Group Inc. Second Quarter Financial Results Conference Call. [Operator Instructions] Thank you. Jill MacRae, Head of Investor Relations, you may begin your conference.
Thank you, Amy. Good morning, everybody, and thank you for joining us today. We'll begin the call with remarks from Yousry Bissada, President and Chief Executive Officer; followed by a review of our financials by Brad Kotush, Chief Financial Officer. After the presentation, we'll have a question-and-answer session for analysts and investors. With us on the call to answer your questions are Ed Karthaus, EVP of Sales and Marketing; Mike Forshee, EVP of Underwriting; David Cluff, Chief Risk Officer; Benjie Katchen, Chief Digital and Strategy Officer; and Victor DiRisio, Chief Information Officer.Before we begin, I'd like to caution listeners that this conference call may provide management the opportunity to discuss financial performance and conditions of Home Capital. As such, comments may contain forward-looking statements about strategies and expected financial results. Various factors could cause actual results to differ materially from results projected in forward-looking statements. Accordingly, the audience is cautioned against undue reliance on these remarks. Finally, a link to the slides accompanying this live webcast is available on our website at homecapital.com.I'd like to turn it over to Yousry Bissada.
Thank you, Jill. Good morning, and thank you for joining us for our second quarter 2019 conference call. This morning, I'm pleased to speak with you about our positive Q2 results. I'll discuss the growth at Oaken and give you an update on the progress of our IT transformation program called IGNITE. Then, Brad will review our financial performance in more detail.We're pleased with our results because they're beginning to reflect the impact of some initiatives that we at Home Capital have been working very hard at for the past few quarters. Our focus on lending to the high-quality market segments we have targeted, primarily the business-for-self borrower and the new Canadian, is producing good results.We delivered significant improvements in revenues and margins. Most notably, Home Capital delivered a 43% year-over-year increase in earnings for -- increase in earnings per share compared with Q2 of 2018. We achieved this by focusing on our strengths, by executing on our business plan, by concentrating on the markets we know best, by operating within our sustainable risk culture and by strategically distributing some of our excess capital. As a result, we have created substantial value for shareholders, both organically and by buying back our shares at a discount to book value through our normal course issuer bid.Home Capital continues to be a partner of choice in alternative mortgage lending. Recently, we have seen the term alternative used to describe mortgage investment companies or MICs and private lenders that are not required to comply with B-20 regulations. When I refer to alternative lending, I'm referring to our target market of B-20-compliant mortgages, and I use the term interchangeably with near prime.Our single-family originations grew by more than 10% over the same period in 2018 with particular strength in our alternative mortgage segment. Our single-family mortgages in this alternative segment were nearly $11 billion at the end of Q2, 12% higher than at the end of Q2 last year. During this quarter, we saw some encouraging signs from the housing market. Sales activity is picking up with particular strength in the GTA. The latest data on economic growth, employment and interest rate expectations are consistent with our outlook for a stable and balanced real estate market for the rest of 2019.Originations in our commercial business were on par with last year's volume. Following our quarter end, we welcome James Pelletier to Home Capital as SVP, Commercial Lending. James comes to us with over 25 years of financial service experience with a concentration in commercial lending and risk management. Most recently, he was Vice President, Toronto Construction and Real Estate with a large Canadian bank. We're excited to have him as a member of our team.We're just enthusiastic about our progress on the deposit side as well as where we continue to be a partner of choice for our customers. Our Oaken channel deposits passed the $3 billion mark in April, up 28% over June 2018. 89% of these deposits are in term GICs, which indicates the confidence our customers have in the Oaken brand. Having our customer deposits in term investments rather than in demand deposits gives us low liquidity risk and better ability to match our deposits with the term of our mortgage loans. In an environment with multiple competing investment options, our customers recognize the appeal of a guaranteed savings solution with a competitive rate as part of their financial plans.Looking ahead, our plans for Oaken include a greater implementation of digital technology and continuous enhancement of the user experience. What will not change is our knowledgeable and helpful people delivering uncomplicated solutions. The first relationship is something that digital technology will enhance rather than replace. We are making steady progress with our IGNITE program, which is the name we have given our multiyear technology investment initiative that will benefit our operations. Key accomplishments in the quarter include: the delivery of the first phase and beginning of the second phase of our SAP implementation to ensure we have a solid digital infrastructure to scale; completing the transition to paperless underwriting and funding in our residential and small commercial loans. We are now able to move from accepting applications to funding the loan completely paperless, a strong indication of the opportunity for optimization and automation; setting up robotic process automation infrastructure and implementing the first automation in production, reducing manual input and potential for error. The first process to be automated was property tax administration. This is time-consuming manual process that requires a high degree of checking and verification. Additional automation rollouts are planned for the third quarter.We're continuing migration of our data centers and data strategy to the cloud in partnership with Microsoft and IBM. This migration is about 30% complete. We expect it will be 100% done by year-end, and the ultimate goal of having our entire banking system in the cloud. This will allow us flexible and scalable systems.IGNITE is a program that will change the way we do our mortgage and deposit businesses and touch everyone in the organization along the way. I will continue to share progress with you in future conference calls.Now I'll turn the call over to Brad to discuss our financial results.
Thanks, Yousry, and good morning, everyone. We will continue with the investor presentation beginning on Slide 6. Home Capital's second quarter earnings were $0.53 per share or $0.58 per share after adjusting for items of note associated with implementing our IT road map. On an IFRS basis, our earnings grew 43% over the same period in 2018, and on an adjusted basis, they grew by 56%.Slide 7 shows some of the drivers behind our growth in reported earnings. The 2 most significant drivers were an increase in net interest income compared to the second quarter of last year and a reduced number of shares from repurchases made in our substantial issuer bid completed in December of 2018 and our normal course issuer bid in 2019 offset by moderately higher expenses.Slides 8 and 9 of the investor presentation show highlights of our second quarter performance on an IFRS basis and after adjusting for those items of note. We will not speak to each of these data points right now. These metrics are highlighted for ease of use and are discussed in more detail in the MD&A.Slide 10 has a summary of the adjustments treated as items of note. We expect our financial reports to include adjustments for items of note connected to our IT road map implementation for the duration of the project, expected to be staged over 3 years.Moving to Slide 11, on our single-family residential originations. We originated over $1 billion of our traditional near-prime mortgage loans, an increase of 12.2% from a strong Q1 and 15.6% from the second quarter last year. We deemphasized our prime accelerator product this quarter as yields in this market were not consistent with our margin objectives. Looking ahead, we believe we will have an effective funding solution to make Home Capital more competitive in that market segment.Slide 12 shows a growth of our on-balance-sheet loans, up by more than $1 billion or 9% year-over-year. The latest data from the Bank of Canada shows that year-over-year residential mortgage loan growth was 3.1% in June of 2019. Clearly, our loan growth at Home Capital was well above that of the overall market.Home's net interest margin rose from 1.91% in Q2 2018 to 2.09% in our most recent quarter as shown on Slide 13. Margins were higher in the quarter due to higher overall asset yields as a result of our disciplined risk-based pricing in all our market segments. Deposit costs were slightly higher in the quarter but are trending down, and there are some benefit from asset mix.We are also not sacrificing credit quality. Slide 14 shows the high credit parameters of our loan portfolio. Our average Beacon score on new originations was 703 this quarter while the average Beacon score of our residential loan portfolio as a whole was 699. The average loan-to-value of our single-family residential mortgage book was 59% at the end of Q2.Our net nonperforming loans on Slide 15 are down slightly from Q1 to 0.47% of total loans outstanding. The decline from 0.49% is due to a decrease in nonperforming commercial loans. All our loans are well provisioned and within our internal risk tolerance. Our annualized net write-offs increased from 0.02% last quarter to 0.09% in Q2 as seen on Slide 16 as a result of the write-off of one specific loan in our commercial portfolio. Annualized net write-offs in our residential portfolio were 0.02% for the quarter and 0.01% for the year-to-date. Annualized provisions were flat with Q1 at 0.15% of gross loans. Provisions in Q2 were due primarily to loan growth in the residential portfolio and a higher allowance estimate on stage 2 commercial loans. Our funding mix is on Slide 17. As Yousry mentioned, our Oaken channel surpassed $3 billion of customer deposits in the month of April, the majority of which are in fixed-term GICs. Oaken deposits have grown to 28% from year-ago levels driven by growth in customers as well as growth in deposits per customer. Please turn to Slide 18 for a view of Home Capital's liquidity at the end of the quarter with liquid assets of $1.32 billion not including the $500 million standby facility. In addition, you can see by our maturity schedule that our near-term deposit maturities are more than covered by maturing mortgages. Slide 19 shows our capital and leverage ratios. As of June 30, 2019, our CET1 was 19.49%, up from 18.99% at the end of March, reflecting our addition to capital through retained earnings offset by growth in our risk-weighted assets. Our leverage ratio is up slightly from last quarter to 7.77%.Slide 20 shows the progress of our NCIB. As of August 2, Home had repurchased nearly 3.5 million shares out of our approved purchase limit of 4.75 million shares at an average price of $18.05 per share, an average 35% discount to our quarter-end book value of $27.80 per share. We intend to purchase remaining 1.25 million shares authorized under our NCIB during the remainder of 2019.As we've said in the past, Home is committed to continue deploying our excess capital in a manner that creates sustainable value consistent with our long-term strategic objectives. The Board and management regularly review all options for returning capital, including payment of dividends, renewing our normal course issuer bid or completing another substantial issuer bid. At this point, our priority is completing the NCIB because we believe our own shares are an attractive investment.I will now turn the call back to Yousry for concluding remarks.
Brad and I will invite institutional investors, analysts and members of the investment community to join us at our upcoming Investor Day, which will take place this fall in conjunction with our third quarter reporting. The Investor Day will give Home Capital an opportunity to provide an update to our operate -- to provide an update on our operations, discuss developments in our industry and introduce some key members of our leadership team. Details and registration information will follow closer to the date. We hope to see many of you there. And now I'll turn it over to the operator to poll for questions.
[Operator Instructions] Your first question comes from the line of Nik Priebe with BMO Capital Markets.
Just wanted to start with a question on the net interest margin in the quarter. It looked like it was a pretty good tailwind to the top line in this period. I was just wondering if you could help us sort of rank some of the factors that impacted net interest margin, particularly on the nonsecuritized portfolio versus the prior quarter, whether higher prepayment income played a factor, lower funding costs, the asset mix changes or whether there were any other onetime factors in the mix. Just some insight on the quarter-over-quarter change would be appreciated.
Yes. Thanks, Nik. When you're thinking through our NIM, we did have some prepayment income, but it was lower than the previous quarter. So we're really looking at mostly rate increases that we were able to achieve through our pricing.
Okay. And I did take note that -- I think Home Trust's posted mortgage rates were just lowered in July. I was just wondering if you could provide a bit of color on what motivated the change, whether that's a response to a decline in funding costs and just what sort of competitive dynamics you're seeing in the alt space at the moment.
We didn't lower our mortgage rates in July, Nik. Are you thinking of deposit rates maybe? But our mortgage rates have stayed steady for some time now.
Okay. It was just the posted rates on the Home Trust web page that I follow, but...
Oh, okay. I'm going to guess. Maybe you're looking at our A business, which is our accelerator business, a very small part of our business. Alternative mortgage, near-prime business, the rates have not changed for some time. But our A business may have changed, a very small part of our business, and it's just to keep us in the game. And I think that's what you're probably looking at.
Got it. Okay. I think it clarified that. The other thing I wanted to ask, the stocks obviously performed exceptionally well this year. As we look beyond the current NCIB program and we think about future capital return to shareholders, does the fact that the stock is trading at a narrower discount to book value start to sort of influence the buyback versus dividend decision a little further out? Maybe it's a bit premature to discuss this here in August, but just wondered if I can get some preliminary thoughts on capital return beyond 2019.
Yes, Nik. I think we will continue to prefer repurchases when the stock is trading at a discount, I think, is the easiest way to answer your question and most direct way.
Your next question comes from the line of Marco Giurleo with CIBC.
So my first question pertains to your commercial growth outlook. I noticed a 1% decline -- sequential decline in the book this quarter. I know there has been some changes in the leadership for that portfolio. So could you perhaps give some color as to your expectations for the remainder of the year? And perhaps comment on whether or not the decline in the book has to do with some of that change in leadership.
So we intend to grow our commercial book. It is about 10% or a little below 10% of our overall book. In the past, it had reached around 15%. So over the coming years, I think we would grow it again to meet that ratio. We have very good relationships with third parties that we do commercial mortgages with. And James is charged with going out and rebuilding and building those relationships to increase our volumes, and it will be a good and important part of our growth going forward.
Okay. Great. So just in terms of the, I guess, the current pipeline for opportunities, do you see that as being robust?
Yes, it is and it's going to get more robust. I realize I didn't answer the first part of your question. 1% growth is just -- we look at -- without leadership, we had very good people in the jobs running the business, and they kept the machine running. And now it's just time to go out and grow it.
All right. Great. And my next question is with respect to expenses. After adjusting for the items of note highlighted in the deck, your adjusted expense base came in at $57.9 million. I believe you were targeting something closer to $60 million a quarter through the rest of the year. Is that still a good target? Or are there incremental cost savings that you've been able to carve-out?
Marco, we were -- when we discussed the $60 million before, we had assumed that, that would be the average over the course of the year. So we expect that those costs will increase in the next 2 quarters. Some of the spending that we had incurred was delayed on some of our other projects. So as we ramp those up -- and these are separate projects from the IT road map so they're not adjusted as an item of note. So we would expect to have the next 2 quarters at higher than $60 million so that we would average $60 million over the course of the fiscal year.
All right. Great. And if I could just sneak one last question in on the margin. Just based on the trajectory of GIC rates through the year, do you anticipate some further tailwinds for the margins -- for the overall margin in the second half?
Yes.
Your next question comes from the line of Geoff Kwan with RBC.
Just wanted to get back on the return of capital or just how you're thinking about the ROE expansion over time because, I think, you talked about ideally getting to a mid-teen ROE. Can you just kind of refresh us on the time frame that you think that might be achievable? But also two is roughly ballpark how much of that versus the current ROE comes from optimizing the capital base versus growing the earnings.
Thanks, Geoff. We estimate that we'll get to the mid-teens sometime in the next 2 to 3 years, and that's going to be a mix of capital return and profit expansion.
And then are you able to kind of say ballpark, like the mix between how much is the capital return versus earnings?
Well, if we're going to increase from 8% to 13%, that would be worth 2.5% and 2.5%.
Okay. So kind of about 50/50 then from optimized capital...
Sorry, yes. 50/50 is a much better way of describing it. Thank you.
Okay. And just the other part. When thinking about that improvement in the earnings, it sounds like with the way you grew -- you talked about the business and investments you're making, is -- it's really more driven by the expense base growing at a slower rate than the revenues as opposed to some of the investments you're making. You might actually see, at some point, maybe a bit of a step down on an absolute basis of the expenses. Is that an accurate way to think about it?
What we're anticipating is as we implement phases of our IT road map and other technology innovations, our productivity would increase, so we would definitely see our revenue growing at a faster rate than expenses. There might be some incremental increases, but certainly, we're focused on growing that top line through margin expansion and loan growth and then being able to hold our expenses steady with only some smaller incremental increases.
Okay. And if I can sneak in one last question. Is moving on to AIRB at some -- is that -- obviously, you've got a lot of different projects on the go right now, but is that something on the radar? And if so like what might be the time frame that you might try to go down that road?
Well, we're -- as you know, Geoff, our issue right now is not capital. It's capital deployment and how to more effectively do that. We would certainly look at AIRB at the appropriate point. There are some capital changes coming through from OSB that would be effective, I think, in 2020, not -- 2022, sorry. So there are -- we'll keep our eye on some of those changes to see whether the investment and moving to AIRB is -- if, as and when it's appropriate.
Your next question comes the line of Cihan Tuncay with GMP Securities.
Just a couple of quick questions. First, could you talk to the split between -- of the originations in the quarter, could you talk to the split between new borrowers and renewals? What was the share or order of magnitude?
We might have to get back to you on that one, Cihan.
We're just looking in -- we're just trying to get you the answer, but we may have to get back to you.
Sure. Well, I can continue with a couple more questions. Just quickly back to the NIM -- previous questions on the NIM. So obviously, 2.09% is ahead of what you have discussed before in terms of your outlook, more in the range of 2.0%. Do you think the 2.09% is a sustainable level for -- or order of magnitude for the balance of the year?
Yes, we should -- if present trends continue, that is a reasonable expectation.
Okay. And just on -- coming back to the capital levels, Brad. Maybe if you can help me out here. So of the -- at the beginning of the year, there was the excess $150 million at the parent company level that was not included at the Home Trust level CET1 ratio calculation. I know you've been paying out the NCIB with that excess of capital level. Just wondering how much of that is still left.
We had roughly greater than -- roughly $100 million. And we anticipate, depending on where the current share price is, probably taking another $30 million to buy the remaining shares under the NCIB.
Okay. And then just one last quick question. You're talking about different ways to deploy your excess capital levels. We saw in the quarter you made a small investment in Lendified. Wondering what the relationship is with Lendified and if you could talk to your broader acquisition pipeline going forward when you think about how you deploy capital.
Yes. So we took a convertible debenture. It was $3 million, so it's not a material investment to us. But in terms of financial, where we hope to do it is work with them as we implement pieces of financial technology and incorporate it into our business. So that's where we see the biggest thing there. Right now, we're not focused on M&A. We have a lot of things to do in our current business to implement our strategy. However, that doesn't mean that we may not consider any opportunistic acquisitions as -- or opportunities as they develop, but there's nothing on the near-term horizon that we can see.
Your next question comes from the line of Brenna Phelan with Raymond James.
So starting on credit. Could you just give us a little more detail on the remeasurement due to transfer to stage 2 in the commercial book?
Yes. Just one second, Brenna, and we'll get you an answer to that.
It's change in model inputs related to volatility.
Okay. So volatility, is that -- do we think of that as being macro driven? Or is that specific to some of the specific credits that you're underwriting?
Macro.
Okay. Anything -- because, generally, if like -- as you've said in your commentary, unemployment, inflation, interest rates are trending in the right direction. What is that specific input related to?
Vacancy rates.
Okay. Very helpful. And then switching up to the single-family residential, same thing. Stage 3 change in risk parameters and models, is that also macro inputs or something specific?
We're considering their fluctuations in normal course.
Okay. And then switching to the other consumer retail book. Any update to give us on the strategic review that's going on there and some goalposts on the outlook for how you expect provisions to trend in that portfolio through the remainder of the year?
In answer to your first question, we're evaluating the different segments and whether we can, as we said on the last call, grow them, what their value to us is as part of the overall corporate strategy, including the ability to cross-sell or use -- or to better serve our clients by offering alternative products. So that continues, and we expect to have a conclusion to that by the time of our next conference call. In terms of the provisioning, we've seen some of those stabilize over the course. We did make some additional provisions, but we don't currently see any of the large risk parameter changes or method -- things that we are doing in relation to providing for those credits, similar to Q1 of this year.
You don't expect them to be similar to Q1? Or are you saying that Q1...
We don't. We do not expect to have a significant single movement that we had in Q1.
Okay. Great. And then last one for me just on the move in deposit funding cost in the quarter. Could you walk us through some of the moving parts in that small sequential increase in the context of rates generally moving down? Is that funding mix? And then following on, you spoke to an effective funding solution for the Accelerator Program. Maybe a little bit of color on that.
In relation to deposits, it's mix. In terms of the overall funding facilities, we're in discussions with a number of parties in terms of being able to implement different funding strategies, for you to -- our implementation of the prime warehouse facility last year and the repo facility. So we're looking at those sorts of alternative funding channels to be able to more effectively compete for that prime insured business.
Okay. So when you say deposits mix, is that Oaken versus broker? Or are you terming out the duration a little bit?
Your next question comes from the line of Graham Ryding with TD Securities.
Just wanted to follow back on the margin lift. It was quite material quarter-over-quarter. I believe your messaging last quarter was we expect -- sort of around the 2% mark is a reasonable expectation. There could be some lift towards the end of the year as funding costs -- or expensed funding costs from last year drop off. So I guess my question is, generally, did anything change materially quarter-over-quarter to sort of drive that material lift in your average mortgage yields?
It's Yousry here. Because government of Canada went down, GIC rates also followed down over time. But our -- we did not move our mortgage rates. So it's difficult to predict those things in advance, but that wound up and we were able to hold them. And we think we can still hold them and continue to keep the margins going.
Yes. Graham, the most significant factor was our ability to maintain rates on our mortgages.
Okay. But your -- I guess your weighted average yield on your mortgages overall went up quarter-over-quarter. So is that a reflection of just the mix of your overall portfolio? Why would that actually increase quarter-over-quarter if your...
Yes, it's mix. And generally, one would think of mix as term, but for us, it's also the different Beacon and different locations that mortgages come in. We price differently. So the combination of those things gave us a higher weighted average.
Yes. Okay. And I guess it's also just the -- what's dropping off versus what you're putting on dynamic as well. Okay. And then just generally, your loans under administration, it sounds like -- in terms of your outlook or your expectation, it sounds like you're pretty comfortable with your ability to compete on the Alt-A side right now. And commercial, you're looking to ramp up, but the accelerator business is competitive. So when we pull all those pieces together, what's a reasonable expectation on your part in terms of growing the overall portfolio?
I didn't hear what you said about the Accelerator, but the alternative business, the near-prime business continues to be healthy. We do expect to continue to flow good business there and grow. The commercial, as we've said, James is here and his task is to grow it. On the Accelerator -- I didn't hear what you said. But even on Accelerator, we've been working on some funding mechanisms that should produce volumes going forward. You won't see anything immediately but over the coming months, to produce, on a more regular basis, higher volumes in the A accelerator product.
[Operator Instructions] Your next question comes from the line of Jaeme Gloyn with National Bank.
First question is on the net impaired loans growth in the quarter sequentially and year-over-year. In the single-family portfolio, I wonder if you can sort of break that out in terms of either geography or some other factor that's driving that increase.
It's just broadly based. There's no specific factor to -- that we can attribute to that growth.
Is there a change in any sort of credit metrics in terms of the underwriting that we're seeing in the book these days that could be driving that increase on a -- on -- sequentially or year-over-year and as a percentage of the gross loans as well?
No, Jaeme, we haven't changed any of our underwriting criteria. It's still strong and within our risk appetites.
Okay. Switching to the growth in the portfolio. So seeing very strong growth out of the BC market and relative to other regions as well. Can you just speak to what you're seeing in that region versus others as being attractive?
The BC market is -- there are many segments to it. There are pockets that we will not lend in. There are pockets that we still believe are very steady and, in fact, growing. So we have continuously upgrading our risk models as to what we can and can't, and it's been a healthy market for us. We're very confident in the business that we have been doing. And so it's been a healthy quarter, and we think it will continue.
Okay. And then -- yes. I guess Brenna's question got cut off there, and I was curious to hear the answer as well related to the deposit mix. What is driving that change in rate? Is it terming it out? Or is it the mix between Oaken and broker?
It's both of those factors. There are changes in term, and additionally, we are adding more Oaken.
Okay. And would you be able to quantify what's driving the change? Is it one more than the other?
It's a mix -- it's even.
Roughly even, okay.
Yes. No -- there's no magic here, Jaeme. It's just steady as she goes. We continue to want to grow Oaken and just have levers on both sides to stay competitive on the deposit side for when Oaken competes and stay competitive on the bank side deposits where we compete. No magic, and it's just been lower rates because the government of Canada have been coming down, and we've been able to attract deposits the way we want.
Yes. I guess maybe the confusion comes from seeing Oaken GICs increase significantly and broker GICs come down significantly, it looks like, quarter-over-quarter. And the general view is that Oaken GICs would be cheaper than broker GICs. Is that a -- do I have that correctly? And so there must be something else going on there, right?
Broker GICs -- sorry, Oaken GICs for us are a very healthy way to grow. But Oaken GICs, we don't have commission costs, but we do have advertising costs. And you do have to have a more attractive rate to attract business. And as I say, we just move the levers where we can, and we look at an overall net cost of raising business. And as long as we can keep the mix between Oaken and the bank deposits to do that overall, we'll grow Oaken as much as we can.
Okay. So if I understand correctly, then Oaken GICs net-net would be roughly equal to broker GICs in terms of total cost to fund.
No. It's...
Oaken GICs would be...
Just say who you are speaking.
Sorry, it's Benjie Katchen here. Oaken GICs on an interest expense across the term are roughly 25 to 35 basis points higher than broker GICs. So as we're moving the mix to more Oaken, that's one of the levers that will increase the interest expense.
Okay. I see. And would you be able to give us a similar comparison with Oaken savings accounts relative to GICs and then I guess, also the HISAs?
So we don't compare -- we would compare the Oaken savings account to our broker HISA. However, we've not grown our broker HISA. The Oaken savings rate is 230 right now compared to broker HISA, all-in cost of funding is 160, including the 25 bps broker commission.
[Operator Instructions] There are no further questions at this time. I will turn the call back over to CEO, Yousry Bissada, for closing remarks.
We appreciate your questions and your interest in Home Capital. If you have any further questions, please contact Investor Relations. Thank you for attending this call, and have a good day.
This concludes today's conference call. Thank you for your participation. You may now disconnect.