Q2 2024 ECN Capital Corp Earnings Call

August 7, 2024

Thank you for standing by. This is the conference operator. Welcome to the ECN Capital Second Quarter 2024 Results Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded.

Operator: As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the meeting over to Katherine Moradiellos, VP of Finance and Investor Relations. Please go ahead, Katherine. Thank you. Thank you.

Unknown Executive: As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the questions here, you may press start in one on your telephone keypad.

After the presentation, there will be an opportunity to ask questions.

Speaker Change: To join the question queue, you may press star then 1 on your telephone keypad.

Unknown Executive: Should you need assistance during the conference call, you may signal an operator by pressing "start" in zero.

Speaker Change: Should you need assistance during the conference call, you may signal an operator by pressing star then zero.

Katherine Moradiellos: I would now like to turn the meeting over to you. Thank you for joining us today on the call, our Steven Hudson, Chief Executive Officer; Jackie Weber, Chief Financial Officer; Chris Johnson, Senior Vice President and Head of Capital Markets; Lance Hull, President of Triad Financial; Matt Heidelberg, Chief Operating Officer of Triad Financial; Mike Opdahl, President of Source One; and Hans Kraaz, Founder and CEO of IFG. A news release summarizing these results was issued this afternoon, and the financial statements and MDNA for the three-month period ended June 30th, 2024, have been filed with Cedar. These documents are available on our website at www.ecncapitalcorp.com.

Katherine Moradiellos: I would now like to turn the meeting over to Katherine Moradiellos, VP of Finance and Investor Relations. Please go ahead, Katherine. Thank you.

Katherine Moradiellos: Thank you, Brenda. Good afternoon, everyone, and thank you all for joining this call. Joining us today on the call are Steven Hudson, Chief Executive Officer, Jackie Weber, Chief Financial Officer, Chris Johnson, Senior Vice President and Head of Capital Markets, Lance Hull, President of Triad Financial, Matt Heidelberg, Chief Operating Officer of Triad Financial, Mike Opdahl, President of SourceOne, and Hans Kraaz, Founder and CEO of IFG. A news release summarizing these results was issued this afternoon, and the These documents are available on our website at www.ecncapitalcorp.com. Presentation slides to be referenced during the call are accessible during the webcast as well as in PDF format under the presentation section of the company's website.

Katherine Moradiellos: Thank you, Brenda. Good afternoon, everyone, and thank you all for joining this call.

Speaker Change: Joining us today on the call are Stephen Hudson, Chief Executive Officer, Jackie Weber, Chief Financial Officer, Chris Johnson, Senior Vice President and Head of Capital Markets,

Speaker Change: Lance Hull, President of Triad Financial, Matt Heidelberg, Chief Operating Officer of Triad Financial, Mike Opdahl, President of Source One, and Hans Kraaz, Founder and CEO of IFG.

Speaker Change: A news release summarizing these results was issued this afternoon, and the financial statements and MD&A for the three-month period ended June 30, 2024, have been filed with CDAR. These documents are available on our website at www.ecncapitalcorp.com.

Katherine Moradiellos: Presentation slides to be referenced during the call are accessible in the webcast, as well as in PDF format under the presentation section of the company's website.

Presentation slides to be referenced during the call are accessible in the webcast as well as in PDF format under the presentation section of the company's website.

Katherine Moradiellos: Before we begin, I want to remind our listeners that some of the information we are sharing with you today includes forward-looking statements. These statements are based on assumptions that are subject to significant risk and uncertainties. I will refer you to the cautionary statement section of the MDNA for a description of such risks, uncertainties, and assumptions. Although management believes that the expectations reflected in these statements are reasonable, we can obviously give no assurance that the expectations of any forward-looking statements will prove to be correct.

Katherine Moradiellos: Before we begin, I want to remind our listeners that some of the information we are sharing with you today includes forward-looking statements. These statements are based on assumptions that are subject to significant risk and uncertainties. I will refer you to the Cautionary Statements section of the MD&A for a description of such risk, uncertainties, and assumptions. Although management believes that the expectations reflected in these statements are reasonable, we can obviously give no assurance that the expectations of any forward-looking statements will prove to be correct.

Katherine Moradiellos: Before we begin, I want to remind our listeners that some of the information we are sharing with you today includes forward-looking statements. These statements are based on assumptions that are subject to significant risk and uncertainties. I will refer you to the cautionary statement section of the MD&A for a description of such risk, uncertainties, and assumptions. Although management believes that the expectations reflected in these statements are reasonable, we can obviously give no assurance that the expectations of any forward-looking statements will prove to be correct.

Speaker Change: Before we begin, I want to remind our listeners that some of the information we are sharing with you today includes forward-looking statements.

Speaker Change: These statements are based on assumptions that are subject to significant risk and uncertainties. I will refer you to the Cautionary Statements section of the MD&A for a description of such risk, uncertainties, and assumptions.

Speaker Change: Although management believes that the expectations reflected in these statements are reasonable, we can obviously give no assurance that the expectations of any forward-looking statements will prove to be correct.

Katherine Moradiellos: You should note that the company's earnings release, financial statements, MD&A and today's call includes references to non-IFRS measures, which we believe help to present the company and its operations in ways that are useful to investors. A reconciliation of these non-IFRS measures to IFRS measures can be found in our MD&A. All figures are presented in US dollars unless explicitly noted.

Katherine Moradiellos: You should note that the company's earnings release, financial statements, MD&A, and today's call includes references to non-IFRS measures, which we believe help to present the company and its operations in ways that are useful to investors. A reconciliation of these non-IFRS measures to IFRS measures can be found in our MD&A. All figures are presented in U.S. dollars unless explicitly noted. With those introductory remarks complete, I will now turn the call over to Steve Hudson, CEO.

You should note that the company's earnings release, financial statements, MD&A, and today's call includes references to non-IFRS measures, which we believe help to present the company and its operations in ways that are useful to investors.

A reconciliation of these non-IFRS measures to IFRS measures can be found in our MD&A. All figures are presented in U.S. dollars unless explicitly noted.

Steven Hudson: With those introductory remarks complete, I will now turn the call over to Steve Hudson, CEO. Thank you, Kathy, and good evening and welcome to our second quarter conference call. Turning to slide five. I'd like to highlight three key takeaways, if I can. The second bullet, the scaled originator, it's now been three years since we've developed our first institutional flow program. In this last quarter, we got our first detailed look at both the credit and yield performance of the portfolios for our large institutional investors. And they came in both yield and credit came in much better than expected.

Speaker Change: With those introductory remarks complete, I will now turn the call over to Steve Hudson, CEO .

Steve Hudson: Thank you, Kathy, and good evening and welcome to our second quarter conference call. Turning to slide five, I'd like to just highlight three key takeaways, if I can.

Steve Hudson: Thank you, Kathy, and good evening and welcome to our second quarter conference call. Turning to slide five.

Speaker Change: I'd like to just highlight three key takeaways if I can. The second bullet, the scaled originator, it's now been three years since we've developed our first institutional flow program.

Steve Hudson: The second bullet, the scaled originator. It's now been three years since we developed our first institutional flow program. In this last quarter, we got our first detailed look at both the credit and yield performance of the portfolios for our large institutional investors, and they came in, both yield and credit came in much better than expected. As a result, demand exceeds supply, and we truly have a scarcity of MH assets.

Speaker Change: And this last quarter, we got our first detailed look at both the credit and yield performance of the portfolios for our large institutional investors.

Steven Hudson: As a result, demand exceeds supply, and we truly have a scarcity of our MH assets. Turning to the fourth bullet on diverse funding relationships, we have now completed our strategic flow shift to institutional versus bank credit unions. And that shift remains at 70% institutions and 30% banks and credit unions. We think that's a healthy balance from the perspective of our liquidity and profitability. And finally, on the second last bullet, with respect to our investment grade rated loan servicing business, we've now created three pillars within Triad: a retail pillar, commercial finance pillar, and our servicing pillar, leading to further diversification.

Steve Hudson: And they came in, both yield and credit came in much better than expected.

Speaker Change: As a result, demand exceeds supply, and we truly have a scarcity of MH assets.

Steve Hudson: Turning to the fourth bullet on diverse funding relationships, we have now completed our strategic flow shift to institutional versus bank credit unions, and that shift remains at 70% institutions and 30% banks and credit unions. We think that's a healthy balance from the perspective of our liquidity and profitability. And finally, on the second last bullet, with respect to our investment-grade rated loan servicing business, we've now created three pillars within Triad, a retail pillar, a commercial finance pillar, and our servicing pillar, leading to further diversification and, I believe, improvement in the quality of earnings for the Triad business.

Speaker Change: Turning to the fourth bullet on diverse funding relationships.

We have now completed our strategic flow shift to institutional versus bank credit unions and that shift remains at 70% institutions and 30% banks and credit unions. We think that's a healthy balance.

Speaker Change: From the perspective of our liquidity and profitability. And finally, on the second last bullet, with respect to our investment grade rated.

Loan servicing business, we've now created three pillars within Triad, a retail pillar, commercial finance pillar, and our servicing pillar, leading to further diversification, and I believe improvement in the quality of earnings for the Triad business. Turning to slide six.

Steven Hudson: And I believe improvement in the quality of earnings for the triad business, turning to side six. A couple items I like to focus on. We're happy to report three cents of earnings per share and confirming our guidance of 10 to 16 cents. 20.2 million of operating income from Triad ahead of our plan, and origination revenues came at 7.5 percent. Evidence of our path to returning to our former profitability. Our funding program's Carlisle, our partnership of Carlisle was extended and expanded, which is great news. And I'm very pleased to announce that Monroe Capital has joined our partnership group with a 300 million dollar forward rental funding program launched in late June.

Steve Hudson: A couple items I'd like to focus on. We're happy to report $0.03 of earnings per share and confirm our guidance of $0.10 to $0.16. $20.2 million of operating income from triad ahead of our plan, and origination revenues came at 7.5 percent, evidence of our path to returning to our former profitability. Our funding programs, Carlisle, our partnership with Carlisle was extended and expanded, which is great news. And I'm very pleased to announce that Monroe Capital has joined our partnership group with a $300 million forward rental funding program launched in late June. It came a little later, but it's better late than never.

Speaker Change: A couple items I'd like to focus on, we're happy to report $0.03 of earnings per share and confirming our guidance of $0.10 to $0.16.

Speaker Change: $20.2 million of operating income from triad ahead of our plan, and origination revenues came at 7.5 percent, evidence of our path to returning to our former profitability.

Speaker Change: Our funding programs, Carlisle, our partnership with Carlisle was extended and expanded, which is great news, and I'm very pleased to announce that Monroe Capital has joined our partnership group with a $300 million forward rental funding program launched in late June . It came a little later, but better late than never.

Steven Hudson: It came a little later, but better late than never. I want to thank the team at Monroe, particularly our friend Kyle. Turning to RV Marine, it's nice to see growth coming back up 14 percent year over year.

Steve Hudson: Well, I want to thank the team at Munro, particularly our friend Kyle. Turning to RV Marine, it's nice to see growth coming back up 14% year-over-year. Thank you, fellows. With 311 million originations, I do want to point out two significant developments. First of all, we acquired a servicing platform, Paramount Capital, a great addition to our family, which will service our RV and marine assets. And as well, with Chris Johnson's leadership, we've now launched our institutional funding with a $250 million forward funding program with a AAA-rated mutual insurance company. This signals the movement away from credit unions and towards institutional funding. With that, I'll pass to Lance.

Steve Hudson: Well, I want to thank the team at Munro, particularly our friend Kyle. Turning to RV Marine, It's nice to see growth coming back up 14% year over year. Thank you, fellows, for 311 million originations. I do want to point out two significant developments. First of all, we acquired a servicing platform, Paramount Capital, a great addition to our family, which will service our RV and marine assets. And as well, with Chris Johnson's leadership, we've now launched our institutional funding with a $250 million forward funding program with a AAA-rated mutual insurance company. That signals the movement away from credit unions and toward institutional funding. With that, I'll pass it to Lance.

Speaker Change: Well, I want to thank the team at Monroe, particularly our friend Kyle.

Speaker Change: Turning to RV Marine, it's nice to see growth coming back up 14% year over year. Thank you, fellows.

Steven Hudson: Thank you, fellas. It was 311 million of originations. I do want to point out the two significant developments. First of all, we acquired a servicing platform, Paramount Capital, a great addition to our family, which will service our RV marine assets. And as well, we've now, with Chris Johnson's leadership, launched our institutional funding with a $250 million forward funding program with the AAA-rated mutual insurance company. That signals the movement away from credit unions and to institutional funding.

Speaker Change: with 311 million originations.

Speaker Change: I do want to point out the two significant developments. First of all, we acquired a servicing platform.

Speaker Change: Paramount Capital, a great addition to our family, which will service our RV and marine assets.

Chris Johnson: And as well, we've now, with Chris Johnson's leadership, we've now launched our institutional funding with a $250 million forward funding program with a AAA-rated mutual insurance company that signals the movement away from credit unions and to institutional funding.

Lance Hull: With that, I'll pass to relapse.

Lance Hull: Thank you, Steve. Let me take you forward to slide 9, where I'll hit just a few of our highlights from TRIAD. Our adjusted operating income was up 108% year-over-year to $20.2 million, while our origination revenue margin climbed to 7.5% from 5.2% in Q1, leading to $23.4 million in origination revenue for the quarter. Our managed assets continue to grow. We're now at $5.3 billion, which is a 13% increase year over year.

Matthew Heidelberg: Thank you, Steve. Let me take you forward to slide nine, where I'll hit just a few of our highlights from Triad. Our just an operating income was up 108 percent year over year to 20.2 million. Our origination revenue margin climbed to 7.5 percent from 5.2 percent in Q1, leading to a 23.4 million dollar origination revenue for the quarter. Our managed assets continue to grow. We're now at 5.3 billion, which is a 13 percent increase year over year. And the ongoing initiatives that I've been discussing for the last couple of quarters regarding our improvements into operational efficiencies have resulted in a modest quarter-over-quarter in year-over-year reduction in operating expenses.

Chris Johnson: With that, I'll pass to Lance.

Lance: Thank you, Steve. Let me take you forward to slide nine, where I'll hit just a few of our highlights from TRIAD.

Lance: Our adjusted operating income was up 108% year-over-year to $20.2 million. Our origination revenue margin climbed to 7.5% from 5.2% in Q1, leading to a $23.4 million origination revenue for the quarter.

Lance: Our managed assets continue to grow. We're now at $5.3 billion, which is a 13% increase year-over-year.

Lance Hull: And the ongoing initiatives that I've been discussing for the last couple of quarters regarding our improvements to operational efficiencies have resulted in a modest quarter-over-quarter and year-over-year reduction in operating expenses. And, as Steve mentioned, we have a new funding partner in Carlisle, which is very exciting for us, and the Monroe Capital rental program is going to allow us to expand our operations further. Over to slide 10, Steve also mentioned the three-pillared business that Triad is now operating under and reporting under, and I think it's important for me to spend just a minute kind of talking about each of these and how it's flowing into our path forward.

Lance Hull: And the ongoing initiatives that I've been discussing for the last couple of quarters regarding our improvements to operational efficiencies have resulted in a modest quarter-over-quarter and year-over-year reduction in operating expenses. And, as Steve mentioned, we have a new funding partner in Carlisle, which is very exciting for us, and the Monroe Capital rental program is going to allow us to expand our operations further. Over to slide 10, Steve also mentioned the three-pillared business that Triad is now operating under and reporting under. And I think it's important for me to spend just a minute kind of talking about each of these and how it's flowing into our path forward.

Lance: And the ongoing initiatives that I've been discussing for the last couple of quarters regarding our improvements to operational efficiencies have resulted in a modest quarter-over-quarter

Matthew Heidelberg: And as Steve mentioned, we have a new funding partner in Carlisle, which is very exciting for us. And the Monroe Capital rental program is going to allow us to expand our operations further.

Lance: and year-over-year reduction in operating expenses. And as Steve mentioned, we have a new funding partner in Carlisle, which is very exciting for us, and the Monroe Capital rental program is going to allow us to expand our operations further.

Lance Hull: Over to slide 10. Steve also mentioned the three-pillar business that Triad is now operating under, reporting under. And I think it's important for us to spend just a minute kind of talking about each of these and how it's flowing into our path forward. When ECN acquired Triad in 2017, it was basically a retail-driven company, mid-size lender specializing in prime and super prime borrowers. But we've been able to expand the retail program, which is the first pillar, to include, of course, everything that was done prior to ECN acquisition. But now, with the addition of the silver and bronze program and a larger buy box, we're much more capable of serving a larger portion of the borrowers and buyers for manufactured housing.

Lance: Over to slide 10, Steve also mentioned the three-pillar business that Triad is now operating under, reporting under, and I think it's important for just to spend just a minute kind of talking about each of these and how it's flowing into our path forward.

Lance Hull: When ECN acquired Triad in 2017, it was basically a retail-driven company, a mid-sized lender specializing in prime and super prime borrowers, but we've been able to expand the retail program, which is the first pillar, to include, of course, everything that was done prior to ECN's acquisition, but now, with the addition of the silver and bronze programs and a larger buy box, we're much more capable of Our commercial lending program started with FloorPlan.

Lance Hull: When ECN acquired Triad in 2017, it was basically a retail-driven company, a mid-size lender specializing in prime and super prime borrowers. But we've been able to expand the retail program, which is the first pillar, to include, of course, everything that was done prior to ECN's acquisition, but now, with the addition of the silver and bronze programs and a larger buy box, we're much more capable of serving a larger portion of the borrowers and buyers for manufactured housing.

Speaker Change: When ECN acquired Triad in 2017, it was basically a retail-driven company, mid-sized lender specializing in prime and super prime borrowers. But we've been able to expand the retail program, which is the first pillar.

Lance: To include, of course, everything that was done prior to ECN acquisition, but now with the addition of the silver and bronze program and a larger buy box, we're much more capable of serving a larger portion of the borrowers and buyers for manufactured housing.

Lance Hull: Our commercial lending program started with FloorPlan. FloorPlan is an outstanding business for us to be in because it increases our engagement with our retailers and it drives retail originations, which I'll speak to a little more in just a minute. And then lastly, our servicing business, which was very small back in 2017, but now serves nearly 50,000 borrowers and over $5.3 billion in managed assets. These last two pillars are so important because while today about two-thirds of our revenue is driven by our retail business, the commercial and servicing platforms are delivering recurring and stable revenues that will increase in the years to come. And with that, I'm going to turn it over to Matt Heidelberg, our COO, to talk about some of the details and our results.

Lance Hull: Our commercial lending program started with floor plan. Floor plan is an outstanding business for us to be in because it increases our engagement with our retailers, and it drives retail originations, which I'll speak to a little more in just a minute. And then lastly, our servicing business, which was very small back in 2017, but now serving nearly 50,000 borrowers and over $5.3 billion in managed assets. These last two pillars, in particular, are so important because, while today about two thirds of our revenue is driven off of our retail business, the commercial and servicing platforms are delivering recurring and stable revenues that will increase in the years to come.

Lance Hull: FloorPlan is an outstanding business for us to be in because it increases our engagement with our retailers and it drives retail originations, which I'll speak to a little more in just a minute. And then lastly, our servicing business, which was very small back in 2017, but is now serving nearly 50,000 borrowers and over $5.3 billion in managed assets. These last two pillars, in particular, are so important because while today about two-thirds of our revenue is driven by our retail business, the commercial and servicing platforms are delivering recurring and stable revenues that will increase in the years to come. And with that, I'm going to turn it over to Matt Heidelberg, our COO, to talk about some of the details and our results.

Lance: Our commercial lending program started with Floor Plan.

Lance: FloorPlan is an outstanding business for us to be in because it increases our engagement with our retailers and it drives retail originations, which I'll speak to a little more in just a minute.

Lance: And then lastly, our servicing business, which was very small back in 2017, but now serving nearly 50,000 borrowers and over $5.3 billion in managed assets.

Lance: These last two pillars in particular are so important because while today about two-thirds of our revenue is driven off of our retail business, the commercial and servicing platforms are delivering recurring and stable revenues that will increase in the years to come.

Matthew Heidelberg: And with that, I'm going to turn it over to Matt Heidelberg, our COO, to talk about some of the details and our results. Thank you, Lance. Over to page 11. I was going to walk you through a few more details on our results in the first half. Beginning on page 11 is going to walk you through these three graphs; you see, beginning with the one on the top right. Like to highlight our origination revenues of $23.4 million, which was up 19% year-over-year. And a margin of 7.5%. These results were above our internal budget and set us up very well for the remainder of the year.

Tom Thdlberg: and with i'mgoing to turnit tomthdlberg our coo to talks about some of the details and our results

Matt Heidelberg: Thank you, Lance. Now, over to page 11. I was going to walk you through a few more details on our results in the first half. Beginning on page 11, I was going to walk you through these three graphs you see, beginning with the one on the top right. I'd like to highlight our origination revenues of $23.4 million, which was up 19% year over year and a margin of 7.5%. These results were above our internal budget and set us up very well for the remainder of the year. Next, on the bottom left, you'll see a decision to delay our land home relaunch and a later signing of a rental flow agreement than expected did impact originations in the first half.

Matt Heidelberg: Thank you, Lance. Over to page 11. I was going to walk you through a few more details on our results in the first half, beginning on page 11. I was going to walk you through these three graphs you see, beginning with the one on the top right.

Tom Thdlberg: Thank you, Lance. Over to page 11.

Tom Thdlberg: I was going to walk you through a few more details on our results in the first half. Beginning on page 11, I was going to walk you through these three graphs you see, beginning with the one on the top right.

Matt Heidelberg: As these products are lower margin products, they had a minimal impact on our financial results. To the right, for the second half, we see chattel continuing to accelerate, and the longer time to fund and lend homes, leading to still a small contribution for the second half. Turning to page 12, tying these two halves together. We have a lower, we've lowered our origination guidance from $1.7 billion to $1.5 billion, primarily due to the land, home, and community products I've just discussed.

Matt Heidelberg: I'd like to highlight our origination revenues of $23.4 million, which was up 19% year over year and a margin of 7.5%. These results were above our internal budget and set us up very well for the remainder of the year. Next, on the bottom left, you'll see a decision to delay our land home relaunch and a later signing of a rental flow agreement than expected did impact originations in the first half.

Speaker Change: I'd like to highlight our origination revenues of $23.4 million, which was up 19% year-over-year and a margin of 7.5%. These results were above our internal budget and set us up very well for the remainder of the year.

Matthew Heidelberg: Next, on the bottom left, you'll see a decision to delay our land home, relaunch, and a later signing of a rental flow agreement that expected did impact originations in the first half. However, as these products are lower margin products, it had minimal impact on our financial results. To the right, for the second half, we see chattel continuing to accelerate and the longer time to fund and land home leading to still a small contribution for the second half.

Lance: Next, on the bottom left, you'll see a decision to delay our land home relaunch and a later signing of a rental flow agreement than expected did impact originations in the first half.

Lance: However, as these products are lower margin products, it had minimal impact on our financial results.

Lance: well

Lance: To the right, for the second half, we see chattel continuing to accelerate and the longer time to fund and land home, leading to still a small contribution for the second half.

Matthew Heidelberg: Turning to page 12, tying these two halves together, we have lowered our origination guidance from 1.7 billion to 1.5 billion. Primarily due to the land, home, and community products, as I've just discussed. However, due to the increased chattel mix and margins, we're able to maintain both, reaffirming our originations revenue guidance of 95 million to 105 million and reaffirming adjusted operating income guidance of 68 million to 80 million.

Lance: Turning to page 12, tying these two halves together.

Lance: We've lowered our origination guidance from $1.7 billion to $1.5 billion, primarily due to the land, home, and community products, as I've just discussed. However, due to the increased chattel mix and margins, we're able to maintain both

Matt Heidelberg: However, due to the increased chattel mix and margins, we're able to maintain both, reaffirming our Originations Revenue Guidance of $95 million to $105 million and reaffirming adjusted operating income guidance of $68 million to $80 million. Moving to page 13, giving us confidence in this guidance and forward originations. I'd like to highlight total approval growth of 25% year-over-year in the quarter. Breaking this down closer, chattel is up 28%, and land homes are up 30% following the re-lawn, while community is down 12% in the quarter.

Lance: Reaffirming our Originations Revenue Guidance of $95 million to $105 million. And reaffirming Adjusted Operating Income Guidance of $68 million to $80 million.

Matthew Heidelberg: Moving to page 13, giving us confidence in this guidance and forward originations. I'd like to highlight total approval growth of 25% year-over-year in the quarter. Breaking this down closer, chattel is up 28%, and land home's up 30% following the relaunch, while communities down 12% in the quarter. We believe approval growth of 25% relative to second half guidance of just 15% growth positions us very well for the remainder of the year.

Lance: Moving to page 13, giving us confidence in this guidance and forward originations.

Speaker Change: I'd like to highlight total approval growth of 25% year-over-year in the quarter.

Lance: Breaking this down closer, chattel is up 28 percent.

Lance: And land homes up 30% following the relaunch.

Matt Heidelberg: We believe approval growth of 25% relative to second half guidance of just 15% growth positions us very well for the remainder of the year. Moving onto page 14, I will give you an industry update. On the left is the shipment update that you've seen previously. Second quarter shipments were up 18 percent, and this in particular has been benefiting our floor plan portfolio, which Lance is going to get into more detail later. On the right, we have an analysis of annual shipments for the industry compared to both consumer sentiment and the 10-year Treasury.

Matt Heidelberg: We believe approval growth of 25% relative to second half guidance of just 15% growth positions us very well for the remainder of the year. Moving onto page 14, I will give you an industry update. On the left is the shipment update that you've seen previously. Second quarter shipments were up 18%, and this in particular has been benefiting our floor plan portfolio, which Lance is going to get into more detail later. On the right, we have an analysis of annual shipments for the industry compared to both consumer sentiment and the 10-year Treasury.

Lance: While community is down 12% in the quarter. We believe approval growth of 25% relative to second half guidance of just 15% growth positions us very well for the remainder of the year.

Matthew Heidelberg: Moving to page 14, to give you an industry update, on the left is the shipment update that you've seen previously. Secondly, second quarter shipments were up 18%, and this in particular has been benefiting our floor plan portfolio, which lands is going to get into more detail later. On the right, we have an analysis of annual shipments for the industry compared to both consumer sentiment and tenure treasury. With the analysis shows us that historically there's been no correlation, which leads us to believe that affordable housing, the need and demands is there despite market conditions. Moving you on to page 15, you'll see that we've maintained loan rates at healthy premiums to market rates, as we have the last several quarters.

Speaker Change: movie get to page fourteen to give you an industry update

Lance: On the left is the shipment update that you've seen previously. Second quarter shipments were up 18%, and this in particular has been benefiting our floor plan portfolio, which Lance is going to get into more detail later.

Lance: on the right we have an analysis of annual shipments for the industry compared to both consumer sentiment and ten year treasury with the analysis shows us is that historically there's been no correlation

Matt Heidelberg: What the analysis shows us is that historically, there's been no correlation, which leads us to believe that affordable housing, the need, and demand, is there despite market conditions. Moving you on to page 15. You'll see that we've maintained loan rates at healthy premiums to market rates as we have for the last several quarters. In our performance on page 16, we've also maintained consistent delinquency and net charge-offs while still building and growing our managed asset portfolio.

Lance: Which leads us to believe that affordable housing, the need and demands, is there despite market conditions.

Lance: Moving you on to page 15.

Speaker Change: You'll see that we've maintained loan rates at healthy premiums to market rates as we have the last several quarters.

Matthew Heidelberg: In our performance on page 16, we've also maintained consistent delinquency and net charge drops, while still building and growing our managed asset portfolio.

Lance: In our performance on to page 16, we've also maintained consistent delinquency and net charge-offs while still building and growing our managed asset portfolio.

Lance Hull: That'll turn it back over to you, Lath.

Lance Hull: That'll turn it back over to you, Lance. Thank you, Matt. I want to highlight again that second pillar that we mentioned earlier, which is our commercial business. It increased our outstanding balances to $452 million, which is up 18% versus the same time a year ago. These are higher-yielding assets with an average yield of 11 percent, and they are floating and indexed to SOFR, so we'll continue to see positive returns there. I mentioned before that these programs are so important because they drive engagement and increase retail flow.

Lance Hull: That'll turn it back over to you, Lance. Thank you, Matt. I want to highlight again that the second pillar that we mentioned earlier, which is our commercial business, increased our outstanding balances to $452 million, which is up 18% versus the same time a year ago. These are higher-yielding assets with an average yield of 11 percent, and they are floating and indexed to SOFR, so we'll continue to see positive returns there. I mentioned before that these programs are so important because they drive engagement and increase retail flow.

Lance Hull: Thank you, Matt. I want to highlight again that second pillar that we mentioned earlier, which is our commercial business. We've increased our outstanding balances to 452 million, which is up 18% versus the same time a year ago. These are higher yielding assets with an average yield of 11%, and they are floating in index to sofa, so we'll continue to see positive returns there. I mentioned before that these programs are so important because they drive engagement and increase retail flow. And today, about three quarters of this 452 million are floor plan. And we know that as our floor plan business grows, so will our retail business grow because the average floor planning retailer that does business with Triad does about two and a half times the amount of retail volume with us as well.

Lance Hull: And today, about three-quarters of this $452 million are floor plan, and we know that as our floor plan business grows, so will our retail business, because the average floor-planning retailer that does business with Triad does about two-and-a-half times the amount of retail volume with us as well. So the synergies that we gain by engaging them in multiple products will deliver better and better returns going forward. And then lastly, we did, as we've mentioned a couple of times, recently sign the Monroe Capital Rental Agreement, and we're beginning to add assets to the portfolio, and that will also, of course, increase our ongoing servicing portfolio. Flipping you over to slide 18, I want to spend just a minute talking about LandHome. It's been such a big part of our communication over the last couple of quarters.

Lance: That'll turn it back over to you Lance. Thank you Matt. I want to highlight again that second pillar that we mentioned earlier which is our commercial business.

Lance: We've increased our outstanding balances to $452 million, which is up 18% versus the same time a year ago.

Lance: These are higher yielding assets with an average yield of 11% and they are floating and indexed to SOFR, so we'll continue to see positive returns there.

Lance: I mentioned before that these programs are so important because they drive engagement and increase retail flow. And today, about three-quarters of this $452 million

Lance Hull: And today, about three-quarters of this $452 million is floor plan. And we know that as our floor plan business grows, so will our retail business grow because the average floor plan retailer that does business with Triad does about two-and-a-half times the amount of retail volume with us as well. So the synergies that we gain by engaging them in multiple products will deliver better and better returns going forward. And then lastly, we did, as we've mentioned a couple of times, recently sign the Monroe Capital Rental Agreement, and we're beginning to add assets to the portfolio. And that will also, of course, increase our ongoing servicing portfolio. Flipping you over to slide 18, we want to spend just a minute talking about LandHome.

Lance: Our floor plan, and we know that as our floor plan business grows, so will our retail business grow, because the average floor planning retailer that does business with Triad does about two and a half times the amount of retail volume with us as well, so the synergies that we gain by engaging them in multiple products

Lance Hull: So the synergies that we gain by engaging them in multiple products will deliver better and better returns going forward. And then lastly, we did, as we've mentioned a couple of times, recently signed the Monroe Capital rental agreement, and we're beginning to add assets to the portfolio. And that will also, of course, increase our ongoing servicing portfolio.

Lance: We'll deliver better and better returns going forward.

Lance: And then lastly, we did, as we've mentioned a couple of times, recently signed the Monroe Capital Rental Agreement, and we're beginning to add assets to the portfolio, and that will also of course increase our ongoing servicing portfolio.

Lance Hull: Let me over to slide 18. We want to spend just a minute to talk about Land home. It's been such a big part of our communication over the last couple of quarters. And Matt commented on our delayed relaunch of Land Home, but this period has allowed us to put the things in place and to implement the operational changes needed to ensure that we have a great go forward business. During this time, we have been able to consolidate our underwriting and processing teams and better align them with our retailers to ensure a very enhanced and positive construction process.

Lance Hull: And Matt commented on our delayed relaunch of LandHome. But this period has allowed us to put the things in place and to implement the operational changes needed to ensure that we have a great going forward business. During this time, we have been able to consolidate our underwriting and processing teams and better align them with our retailers to ensure a very enhanced and positive construction process. We've also improved systems for faster decisioning and more efficient processing that have elevated our customers' experience and the buying experience overall for both the borrower and our retailer.

Lance: Flipping you over to slide 18, we want to spend just a minute to talk about LandHome. It's been such a big part of our communication over the last couple of quarters, and Matt commented on our delayed relaunch of LandHome. But this period has allowed us to put the things in place and to implement the operational changes needed to ensure that we have a great...

Lance Hull: It's been such a big part of our communication over the last couple of quarters, and Matt commented on our delayed relaunch of LandHome. But this period has allowed us to put the things in place and implement the operational changes needed to ensure that we have a great go-forward business. During this time, we have been able to consolidate our underwriting and processing teams and better align them with our retailers to ensure a very enhanced and positive construction process.

Matt: Go forward, business.

Lance: During this time, we have been able to consolidate our underwriting and processing teams and better align them with our retailers to ensure a very enhanced and positive construction process.

Lance Hull: We've also improved systems for faster decisioning and more efficient processing that have elevated our customer experience and the buying experience overall for both the borrower and our retailer. And these have paid dividends, as Matt alluded to earlier. We're now seeing our land home approvals up 30% in the second quarter year over year. We have also significantly de-risked the platform by reducing the balance in our construction book and have also, of course, seen much more attractive rates. So we're in a tremendous position now to spring forward. And we anticipate that while we are seeing growth in land home approvals, we will see the originations from those late in 2024.

Lance Hull: We've also improved systems for faster decisioning and more efficient processing that have elevated our customers' experience and the buying experience overall for both the borrower and our retailer. And these have paid dividends. As Matt alluded to earlier, we're now seeing our land home approvals up 30% in the second quarter year-over-year. We have also significantly de-risked the platform by reducing the balance in our construction book, and we have also, of course, seen much more attractive rates.

Matt: We've also improved systems for faster decisioning and more efficient processing that have elevated our customers' experience and the buying experience overall for both the borrower and our retailer. And these have paid dividends. As Matt alluded to earlier, we're now seeing our land home approvals.

Lance Hull: And these have paid dividends. As Matt alluded to earlier, we're now seeing our land home approvals up 30% in the second quarter year-over-year. We have also significantly de-risked the platform by reducing the balance in our construction book, and we have also, of course, seen much more attractive rates.

Matt: Up 30% in the second quarter year-over-year.

Speaker Change: We have also significantly de-risked the platform by reducing the balance in our construction book and have also, of course, seen much more attractive rates.

Lance Hull: So we're in a tremendous position now to spring forward, and we anticipate that while we are seeing growth in land home approvals, we will see originations from those late in 2024, and many of them, again, due to the nature of land homes, and as Matt alluded to, the longer tail on the business. We'll see even more business throughout 2025 as this business continues to expand. On to slide 19, just to very quickly talk about the Champion Financing Update. We're so fortunate to have this relationship with Skyline Champion.

Lance Hull: So we're in a tremendous position now to spring forward, and we anticipate that while we are seeing growth in Lantome approvals, we will see originations from those late in 2024, and many of them, again, due to the nature of Lantome, and as Matt alluded to, the longer tail on the business. We'll see even more business throughout 2025 as this business continues to expand. On to slide 19, just to very quickly talk about the Champion Financing Update. We're so fortunate to have this relationship with Skyline Champion.

Speaker Change: So we're in a tremendous position now to spring forward and we anticipate that while we are seeing growth in land home approvals

Hans Kraaz: And many of them, again, due to the nature of land home and, as Matt alluded to, the longer tail on the business, we'll see even more business throughout 2025 as this business continues to expand.

Matt: We will see the originations from those late in 2024, and many of them, again, due to the nature of Lanthome, and as Matt alluded to, the longer tail on the business. We'll see even more business throughout 2025 as this business continues to expand.

Hans Kraaz: On to slide 19, just to very quickly talk about the champion financing update, we're so fortunate to have this relationship with Skyline Champion. Just to recap, we had the original launch on the program was in January of this year in Louisville with our floor plan and commercial business, and then we followed that up a few months later with the retail launch at the Baluxi Show in March of 2024. Both of these are really picking up speed and beginning to show significant dividends. If you look down in the lower left-hand corner of this slide, you'll see that our current active balance in our floor plan pipeline is at 57.8 million, which is more than double what it was just a quarter ago.

Speaker Change: On to slide 19, just to very quickly talk about the Champion Financing Update. We're so fortunate to have this relationship with Skyline Champion. Just to recap, the original launch on the program was in January of this year in Louisville with our floor plan and commercial business, and then we followed that up a few months later with the retail launch.

Lance Hull: Just to recap, we had the original launch of the program in January of this year in Louisville with our floor plan and commercial business. And then we followed that up a few months later with the retail launch at the Biloxi Show in March of 2024. Both of these are really picking up speed and beginning to show significant dividends.

Matt: at the Biloxi Show in March of 2024. Both of these are really picking up speed and beginning to show significant dividends. If you look down in the lower left-hand corner of this slide, you'll see that our current active balance in our floor plan pipeline is at $57.8 million, which is more than double what it was just a quarter ago.

Lance Hull: If you look down in the lower left-hand corner of this slide, you'll see that our current active balance in our floor plan pipeline is at 57.8 million, which is more than double what it was just a quarter ago. Again, to highlight the benefit of this, we grow these outstanding floor plan balances and engage more retailers with us in floor plans. We know that's also going to drive retail business to both us and, of course, the Champion Finance product, as those retailers will typically do about two and a half times the retail volume with us.

Hans Kraaz: Again, to highlight the benefit of this is we grow these outstanding floor plan balances and engage more retailers with us in floor plan. We know that's also going to drive retail business to both us, and of course, champion finance product, as those retailers will typically do about two and a half times the retail volume with us. And then I would like to comment that while our total approvals are up 28%, as you heard, Matt alluded to earlier, our approvals through the champion financing group are up more than double that. So we're having a tremendous opportunity with some of the programs that we put in place with them and some of the new products that have been launched to see the interest rise in both their products as well as our financing.

Matt: Again, to highlight the benefit of this, as we grow these outstanding floor plan balances and engage more retailers with us in floor plan, we know that's also going to drive retail business to both us and, of course, Champion Finance Product, as those retailers will typically do about two and a half times the retail volume with us.

Lance Hull: And then I would like to comment that while our total approvals are up 28 percent, as you heard Matt allude to earlier, our approvals through the Champion Financing Group are up more than double that. So we have a tremendous opportunity with some of the programs that we put in place with them and some of the new products that have been launched to see interest rise in both their products as well as our financing.

Lance Hull: And then I would like to comment that while our total approvals are up 28%, as you heard Matt allude to earlier, our approvals through the Champion Financing Group are up more than double that. So we're having a tremendous opportunity with some of the programs that we've put in place with them and some of the new products that have been launched to see interest rise in both their products as well as our financing.

Speaker Change: And then I would like to comment that while our total approvals are up 28%, as you heard Matalou too earlier, our approvals through the Champion Financing Group,

Matt: are up more than double that. So we're having a tremendous opportunity with some of the programs that we put in place with them and some of the new products that have been launched to see the interest rise in both their products as well as our financing. So we're excited to see where this is gonna take us going forward.

Lance Hull: So we're excited to see where this is going to take us going forward. And on slide 20, it's a slide that we've included many times before. It's got some details, and I'll leave that with you. And with that, I will turn it over to Steve Hudson.

Hans Kraaz: So we're excited to see where this is going to take us going forward.

Steven Hudson: And on slide 20, it's a slide that we've included many times before. It's got some of the details, and I'll leave that with you. And with that, I will turn it over to Steve Hudson.

Matt: And on slide 20, it's a slide that we've included many times before, it's got some of the details and I'll leave that with you and with that I will turn it over to Steve Hudson.

Steve Hudson: Thank you. Thank you. Thank you. I will go through it again.

Unknown Executive: As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the questions here, you may press start in one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by press and start in zero.

Steve Hudson: let slide point two i think i spoken to most of the al and go throughreally again the fact that thanks to see growth returning to the argmy ine bus

Steve Hudson: Thanks Lance. Bye. Go through it again. The playbook at ECN for all of our businesses. The four components are making sure that we're licensed for all of our activities.

Steven Hudson: We're going to start the transition away from credit units. We're never going to leave credit units entirely, but we're looking ultimately to get to that 7036. I want to have forward to that, Chris Johnson. We'll speak to the second and the second component.

Speaker Change: He was also known as the Jackie Heidelberg award because he claimed to be a part of the Michael and Anne With An Arse

Speaker Change: Funding update. It's great to start the transition away from credit units. We're never going to leave credit units entirely, but we're looking ultimately to get to that 70-30 mix.

Unknown Executive: I would now like to turn the meeting over to you.

Speaker Change: some of the p

Christopher Johnson: We run a four component playbook at ECM for all of our businesses. The four components are making sure that we're licensed for all of our activities. The second is assistance and place to create a culture of compliance. The third is making sure we have internalized servicing on the fourth is institute four arrangements. We now have those four components complete.

Steve Hudson: We're out of four components. We're out of four components. The playbook at ECN for all of our businesses, the four components are making sure that we're licensed for all of our activities. Culture, compliance.

Speaker Change: We run a four-component playbook at ECN for all of our businesses. The four components are making sure that we're licensed for all of our activities. The second is the systems in place to create a culture of compliance.

Katherine Moradiellos: Thank you for joining us today on the call, our Steven Hudson Chief Executive Officer, Jackie Weber, Chief Financial Officer, Chris Johnson, Senior Vice President and Head of Capital Markets, Lance Hull, President of Triad Financial, Matt Heidelberg, Chief Operating Officer of Triad Financial, Mike Opdahl, President of Source One, and Hans Kraaz, Founder and CEO of IFG. A news release summarizing these results was issued this afternoon and the financial statements and MDNA for the three month period ended June 30th, 2024, have been filed with Cedar.

Steve Hudson: [inaudible] Drone and Life's Truth. Orange, we now have those four. Sir, I have my mic off. You'll probably like that anyhow. But we now have the four components complete for RV Marine. I won't speak to 23. You've seen it before, and with that, Mike.

Speaker Change: The third is making sure we have internalized servicing, and the fourth is institutional call arrangements. We now have those four components complete.

Steven Hudson: Sir, I have my mic off; you're probably like that anyhow. But we now have the four components complete for RV Marine. I won't speak to 23. You've seen it before, and with that mic.

Steve Hudson: Sir, I have my mic off. You'll probably like that anyhow. But we now have the four components complete for RV Marine. I won't speak to 23. You've seen it before, and with that, Mike.

Speaker Change: Sir, I have my mic off, you'll probably like that anyhow. We now have the four components complete for RV Marine.

Mike: I won't speak to 23, you've seen it before, and with that, Mike.

Mike Opdahl: Thank you, Steve. Good afternoon.

Christopher Johnson: Thank you, Steve.

Michael Opdahl: Good afternoon. Please turn to slide 24. As Steve mentioned, we are executing the ECM playbook, and I'm very pleased to report that the initiatives launched last year are starting to pay off. Looking at the marine and RV market in totality, momentum is definitely shifting. Both the RV Association and total manufacturers are reporting that shipments of new RVs are up. In marine, a recently released industry survey reported that almost 70% of marine lenders originated higher Q2 loan volume year over year. In fact, it was the highest quarterly increase since pre-COVID. IFG and Source One are seeing the same.

Mike: Thank you, Steve. Good afternoon. Please turn to slide 24. As Steve mentioned, we are executing the ECN playbook, and I'm very pleased to report that the initiatives launched last year are starting to pay off.

Katherine Moradiellos: These documents are available on our website at www.ecncapitalcorp.com. Presentation slides to be referenced during the call are accessible in the webcast as well as in PDF format under the presentation section of the company's website. Before we begin, I want to remind our listeners that some of the information we are sharing with you today includes forward-looking statements. These statements are based on assumptions that are subject to significant risk and uncertainties. I will refer you to the cautionary statement section of the MDNA for a description of such risk, uncertainties and assumptions.

Mike Opdahl: Please turn to slide 24. As Steve mentioned, we are executing the ECN playbook, and I'm very pleased to report that the initiatives launched last year are starting to pay off. Looking at the marine and RV market in totality, momentum is definitely shifting. Both the RV Association and Tobol Manufacturers are reporting that shipments of new RVs are up. And Marine, a recently released industry survey, reported that almost 70 percent of marine lenders originated higher Q2 loan volume year over year. In fact, it was the highest quarterly increase since pre-COVID.

Speaker Change: Looking at the marine and RV market in totality, momentum is definitely shifting. Both the RV Association and Tobol Manufacturers are reporting that shipments of new RVs are up.

Katherine Moradiellos: Although management believes that the expectations reflected in these statements are reasonable, we can obviously give no assurance that the expectations of any forward-looking statements will prove to be correct. You should note that the company's earnings release, financial statements, MDNA and today's call includes references to non-IFRS measures which we believe help to present the company and its operations in ways that are useful to investors. A reconciliation of these non-IFRS measures to IFRS measures can be found in our MDNA. All figures are presented in US dollars unless explicitly noted.

Speaker Change: And Marine, a recently released industry survey, reported that almost 70% of Marine lenders originated higher Q2 loan volume year over year. In fact, it was the highest quarterly increase since pre-COVID.

Mike Opdahl: IFG and Source One are seeing the same significant increases in applications, approvals, and funding in the second quarter. As evidenced by our Q2 results, ECN's marine and RV businesses are on plan, with quarterly approvals up over 21% and originations up almost 14%. We saw this positive momentum continuing through July. Turning to slide 25.

Mike Opdahl: IFG and Source One are seeing the same significant increases in applications, approvals, and funding in the second quarter. As evidenced by our Q2 results, ECNs wearing and RV businesses are on plan with quarterly approvals up over 21% and originations up almost 14%. We saw this positive momentum continuing through July. Turning to slide 25.

Michael Opdahl: Significant increases in applications, approvals, and fundings in the second quarter. As evidenced by our Q2 results, ECM's marine and RV businesses are on plan with quarterly approvals up over 21% and originations up almost 14%. We saw this positive momentum continuing through July. Turn to slide 25. A couple of highlights here. As the top right graph shows, even in the face of elevated rates, RV and marine assets continue to deliver substantial yield premiums versus automotive. As the bottom right chart illustrates, source ones held for sale portfolio continue to experience extremely low losses, and our lending partners are reporting similar results.

Speaker Change: IFG and Source One are seeing the same, significant increases in applications, approvals, and fundings in the second quarter.

Speaker Change: As evidenced by our Q2 results, ECN's marine and RV businesses are on plan, with quarterly approvals up over 21% and originations up almost 14%.

Speaker Change: We saw this positive momentum continuing through July .

Mike Opdahl: A couple of highlights here. As the top right graph shows, even in the face of elevated rates, RV and marine assets continue to deliver substantial yield premiums versus automotive. As the bottom right chart illustrates, SourceOne's held for sale portfolio continues to experience extremely low losses, and our lending partners are reporting similar results. As a result of this superior performance, both IFG and SourceOne enjoy strong lender support and are fully funded through 2024.

Speaker Change: Turning to slide 25.

Speaker Change: A couple of highlights here.

Speaker Change: As the top right graph shows, even in the face of elevated rates, RV and marine assets continue to deliver substantial yield premiums versus automotive.

Katherine Moradiellos: With those introductory remarks complete, I will now turn the call over to Steve Hudson CEO.

Speaker Change: As the bottom right chart illustrates, SourceOne's held-for-sale portfolio continues to experience extremely low losses, and our lending partners are reporting similar results.

Steven Hudson: Thank you, Kathy, and good evening and welcome to our second quarter conference call, turning to slide five.

Michael Opdahl: As a result of this superior performance, both IFG and Source One enjoy strong lender support and are fully funded through 2024. With Source One's entry into the capital markets, we have the capacity to accelerate our growth plans, and we are very well positioned to take advantage of the coming lower rate environment.

Steven Hudson: I'd like to highlight three key takeaways if I can. The second bullet, the scaled originator, it's now been three years since we've developed our first institutional flow program. In this last quarter, we got our first detailed look at both the credit and yield performance of the portfolios for our large institutional investors. And they came in both yield and credit came in much better than expected. As a result, demand exceeds supply and we truly have a scarcity of our MH assets.

Speaker Change: as a result of this superior performance both iffg and source one enjoy strong lender support and are fully funded through two thousand and twenty-four

Mike Opdahl: With Source One's entry into the capital markets, we have the capacity to accelerate our growth plans, and we are very well positioned to take advantage of the coming lower-rate environment. Please turn to slide 26, and let's focus on some of the accomplishments of Resource One this past quarter. We've added four new sales reps to our team, and we are now operating in 44 states. Our take-share strategy is working very well, as we focus on capturing significant volume once we've entered a new market.

Speaker Change: With Source One's entry into the capital markets, we have the capacity to accelerate our growth plans, and we are very well positioned to take advantage of the coming lower-rate environment.

Michael Opdahl: Please turn to slide 26, and let's focus on some of the accomplishments of Resource One this past quarter. We've added four new sales reps to our team, and we are now originating in 44 states. Our take share strategy is working very well. As we focus on capturing significant volume, once we've entered a new market. Examples of our success include tripling our market share in the US's three largest RV markets, and we are now the number one lender for one of the nation's largest RV groups. Our momentum is definitely building. Second quarter originations were up 42% year over year, and that positive trend continued in July as we're up 48% versus 2023.

Speaker Change: Please turn to slide 26, and let's focus on some of the accomplishments of Resource One this past quarter.

Speaker Change: We've added four new sales reps to our team, and we are now originating in 44 states.

Steven Hudson: Turning to the fourth bullet on diverse funding relationships, we have now completed our strategic flow shift to institutional versus bank credit unions. And that shift remains at 70% institutions and 30% banks and credit unions we think that's a healthy balance from the perspective of our liquidity and profitability. And finally, on the second last bullet, with respect to our investment grade rated loan servicing business, we've now created three pillars within triad, a retail pillar, commercial finance pillar, and our servicing pillar leading to further diversification.

Speaker Change: Our take share strategy is working very well, as we focus on capturing significant volume once we've entered a new market. Examples of our success include tripling our market share in the U.S.'s three largest RV markets.

Mike Opdahl: Examples of our success include tripling our market share in the U.S.'s three largest RV markets, and we are now the number one lender for one of the nation's largest RV groups. Our momentum is definitely building. Second quarter originations were up 42 percent year over year, and that positive trend continued in July, as we're up 48 percent versus 2023. Our investments in technology continue to bear fruit. Our industry-leading e-contracting platform has improved capture rates and dealer efficiencies.

Speaker Change: And we are now the number one lender for one of the nation's largest RV groups. Our momentum is definitely building. Second quarter originations were up 42% year over year. And that positive trend continued in July as we're up 48% versus 2023.

Michael Opdahl: Our investments in technology continue to bear fruit. Our industry leading e-contracting platform has improved capture rates and dealer efficiencies. We anticipate launching our proprietary scorecard and pricing model in Q3. This will improve an improved dealer experience and a stronger portfolio performance.

Speaker Change: Our investments in technology continue to bear fruit. Our industry-leading e-contracting platform has improved capture rates and dealer efficiencies. We anticipate launching our proprietary scorecard and pricing model in Q3. This will improve dealer experience and a stronger portfolio performance.

Steven Hudson: And I believe improvement in the quality of earnings for the triad business, turning to side six. A couple items I like to focus on. We're happy to report three cents of earnings per share and confirming our guidance of 10 to 16 cents. 20.2 million of operating income from Triad ahead of our plan and origination revenues came at 7.5 percent. Evidence of our path to returning to our former profitability. Our funding program's Carlisle, our partnership of Carlisle was extended and expanded, which is great news.

Mike Opdahl: We anticipate launching our proprietary scorecard and pricing model in Q3. This will improve dealer experience and strengthen portfolio performance. With that, I'll turn it over to Hans to bring everyone up to speed on IFG's accomplishments and talk about our cross-company initiatives. Thanks, Mike. Well done.

Hans Kraaz: With that, I'll turn it over to Hans to bring everyone up to speed on IFG's accomplishments and talk about our cross-company initiatives. Thanks, Mike. Well done on a great quarter at Source One turning the slide 27. We also had several very positive developments across IFG, on which I'm very, very proud of, beginning with the second quarter results. Originations for the quarter were up 4% year over year, largely driven by strong man June months and a continuation of an upward trend and a number of transactions, with a 7% increase versus the same period last year. This is a great sign for our business.

Speaker Change: With that, I'll turn it over to Hans to bring everyone up to speed on IFG's accomplishments and talk about our cross-company initiatives. Thanks, Mike. Well done on a great quarter at Source One.

Hans Kraaz: Thanks, Mike. Well done on a great quarter at Source One. Turning to slide 27.

Hans Kraaz: We also had several very positive developments across IFG of which I'm very, very proud of, beginning with the second quarter results. Originations for the quarter were up 4% year-over-year, largely driven by strong May and June months and a continuation of an upward trend in the number of transactions, with a 7% increase versus the same period last year. This is a great sign for our business. We're seeing strong demand from the consumer as well as appetite for our loans from our bank partners.

Hans Kraaz: We also had several very positive developments across IFG of which I'm very, very proud of, beginning with the second quarter results. Originations for the quarter were up 4% year over year, largely driven by strong May and June months and a continuation of an upward trend in the number of transactions, with a 7% increase versus the same period last year. This is a great sign for our business. We're seeing strong demand from the consumer as well as appetite for our loans from our bank partners.

Hans: Turning to slide 27.

Hans: We also had several very positive developments across IFG, all of which I'm very, very proud of.

Steven Hudson: And I'm very pleased to announce that Monroe Capital has joined our partnership group with a 300 million dollar forward rental funding program launched in late June. It came a little later, but better late than never. I want to thank the team at Monroe, particularly our friend Kyle.

Hans: Beginning with the second quarter results.

Speaker Change: Originations for the quarter were up 4% year over year, largely driven by strong May and June months and a continuation of an upward trend in the number of transactions, with a 7% increase versus the same period last year.

Steven Hudson: Turning to RV Marine, it's nice to see growth coming back up 14 percent year over year. Thank you, fellas. It was 311 million of originations.

Hans Kraaz: We're seeing strong demand from the consumer as well as appetite from our loans from our bank partners. In terms of dealers, we have signed up more new dealers this year than any time in the company's history. More dealers will ultimately lead to more volume. This is clearly evidenced by a 30% increase in volume for the month of June versus 2023. On that note, we have executed on our take share plan and have expanded into new markets with the addition of seven new sales agents. We'll begin to see this impact almost immediately and are anticipating an incremental 75 million in originations on an annualized basis from this group.

Speaker Change: This is a great sign for our business. We're seeing strong demand from the consumer as well as appetite from our loans from our bank partners.

Steven Hudson: I do want to point out the two significant developments. First of all, we acquired a servicing platform, Paramount Capital, a great addition to our family, which will service our RV Marine assets. And as well, we've now, with Chris Johnson's leadership, we've now launched our institutional funding with a $250 million forward funding program with the AAA rated mutual insurance company. That signals the movement away from credit unions and to institutional funding.

Hans Kraaz: In terms of dealers, we have signed up more new dealers this year than at any time in the company's history. More dealers will ultimately lead to more volume. This is clearly evidenced by a 30% increase in volume for the month of June versus 2023. On that note, we have executed on our take-share plan and have expanded into new markets with the addition of seven new sales agents. We'll begin to see this impact almost immediately and are anticipating an incremental $75 million in originations on an annualized basis from this group.

Speaker Change: In terms of dealers, we have signed up more new dealers this year than any time in the company's history.

Speaker Change: And more dealers will ultimately lead to more volume.

Speaker Change: This is clearly evidenced by a 30% increase in volume for the month of June versus 2023.

Speaker Change: On that note, we have executed on our take-share plan and have expanded into new markets with the addition of seven new sales agents.

Lance Hull: With that, I'll pass to relapse. Thank you, Steve. Let me take you forward to slide nine, where I'll hit just a few of our highlights from Triad. Our just an operating income was up 108 percent year over year to 20.2 million. Our origination revenue margin climbed to 7.5 percent from 5.2 percent in Q1 leading to a 23.4 million dollar origination revenue for the quarter. Our managed assets continue to grow. We're now at 5.3 billion, which is a 13 percent increase year over year.

Speaker Change: We'll begin to see this impact almost immediately and are anticipating an incremental $75 million in originations on an annualized basis from this group.

Hans Kraaz: The new hires bring 150 years of combined experience and will significantly expand key markets from the East to the West Coast.

Hans Kraaz: The new hires bring 150 years of combined experience and will significantly expand key markets from the east to the west coast. It's important to note that July's positive performance was not impacted by the addition of our new sales team. Next slide.

Speaker Change: The new hires bring 150 years of combined experience and will significantly expand key markets from the east to the west coast.

Hans Kraaz: It's important to note that July's positive performance was not impacted by the addition of our new sales team.

Speaker Change: It's important to note that July's positive performance was not impacted by the addition of our new sales team.

Hans Kraaz: Next slide. Last quarter, we reported the purchase of First Approval Source. This acquisition fits squarely in the ECN playbook. Although this was a smaller purchase and confident this will bring significant value to IFG and across the RV and marine platform. For a purchase price of $800,000, we have picked up over 30 dealers and 40 million worth of annualized origination value. But that's not all. We have also added an industry-leading front end and underwriting technology platform. The first approval source system, where at the FAS and short, will unlock value by enhancing the customer experience. This will be achieved by providing our team with enhanced underwriting tools and decision engines.

Hans Kraaz: Last quarter, we reported the purchase of First Approval Source. This acquisition fits squarely in the ECN playbook. Although this was a smaller purchase, I'm confident this will bring significant value to IFG and across the RV and marine platform. For a purchase price of $800,000, we have picked up over 30 dealers and $40 million worth of annualized origination volume. But that's not all.

Hans Kraaz: Last quarter, we reported the purchase of First Approval Source. This acquisition fits squarely in the ECN playbook. Although this was a smaller purchase, I am confident this will bring significant value to IFG and across the RV and Marine platforms. For a purchase price of $800,000, we have picked up over 30 dealers and $40 million worth of annualized origination volume. But that's not all.

Speaker Change: Next slide.

Lance Hull: And the ongoing initiatives that I've been discussing for the last couple of quarters regarding our improvements into operational efficiencies have resulted in a modest quarter of a quarter in year over year reduction in operating expenses. And as Steve mentioned, we have a new funding partner in Carlisle, which is very exciting for us. And the Monroe Capital rental program is going to allow us to expand our operations further.

Speaker Change: Last quarter, we reported the purchase of first approval source.

Speaker Change: This acquisition fits squarely in the ECN playbook.

Speaker Change: Although this was a smaller purchase, I'm confident this will bring significant value to IFG and across the RV and marine platform.

Speaker Change: For a purchase price of $800,000, we have picked up over 30 dealers and $40 million worth of annualized origination volume.

Lance Hull: Over to slide 10. Steve also mentioned the three pillar business that Triad is now operating under reporting under. And I think it's important for just to spend just a minute kind of talking about each of these and how it's flowing into our path forward. When ECN acquired Triad in 2017, it was basically a retail driven company mid-size lender specializing in prime and super prime borrowers. But we've been able to expand the retail program, which is the first pillar to include, of course, everything that was done prior to ECN acquisition.

Hans Kraaz: We have also added an industry-leading front-end and underwriting technology platform. The First Approval Source System, or FAS, in short, will unlock value by enhancing the customer experience. This will be achieved by providing our team with enhanced underwriting tools and decision engineering. The result will be a reduction in time from application to funding and maximum profit per transaction. The platform is built for scale, which ties into our sales expansion strategy and will allow us to benefit from enhanced data collection.

Hans Kraaz: We have also added an industry-leading front-end and underwriting technology platform. First Approval Source System, or FAS, for short, will unlock value by enhancing the customer experience. This will be achieved by providing our team with enhanced underwriting tools and decision engineering. The result will be a reduction in time from application to funding and maximum profit per transaction. The platform is built for scale, which ties into our sales expansion strategy and will allow us to benefit from enhanced data collection.

Speaker Change: But that's not all.

Speaker Change: We have also added an industry-leading front-end and underwriting technology platform.

Speaker Change: The first approval source system, or FAS in short, will unlock value by enhancing the customer experience.

Speaker Change: This will be achieved by providing our team with enhanced underwriting tools and decision engines.

Hans Kraaz: The result will be a reduction in time from application to funding and maximum profit per transaction. The platform is built for scale, which ties into our sales expansion strategy and will allow us to benefit from enhanced data collection. From a funding perspective, demands RFG paper continues to outpace supply. That said, we see incremental benefits in accessing source one's unique funding arrangements, which will further our competitive advantage versus our peers. Source one's drive for efficiency, speed, and execution will bring new options for our customers, dealers, and brokers nationwide. I continue to work closely with Mike Opdahl to capitalize on cross-energies across the RV and marine platform.

Speaker Change: The result will be a reduction in time from application to funding and maximum profit per transaction.

Lance Hull: But now with the addition of the silver and bronze program and a larger buy box, we're much more capable of serving a larger portion of the borrowers and buyers for manufactured housing. Our commercial lending program started with floor plan. Floor plan is an outstanding business for us to be in because it increases our engagement with our retailers and it drives retail originations, which I'll speak to a little more in just a minute.

Speaker Change: the platform is built for scale which ties into our sales expansion strategy and will allow us to benefit from enhanced data collection

Hans Kraaz: From a funding perspective, demand for IFG paper continues to outpace supply. That said, we see incremental benefits in accessing Source One's unique funding arrangement, which will further our competitive advantage versus our peers. Source One strives for efficiency, speed, and execution. We'll bring new options for our customers, dealers, and brokers nationwide. I continue to work closely with Mike Opdahl to capitalize on and cross synergies across the RV and marine platform. This will help us benefit from our joint internal capabilities.

Hans Kraaz: From a funding perspective, demand for IFG paper continues to outpace supply. That said, we see incremental benefits in accessing Source One's unique funding arrangement, which will further our competitive advantage versus our peers. Source One strives for efficiency, speed, and execution. We'll bring new options for our customers, dealers, and brokers nationwide. We continue to work closely with Mike Opdahl to capitalize on cross synergies across the RV and marine platforms, which will help us benefit from our joint internal capabilities.

Speaker Change: From a funding perspective, demand for IFG paper continues to outpace supply.

Speaker Change: That said, we see incremental benefits in accessing Source One's unique funding arrangements.

Lance Hull: And then lastly, our servicing business, which was very small back in 2017, but now serving nearly 50,000 borrowers and over $5.3 billion in managed assets. These last two pillars in particular are so important because while today about two thirds of our revenue is driven off of our retail business, the commercial and servicing platforms are delivering recurring and stable revenues that will increase in the years to come.

Speaker Change: which will further our competitive advantage versus our peers. Source One's drive for efficiency, speed, and execution will bring new options for our customers, dealers, and brokers nationwide.

Mike Opdahl: I continue to work closely with Mike Opdahl to capitalize on cross synergies across the RV and marine platform.

Hans Kraaz: This will help us benefit from our joint internal capabilities. Whether it's the lowest cost given scale, RFG's in-house title department, cross sales, or source one's funding, all of which will ultimately lead to margin improvement across the platform and greater number of originations.

Speaker Change: This will help us benefit from our joint internal capabilities.

Hans Kraaz: Whether it's the lowest cost given scale, IFG's in-house title department, cross sales, or Source One's funding, all of which will ultimately lead to margin improvement across the platform and a greater number of originations. In summary, with the platform and technology improvements in place, we are winning customers and increasing our market share. We are attracting new and experienced people to our team and expanding funding. And with that, I will pass it back to Jackie.

Matthew Heidelberg: And with that, I'm going to turn it over to Matt Heidelberg, our COO, to talk about some of the details and our results. Thank you, Lance. Over to page 11. I was going to walk you through a few more details on our results in the first half. Beginning on page 11 is going to walk you through these three graphs, you see, beginning with the one on the top right. Like to highlight our origination revenues of $23.4 million, which was up 19% year-over-year.

Speaker Change: Whether it's the lowest cost given scale, IFG's in-house title department, cross-sales, or Source One's funding, all of which will ultimately lead to margin improvement across the platform and greater number of originations.

Matthew Heidelberg: And a margin of 7.5%. These results were above our internal budget and set us up very well for the remainder of the year. Next, on the bottom left, you'll see a decision to delay our land home, relaunch, and a later signing of a rental flow agreement that expected did impact originations in the first half. However, as these products are lower margin products, it had minimal impact on our financial results. To the right, for the second half, we see chattel continuing to accelerate and the longer time to fund and land home leading to still a small contribution for the second half.

Hans Kraaz: In summary, with the platform and technology improvements in place, we are winning customers and increasing our market share. We are attracting new and experienced people to our team and expanding funding.

Speaker Change: In summary, with the platform and technology improvements in place, we are winning customers and increasing our market share. We are attracting new and experienced people to our team and expanding funding.

Jackie Weber: With that, I will pass it back to Jackie. Thank you, Harns. Turning to page 30 for our consolidated operating highlights. Overall, our Q2 operating results are on plan as we continue to improve from 2023, with adjusted EBIDA of 31.5 million and adjusted operating income of 14.5 million. Overall, revenues were up across each of our businesses, while consolidated operating expenses state flat, which drove the improvement EBIDA. I would also add that there were no fair value provisions in the current quarter. Adjusted net income was 8.2 million, or three cents per share, consistent with our guidance of two to four cents per share.

Speaker Change: And with that, I will pass it back to Jackie.

Jackie Weber: Turning to page 30 for our consolidated operating highlights, overall, our Q2 operating results are on plan as we continue to improve from 2023 with adjusted EBITDA of $31.5 million and adjusted operating income of $14.5 million. Overall, revenues were up across each of our businesses, while consolidated operating expenses stayed flat, which drove the improvement in EBITDA. I would also add that there were no fair value provisions in the current quarter.

Jackie Weber: Thank you, Hans.

Jackie Weber: Turning to page 30 for our consolidated operating highlights.

Jackie Weber: Overall, our Q2 operating results are on plan as we continue to improve from 2023 with adjusted EBITDA of $31.5 million and adjusted operating income of $14.5 million.

Jackie Weber: Overall, revenues were up across each of our businesses, while consolidated operating expenses stayed flat, which drove the improvement in EBITDA.

Speaker Change: I would also add that there were no fair value provisions in the current quarter.

Jackie Weber: Adjusted net income was $8.2 million, or $0.03 per share, consistent with our guidance of $0.02 to $0.04 per share. Turning to page 31, looking at the balance sheet, our total balance sheet remains down over $200 million from the prior year quarter. However, compared to the first quarter of 2024, finance assets and debt were up due to the timing of pooled loan sales that were subsequently completed in July. Turning to page 32.

Speaker Change: Adjusted net income was $8.2 million, or $0.03 per share, consistent with our guidance of $0.02 to $0.04 per share.

Matthew Heidelberg: Turning to page 12, tying these two halves together, we have a lower, we've lowered our origination guidance from 1.7 billion to 1.5 billion. Primarily due to the land home and community products, as I've just discussed. However, due to the increased chattel mix and margins, we're able to maintain both reaffirming our originations revenue guidance of 95 million to 105 million and reaffirming adjusted operating income guidance of 68 million to 80 million. Moving to page 13, giving us confidence in this guidance and forward originations.

Jackie Weber: Turning to page 31, looking at the balance sheet, our total balance sheet remains down over 200 million from the prior year quarter. Comparing to the first quarter of 2024, finance assets and debt were up due to the timing of pooled loan sales that were subsequently completed in July.

Speaker Change: turnning to page thirty-one looking at the balance sheet our total balance sheet remains down over two hundred million from the prior year quarter

Speaker Change: Comparing to the first quarter of 2024, finance assets and debt were up due to the timing of pooled loan sales that were subsequently completed in July .

Jackie Weber: Turning to page 32, we continue to stay on track to deliver our 2024 business plan. Loan origination revenues were 30.7 million in the quarter, up from 25.9 million in 2023, which reflects margin improvement at Triad and growth in origination volumes at RV and Marine. The improvement in adjusted operating income reflects higher overall revenue and flat overall operating expenses. Interest expense and interest income each decreased as a result of lower on-balance sheet finance assets in 2024. On page 33, manufactured housing operating expenses decreased modestly from the prior year, reflecting operational efficiencies. RV and marine operating expenses were up as a result of continued investments in growth and operational improvement.

Jackie Weber: We continue to stay on track to deliver our 2024 business plan. Loan origination revenues were $30.7 million in the quarter, up from $25.9 million in 2023, which reflects margin improvement at Triad and growth in origination volumes at RV and marine. The improvement in adjusted operating income reflects higher overall revenue and flat overall operating expenses. However, interest expense and interest income each decreased as a result of lower on-balance sheet finance assets in 2024. On page 33.

Speaker Change: Turning to page 32.

Speaker Change: We continue to stay on track to deliver our 2024 business plan.

Matthew Heidelberg: I'd like to highlight total approval growth of 25% year-over-year in the quarter. Breaking this down closer, chattel is up 28%, and land home's up 30% following the relaunch, while communities down 12% in the quarter. We believe approval growth of 25% relative to second half guidance of just 15% growth positions us very well for the remainder of the year.

Speaker Change: Loan origination revenues were $30.7 million in the quarter, up from $25.9 million in 2023, which reflects margin improvement at triad and growth in origination volumes at RV and marine.

Speaker Change: The improvement in adjusted operating income reflects higher overall revenue and flat overall operating expenses.

Speaker Change: Interest expense and interest income each decreased as a result of lower on-balance sheet finance assets in 2024.

Jackie Weber: Manufactured housing operating expenses decreased modestly from the prior year, reflecting operational efficiencies. RV and marine operating expenses were up as a result of continued investments and growth in operational improvements. Corporate operating expenses decreased to $2.5 million. And lastly, on page 34, our health for trading portfolio remains down from $440 million at the end of 2023 to $375 million at the end of Q2. Subsequent to the end of the quarter, we completed additional sales that further reduced the held for trading balance down to approximately $325 million. I'll turn to Chris Johnson, our Head of Capital Markets, for comments on funding. [inaudible]

Jackie Weber: Manufactured housing operating expenses decreased modestly from the prior year, reflecting operational efficiencies. RV and marine operating expenses were up as a result of continued investments and growth in operational improvement. Corporate operating expenses decreased to $2.5 million. And lastly, on page 34, our health for trading portfolio remains down from $440 million at the end of 2023 to $375 million at the end of Q2. Subsequent to the end of the quarter, we completed additional sales that further reduced the held for trading balance down to approximately $325 million. I'll turn to Chris Johnson, our Head of Capital Markets, for comments on funding.

Speaker Change: On page 33.

Speaker Change: Manufactured housing operating expenses decreased modestly from the prior year, reflecting operational efficiencies.

Speaker Change: RV and marine operating expenses were up as a result of continued investments and growth in operational improvements.

Jackie Weber: Corporate operating expenses decreased to 2.5 million. And lastly, on page 34, our Health Retreating Portfolio remains down from 440 million at the end of 2023 to 375 million at the end of Q2.

Speaker Change: Corporate operating expenses decreased to $2.5 million.

Speaker Change: And lastly, on page 34, our health for trading portfolio remains down from $440 million at the end of 2023.

Jackie Weber: Subsequent to the end of the quarter, we completed additional sales that further reduced the health retreating balance down to approximately 325 million.

Speaker Change: to $375 million at the end of Q2.

Speaker Change: Subsequent to the end of the quarter, we completed additional sales that further reduced the held-for-trading balance down to approximately $325 million.

Matthew Heidelberg: Moving you on to page 15, you'll see that we've maintained loan rates at healthy premiums to market rates as we have the last several quarters. In our performance on the page 16, we've also maintained consistent delinquency and net charge drops, while still building and growing our managed asset portfolio.

Jackie Weber: I'll turn to Chris Johnson or Head of Capital Markets for comments on funding. Thank you, Jackie. Turning to slide 35, ECN continues to diversify its financing sources with well-respected, sophisticated institutional investors that appreciate the quality of our assets. Our Triad Business continues the path that has been on for the past three years. We secured a 300 million funding program for our rental assets with Monroe Capital, a premier credit manager with 20 billion of managed capital. We extended an increase the commitment size of our Carlyle funding program on May 30th. And we also extended our Blackstone funding agreement for Chattel and other products this past March.

Chris Johnson: I'll turn to Chris Johnson, our Head of Capital Markets, for comments on funding.

Chris Johnson: Turning to slide 35, ECN continues to diversify its financing sources with well-respected, sophisticated institutional investors that appreciate the quality of our assets. Our triad business continues the path it has been on for the past three years. We secured a $300 million funding program for our rental assets with Monroe Capital, a premier credit manager with $20 billion of managed capital. We extended and increased the commitment size of our Carlisle funding program on May 30th.

Chris Johnson: Thank you, Jackie. Turning to slide 35, ECN continues to diversify its financing sources.

Lance Hull: That'll turn it back over to you, Lath. Thank you, Matt. I want to highlight again that second pillar that we mentioned earlier, which is our commercial business. We've increased our outstanding balances to 452 million, which is up 18% versus the same time a year ago. These are higher yielding assets with an average yield of 11% and they are floating in index to sofa, so we'll continue to see positive returns there. I mentioned before that these programs are so important because they drive engagement and increase retail flow.

Chris Johnson: With well-respected, sophisticated, institutional investors.

Chris Johnson: that appreciate the quality of our assets.

Speaker Change: Our triad business continues the path it has been on for the past three years.

Lance Hull: And today about three quarters of this 452 million are floor plan. And we know that as our floor plan business grows, so will our retail business grow because the average floor planning retailer that does business with Triad does about two and a half times the amount of retail volume with us as well. So the synergies that we gain by engaging them in multiple products will deliver better and better returns going forward.

Speaker Change: We secured a $300 million funding program for our rental assets with Monroe Capital, a premier credit manager with $20 billion of managed capital.

Chris Johnson: We extended and increased the commitment size of our Carlisle funding program on May 30th.

Chris Johnson: And we also extended our Blackstone funding agreement for chattel and other products this past March. As mentioned before, as we continue to increase originations in RV Marine, we are diversifying funding. In that regard, we executed last month... a $250 million flow agreement with a AAA-rated mutual insurance company for Source One's originated assets. This agreement, which is a monthly flow agreement, also included a sale of Source One's seasoned assets. Totaling $36 million, uh... late last month, For RV Marine, we're working on other programs for further funding diversification, which will be executed in the remainder of 2024. I will now turn this back to...

Speaker Change: And we also extended our Blackstone funding agreement for chattel and other products this past March.

Christopher Johnson: As mentioned before, as we continued to increase the originations in RV marine, we are diversifying funding. In that regard, we executed last month a 250 million flow agreement with a AAA rated mutual insurance company for source ones originated assets. This agreement, which is a monthly flow agreement, also included a sale of source one season assets, totaling 36 million late last month.

Speaker Change: As mentioned before, as we continue to increase originations in RV Marine, we are diversifying funding. In that regard, we executed last month

Chris Johnson: A $250 million flow agreement with a AAA-rated mutual insurance company for Source One's originated assets.

Speaker Change: This agreement, which is a monthly flow agreement, also included a sale of Source One seasoned assets.

Lance Hull: And then lastly, we did, as we've mentioned a couple of times, recently signed the Monroe Capital Rental Agreement, and we're beginning to add assets to the portfolio. And that will also, of course, increase our ongoing servicing portfolio.

Christopher Johnson: For RV Marine, we're working on other programs for further funding diversification, which will be executed in the remainder of 2024.

Speaker Change: Totaling $36 million late last month.

Speaker Change: For RV Marine, we're working on other programs for further funding diversification, which will be executed in the remainder of 2024.

Steven Hudson: I will now turn this back to Steve. Thanks, Chris. I think I've spoken to every bullet on the slide, but let me just close by thanking ECN's partners and employees for your exceptional commitment, focus, and execution. I'm producing a solid Q1 and Q2. And some of you know I'm an old football player and terrible football player. Hans was a good one. I was bad.

Lance Hull: Let me over to slide 18. We want to spend just a minute to talk about land home. It's been such a big part of our communication over the last couple of quarters. And Matt commented on our delayed relaunch of land home, but this period has allowed us to put the things in place and to implement the operational changes needed to ensure that we have a great go forward business. During this time, we have been able to consolidate our underwriting and processing teams and better align them with our retailers to ensure a very enhanced and positive construction process.

Speaker Change: I will now turn this back to Steve.

Steve Hudson: I think I've spoken about every bullet on the slide, but let me just close by thanking ECN's partners and employees for your exceptional commitment, focus, and execution on producing a solid Q1 and Q2. And I'm, many of you, some of you know I'm an old football player, a terrible football player. Hans was a good one.

Steve Hudson: Thanks Chris. I think I've spoken to every bullet on the slide, but let me just close by thanking ECN's partners and employees.

Steve Hudson: for your exceptional commitment, focus, and execution on producing a solid Q1 and Q2.

Speaker Change: And I'm, many of you, some of you know I'm an old football player, a terrible football player. Hans was a good one. I was bad.

Steven Hudson: But I liken ECN to a football game. We've had two strong quarters, Q1 and Q2. We are at halftime, but we're not ready to announce victory. We have to punch out the last two quarters and restore our credibility and continue our path of profitability.

Operator: But I liken ECN to a football game. We've had two strong quarters, Q1 and Q2. We are at halftime, but we're not ready to announce victory. We have to punch out the last two quarters, restore our credibility, and continue our path of profitability. Thank you. Operator, with that, we'd like to take questions.

Steve Hudson: But I liken ECN to a football game. We've had two strong quarters, Q1 and Q2. We are at halftime, but we're not ready to announce victory. We have to punch out the last two quarters.

Lance Hull: We've also improved systems for faster decisioning and more efficient processing that have elevated our customer experience and the buying experience overall for both the borrower and our retailer. And these have paid dividends, as Matt alluded to earlier, we're now seeing our land home approvals up 30% in the second quarter year over year. We have also significantly de-risked the platform by reducing the balance in our construction book and have also, of course, seen much more attractive rates. So we're in a tremendous position now to spring forward. And we anticipate that while we are seeing growth in land home approvals, we will see the originations from those late in 2024.

Steve Hudson: Restore our credibility and continue our path of profitability.

Steven Hudson: Thank you. Operate it with that.

Unknown Executive: We'd like to take questions. We'll now take a list of questions from the telephone line. If you have a question, please press start in one or your telephone to bed. You'll hear tone and knowledge in your request. If you're using a speaker phone, please lift your hands up if you feel stress and any heat. Should we draw your question, please press start in two. There will be a brief pause while the participants register for questions. Thank you for your patience.

Steve Hudson: Thank you. Operating with that, we'd like to take questions.

Operator: We will now take any questions from the telephone line. If you have a question, please press star then 1 on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please lift your handset before pressing any key. To withdraw your questions, please press star then 2. There will be a brief pause while the participants register for questions. Thank you for your patience. The first question comes from Nik Priebe with CIBC Capital Markets. Please go ahead.

Operator: We will now take any questions from the telephone line. If you have a question, please press star, then 1 on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please lift your handset before pressing any key. To withdraw your question, please press star then 2. There will be a brief pause while the participants register for questions. Thank you for your patience. The first question comes from Nik Priebe with CIBC Capital Markets. Please go ahead.

Speaker Change: We will now take any questions from the telephone line. If you have a question, please press star then 1 on the telephone keypad. You will hear a tone acknowledging your request.

Lance Hull: And many of them, again, due to the nature of land home and as Matt alluded to, the longer tail on the business, we'll see even more business throughout 2025 as this business continues to expand.

Speaker Change: If you are using a speakerphone, please lift your handset before pressing any keys.

Speaker Change: To withdraw your questions, please press star then 2.

Speaker Change: There will be a brief pause while the participants register for questions. Thank you for your patience.

Nikolaus Priebe: The first question comes from Nick Priebe with CIBC Capital Markets. Please go ahead. Yeah, thanks.

Lance Hull: On to slide 19, just to very quickly talk about the champion financing update, we're so fortunate to have this relationship with Skyline Champion. Just to recap, we had the original launch on the program was in January of this year in Louisville with our floor plan and commercial business, and then we followed that up a few months later with the retail launch at the Baluxi Show in March of 2024. Both of these are really picking up speed and beginning to show significant dividends.

Speaker Change: The first question comes from Nik Priebe with CIBC Capital Markets. Please go ahead.

Nikolaus Priebe: Yeah, thanks. I just want to start the question on the acquisition of Paramount Capital. I don't know if I've overlooked it, but can you say what the transaction value was there? And just based on the unchanged full-year earnings guidance, is it reasonable to assume any incremental earnings contribution associated with that business will be relatively modest overall?

Steven Hudson: I just want to start the question on the acquisition of Paramount Capital. I don't know if I've overlooked it, but can you say what the transaction value was there and just based on the unchanged, full year earnings guidance? Is it reasonable to assume any incremental earnings contribution associated with that business will be relatively modest overall?

Nik Priebe: Thanks. I just want to start with a question on the acquisition of Paramount Capital. I don't know if I've overlooked it, but can you say what the transaction value was there?

Speaker Change: And just based on the unchanged full-year earnings guidance, is it reasonable to assume any incremental earnings contribution associated with that business will be relatively modest overall?

Steven Hudson: Yeah, good evening, Nick at Steve. The acquisition will close. If we committed and closed, we're waiting for final regulatory approval. So it's first month of operation will be September. There'll be modest, very modest income in 24. We expect profitability in 25. When we provide updated guidance, we will provide it, but the acquisition price was $10 million, $6 million cash from us, and the management team founders took $4 million in stock. So modest, but it has a very strong proven technology platform. It's a rated servicer by KBRA, and we think it'll do amazing things for us.

Steve Hudson: Good evening, Nick. It's Steve.

Steve Hudson: Yeah, good evening, Nick and Steve. The acquisition will close if we commit to and close it. We're waiting for final regulatory approval. So its first month of operation will be September. And there'll be modest, very modest income in 2024. We expect profitability in 2025, and when we provide updated guidance, we'll provide it. But the acquisition price was $10 million, $6 million in cash from us, and the management team founders took $4 million in stock. So modest, but it has a very strong proven technology platform. It's rated as a servicer by KBRA. And we think it will do amazing things for us.

Lance Hull: If you look down in the lower left-hand corner of this slide, you'll see that our current active balance in our floor plan pipeline is at 57.8 million, which is more than double what it was just a quarter of a go. Again, to highlight the benefit of this is we grow these outstanding floor plan balances and engage more retailers with us in floor plan. We know that's also going to drive retail business to both us, and of course, champion finance product, as those retailers will typically do about two and a half times the retail volume with us.

Speaker Change: Yeah, good evening, Nick and Steve.

Speaker Change: The acquisition will close, if we commit it and close it, we're waiting for final regulatory approval. So its first month of operation will be September . There will be modest, very modest income in 2024. We expect profitability in 2025 when we provide updated guidance.

Steve Hudson: The acquisition will close, if we commit to and close it; we're waiting for final regulatory approval. So its first month of operation will be September. There will be modest, very modest, income in 2024. We expect profitability in 2025, and when we provide updated guidance, we'll provide it. But the acquisition price was $10 million, $6 million in cash from us, and the management team founders took $4 million in stock. So it is very modest, but it has a very strong proven technology platform. It's a rated servicer by KBRA, and we think it will do amazing things for us.

Steve Hudson: understood. Okay, very good.

Speaker Change: We'll provide the acquisition.

Speaker Change: Price was $10 million, $6 million of cash from us, and the management team founders took $4 million in stock. So, modest, but it has a very strong proven technology platform. It's a rated servicer by KBRA.

Lance Hull: And then I would like to comment that while our total approvals are up 28% as you heard, Matt alluded to earlier, our approvals through the champion financing group are up more than double that. So we're having a tremendous opportunity with some of the programs that we put in place with them and some of the new products that have been launched to see the interest rise in both their products as well as our financing. So we're excited to see where this is going to take us going forward.

Speaker Change: And we think it will do amazing things for us.

Nikolaus Priebe: Understood. Okay, very good.

Steve Hudson: And then a few quarters ago, I think you made the comment that if you added half a billion dollars of incremental funding, it would add a couple of cents of earnings per share that's currently not in the forecast. And there were some comments in the prepared remarks just around how the demand for paper from the RV and marine financing business outstrips the supply. So what is the limiter on growth in business today? Like, is it funding availability? Or is it your ability to source loans? Like, which is the limiter to the growth of the business? The Limiter...

unknown: understood. Okay, very good.

Steven Hudson: And then a few quarters ago, I think you made the comment that if you add half a billion dollars of incremental funding, you would add a couple cents of earnings per share that's currently not in the forecast. And there were some comments in the prepared remarks just around how the demand for paper from the RV and marine financing business, I would strip the supply. So what is the limiter on growth in the business today? Is it funding availability or your ability to source loans, which is the limiter to the growth of the business? The limiter is, if we had three billion of paper, we could sell three billion of paper, but Lance's leadership is to run a platform with reduced risk in a very prudent fashion as evidence, Nick, by slowing down land home and waiting the next quarter to turn it back on.

Speaker Change: Understood. Okay, very good. And then...

unknown: And then a few quarters ago, I think you made the comment that if you added half a billion dollars of incremental funding, it would add a couple of cents of earnings per share that's currently not in the forecast. And there were some comments in the prepared remarks just around how the demand for paper from the RV and marine financing business outstrips the supply. So what is the limiter on growth in business today? Like, is it funding availability? Or is it your ability to source loans? Like, which is the limiter to the growth of the business?

Speaker Change: A few quarters ago I think you made the comment that if you add half a billion dollars of incremental funding

Unknown Executive: And on slide 20, it's a slide that we've included many times before.

Speaker Change: It would add a couple cents of earnings per share that's currently not in the forecast.

Steven Hudson: It's got some of the details, and I'll leave that with you, and with that I will turn it over to Steve Hudson.

Speaker Change: There were some comments in the prepared remarks just around how the demand for paper from the RV and marine financing business outstrips the supply. So what is the limiter on growth in the business today? Is it funding availability or is it your ability to source loans? Which is the limiter to the growth of the business?

Steve Hudson: The limiter is that if we had $3 billion of paper, we could sell $3 billion of paper. But Lance's leadership is to run a platform with reduced risk in a very prudent fashion, as evidenced by slowing down the land home and waiting an extra quarter to turn it back on.

Steve Hudson: The limiter is if we had $3 billion of paper, we could sell $3 billion of paper. But Lance's leadership is to run a platform with reduced risk in a very prudent fashion, as evidenced by slowing down the land home and waiting an extra quarter to turn it back on.

Speaker Change: The limiter is if we had $3 billion of paper, we could sell $3 billion of paper.

Christopher Johnson: We're going to start the transition away from credit units. We're never going to leave credit units entirely, but we're looking ultimately to get to that 7036. I want to have forward to that, Chris Johnson. We'll speak to the second and the second component.

Lance: But Lance's leadership is to run a...

Lance: a platform with reduced risk in a very prudent fashion, as evidenced, Nick, by slowing down Land Home and waiting an extra quarter to turn it back on.

Steve Hudson: So the limiting factor is the origination of assets. We think Land Home is a great growth asset for 2025, and rental is even larger, just took two quarters. We had planned on closing a rental flow arrangement in early 2024; it got closed in late June.

Steve Hudson: So the limiting factor is the origination of assets. We think land-home is a great growth asset for 2025, and rental is even larger, but it just took two quarters. We had planned on closing a rental flow arrangement in early 2024, but it got closed in late June.

Nikolaus Priebe: So it's the limiting factor is the origination of assets. We think land home is a great growth asset for 25 and rental is even even larger just took two quarters. We had planned and closing a rental flow arrangement and early 24 got closed in late June. Got it. Okay. All right. That's it for me for now.

Steven Hudson: We run a four component playbook at ECM for all of our businesses, the four components are making sure that we're licensed for all of our activities. The second is assistance and place to create a culture of compliance. The third is making sure we have internalized servicing on the fourth is institute four arrangements. We now have those four components complete.

Lance: So, the limiting factor is the origination of assets.

Speaker Change: We think Land Home is a great growth asset for 2025, and rental is even larger, just took two quarters. We had planned on closing a rental flow arrangement in early 2024. It got closed in late June .

unknown: Got it. Okay. All right. That's it for me for now. I'll pass the line. Thank you.

Nikolaus Priebe: Got it. Okay. All right. That's it for me for now. I'll pass the line. Thank you.

Unknown Executive: I'll pass the line.

Unknown Executive: Thank you.

Nick: Got it. Okay. All right. That's it for me for now. I'll pass the line. Thank you.

Steven Hudson: Sir, I have my mic off, you're probably like that anyhow. But we now have the four components complete for RV marine. I won't speak to 23 you've seen it before and with that mic.

James Glowen: The next question comes from James Glowen with National Bank Financial. Please go ahead. Yeah. Thanks. First question just on the champion financing. Some positive developments there in growth from what you've disclosed in the past. I just want to clarify, are these pipeline numbers actually hitting anything on the balance sheet for ECN or the financial statements, or is this just sort of building the outlook for 2025? I guess, like the questions, are we generating income from champion financing at the stage?

Operator: The next question comes from Jaeme Gloyn with National Bank Financial. Please go ahead.

Jaeme Gloyn: The next question comes from Jaeme Gloyn with National Bank Financial. Please go ahead.

Lance: The next question comes from Jaeme Gloyn with National Bank Financial. Please go ahead.

Jaeme Gloyn: Yeah, thanks. First question, just on champion financing. Some positive developments there and growth from what you've disclosed in the past. I just want to clarify, are these pipeline numbers actually hitting anything on the balance sheet for ECN or the financial statements? Or is this just sort of building the outlook for 2025? I guess the question is, are we generating income from champion financing at this stage?

Jaeme Gloyn: Yeah, thanks. First question, just on champion financing. Some positive developments there and growth from what you've disclosed in the past. I just want to clarify, are these pipeline numbers actually hitting anything on the balance sheet for ECN or the financial statements? Or is this sort of building the outlook for 2025? I guess the question is, are we generating income from champion financing at this stage?

Jaeme Gloyn: Yeah, thanks. First question just on the champion financing.

Unknown Executive: Thank you, Steve.

Michael Opdahl: Good afternoon. Please turn to slide 24. As Steve mentioned, we are executing the ECM playbook and I'm very pleased to report that the initiatives launched last year are starting to pay off. Looking at the marine and RV market in totality, momentum is definitely shifting. Both the RV association and total manufacturers are reporting that shipments of new RVs are up. In marine, a recently released industry survey reported that almost 70% of marine lenders originated higher Q2 loan volume year over year.

Jaeme Gloyn: Some positive developments there and growth from what you've disclosed in the past.

Jaeme Gloyn: I just want to clarify, are these pipeline numbers actually hitting anything on the balance sheet for ECN or the financial statements, or is this just sort of building

Speaker Change: The outlook for 2025. I guess the question is, are we generating income from champion financing at this stage?

Lance Hull: Hey, this is Lance Hull. And the answer to that question is yes. There is an arrangement with Skyline Champion where we're generating loans that flow through the JV for which we share in the economic benefit of those loans. So yes, it's generating income.

Lance Hull: This is Lance Hull. And the answer to that question is yes. The arrangement with Skyline Champion is that we're generating loans that flow through the JV for which we share in the economic benefit of those loans. So, yes, it's generating income. I think it's fair to say that it was launched into components. The first was floor plan and the second was retail program. The floor plan is now, as Matt has gone through the number members with you, very active. An on track retail was probably a quarter late, but it's now launched with a national buy down.

Lance Hull: Hey, this is Lance Hull, and the answer to that question is yes, there is the arrangement with Skyline Champion is that we're generating loans that flow through the JV for which we share in the economic benefit of those loans, so yes, it's generating income.

Michael Opdahl: In fact, it was the highest quarterly increase since pre-COVID. IFG and source one are seeing the same. Significant increases in applications, approvals and fundings in the second quarter. As evidenced by our Q2 results, ECM's marine and RV businesses are on plan with quarterly approvals up over 21% and originations up almost 14%. We saw this positive momentum continuing through July.

Steve Hudson: I think it's fair to say that it was launched with two components. The first was the floor plan, and the second was the retail program. The floor plan is now, as Matt has gone through the numbers with you, very active and on track. Retail was probably a quarter late, Jaeme, but it's now launched with a national buy-down. There was a commentary in the Skyline Champion conference call earlier this morning that said that the activity is exceeding expectations. You can pull up the comment, or we can send you the link. So we think it's a significant driver of profitability in the latter part of this year, particularly into 2025.

Steve Hudson: I think it's fair to say that it was launched with two components. The first was the floor plan, and the second was the retail program. The floor plan is now, as Matt has gone through the numbers with you, very active and on track. Retail was probably a quarter late, Jaeme, but it's now launched with a national buy-down. There was a commentary in the Skyline Champion conference call early this morning that said that the activity is exceeding expectations. You can pull up the comment, or we can send you the link. So we think it's a significant driver of profitability in the latter part of this year, particularly into 2025.

Speaker Change: I think it's fair to say that it was launched in two components. The first was floor plan and the second was...

Jaeme Gloyn: The floor plan is now, as Matt has gone through the numbers with you, very active.

Michael Opdahl: Turn to slide 25. A couple of highlights here. As the top right graph shows, even in the face of elevated rates, RV and marine assets continue to deliver substantial yield premiums versus automotive. As the bottom right chart illustrates, source ones held for sale portfolio continue to experience extremely low losses and our lending partners are reporting similar results.

Lance: And on track. Retail was probably a quarter late, Jimmy, but it's now launched with a national buy-down. There was a commentary in the...

Lance Hull: There was a commentary in the Skyline Champion conference call early this morning saying that activity is exceeding expectations. You can pull up the comment, or we can send you the link. So, we think it's a significant driver of profitability and a lot of part of this year, particularly into 25.

Speaker Change: A Skyline Champion conference call earlier this morning that's saying that the activity is exceeding expectations. You can pull up the comment or we can send you the link.

Lance: So we think it's a significant driver of profitability in the latter part of this year, and particularly into 2025.

Michael Opdahl: As a result of this superior performance, both IFG and source one enjoy strong lender support and are fully funded through 2024. With Source One's entry into the capital markets, we have the capacity to accelerate our growth plans, and we are very well positioned to take advantage of the coming lower rate environment.

James Glowen: Just from an accounting perspective, is this showing up across the three revenue lines within manufactured housing within Triad? It's primarily in the other revenue line at Triad. Other revenue? Okay. Good.

unknown: Okay, and just from an accounting perspective, is this this showing up across the three revenue lines within manufactured housing, within the triad?

Jaeme Gloyn: Okay, and just from an accounting perspective, is this this showing up across the three revenue lines within manufactured housing, within the triad?

Speaker Change: Okay, just from an accounting perspective, is this showing up across the three revenue lines within manufactured housing, within triad?

Lance Hull: It's primarily in the other revenue line at Triad.

unknown: It's primarily in the other revenue line at Triad.

unknown: Other revenue. Okay. Good.

Jaeme Gloyn: Other revenue. Okay. Good.

Speaker Change: It's primarily in the other revenue line at Triad.

Hans Kraaz: Please turn to slide 26, and let's focus on some of the accomplishments of resource one this past quarter. We've added four new sales reps to our team, and we are now originating in 44 states. Our take share strategy is working very well.

Matthew Heidelberg: Just in terms, maybe a bit more of a macro refresh here, as maybe we're getting into a lower interest rate environment from a federal perspective. Active keys refresh us on the sensitivity of the two business lines to lower overnight interest rates. Hi, James. Matt, for Triad, if you recall, we just added that additional slide of some information about MH shipments relative to the Tenure Treasury. So, from what that data showed us was that there really is no correlation. You know, what we're looking to serve and provide people is a portable housing need and the financing for that.

Speaker Change: Are there any? Okay.

Speaker Change: Good. Just in terms of maybe a bit more of a macro refresh here as maybe we're getting into a lower interest rate environment from

Michael Opdahl: As we focus on capturing significant volume, once we've entered a new market. Examples of our success include tripling our market share in the US's three largest RV markets, and we are now the number one lender for one of the nation's largest RV groups. Our momentum is definitely building. Second quarter originations were up 42% year over year, and that positive trend continued in July as we're up 48% versus 2023.

Speaker Change: From a Fed perspective, can you just refresh us on, let's say, sensitivity of the two business lines to lower overnight interest rates?

Matt Heidelberg: Just in terms of, maybe a bit more of a macro refresh here, as maybe we're getting into a lower interest rate environment from a Fed perspective, can you just refresh us on, let's say, the sensitivity of the two business lines to lower overnight interest rates?

Matt Heidelberg: Just in terms of, maybe a bit more of a macro refresh here, as maybe we're getting into a lower interest rate environment from a federal perspective, can you just refresh us on, let's say, the sensitivity of the two business lines to lower overnight interest rates?

Speaker Change: Thank you.

Speaker Change: Hi Jaeme, it's Matt. For Triad, if you recall, we just added that additional slide with some information about it.

Matt Heidelberg: Hi Jaeme, it's Matt. For TRIAD, if you recall, we just added that additional slide with some information about... I have a question. So, we've had a lot of questions about the mh shipments relative to the 10-year treasury. And what that data showed us was that there really is no correlation.

Speaker Change: MH shipments relative to the 10-year Treasury.

Michael Opdahl: Our investments in technology continue to bear fruit. Our industry leading e-contracting platform has improved capture rates and dealer efficiencies.

Speaker Change: that was so for

Speaker Change: from what that data showed us was that there really is no correlations

Matt Heidelberg: Hi Jaeme, it's Matt. For Triad, if you recall, we just added that additional slide with some information about... I made shipments relative to the 10-year Treasury. So from what that data showed us was that there really is no correlation. What we're looking to serve and provide people is a portable housing need and the financing for that. So we haven't seen a correlation ourselves as a triad business.

Speaker Change: You know, what we're looking to serve and provide people is a portable housing need and the financing for that. So we haven't seen a correlation ourselves as a triad business.

Matthew Heidelberg: So, we haven't seen a correlation ourselves as a Triad business in the RV Marine business; interest rates matter. And in particular, payments given by interest rates, I don't think in July, IFG and Source One had their best July ever. Again, that's not where hedge, but that's because the overall payments to the consumer coming down, which is driving significant, significant business activity for both of our RV Marine finance businesses.

Michael Opdahl: We anticipate launching our proprietary scorecard and pricing model in Q3. This will improve a improved dealer experience and a stronger portfolio performance.

Matt Heidelberg: You know, what we're looking to serve and provide people with is portable housing needs and the financing for that.

Matt Heidelberg: In the RV marine business, interest rates matter, and in particular payments given by interest rates. I don't think July was IFG and Source One's best July ever. Again, that's not because we're hedged, but that's because the overall payments to the consumer are coming down, which is driving significant business activity for both of our RV marine finance businesses.

Steve Hudson: In the RV marine business, interest rates matter, and in particular payments given by interest rates. I don't think July was IFG and Source One's best July ever. Again, that's not because we're hedged, but that's because the overall payments to the consumer are coming down, which is driving significant business activity for both of our RV marine finance businesses.

Speaker Change: In the RV marine business, interest rates matter, and in particular payments given by interest rates. I don't think in July , IFG and Source One had their best Julys ever.

Hans Kraaz: With that, I'll turn it over to Hans to bring everyone up to speed on IFG's accomplishments and talk about our cross company initiatives. Thanks, Mike. Well done on a great quarter at source one turning the slide 27.

Speaker Change: Again, that's not, we're hedged, but that's because the overall payments to the consumer are coming down, which is driving significant business activity for both of our RV marine finance businesses.

Hans Kraaz: We also had several very positive developments across IFG, on which I'm very, very proud of beginning with the second quarter results. Originations for the quarter were up 4% year over year largely driven by strong man June months and a continuation of an upward trend and a number of transactions with a 7% increase versus the same period last year. This is a great sign for our business. We're seeing strong demand from the consumer as well as appetite from our loans from our bank partners.

Steven Hudson: Okay, so that was a comment on activity impacts. I guess maybe do you have a comment on the impact of the existing book. So, kind of like in reverse or last year we had some hiccups, let's say, with the right interest rates quickly. So, what's the impact to existing book, existing originations on the balance sheet in your health or trading assets, things of that nature that would give us a bit more perspective on the financial impacts of lower interest rates rather than just impacts on the interest rates. So, I don't want consumer to miss. Right, I think you're being kind when you use the word hiccup, so I have another word for it, but I won't repeat it.

Steve Hudson: Okay, so that was a comment on activity impacts, and I guess, maybe, do you have a comment on the impact of the existing book? So kind of like, you know, in reverse. Last quarter, last year, we had some hiccups, let's say, with rising interest rates quickly. So who are we, what's the impact on existing book, existing originations on the balance sheet in your health or trading assets, things of that nature that would give us a bit more perspective on the financial impacts of lower interest rates rather than just impacts on consumer demand?

Jaeme Gloyn: Okay, so that was a comment on activity impacts, and I guess maybe you have a comment on the impact of the existing book? So kind of like, you know, in reverse, or the last few quarters, last year, we had some hiccups, let's say, with rising interest rates quickly. So who are we, what's the impact on existing book, existing originations on the balance sheet in your health or trading assets, things of that nature that would give us a bit more perspective on the financial impacts of lower interest rates, rather than just impacts on consumer demand?

Speaker Change: Okay, so that was a comment on on activity impacts. I'm and I guess maybe do you have a comment on the impact of the existing book? So kind of like, you know, in reverses or...

Steve Hudson: I think you're being kind when you use the word hiccup, so... I have another word for it, but I won't repeat it.

Speaker Change: Last quarter, last year, we had some

Speaker Change: some pickabsoute say with the rise at interest rates quickly so what are we what's the impact to existing bug

Hans Kraaz: In terms of dealers, we have signed up more new dealers this year than any time in the company's history. More dealers will ultimately lead to more volume. This is clearly evidenced by a 30% increase in volume for the month of June versus 2023. On that note, we have executed on our take share plan and have expanded into new markets with the addition of seven new sales agents. We'll begin to see this impact almost immediately and are anticipating an incremental 75 million in originations on an annualized basis from this group.

Speaker Change: Existing originations on the balance sheet in your health or trading assets, things of that nature that would give us a bit more perspective on the financial impacts of lower interest rates rather than just impacts on consumer demand.

Steve Hudson: I think you're being kind when you use the word hiccup, so I have another word for it, but I won't repeat it.

Speaker Change: I think you're being kind when you use the word hiccup, so...

Steven Hudson: The book is hatched, so you're not going to see a mark on the book doing lower interest rates. The lower interest rates impact, particularly RB Marine, because of the lower payment factors. People are now buying more votes and more RVs. And as Matt mentioned, there doesn't, we ran a correlation analysis on interest rates and consumer sentiment. And there is no correlation. I think the R factors 0.02 for both of those. Okay, so no financial impacts, particularly. I think there's no mark coming on the book; we expect the balance sheet.

Speaker Change: I have another word for it, but I won't repeat it. The book is hedged, so you're not going to see a mark on the book due to lower interest rates, the lower interest rates impact.

Steve Hudson: The book is hedged, so you're not going to see a mark on the book due to lower interest rates. The Lower Interest Rates Impact, particularly RV marine because of the lower payment factors; people are now buying more boats and more RVs. And as Matt mentioned, we had a correlation, Alison, on interest rates and consumer sentiment, and there is no correlation. I think the r-factor is 0.02 for both of those.

Speaker Change: Particularly RV Marine because of the lower payment factors, people are now buying more boats and more RVs.

Matt: And as Matt mentioned, we ran a correlation, Allison, on interest rates and consumer sentiment, and there is no correlation. I think the r-factor is 0.02 for both of those.

Jaeme Gloyn: Okay, so no financial impacts.

unknown: Okay, so no financial impacts.

Steve Hudson: I think you are going to see a significant lift in RV marine business activity and origination. In July, Hans' business went from $44 million last year to $68 million in July. And that's the impact of lower interest rates and lower payments.

Steve Hudson: Well, no, I think you know, no, no. Yeah, there's no mark coming on the book.

Speaker Change: Okay, so no financial impacts is the takeaway. Well, no, I think, you know, no, no, there's no mark coming on the book. Inspect the balance sheet. And I think you're going to see significant lift in RV marine business activity and originations.

Hans Kraaz: Next slide. Last quarter, we reported the purchase of first approval source. This acquisition fits squarely in the ECN playbook.

Steve Hudson: So inspect the balance sheet. And I think you're going to see a significant lift in RV marine business activity and origination. In July, Hans' business went from $44 million last year to $68 million in July. And that's the impact of lower interest rates and lower payments. Yeah.

Steven Hudson: And I think you're going to see a significant lift in RV marine business activity and originations in July. Hans's business went from 44 million last year to 68 million in July. And that's the impact of lower interest rates and lower payments. Yeah, understand.

Hans Kraaz: Although this was a smaller purchase and confident this will bring significant value to IFG and across the RV and marine platform. For a purchase price of $800,000, we have picked up over 30 dealers and 40 million worth of annualized origination value.

Speaker Change: In July , Hans' business went from $44 million last year to $68 million in July .

Lance: And that's the impact of lower interest rates and lower payments.

unknown: Yeah. Understood. Okay. I'll turn it over.

Unknown Executive: Okay, I'll turn it over.

Unknown Executive: Thanks.

Jaeme Gloyn: Yeah. Understood. Okay. I'll turn it over.

Speaker Change: Yeah, understood. Okay, I'll turn it over, thanks.

Stephen Roland: The next question comes from Stephen Roland with Raymond James. Please go ahead. I apologize. I'm jumping around a little bit tonight. Just on the on the tried servicing a margin. Just kind of eyeballing it, didn't jump up this quarter compared to past quarters, and if it's, or if it didn't, maybe is the margin where you want it to be, I guess. Yeah, we, you know, there are few things that go into the servicing margin there and the servicing income deal. It depends on mix, right? Silver and bronze products, as you've heard us say before, come in a much higher servicing fee.

Stephen Boland: The next question comes from Stephen Boland with Raymond James. Please go ahead.

Operator: The next question comes from Stephen Boland with Raymond James. Please go ahead.

Jackie Weber: But that's not all. We have also added an industry leading front end and underwriting technology platform. The first approval source system, where at the FAS and short, will unlock value by enhancing the customer experience. This will be achieved by providing our team with enhanced underwriting tools and decision engines. The result will be a reduction in time from application to funding and maximum profit per transaction. The platform is built for scale, which ties into our sales expansion strategy, and will allow us to benefit from enhanced data collection.

Lance: The next question comes from Stephen Boland with Raymond James. Please go ahead.

Stephen Boland: I apologize, I'm jumping around a little bit tonight. Just on the tribe servicing margin, just kind of eyeballing it. Did it jump up this quarter compared to past quarters? And if so, or if it didn't, maybe is the margin where you want it to be?

Stephen Boland: I apologize, I'm jumping around a little bit tonight. Just on the tribe servicing margin, just kind of eyeballing it. Did it jump up this quarter compared to past quarters? And if it did, or if it didn't, maybe is the margin where you want it to be?

Stephen Boland: I apologize I'm jumping around a little bit tonight. Just on the tribe servicing margin, just kind of eyeballing it, did it jump up?

Stephen Boland: This quarter compared to past quarters, or if it didn't, maybe is the margin where you want it to be, I guess.

Lance Hull: Yeah, there are a few things that go into the servicing margin there and the servicing income yield. It depends on the mix, right?

Speaker Change: Yeah, we, you know, there are a few things that go into the servicing margin there and the servicing income yield.

Lance Hull: Silver and bronze products, as you've heard us say before, come at a much higher servicing fee. There's some fee income that's in there, too, that we're able to pick up. The second quarter was a particularly higher servicing yield for us. If you were to think about modeling it, I'd think more about the average of the first half into the second half.

Speaker Change: It depends on mix, right? Silver and bronze products, as you've heard us say before, come at a much higher servicing fee. There's some fee income that's in there, too, that we're able to pick up.

Lance Hull: There's some fee income that's in there too that we're able to pick up. The second quarter was a particularly higher servicing yield for us. If you were to think about modeling it, I'd think about more about the average of the first half into the second half.

Jackie Weber: From a funding perspective, demands RFG paper continues to outpace supply. That said, we see incremental benefits in accessing source ones unique funding arrangements, which will further our competitive advantage versus our peers. Source ones drive for efficiency, speed, and execution will bring new options for our customers, dealers, and brokers nationwide. I continue to work closely with Mike Opdahl to capitalize on cross-energies across the RV and marine platform. This will help us benefit from our joint internal capabilities. Whether it's the lowest cost given scale, RFG's in-house title department, cross sales, or source ones funding, all of which will ultimately lead to margin improvement across the platform and greater number of originations.

Lance: The second quarter was a particularly higher servicing yield for us. If you were to think about modeling it, I'd think more about the average of the first half into the second half.

Lance Hull: Okay, that's that's really helpful.

Lance Hull: Okay, that's really helpful. And just going back to Skyline, when I look back, it's been a year since pretty much everyone announced the deal. And you know, they were talking about 30% penetration and, you know, maybe 40 million dollars in income if that happened. I mean, obviously, there's been good progress. But is it going as expected, as you thought when you contemplated the deal a year ago, Steve? I'

Steve Hudson: Okay, that's really helpful. And just going back to Skyline, when I look back, it's been a year since pretty much everyone announced the deal. And you know, they were talking about 30% penetration and, you know, maybe 40 million in income if that happened. I mean, obviously, there's been good progress. But is it going as expected, as you thought when you contemplated the deal a year ago, Steve?

Steven Hudson: Just going back to Skyline, when I looked back, it's a year since pretty much announced the deal. And you know, there was talking about 30% penetration and, you know, maybe 40 million of income if that happened. You know, obviously there's been good progress. But is it going, you know, as expected, as you thought, when you contemplated the deal a year ago, Steve? I'd say, I'd say, Steve, it's going as expected. It was just late to get, you know, it was maybe I was too ambitious thinking about the launch of floor plan and plants as usual was more measured, but it's got launched and it's got, it's now up to where it should be.

Speaker Change: Okay, that's that's really helpful. And just going back to Skyline, when I look back, it's a year since I pretty much announced the deal. And you know, they were talking about 30% penetration and

Speaker Change: You know, maybe $40 million of income if that happened. I mean, obviously there's been good progress, but is it going, you know, as expected as you thought when you contemplated the deal a year ago, Steve?

Steve Hudson: I'd say, I'd say, Steve, it's, it's, it's going as expected. It was just late to get, you know, it was, maybe. I was too ambitious thinking about to launch a floor plan. Lance, as usual, was more measured, but it's got launched, and it's now up to where it should be. Retail launched the buy down was probably 3 to 4 months late; it's now launched, and it's performing as it's planned.

Steve Hudson: I'd say, Steve, it's going as expected. It was just late. You know, it was maybe... I was too ambitious thinking about launching a floor plan.

Speaker Change: I'd say, Steve, it's going as expected. It was just late.

Steve Hudson: Lance, as usual, was more measured, but it got launched, and it's now up to where it should be. Retail launched, the buy-down was probably... 3 to 4 months late, but it's now launched, and it's performing as it's planned. If you look to our heritage as a company, we created Dell Financial Services and a bunch of other capital finance companies. I think this one is going to be as good as. At our competitor Clayton, they have both 21st and Vanderbilt, and we think this business will be as strong as those two combined groups.

Lance: I was too ambitious thinking about to launch a floor plan, and Lance, as usual, was more measured, but it got launched, and it's now up to where it should be. Retail launch, the buy-down was probably...

Steven Hudson: The retail launch, the buy down was probably three to four months late. Now launch is performing as it's planned. You know, I, if you look to our heritage as a company, we created dental financial services and a bunch of other capital finance companies. I think this one is going to be as good. At a competitor claim, they have both 21st and Vanderbilt. And we think this business will be as strong as those two combined groups. And when, when I look at the change in guidance on originations for, for triad, basically what your comments I think on the call have been that you're just pushing it out a little bit later in 2024.

Speaker Change: 3 to 4 months late, it's now launched and it's performing as it's planned. If you look to our heritage as a company, we created Dell Financial Services.

Steve Hudson: If you look at our heritage as a company, we created Dell Financial Services, and a bunch of other capital finance companies. I think this one is going to be as good as them. At our competitor, Clayton, they have both 21st and Vanderbilt, and we think this business will be as strong as those two combined groups.

Jackie Weber: With that, I will pass it back to Jackie. Thank you, Harns. Turning to page 30 for our consolidated operating highlights. Overall, our Q2 operating results are on plan as we continue to improve from 2023 with adjusted EBIDA of 31.5 million and adjusted operating income of 14.5 million. Overall, revenues were up across each of our businesses, while consolidated operating expenses state flat, which drove the improvement EBIDA. I would also add that there were no fair value provisions in the current quarter. Adjusted net income was 8.2 million or three cents per share, consistent with our guidance of two to four cents per share.

Lance: A bunch of other capital finance companies. I think this one is going to be as good as...

Lance: At our competitor Clayton, they have both 21st and Vanderbilt, and we think this business will be as strong as those two combined groups.

Steve Hudson: And when I look at the change in guidance on originations for triad, basically, what your comments on the call have been that you're just pushing it out a little bit later into 2024, you know, it's almost like a catch-up in 2025. Is that a fair comment? Yeah, I think that's right.

Steve Hudson: And when I look at the change in guidance on originations for triad, basically, what your comments on the call have been that you're just pushing it out a little bit later into 2024, but, you know, it's almost like a catch-up in 2025. Is that a fair comment? Yeah, I think that it is.

Speaker Change: And when I look at the change in guidance on originations for triad, basically what your comments I think on the call have been that you're just pushing it out a little bit later into 2024, you know, it's almost like a catch-up in 2025, is that a fair comment?

Steven Hudson: You know, it's almost like a catch up in 2025. Is that a fair comment? Yeah, I think that's fair. Lance came to me and said he wanted an extra quarter, three or four months, to relaunch land home. It's now launched, as you'll see the approvals going up in the approval sheet that matched reference. So we gave Lance the time he needed to launch it. We are not going to repeat 23 again. And rental was simply that the flow program came to longer to get structured and closed. But you're going to see a strong second half of originations.

Steve Hudson: Yeah, I think that's fair, Steve. Lance came to me and said he wanted an extra quarter, three or four months, to relaunch Land Home. It's now launched, and you'll see the approvals going up on the approval sheet that Matt referenced.

Speaker Change: Yeah, I think that's fair, Steve. Lance came to me and said he wanted an extra quarter.

Speaker Change: We're going to be back in three or four months to relaunch LANDhome. It's now launched as of, you'll see the approvals going up in the approval sheet that Match referenced. So we gave Lance the time he needed to launch it. We are not going to repeat 23 again.

Steve Hudson: So we gave Lance the time he needed to launch it. We are not going to repeat 23 again. And rental was simply that the flow program took longer to get structured and closed. But you're going to see a strong second half of origination. And more importantly, because of our focus on profitability on origination revenue, I think you're going to have triad outperform.

Speaker Change: And rental was simply that the flow program took longer to get structured and closed.

Steven Hudson: And more importantly, because of our focus on profitability on origination revenue, I think you're going to have triad open form.

Speaker Change: But you're going to see a strong second half of originations.

Speaker Change: And more importantly, because of our focus on profitability and origination revenue, I think you're going to have Triad outperform.

Unknown Executive: Okay, that's great.

Stephen Boland: That's great; that's all from me, thanks.

unknown: That's great; that's all from me, thanks.

Unknown Executive: That's all from me. Thanks.

Lance: Okay.

Speaker Change: That's great, that's all from me, thanks.

Tom Mackinnon: The next question comes from Tom MacKinnon with VMO Capital Market. Please go ahead. Yeah, thanks very much.

Tom Mackinnon: The next question comes from Tom MacKinnon with VMO Capital Markets. Please go ahead. Yeah, thanks.

Operator: The next question comes from Tom MacKinnon with VMO Capital Markets. Please go ahead.

Speaker Change: Thank you.

Speaker Change: The next question comes from Tom MacKinnon with VMO Capital Markets. Please go ahead.

Tom Mackinnon: Yeah, thanks very much. Just sticking with the new guide for Originations at Triad, why was Land Home temporarily paused? And, uh, and what would make it not pause again or what would make it not pause any of these programs again or reconsider any of these programs again?

Tom Mackinnon: Yeah, thanks very much. Just sticking with the new guide for Originations at Triad, why was Land Home temporarily paused? And, uh, and, oh. What would make it not pause again, or what would make it not pause any of these programs again or reconsider any of these programs again?

Steven Hudson: Just sticking on the new guide for origination to triad, why was Land Home temporarily paused? And what would make it not pause again, or what would make it not pause any of these programs again, or reconsidering these programs again?

Tom Mackinnon: And what would make it not pause again, or what would make it not pause any of these programs again, or reconsider any of these programs again?

Jackie Weber: On page 33, manufactured housing operating expenses decreased modestly from the prior year, reflecting operational efficiencies. RV and marine operating expenses were up as a result of continued investments in growth and operational improvement. Corporate operating expenses decreased to 2.5 million. And lastly, on page 34, our Health Retreating Portfolio remains down from 440 million at the end of 2023 to 375 million at the end of Q2. Subsequent to the end of the quarter, we completed additional sales that further reduced the health retreating balance down to approximately 325 million.

Steve Hudson: Hi Tom, it's Steve. As you remember from 23rd, it wasn't a hiccup that it takes... You know, four to six months to build a new home mortgage. The home is ordered, we enter into a commitment for the mortgage, but then the house has to be built, the site has to be serviced, the services come in, it takes a period of four to six months to do that. In 2023, under prior management, they did not effectively hedge that four- to six-month build.

Steve Hudson: Hi Tom and Steve. As you remember from 23, it wasn't a hiccup that it takes, you know, four to six months to build a land-home mortgage. The home is ordered, we enter into a commitment for the mortgage, but then the house has to be built, the site has to be serviced, the services come in, it takes a period of four to six months to do that. In 2023, under prior management, they did not effectively hedge that four- to six-month build.

Steven Hudson: Hi, Tom, Steve. As you remember in 23, it wasn't a hiccup that it takes, you know, four to six months to build a land home mortgage. The home is ordered. We enter into a commitment for the mortgage, but then the house has to be built. The site has to be serviced. The services come in. It takes a period of four to six months to do that. In the in 23 under prior management, they did not effectively hedge that four to six month build 600 basis points increase gave us that horrendous mark to market. This time under Lands leadership, we have a system where the moment we sign that commitment, we are having an entry; we are hedging that mortgage, whether rates go up or go down.

Speaker Change: Hi Tom, it's Steve. As you remember in 23, it wasn't a hiccup that it takes...

Speaker Change: You know, four to six months to build a land home mortgage, the home is ordered, we enter into a commitment for the mortgage, but then the house has to be built, the site has to be serviced, the services come in, it takes a period of four to six months to do that.

Speaker Change: in 23 under prior management.

Steve Hudson: A 600 basis points increase gave us that horrendous mark to market. This time, under Lance's leadership, we have a system where, the moment we sign that commitment, we are hedging that mortgage, whether rates go up or go down.

Speaker Change: They did not effectively hedge that four to six month build, 600 basis points increase.

Lance: It gave us that horrendous mark to market. This time, under Lance's leadership, we have a system where the moment we sign that commitment, we are hedging that mortgage, whether rates go up or go down.

Tom Mackinnon: Okay, thanks for reminding me. Second, just with respect to the guide, does it include any revenue from corporate? Because we seem to always be getting gains and losses from corporate investments. So how should we be thinking about that going forward?

Jackie Weber: Yeah, okay, thanks for reminding me. Second, does the guide include any revenue from corporate? Because we seem to always be getting, you know, gains and losses from corporate investments. So, how should we be thinking about that going forward?

Tom Mackinnon: Yeah, okay, thanks for reminding me.

Christopher Johnson: I'll turn to Chris Johnson or head of capital markets for comments on funding. Thank you, Jackie. Turning the slide 35, ECN continues to diversify its financing sources with well-respected sophisticated institutional investors that appreciate the quality of our assets. Our Triad Business continues the path that has been on for the past three years. We secured a 300 million funding program for our rental assets with Monroe Capital, a premier credit manager with 20 billion of managed capital.

Jackie Weber: Second is just with respect to the guide, does it include any revenue and corporate because we seem to always be getting gains and losses from corporate investments? So I'm actually be thinking about that going forward.

Speaker Change: Yeah, okay, thanks for reminding me. Second is, just with respect to the guide, does it include any revenue in corporate? Because we seem to always be getting, you know, gains and losses from corporate investments. So, how should we be thinking about that going forward?

Jackie Weber: Hi, Tom. So other revenue did benefit again this quarter from investment income and also unrealized gains on an interest rate hedge. I would just guide you that these items vary from quarter to quarter, and those gains right now are unrealized, so we don't model an additional income for the second half.

Jackie Weber: So other revenue did benefit again this quarter from investment income and also unrealized gains on an interest rate hedge. I would just remind you that these items vary from quarter to quarter, and those gains right now are unrealized, so we don't model in additional income for the second half.

Jackie Weber: Other revenue did benefit again this quarter from investment income and also unrealized gains on an interest rate hedge. I would just remind you that these items vary from quarter to quarter, and those gains right now are unrealized, so we don't model in additional income for the second half.

Speaker Change: Hi Tom, so other revenue did benefit again this quarter from investment income and also

Tom Thdlberg: Unrealized gains on an interest rate hedge. I would just guide you that these items vary from quarter to quarter, and those gains right now are unrealized, so we don't model in additional income for the second half.

Christopher Johnson: We extended an increase the commitment size of our Carlyle funding program on May 30th. And we also extended our Blackstone funding agreement for Chattel and other products this past March. As mentioned before, as we continued to increase the originations in RV Marine, we are diversifying funding. In that regard, we executed last month a 250 million flow agreement with a AAA rated mutual insurance company for source ones originated assets. This agreement, which is a monthly flow agreement, also included a sale of source one season assets, totaling 36 million late last month. For RV Marine, we're working on other programs for further funding diversification, which will be executed in the remainder of 2024.

Tom Mackinnon: Okay, thanks.

Tom Mackinnon: Okay, thanks. And then the final question is, with respect to interest rate expenses. If we get a knockdown in rates at the shorter end, are we going to get any lower interest expenses, or how should we be thinking about modeling that, particularly in corporate?

Jackie Weber: OK, thanks. And then the final question is with respect to just interest rate expenses. If we get a knockdown in rates at the shorter end, are we going to get any lower interest expenses, or how should we be thinking about modeling that, particularly in corporate?

Jackie Weber: And then the final is with respect to just interest rate expenses. If we get a knockdown and rates of the shorter end, are we going to get any lower interest expenses or how should we be thinking about modeling that, particularly in corporate? So overall, Tom, we do have floating rate debt, but we also have floating rate assets. So if interest rates do stay down, as they have been just very recently, we do expect some decrease in overall interest expense, but that would be also offset by lower interest income. So, on a net basis, we don't think it would be a material chart overall guidance, but again, that's based on where rates are today.

Speaker Change: Okay, thanks. And then the final is with respect to just interest rate expenses, if we get a knockdown in rates at the shorter end, are we going to get any lower interest expenses, or how should we be thinking about modeling that, particularly in corporate?

Jackie Weber: So overall, Tom, we do have floating rate debt, but we also have floating rate assets. So if interest rates do stay down, as they have been just recently, we do expect some decrease in overall interest expense, but that would also be offset by lower interest income. So on a net basis, you know, we don't think it would be material to our overall guidance, but again, that's based on where rates are today.

Jackie Weber: So overall, Tom, we do have floating rate debt, but we also have floating rate assets. So if interest rates do stay down, as they have been just recently, we do expect some decrease in overall interest expense, but that would also be offset by lower interest income. So on a net basis, we don't think it would be material to our overall guidance, but again, that's based on where rates are today.

Speaker Change: So overall, Tom, we do have floating rate debt, but we also have floating rate assets.

Tom Thdlberg: If interest rates do stay down, as they have been just very recently, we do expect some decrease in overall interest expense, but that would be also offset by lower interest income.

Steven Hudson: I will now turn this back to Steve. Thanks, Chris. I think I've spoken to every bullets on the slide, but let me just close by thanking ECN's partners and employees for your exceptional commitment, focus and execution. I'm producing a solid Q1 and Q2. And some of you know I'm an old football player and terrible football player. Hans was a good one. I was bad. But I liken ECN to a football game.

Tom Thdlberg: So on a net basis, you know, we don't think it would be material to our overall guidance, but again, that's based on, you know, where rates are today.

Steven Hudson: Okay, and then I guess maybe one final is, I think there was a time when there was a discussion of any kind of strategic review here maybe as it related to RV and marine. It seems like you're pretty excited about this business and making additional spends here to continue to build it. It's suffice to say it's just going to be both a manufactured home and as well as an RV and marine finance company going forward. Yeah, I think Tom, your memory's better than mine, but you're 100% right. So, at one point, we did take a look at RV Marine over the last six months.

Steve Hudson: Okay, and then I guess maybe one final thing is, I think there was a time when there was a discussion of any kind of strategic review here, maybe as it related to RV and Marine. It seems like you're pretty excited about this business and making additional expenditures here to continue to build it. Suffice to say, is this going to be both a manufactured home and as well as an RV and Marine finance company going forward? Yeah, I think, Tom, your memory's better.

Tom Mackinnon: Okay, and then I guess maybe one final thing is, I think there was a time when there was a discussion of any kind of strategic review here, maybe as it related to RV and Marine. It seems like you're pretty excited about this business and making additional expenditures here to continue to build it. Suffice to say, is this going to be both a manufactured home and as well as an RV and Marine finance company going forward? Yeah, I think, Tom, your memory's better.

Speaker Change: Okay and then I guess maybe one final is I think there was a time when there was a discussion of any kind of strategic review here maybe as it related to RV and marine it seems like

Speaker Change: You're pretty excited about this business and making additional spends here to continue to build it. Suffice to say, it's just going to be both a manufactured home and as well as an RV and marine finance company going forward.

Steven Hudson: We've had two strong quarters, Q1 and Q2. We are at halftime, but we're not ready to announce victory. We have to punch out the last two quarters and restore our credibility and continue our path of profitability. Thank you. Operate it with that.

Steve Hudson: Yeah, I think, Tom, your memory's better than mine, but you're 100% right. At one point, we did take a look at RV Marine. Over the last six months, we've been able, with both Hans and with Mike, to really replicate, albeit on a smaller scale, the four components that Triad has been successful with. So I'm sitting here, and myself and the board have had a conversation about this. We're feeling much better about the RV Marine business. We also think that there are opportunities for vendor-finance relationships in RV Marine. Those discussions are ongoing.

Tom Thdlberg: Yeah, I think, Tom, your memory's better than mine, but you're 100% right. So at one point, we did take a look at RV Marine. Over the last six months, we've been able with...

Steven Hudson: We've been able with both the Hans and with Mike to really replicate, albeit on a smaller scale, replicate the four components that Try it has been success with. So I'm sitting here and myself on the board had a conversation about this refilling much better about the RV Marine business. We also think of this opportunities for vendor finance relationships and RV Marine, or those discussions are ongoing. Nothing to report yet, but that would be the next leg to the growth of this business. We like the business. We think it's coming into its own. We tend to 10 to 12 million of profitability this year.

Unknown Executive: We'd like to take questions. We'll now take a list of questions from the telephone line.

Speaker Change: with both Hans and with Mike to to really replicate, albeit on a smaller scale, replicate the four components that TRIAD has been successful with. So I'm sitting here and myself and the board had a conversation about this. We're feeling much better about the RV marine business.

Unknown Executive: If you have a question, please press start in one or your telephone to bed. You'll hear tone and knowledge in your request. If you're using a speaker phone, please lift your hands up if you feel stress and any heat.

Speaker Change: we also think opportunities for vendor finance relationships and rb marine those discussions are ongoing nothing to report yet but that would be the the next leg to the to the growth of this businessso

Unknown Executive: Should we draw your question, please press start in two. There will be a brief pause while the participants register for questions. Thank you for your patience.

Steve Hudson: Nothing to report yet, but that would be the next leg to the growth of this business. We like the business. We think it's coming into its own. We have 10 to 12 million dollars of profitability this year. We think it could be double that in the next 12 to 18.

unknown: Nothing to report yet, but that would be the next leg to the growth of this business. We like the business. We think it's coming into its own. We have 10 to 12 million dollars of profitability this year. We think it could be double that in the next 12 to 18 months.

Speaker Change: We like the business. We think it's coming into its own. 10 to 12 million of profitability this year, we think it could be double of that in the next 12 to 18 months.

Jeff Quant: We think it could be double of that in the next 12 to 18 months.

Nikolaus Priebe: The first question comes from Nick Priebe with CIBC Capital Market. Please go ahead. Yeah, thanks.

Steven Hudson: Okay, thanks.

Speaker Change: okhe thanks

Jeff Quant: The next question comes from Jeff Quant with RBC Capital Markets. Please go ahead. I get up from you and just wanted to follow up on Tom's last question on this strategic review, because my person at the time was, you know, there were things in that business you wanted to kind of fix up. I mean, it sounds like you want to keep it here. The numbers seem to be improving.

Tom Mackinnon: The next question comes from Geoff Kwan with RBC Capital Markets. Please go ahead.

Operator: The next question comes from Geoff Kwan with RBC Capital Markets. Please go ahead.

Speaker Change: The next question comes from Geoff Kwan with RBC Capital Markets. Please go ahead.

Geoff Kwan: Hi, good afternoon. Just wanted to follow up on Tom's last question about the strategic review. Because my impression at the time was, you know, there were things in that business you wanted to kind of fix up. I mean, it sounds like you want to keep it here.

Geoff Kwan: Hi, good afternoon. I just wanted to follow up on Tom's last question about the strategic review. Because my impression at the time was, you know, there were things in that business you wanted to kind of fix up. I mean, it sounds like you want to keep it here; the numbers seem to be improving. Are you at a point where this is where you want it to be when you kind of conclude the initial part of the strategic review or kind of what else do you want to accomplish to kind of feel like, you know, you've got everything kind of set up the way you want to try and execute on growth? Yeah, I think, Geoff, what we've accomplished.

Geoff Kwan: Hi, good afternoon. Just I wanted to follow up on Tom's last question on the strategic review.

Speaker Change: Because my impression at the time was there were things in that business you wanted to kind of fix up.

Steve Hudson: The numbers seem to be improving. Are you at a point where this is where you wanted it to be when you kind of concluded the initial part of the strategic review? Or kind of what else do you want to accomplish to kind of feel like you've got everything kind of set up the way you want to try and execute on growth? Yeah, I think, Geoff, what we've accomplished...

Steven Hudson: Are you at a point where this is where you wanted it to be when you kind of concluded initial part of the strategic review, or kind of what, what else do you want to accomplish to kind of feel like, you know, you've got everything kind of set up. I think what you want to try and execute on growth. Yeah, I think Jeff, the what we've accomplished since the strategic review is that we, in source one, we put, we, we changed leadership and Mike came in, which has been a significant improvement in the business. Hans has been able to reference the eight new originators he brought on.

Speaker Change: I mean it sounds like you want to keep it here, the numbers seem to be improving.

Steven Hudson: So it's first month of operation will be September. There'll be modest, very modest income in 24. We expect profitability in 25 when we provide updated guidance will provide it, but the acquisition price was $10 million, $6 million cash from us and the management team founders took $4 million in stock. So modest, but it has a very strong proven technology platform. It's a rated servicer by KBRA and we think it'll do amazing things for us. Understood. Okay, very good.

Speaker Change: Are you at a point where this is where you want it to be when you kind of conclude an initial part of the strategic review, or kind of what else do you want to accomplish to kind of feel like you've got everything kind of set up the way you want to try and execute on growth?

Steve Hudson: Yeah, I think, Geoff, what we've accomplished since the strategic review is that, in source one, we changed leadership, and Mike came in, which has been a significant improvement in the business. Hans has been able to reference the eight new originators he's brought on, and I think equally as important as adding the servicer, which we've announced this evening, was the third step. And fourth, Chris's leadership on adding institutional flow investors. So it feels like it came together in the second and third quarter, and I think you're going to see the impact of that in the latter part of 24, and certainly 25, I think, from the perspective of creating wealth for our shareholders. We need to continue to grow this business for the next 12 to 18 months, and I think we will be rewarded for having done so.

Steve Hudson: Yeah, I think, Geoff, what we've accomplished since the strategic review is that, in source one, we put in, changed leadership, and Mike came in, which has been a significant improvement in the business. Hans has been able to reference the eight new originators he's brought on, and I think equally as important as adding the servicer, which we've announced this evening, was the third step. And fourth, Chris's leadership on adding institutional flow investors.

Speaker Change: Yeah, I think, Geoff, what we've accomplished since the strategic review is that we, in source one, we put, we changed leadership and Mike came in, which has been a significant improvement in the business.

Speaker Change: Hans has been able to reference the eight new originators he's brought on and I think equally as important is adding the servicer which we've announced this evening.

Steven Hudson: And I think equally as important as adding the servicer, which we've announced this evening, was the third step. And fourth, Chris's leadership on adding institutional flow investors. So it feels like it came together in the second, third quarter. And I think you're going to see the impact of that in the latter part of 24 and certainly 25. I think from the perspective of creating well for our shareholders. We need to continue to grow this business for the next 12 to 18 months. I think we will be rewarded for having done it. Okay, thank you. Once again, if you have a question, please press darndon one.

Steven Hudson: And then a few quarters ago, I think you made the comment that if you add half a billion dollars of incremental funding, you would add a couple sense of earnings per share that's currently not in the forecast. And there were some comments in the prepared remarks just around how the demand for paper from the RV and marine financing business, I would strip the supply. So what is the limiter on growth in the business today?

Speaker Change: was the third step and fourth.

Speaker Change: Chris's leadership on adding institutional flow investors. So it feels like it came together in the second, third quarter.

Steve Hudson: So it feels like it came together in the second and third quarter, and I think you're going to see the impact of that in the latter part of 24, and certainly 25, from the perspective of creating wealth for our shareholders. We need to continue to grow this business for the next 12 to 18 months, and I think we will be rewarded for having done it.

Speaker Change: And I think you're going to see the impact of that in the latter part of 24, and certainly 25. I think from perspective of creating wealth for our shareholders, we need to continue to grow this business for the next 12 to 18 months. I think we will be rewarded for having done it.

Steven Hudson: Is it funding availability or your ability to source loans, which is the limiter to the growth of the business? The limiter is, if we had three billion of paper, we could sell three billion of paper, but Lance's leadership is to run a platform with reduced risk in a very prudent fashion as evidence, Nick, by slowing down land home and waiting the next quarter to turn it back on. So it's the limiting factor is the origination of assets.

Speaker Change: Okay, thank you.

Operator: Once again, if you have a question, please press star then 1. As there are no further questions registered, this concludes today's conference call. You may disconnect your line. Thank you for participating and have a pleasant day.

Operator: Once again, if you have a question, please press the star and then one.

Speaker Change: Once again, if you have a question, please press star then 1.

Unknown Executive: As there are no further questions registered, this concludes today's conference call. You may disconnect your line. Thank you for participating, and have a pleasant day. ¶ ¶ ¶ ¶ ¶

Speaker Change: As there are no further questions registered, this concludes today's conference call. You may disconnect your line. Thank you for participating and have a pleasant day.

Steven Hudson: We think land home is a great growth asset for 25 and rental is even even larger just took two quarters. We had planned and closing a rental flow arrangement and early 24 got closed in late June. Got it. Okay. All right. That's it for me for now. I'll pass the line. Thank you.

Lance Hull: I just want to clarify, are these pipeline numbers actually hitting anything on the balance sheet for ECN or the financial statements or is this just sort of building the outlook for 2025? I guess like the questions are we generating income from champion financing at the stage? This is Lance Hull. And the answer to that question is yes. The arrangement with Skyline Champion is that we're generating loans that flow through the JV for which we share in the economic benefit of those loans.

Lance Hull: So, yes, it's generating income. I think it's fair to say that it was launched into components. The first was floor plan and the second was retail program. The floor plan is now, as Matt has gone through the number members with you, very active. An on track retail was probably a quarter late, but it's now launched with a national buy down. There was a commentary in the Skyline Champion conference call early this morning saying that activity is exceeding expectations. You can pull up the comment or we can send you the link. So, we think it's a significant driver of profitability and a lot of part of this year, particularly into 25.

Lance Hull: Just from an accounting perspective, is this showing up across the three revenue lines within manufactured housing within Triad? It's primarily in the other revenue line at Triad. Other revenue? Okay. Good.

Matthew Heidelberg: Just in terms, maybe a bit more of a macro refresh here, as maybe we're getting into a lower interest rate environment from a federal perspective. Active keys refresh us on the sensitivity of the two business lines to lower overnight interest rates. Hi, James. Matt, for Triad, if you recall, we just added that additional slide of some information about MH shipments relative to the tenure treasury. So, from what that data showed us was that there really is no correlation.

Matthew Heidelberg: You know, what we're looking to serve and provide people is a portable housing need and the financing for that. So, we haven't seen a correlation ourselves as a Triad business in the RV Marine business interest rates matter. And in particular payments given by interest rates, I don't think in July, IFG and Source One had their best July ever. Again, that's not we're hedge, but that's because the overall payments to the consumer coming down, which is driving significant, significant business activity for both of our RV Marine finance businesses. Okay, so that was a comment on activity impacts.

Steven Hudson: I guess maybe do you have a comment on the impact of the existing book. So, kind of like in reverse or last year we had some hiccups, let's say, with the right interest rates quickly. So, what's the impact to existing book, existing originations on the balance sheet in your health or trading assets, things of that nature that would give us a bit more perspective on the financial impacts of lower interest rates rather than just impacts on the interest rates.

Steven Hudson: So, I don't want consumer to miss. Right, I think you're being kind when you use the word hiccup, so I have another word for it, but I won't repeat it. The book is hatched, so you're not going to see a mark on the book doing lower interest rates. The lower interest rates impact, particularly RB Marine because of the lower payment factors. People are now buying more votes and more RVs. And as Matt mentioned, there doesn't, we ran a correlation analysis on interest rates and consumer sentiment.

Steven Hudson: And there is no correlation. I think the R factors 0.02 for both of those. Okay, so no financial impacts, particularly. I think there's no mark coming on the book, we expect the balance sheet. And I think you're going to see a significant lift in RV Marine business activity and originations in July. Hans's business went from 44 million last year to 68 million in July. And that's the impact of lower interest rates and lower payments.

Unknown Executive: Yeah, understand. Okay, I'll turn it over. Thanks.

Stephen Roland: The next question comes from Stephen Roland with Raymond James, please go ahead. I apologize. I'm jumping around a little bit tonight. Just on the on the tried servicing a margin. Just kind of eyeballing it didn't jump up this quarter compared to past quarters and if it's or if it didn't, maybe is the margin where you want it to be, I guess. Yeah, we, you know, there are few things that go into the servicing margin there and the servicing income deal.

Stephen Roland: It depends on mix, right, silver and bronze products as you've heard us say before come in a much higher servicing fee. There's some fee income that's in there too that we're able to pick up. The second quarter was a particularly higher servicing yield for us. If you were to think about modeling it, I'd think about more about the average of the first half into the second half.

Lance Hull: Okay, that's that's really helpful. Just going back to skyline, when I looked back, it's a year since pretty much announced the deal. And you know, there was talking about 30% penetration and, you know, maybe 40 million of income if that happened, you know, obviously there's been good progress. But is it going, you know, as expected, as you thought, when you contemplated the deal a year ago, Steve? I'd say, I'd say, Steve, it's going as expected.

Lance Hull: It was just late to get, you know, it was maybe I was too ambitious thinking about the launch of floor plan and plants as usual was more measured, but it's got launched and it's got, it's now up to where it should be. The retail launch, the buy down was probably three to four months late. Now launch is performing as it's planned. You know, I, if you look to our heritage as a company, we created dental financial services and a bunch of other capital finance companies.

Lance Hull: I think this one is going to be as good. At a competitor claim, they have both 21st and Vanderbilt. And we think this business will be as strong as those two combined groups. And when, when I look at the change in guidance on originations for, for triad, basically what your comments I think on the call have been that you're just pushing it out a little bit later in 2024. You know, it's almost like a catch up in 2025 is that a fair comment?

Lance Hull: Yeah, I think that's fair. Lance came to me and said he wanted an extra quarter, three or four months to relaunch land home. It's now launched as you'll see the approvals going up in the approval sheet that matched reference. So we gave Lance the time he needed to launch it. We are not going to repeat 23 again. And rental was simply that the flow program came to longer to get structured and closed. But you're going to see a strong second half of originations. And more importantly, because of our focus on profitability on origination revenue, I think you're going to have triad open form.

Steven Hudson: Okay, that's great.

Unknown Executive: That's all from me. Thanks.

Tom Mackinnon: The next question comes from Tom MacKinnon with VMO Capital Market. Please go ahead. Yeah, thanks very much.

Steven Hudson: Just sticking on the new guide for origination to triad, why was land home temporarily paused? And what would make it not pause again, or what would make it not pause any of these programs again, or reconsidering these programs again? Hi, Tom, Steve. As you remember in 23, it wasn't a hiccup that it takes, you know, four to six months to build a land home mortgage. The home is ordered. We enter into a commitment for the mortgage, but then the house has to be built.

Steven Hudson: The site has to be serviced. The services come in. It takes a period of four to six months to do that. In the in 23 under under prior management, they did not effectively hedge that four to six month build 600 basis points increase gave us that horrendous mark to market. This time under lands leadership, we have a system where the moment we sign that commitment, we are having an entry, we are hedging that mortgage, whether rates go up or go down.

Jackie Weber: Yeah, okay, thanks for reminding me. Second is just with respect to the guide, does it include any revenue and corporate because we seem to always be getting gains and losses from corporate investments? So I'm actually be thinking about that going forward. Hi, Tom. So other revenue did benefit again this quarter from investment income and also unrealized gains on an interest rate hedge. I would just guide you that these items vary from quarter to quarter and those gains right now are unrealized, so we don't model an additional income for the second half.

Jackie Weber: Okay, thanks. And then the final is with respect to just interest rate expenses. If we get a knockdown and rates of the shorter end, are we going to get any lower interest expenses or how should we be thinking about modeling that, particularly in corporate? So overall, Tom, we do have floating rate debt, but we also have floating rate assets. So if interest rates do stay down, as they have been just very recently, we do expect some decrease in overall interest expense, but that would be also offset by lower interest income. So on a net basis, we don't think it would be a material chart overall guidance, but again, that's based on where rates are today.

Steven Hudson: Okay, and then I guess maybe one final is, I think there was a time when there was a discussion of any kind of strategic review here maybe as it related to RV and Marine. It seems like you're pretty excited about this business and making additional spends here to continue to build it. It's suffice to say it's just going to be both a manufactured home and as well as an RV and Marine finance company going forward.

Steven Hudson: Yeah, I think Tom, your memories better than mine, but you're 100% right. So at one point, we did take a look at RV Marine over the last six months. We've been able with both the Hans and with Mike to really replicate albeit on a smaller scale, replicate the four components that try it has been success with. So I'm sitting here and myself on the board had a conversation about this refilling much better about the RV Marine business.

Steven Hudson: We also think of this opportunities for vendor finance relationships and RV Marine, or those discussions are ongoing, nothing to report yet, but that would be the next leg to the growth of this business. We like the business. We think it's coming into its own. We tend to 10 to 12 million of profitability this year.

Steven Hudson: We think it could be double of that in the next 12 to 18 months.

Unknown Executive: Okay, thanks.

Jeff Quant: The next question comes from Jeff Quant with RBC capital markets. Please go ahead. I get up from you and just wanted to follow up on Tom's last question on this strategic review, because my person at the time was, you know, there were things in that business you wanted to kind of fix up. I mean, it sounds like you want to keep it here. The numbers seem to be improving.

Steven Hudson: Hans has been able to reference the eight new originators he brought on. And I think equally as important as adding the servicer, which we've announced this, this evening was the third step. And fourth, Chris's leadership on adding institutional flow investors. So it feels like it came together in the second, third quarter. And I think you're going to see the impact of that in the latter part of 24 and certainly 25, I think from perspective of creating well for our shareholders.

Steven Hudson: We need to continue to grow this business for the next 12 to 18 months. I think we will be rewarded for having done it. Okay, thank you. Once again, if you have a question, please press darndon one. As there are no further questions registered, this concludes today's conference call. You may disconnect your line. Thank you for participating and have a pleasant day.

Q2 2024 ECN Capital Corp Earnings Call

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