GSY Goeasy Ltd

goeasy Ltd. (TSX: GSY), (“goeasy” or the “Company”), one of Canada’s leading non-prime consumer lenders, today reported results for the fourth quarter and full year ended December 31, 2021.         Fourth Quarter Results

During the quarter, the Company generated a record $507 million in total loan originations, up 52% compared to the $334 million produced in the fourth quarter of 2020, and a sequential increase of 16% from the $436 million in loan originations in the third quarter of 2021. The increase in loan originations led to record organic growth in the loan portfolio of $134 million during the quarter, resulting in a total gross consumer loan receivable portfolio of $2.03 billion, up 63% from $1.25 billion in the fourth quarter of 2020. The growth in consumer loans led to an increase in revenue, which was a record $234 million in the quarter, up 35% over the fourth quarter of 2020.

The net charge off rate in the fourth quarter was 9.6%, in line with the Company’s target range of a net charge off rate between 8.5% and 10.5% on an annualized basis, and up from the 9.0% in the fourth quarter of 2020, a period which was affected by pandemic related government subsidies and a reduction in consumer spending. The Company’s allowance for future credit losses remained stable at 7.87%, compared to 7.83% in the prior quarter.

Operating income for the fourth quarter of 2021 was a record $79.6 million, up 30% from $61.3 million in the fourth quarter of 2020. Operating margin for the fourth quarter was 34.0%, down from 35.4% in the prior year. After adjusting for items related to the recent acquisition of LendCare Holdings Inc. (“LendCare”), the Company reported record adjusted operating income2 of $86.4 million, up $25.1 million or an increase of 41% compared to $61.3 million in the fourth quarter of 2020. Adjusted operating margin1 for the fourth quarter was 36.8%, up from 35.4% in the prior year. During the quarter, the Company also recorded other income of $8.4 million before-tax fair value gains on investments.

Net income in the fourth quarter was $50.0 million, compared to $48.9 million in the same period of 2020, which resulted in diluted earnings per share of $2.90, compared to $3.14 in the fourth quarter of 2020. After adjusting for non-recurring and unusual items on an after-tax basis, including $2.5 million of integration costs related to the acquisition of LendCare, $2.4 million in amortization of acquired intangible assets, and a $7.3 million fair value gains on investments, adjusted net income2 was a record $47.6 million, up 36% from $35.0 million in 2020. Adjusted diluted earnings per share1 was a record $2.76, up 23% from $2.24 in the fourth quarter of 2020.

Return on equity during the quarter was 25.0%, compared to 45.8% in the fourth quarter of 2020. After adjusting for the non-recurring and unusual items previously noted, adjusted return on equity1 was 23.9% in the quarter, compared to 32.8% in the same period of 2020.

“As we concluded another year of significant achievements, the fourth quarter highlighted the growth capability of our diversified non-prime lending platform, with a record $507 million in loan originations and $134 million in organic loan growth, resulting in the consumer loan portfolio finishing the year at over $2 billion,” said Jason Mullins, goeasy’s President and Chief Executive Officer, “During the year our team closed on the acquisition of LendCare, expanded our product range, added $800 million in new funding capacity, delivered record adjusted diluted earnings per share1 of $10.43, a 38% increase, and developed meaningful relationships with a record number of customers. I want to thank our talented team who deserve immense credit for these accomplishments.”

Other Key Fourth Quarter Highlights

easyfinancial

• Revenue of $196 million, up 44%
• 33% of the loan portfolio secured, up from 13%
• 61% of net loan advances in the quarter were issued to new customers, up from 51%
• 51% of applications were acquired online, down from 64%
• 29% of new customers acquired through point-of-sale financing, up from 22%
• 5% of new customers acquired through auto financing, a new product category in 2021
• Record net customer growth during the quarter of 10,725
• Average loan book per branch3 improved to $4.0 million, an increase of 3%
• Weighted average interest rate3 on consumer loans of 33.3%, down from 37.8%
• Record operating income of $87.6 million, up 30%
• Operating margin of 44.7%, down from 49.2%

easyhome

• Record revenue of $38.4 million, up 5%
• Same store revenue growth3 of 5.6%
• Consumer loan portfolio within easyhome stores increased to $69.8 million, up 39%
• Financial revenue1 from consumer lending increased to $9.0 million, up 44% from $6.2 million
• Operating income of $8.5 million, down 2%
• Operating margin of 22.0%, down from 23.6%

Overall

• 47th consecutive quarter of same store revenue growth3
• 82nd consecutive quarter of positive net income
• 2022 marks the 18th consecutive year of paying dividends and the 8th consecutive year of a dividend increase
• Total same store revenue growth3 of 13.4%
• Total active customers now exceed 300,000, with total customers served over 1 million
• Reported return on equity of 25.0%, and adjusted return on equity1 of 23.9% in the quarter, down from 32.8% in the fourth quarter of 2020. Adjusted return on tangible common equity1 of 36.2%, up from 34.5% in the fourth quarter of 2020
• Fully drawn weighted average cost of borrowing reduced to 4.5%, down from 4.8%
• Net debt to net capitalization4 of 65% on December 31, 2021, up from 64% in the prior year and below the Company’s target leverage ratio of 70%

Full Year Results

For the full year of 2021, the Company funded $1.59 billion in loan originations, up 54% from $1.03 billion in 2020. The consumer loan receivable portfolio finished at $2.03 billion, up 63% from $1.25 billion as of December 31, 2020, with the increase related to the organic loan growth and the LendCare portfolio acquired in the second quarter of 2021.

For the full year of 2021, the Company produced record revenues of $827 million, up 27%, compared with $653 million in 2020. Operating income for the full year was $281 million compared with $216 million in 2020, an increase of $64.6 million or 30%. Net income for the full year of 2021 was $245 million and diluted earnings per share was $14.62, compared with $137 million or $8.76 per share, increases of 79% and 67%, respectively.

During the year, the Company recorded before-tax fair value gains on investments of $115 million. Excluding the effects of the adjusting items related to the acquisition of LendCare and fair value gains on investments, adjusted net income2 for the full year of 2021 was $175 million, up 49% from $118 million in 2020; adjusted diluted earnings per share1 was $10.43, up 38% from $7.57 in 2020. Reported return on equity was 36.7%, while adjusted return on equity1 was 26.2%, down from 31.1% in 2020.

Balance Sheet and Liquidity

Total assets were $2.60 billion as of December 31, 2021, an increase of 73% from $1.50 billion as of December 31, 2020, driven by growth in the consumer loan portfolio, including the $445 million gross consumer loan portfolio acquired through the acquisition of LendCare, the intangible assets and goodwill arising from the LendCare acquisition, and the return on the Company’s investment in Affirm Holdings Inc. (“Affirm”).

In November 2021, the Company entered into a 7-month total return swap agreement (the "TRS") to substantively hedge its market exposure related to 75,000 contingent shares related to the equity held in Affirm. The TRS effectively results in the economic value of this hedged portion of the Company’s contingent equity in Affirm being settled in cash at maturity for US$163.00 per share, net of applicable fees. Prior to the fourth quarter, the Company previously entered into a 9-month total return swap agreement to substantively hedge its market exposure related to 100,000 contingent shares related to the equity held in Affirm, with those shares being settled in cash at maturity for US$110.35 per share, net of applicable fees. To date, the Company has substantively hedged its market exposure related to 175,000 of the 468,000, or approximately 37%, of the total contingent shares related to the equity held in Affirm. During the fourth quarter of 2021, the Company recognized a $7.3 million after-tax fair value gains mainly on the investment in Affirm and the TRS. For the full year 2021, the Company has recorded total after-tax fair value gains on investments of $99.7 million.

In January 2022, the Company increased its existing revolving securitization warehouse facility (“Securitization Facility”) from $600 million to $900 million. The Securitization Facility, which was originally established in December 2020, will continue to be structured by National Bank Financial Markets, with the addition of Bank of Montreal and Royal Bank of Canada as new lenders to the syndicate. The facility will continue to bear interest on advances payable at the rate of 1-month Canadian Dollar Offered Rate (“CDOR”) plus 185 bps. Based on the current 1-month CDOR rate of 0.61% as of February 14, 2022, the interest rate would be 2.46%. The Company continues utilizing an interest rate swap agreement to generate fixed rate payments on the amounts drawn and mitigate the impact of interest rate volatility.

In January 2022, the Company also announced an amendment to its senior secured revolving credit facility (“Credit Facility”), which will decrease from $310 million to $270 million, with the maturity extended to January 27, 2025 and a reduction to the interest rate payable on advances. On lenders prime rate (“Prime”) advances, the interest rate payable has been reduced by 125 bps, from the previous rate of Prime plus 200 bps to Prime plus 75 bps. On draws elected to be taken utilizing the Canadian Bankers’ Acceptance rate (“BA”), the interest rate payable has been reduced by 75 bps, from the previous rate of BA plus 300 bps to BA plus 225 bps. Based on the current Prime rate of 2.45% and the current 90-day BA rate of 0.84% as of February 14, 2022, the interest rate on the principal amount drawn would be 3.20% or 3.09%, respectively, at the option of the Company. Additionally, the amendment incorporates key modifications including improved advance rates, less restrictive covenants, and a broader syndicate of banks. The amended Credit Facility is underwritten by Bank of Montreal, Royal Bank of Canada, Wells Fargo Bank, CIBC, National Bank of Canada and Toronto-Dominion Bank, and the Company has the ability to utilize an accordion feature to increase the size of the facility by up to an additional $100 million.

Free cash flow from operations before net growth in gross consumer loans receivable2 in the quarter was $59.5 million, up 45% from $41.0 million in the fourth quarter of 2020. Based on the cash on hand at the end of the quarter and the borrowing capacity under the Company’s recently amended revolving credit facilities, goeasy has approximately $978 million in total funding capacity, which it estimates is sufficient to fund its organic growth through the fourth quarter of 2024. Inclusive of these amendments, the Company’s fully drawn weighted average cost of borrowing reduced to 4.2%, with incremental draws on its senior secured revolving credit facility bearing a rate of approximately 3.09% and incremental draws on its amended Securitization Facility bearing a rate of approximately 2.46%, prior to interest rate swaps.

The Company also estimates that once its existing and available sources of capital are fully utilized, it could continue to grow the loan portfolio by approximately $200 million per year solely from internal cash flows. The Company also estimates that if it were to run-off its consumer loan and consumer leasing portfolios, the value of the total cash repayments paid to the Company over the remaining life of its contracts would be approximately $3.1 billion. If, during such a run-off scenario, all excess cash flows were applied directly to debt, the Company estimates it would extinguish all external debt within 15 months.

Future Outlook

The Company has provided a new 3-year forecast for the years 2022 through 2024. The periods of 2022 and 2023 have been updated to reflect the most recent outlook. The Company continues to pursue a long-term strategy that includes expanding its product range, developing its channels of distribution and leveraging risk-based pricing to reduce the cost of borrowing for its consumers and extend the life of its customer relationships. As such, the total yield earned on its consumer loan portfolio1 will gradually decline, while net charge off rates remain stable and operating margins expand. The forecasts outlined below contemplate the Company’s expected domestic organic growth plan and do not include the impact of any future mergers or acquisitions, or the associated gains or losses associated with its investments.

	Forecasts for 2022	Forecasts for 2023	Forecasts for 2024
Gross consumer loans receivable at year end	$2.4B - $2.6B	$2.9B - $3.1B	$3.4B - $3.6B
New easyfinancial locations to be opened during the year	15 - 20	10 - 15	5
Total Company revenue	$970M - $1B	$1.10B - $1.14B	$1.24B - $1.28B
Total yield on consumer loans (including ancillary products)1	36.5% - 38.5%	35% - 37%	34% - 36%
Net charge offs as a percentage of average gross consumer loans receivable	8.5% - 10.5%	8% - 10%	8% - 10%
Total Company Operating Margin	35%+	36%+	37%+
Return on Equity	22%+	22%+	22%+

“With consumer demand and repayment behavior trending at normal levels, we are confident in the future growth and performance of our business. For nearly 10 consecutive years we have produced a long range forecast and have consistently met or exceeded it,” Mr. Mullins continued, “Our strategy to leverage a wide range of lending products and distribution channels to serve all the borrowing needs of more than 8 million non-prime Canadians, will allow us to capture an even greater share of the nearly $200 billion non-prime consumer credit market. With only 1% share of that market today, we expect to scale our consumer loan portfolio by 75%, to approximately $3.5 billion by the end of 2024. However, none of this would be possible, without the incredible team that works day-in and day-out, to provide our customers with honest and responsible financial products, that put them on a path to a better tomorrow. We are truly just getting started.”

Dividend

Based on its 2021 adjusted earnings and the Company’s confidence in its continued growth and access to capital going forward, the Board of Directors has approved an increase to the annual dividend from $2.64 per share to $3.64 per share, an increase of 38%. This year marks the 8th consecutive year of an increase in the dividend to shareholders. As such, the Board of Directors has approved a quarterly dividend of $0.91 per share payable on April 8, 2022 to the holders of common shares of record as at the close of business on March 25, 2022.

Forward-Looking Statements

All figures reported above with respect to outlook are targets established by the Company and are subject to change as plans and business conditions vary. Accordingly, investors are cautioned not to place undue reliance on the foregoing guidance. Actual results may differ materially.

This press release includes forward-looking statements about goeasy, including, but not limited to, its business operations, strategy, expected financial performance and condition, the estimated number of new locations to be opened, targets for growth of the consumer loans receivable portfolio, annual revenue growth targets, strategic initiatives, new product offerings and new delivery channels, anticipated cost savings, planned capital expenditures, anticipated capital requirements, liquidity of the Company, plans and references to future operations and results and critical accounting estimates. In certain cases, forward-looking statements are statements that are predictive in nature, depend upon or refer to future events or conditions, and/or can be identified by the use of words such as ‘expects’, ‘anticipates’, ‘intends’, ‘plans’, ‘believes’, ‘budgeted’, ‘estimates’, ‘forecasts’, ‘targets’ or negative versions thereof and similar expressions, and/or state that certain actions, events or results ‘may’, ‘could’, ‘would’, ‘might’ or ‘will’ be taken, occur or be achieved.

Forward-looking statements are based on certain factors and assumptions, including expected growth, results of operations and business prospects and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company’s operations, economic factors and the industry generally, as well as those factors referred to in the Company’s most recent Annual Information Form and Management Discussion and Analysis, as available on www.sedar.com, in the section entitled “Risk Factors”. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those expressed or implied by forward-looking statements made by the Company, due to, but not limited to, important factors such as the Company’s ability to enter into new lease and/or financing agreements, collect on existing lease and/or financing agreements, open new locations on favourable terms, purchase products which appeal to customers at a competitive rate, respond to changes in legislation, react to uncertainties related to regulatory action, raise capital under favourable terms, manage the impact of litigation (including shareholder litigation), control costs at all levels of the organization and maintain and enhance the system of internal controls. The Company cautions that the foregoing list is not exhaustive.

The reader is cautioned to consider these, and other factors carefully and not to place undue reliance on forward-looking statements, which may not be appropriate for other purposes. The Company is under no obligation (and expressly disclaims any such obligation) to update or alter the forward-looking statements whether as a result of new information, future events or otherwise, unless required by law.

About goeasy

goeasy Ltd., a Canadian company, headquartered in Mississauga, Ontario, provides non-prime leasing and lending services through its easyhome, easyfinancial and LendCare brands. Supported by more than 2,300 employees, the Company offers a wide variety of financial products and services including unsecured and secured instalment loans. Customers can transact seamlessly through an omni-channel model that includes an online and mobile platform, over 400 locations across Canada, and point-of-sale financing offered in the retail, power sports, automotive, home improvement and healthcare verticals, through more than 4,000 merchants across Canada. Throughout the Company’s history, it has acquired and organically served over 1 million Canadians and originated over $7.7 billion in loans, with one in three easyfinancial customers graduating to prime credit and 60% increasing their credit score within 12 months of borrowing.

Accredited by the Better Business Bureau, goeasy is the proud recipient of several awards including Waterstone Canada’s Most Admired Corporate Cultures, Glassdoor Top CEO Award, Achievers Top 50 Most Engaged Workplaces in North America, Greater Toronto Top Employers Award, the Digital Finance Institute’s Canada’s Top 50 FinTech Companies, ranking on the TSX30 and placing on the Report on Business ranking of Canada’s Top Growing Companies and has been certified as a Great Place to Work®. The company is represented by a diverse group of team members from over 75 nationalities who believe strongly in giving back to the communities in which it operates. To date, goeasy has raised and donated over $4.35 million to support its long-standing partnerships with BGC Canada, Habitat for Humanity and many other local charities.

goeasy Ltd.’s. common shares are listed on the TSX under the trading symbol “GSY”. goeasy is rated BB- with a stable trend from S&P and Ba3 with a stable trend from Moody’s. Visit www.goeasy.com.

For further information contact:

Jason MullinsPresident & Chief Executive Officer(905) 272-2788

Farhan Ali KhanSenior Vice President, Chief Corporate Development Officer(905) 272-2788

Notes:

1 These are non-IFRS ratios. Refer to “Non-IFRS Measures and Other Financial Measures” section in this press release. 2 These are non-IFRS measures. Refer to “Non-IFRS Measures and Other Financial Measures” section in this press release. 3 These are supplementary financial measures. Refer to “Non-IFRS Measures and Other Financial Measures” section in this press release.4 These are capital management measures. Refer to “Non-IFRS Measures and Other Financial Measures” section in this press release.5 Non-IFRS ratios, non-IFRS measures, supplementary financial measures and capital management measures are not determined in accordance with IFRS, do not have standardized meanings and may not be comparable to similar financial measures presented by other companies.

goeasy Ltd.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(expressed in thousands of Canadian dollars)
			As At	As At
			December 31,	December 31,
			2021	2020
ASSETS
Cash			102,479	93,053
Amounts receivable			20,769	9,779
Prepaid expenses			8,018	13,005
Consumer loans receivable, net			1,899,631	1,152,378
Investments			64,441	56,040
Lease assets			47,182	49,384
Property and equipment, net			35,285	31,322
Deferred tax assets, net			-	4,066
Derivative financial assets			20,634	-
Intangible assets, net			159,651	25,244
Right-of-use assets, net			57,140	46,335
Goodwill			180,923	21,310
TOTAL ASSETS			2,596,153	1,501,916
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accounts payable and accrued liabilities			57,134	46,065
Income taxes payable			27,859	13,897
Dividends payable			10,692	6,661
Unearned revenue			11,354	10,622
Accrued interest			8,135	2,598
Deferred tax liabilities, net			38,648	-
Lease liabilities			65,607	53,902
Revolving credit facility			-	198,339
Secured borrowings			173,959	-
Revolving securitization warehouse facility			292,814	-
Derivative financial liabilities			34,132	36,910
Notes payable			1,085,906	689,410
TOTAL LIABILITIES			1,806,240	1,058,404
Shareholders' equity
Share capital			363,514	181,753
Contributed surplus			22,583	19,732
Accumulated other comprehensive income (loss)			8,567	(5,280	)
Retained earnings			395,249	247,307
TOTAL SHAREHOLDERS' EQUITY			789,913	443,512
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY			2,596,153	1,501,916

goeasy Ltd.
CONSOLIDATED STATEMENTS OF INCOME
(expressed in thousands of Canadian dollars except earnings per share)
		Three Months Ended		Year Ended
		December 31,	December 31,	December 31,		December 31,
		2021	2020	2021		2020
REVENUE
Interest income		155,529	106,784	535,638		409,583
Lease revenue		27,663	28,564	112,371		112,796
Commissions earned		45,910	34,747	163,734		117,913
Charges and fees		5,328	3,124	14,979		12,630
		234,430	173,219	826,722		652,922
EXPENSES BEFORE DEPRECIATION AND AMORTIZATION
Salaries and benefits		36,171	34,023	157,157		136,306
Stock-based compensation		2,772	1,988	8,875		7,575
Advertising and promotion		9,578	8,591	30,393		26,786
Bad debts		58,640	34,493	182,084		134,998
Occupancy		6,342	5,375	23,614		22,501
Technology costs		5,312	3,692	18,033		14,191
Other expenses		14,321	7,028	46,677		29,406
		133,136	95,190	466,833		371,763
DEPRECIATION AND AMORTIZATION
Depreciation of lease assets		9,157	8,980	35,844		35,770
Depreciation of right-of-use assets		4,791	4,189	18,207		16,183
Amortization of intangible assets		5,546	2,074	16,831		6,773
Depreciation of property and equipment		2,171	1,509	8,004		5,997
		21,665	16,752	78,886		64,723
TOTAL OPERATING EXPENSES		154,801	111,942	545,719		436,486
OPERATING INCOME		79,629	61,277	281,003		216,436
OTHER INCOME		8,371	16,040	114,876		21,740
FINANCE COSTS
Interest expenses and amortization of deferred financing charges		21,460	12,624	75,910		52,248
Interest expense on lease liabilities		821	719	3,115		2,744
		22,281	13,343	79,025		54,992
INCOME BEFORE INCOME TAXES		65,719	63,974	316,854		183,184
INCOME TAX EXPENSE (RECOVERY)
Current		15,167	9,753	73,744		33,041
Deferred		591	5,310	(1,833	)	13,638
		15,758	15,063	71,911		46,679
NET INCOME		49,961	48,911	244,943		136,505
BASIC EARNINGS PER SHARE		3.00	3.26	15.12		9.21
DILUTED EARNINGS PER SHARE		2.90	3.14	14.62		8.76

Segmented Reporting
			Three Months Ended December 31, 2021
($ in 000's except earnings per share)			easyfinancial1	easyhome	Corporate		Total
Revenue
	Interest income		149,004	6,525	-		155,529
	Lease revenue		-	27,663	-		27,663
	Commissions earned		42,676	3,234	-		45,910
	Charges and fees		4,335	993	-		5,328
			196,015	38,415	-		234,430
Total operating expenses before
depreciation and amortization			99,597	18,563	14,976		133,136
Depreciation and amortization
	Depreciation and amortization of lease assets, property and equipment and intangible assets		6,130	9,463	1,281		16,874
	Depreciation of right-of-use assets		2,645	1,939	207		4,791
			8,775	11,402	1,488		21,665
Segment operating income (loss)			87,643	8,450	(16,464	)	79,629
Other income							8,371
Finance costs
	Interest expense and amortization of deferred financing charges						21,460
	Interest expense on lease liabilities						821
							22,281
Income before income taxes							65,719
Income tax expense							15,758
Net Income							49,961
Diluted earnings per share							2.90
1 LendCare’s financial results are reported under the easyfinancial reportable operating segment.
			Three Months Ended December 31, 2020
($ in 000's except earnings per share)			easyfinancial	easyhome	Corporate		Total
Revenue
	Interest income		101,967	4,817	-		106,784
	Lease revenue		-	28,564	-		28,564
	Commissions earned		32,461	2,286	-		34,747
	Charges and fees		2,095	1,029	-		3,124
			136,523	36,696	-		173,219
Total operating expenses before
depreciation and amortization			65,053	16,833	13,304		95,190
Depreciation and amortization
	Depreciation and amortization of lease assets, property and equipment and intangible assets		2,181	9,306	1,076		12,563
	Depreciation of right-of-use assets		2,062	1,894	233		4,189
			4,243	11,200	1,309		16,752
Segment operating income (loss)			67,227	8,663	(14,613	)	61,277
Other income							16,040
Finance costs
	Interest expense and amortization of deferred financing charges						12,624
	Interest expense on lease liabilities						719
							13,343
Income before income taxes							63,974
Income tax expense							15,063
Net Income							48,911
Diluted earnings per share							3.14
			Year Ended December 31, 2021
($ in 000's except earnings per share)			easyfinancial1	easyhome	Corporate		Total
Revenue
	Interest income		512,810	22,828	-		535,638
	Lease revenue		-	112,371	-		112,371
	Commissions earned		152,485	11,249	-		163,734
	Charges and fees		11,056	3,923	-		14,979
			676,351	150,371	-		826,722
Total operating expenses before
depreciation and amortization			323,381	68,706	74,746		466,833
Depreciation and amortization
	Depreciation and amortization of lease assets, property and equipment and intangible assets		18,553	37,115	5,011		60,679
	Depreciation of right-of-use assets		9,666	7,689	852		18,207
			28,219	44,804	5,863		78,886
Segment operating income (loss)			324,751	36,861	(80,609	)	281,003
Other income							114,876
Finance costs
	Interest expense and amortization of deferred financing charges						75,910
	Interest expense on lease liabilities						3,115
							79,025
Income before income taxes							316,854
Income tax expense							71,911
Net Income							244,943
Diluted earnings per share							14.62
1 LendCare’s financial results are reported under the easyfinancial reportable operating segment.
			Year Ended December 31, 2020
($ in 000's except earnings per share)			easyfinancial	easyhome	Corporate		Total
Revenue
	Interest income		392,450	17,133	-		409,583
	Lease revenue		-	112,796	-		112,796
	Commissions earned		109,246	8,667	-		117,913
	Charges and fees		8,208	4,422	-		12,630
			509,904	143,018	-		652,922
Total operating expenses before
depreciation and amortization			251,897	67,261	52,605		371,763
Depreciation and amortization
	Depreciation and amortization of lease assets, property and equipment and intangible assets		7,665	37,209	3,666		48,540
	Depreciation of right-of-use assets		7,753	7,489	941		16,183
			15,418	44,698	4,607		64,723
Segment operating income (loss)			242,589	31,059	(57,212	)	216,436
Other income							21,740
Finance costs
	Interest expense and amortization of deferred financing charges						52,248
	Interest expense on lease liabilities						2,744
							54,992
Income before income taxes							183,184
Income tax expense							46,679
Net Income							136,505
Diluted earnings per share							8.76

Summary of Financial Results and Key Performance Indicators
($ in 000’s except earnings per share and percentages)	Three Months Ended				Variance		Variance
	December 31, 2021		December 31, 2020		$ / bps		% change
Summary Financial Results
Revenue	234,430		173,219		61,211		35.3	%
Operating expenses before depreciation and amortization2	133,136		95,190		37,946		39.9	%
EBITDA1	100,508		85,089		15,419		18.1	%
EBITDA margin1	42.9	%	49.1	%	(620 bps)		(12.6	%)
Depreciation and amortization expense2	21,665		16,752		4,913		29.3	%
Operating income	79,629		61,277		18,352		29.9	%
Operating margin	34.0	%	35.4	%	(140 bps)		(4.0	%)
Other income2,3	8,371		16,040		(7,669	)	(47.8	%)
Finance costs	22,281		13,343		8,938		67.0	%
Effective income tax rate	24.0	%	23.5	%	50 bps		2.1	%
Net income	49,961		48,911		1,050		2.1	%
Diluted earnings per share	2.90		3.14		(0.24	)	(7.6	%)
Return on assets	7.9	%	13.6	%	(570 bps)		(41.9	%)
Return on equity	25.0	%	45.8	%	(2,080 bps)		(45.4	%)
Return on tangible common equity1	39.8	%	48.2	%	(840 bps)		(17.4	%)
Adjusted Financial Results1,2,3
Adjusted operating income	86,353		61,277		25,076		40.9	%
Adjusted operating margin	36.8	%	35.4	%	140 bps		4.0	%
Adjusted net income	47,644		34,996		12,648		36.1	%
Adjusted diluted earnings per share	2.76		2.24		0.52		23.2	%
Adjusted return on assets	7.5	%	9.8	%	(230 bps)		(23.5	%)
Adjusted return on equity	23.9	%	32.8	%	(890 bps)		(27.1	%)
Adjusted return on tangible common equity	36.2	%	34.5	%	170 bps		4.9	%
Key Performance Indicators
Same store revenue growth (overall)1	13.4	%	4.2	%	920 bps		219.0	%
Same store revenue growth (easyhome)1	5.6	%	4.4	%	(120 bps)		27.3	%
Segment Financials
easyfinancial revenue	196,015		136,523		59,492		43.6	%
easyfinancial operating margin	44.7	%	49.2	%	(450 bps)		(9.1	%)
easyhome revenue	38,415		36,696		1,719		4.7	%
easyhome operating margin	22.0	%	23.6	%	(160 bps)		(6.8	%)
Portfolio Indicators
Gross consumer loans receivable	2,030,339		1,246,840		783,499		62.8	%
Growth in consumer loans receivable	133,623		64,039		69,584		108.7	%
Gross loan originations	506,853		334,102		172,751		51.7	%
Total yield on consumer loans (including ancillary products)1	41.4	%	46.6	%	(520 bps)		(11.2	%)
Net charge offs as a percentage of average gross consumer loans receivable	9.6	%	9.0	%	60 bps		6.7	%
Free cash flows from operations before net growth in gross consumer loans receivable1	59,452		40,980		18,472		45.1	%
Potential monthly lease revenue1	8,193		8,461		(268	)	(3.2	%)
1 EBITDA, adjusted operating income, adjusted net income and free cash flows from operations before net growth in gross consumer loans receivable are non-IFRS measures. EBITDA margin, adjusted operating margin, adjusted diluted earnings per share, adjusted return on equity, adjusted return on asset, reported and adjusted return on tangible common equity and total yield on consumer loans (including ancillary products) are non-IFRS ratios. Same store revenue growth (overall), same store revenue growth (easyhome) and potential monthly lease revenue are supplementary financial measures. Refer to “Non-IFRS Measures and Other Financial Measures” section in this press release.  2 During the three-month period ended December 31, 2021, the Company had a total of $1.6 million before-tax ($2.3 million after-tax) of adjusting items which include: Adjusting items related to the LendCare Acquisition •Integration costs related to advisory and consulting costs, employee incentives, representation and warranty insurance cost, and other integration costs related to the acquisition of LendCare and the write off of certain software as a result of the integration with LendCare. Integration costs amounting to $3.4 million before-tax ($2.5 million after-tax) were reported under Operating expenses before depreciation and amortization; and •Amortization of $131 million intangible asset related to the acquisition of LendCare with an estimated useful life of ten years amounting to $3.3 million before-tax ($2.4 million after-tax). Adjusting item related to other income •Unrealized fair value gains mainly on investments in Affirm and TRS amounting to $8.4 million before-tax ($7.3 million after-tax). 3 During the fourth quarter of 2020, the Company’s adjusting item included: •Unrealized fair value gain on investment in PayBright amounting to $16.0 million before-tax ($13.9 million after-tax).
($ in 000’s except earnings per share and percentages)	Year Ended				Variance		Variance
	December 31, 2021		December 31, 2020		$ / bps		% change
Summary Financial Results
Revenue	826,722		652,922		173,800		26.6	%
Operating expenses before depreciation and amortization2	466,833		371,763		95,070		25.6	%
EBITDA1	438,921		267,129		171,792		64.3	%
EBITDA margin1	53.1	%	40.9	%	1,220 bps		29.8	%
Depreciation and amortization expense2	78,886		64,723		14,163		21.9	%
Operating income	281,003		216,436		64,567		29.8	%
Operating margin	34.0	%	33.1	%	90 bps		2.7	%
Other income2,3	114,876		21,740		93,136		428.4	%
Finance costs	79,025		54,992		24,033		43.7	%
Effective income tax rate	22.7	%	25.5	%	(280 bps)		(11.0	%)
Net income	244,943		136,505		108,438		79.4	%
Diluted earnings per share	14.62		8.76		5.86		66.9	%
Return on assets	11.5	%	9.8	%	170 bps		17.3	%
Return on equity	36.7	%	36.1	%	60 bps		1.7	%
Return on tangible common equity1	50.7	%	38.3	%	1,240 bps		32.4	%
Adjusted Financial Results1,2,3
Adjusted operating income	316,652		216,436		100,216		46.3	%
Adjusted operating margin	38.3	%	33.1	%	520 bps		15.7	%
Adjusted net income	174,759		117,646		57,113		48.5	%
Adjusted diluted earnings per share	10.43		7.57		2.86		37.8	%
Adjusted return on assets	8.2	%	8.5	%	(30 bps)		(3.5	%)
Adjusted return on equity	26.2	%	31.1	%	(490 bps)		(15.8	%)
Adjusted return on tangible common equity	35.3	%	33.0	%	230 bps		7.0	%
Key Performance Indicators
Same store revenue growth (overall)1	12.1	%	6.3	%	580 bps		92.1	%
Same store revenue growth (easyhome)1	6.0	%	4.5	%	150 bps		33.3	%
Segment Financials
easyfinancial revenue	676,351		509,904		166,447		32.6	%
easyfinancial operating margin	48.0	%	47.6	%	40 bps		0.8	%
easyhome revenue	150,371		143,018		7,353		5.1	%
easyhome operating margin	24.5	%	21.7	%	280 bps		12.9	%
Portfolio Indicators
Gross consumer loans receivable	2,030,339		1,246,840		783,499		62.8	%
Growth in consumer loans receivable4	783,499		136,207		647,292		475.2	%
Gross loan originations	1,594,480		1,033,130		561,350		54.3	%
Total yield on consumer loans (including ancillary products)1	42.1	%	45.5	%	(340 bps)		(7.5	%)
Net charge offs as a percentage of average gross consumer loans receivable	8.8	%	10.0	%	(120 bps)		(12.0	%)
Free cash flows from operations before net growth in gross consumer loans receivable1	260,104		210,619		49,485		23.5	%
Potential monthly lease revenue1	8,193		8,461		(268	)	(3.2	%)
1 EBITDA, adjusted operating income, adjusted net income and free cash flows from operations before net growth in gross consumer loans receivable are non-IFRS measures. EBITDA margin, adjusted operating margin, adjusted diluted earnings per share, adjusted return on equity, adjusted return on asset, reported and adjusted return on tangible common equity and total yield on consumer loans (including ancillary products) are non-IFRS ratios. Same store revenue growth (overall), same store revenue growth (easyhome) and potential monthly lease revenue are supplementary financial measures. Non-IFRS measures, non-IFRS ratios and supplemental financial measures are not determined in accordance with IFRS, do not have standardized meanings and may not be comparable to similar financial measures presented by other companies. Refer to “Non-IFRS Measures and Other Financial Measures” section in this press release.  2 During the year ended December 31, 2021, the Company had a total of $77.5 million before-tax ($70.2 million after-tax) adjusting items which include: Adjusting items related to the LendCare Acquisition •Transaction costs of $9.3 million before-tax ($8.9 million after-tax) which include advisory and consulting costs, legal costs, and other direct transaction costs related to the acquisition of LendCare reported under Operating expenses before depreciation and amortization amounting to $7.6 million which are non tax-deductible and loan commitment fees related to the acquisition of LendCare reported under Finance costs amounting to $1.7 million before-tax ($1.3 million after-tax); •Integration costs related to advisory and consulting costs, employee incentives, representation and warranty insurance cost, and other integration costs related to the acquisition of LendCare and the write off of certain software as a result of the integration with LendCare. Integration costs amounting to $5.0 million before-tax ($3.7 million after-tax) were reported under Operating expenses before depreciation and amortization; •Bad debt expense related to the day one loan loss provision on the acquired loan portfolio from LendCare amounting to $14.3 million before-tax ($10.5 million after-tax); and •Amortization of $131 million intangible asset related to the acquisition of LendCare with an estimated useful life of ten years amounting to $8.7 million before-tax ($6.4 million after-tax). Adjusting item related to other income •Realized and unrealized fair value gains mainly on investments in Affirm and TRS amounting to $114.9 million before-tax ($99.7 million after-tax). 3 During the year ended December 31, 2020, the Company’s adjusting item included: •Unrealized fair value gain on investment in PayBright amounting to $21.7 million before-tax ($18.9 million after-tax). 4 Growth in consumer loans receivable during the year includes gross loans purchased through the LendCare Acquisition amounting to $444.5 million.

 

Non-IFRS Measures and Other Financial Measures

The Company uses a number of financial measures to assess its performance. Some of these measures are not calculated in accordance with International Financial Reporting Standards (IFRS) as issued by International Accounting Standards Board (IASB), are not identified by IFRS and do not have standardized meanings that would ensure consistency and comparability among companies using these measures. The Company believes that non-IFRS measures are useful in assessing ongoing business performance and provide readers with a better understanding of how management assesses performance. These non-IFRS measures are used throughout this press release and listed below. An explanation of the composition of non-IFRS measures and other financial measures can be found in the Company’s Management Discussion & Analysis (MD&A), available on www.sedar.com.

Adjusted Net Income and Adjusted Diluted Earnings Per Share

Adjusted quarterly and annual net income are non-IFRS measures, while adjusted quarterly and annual diluted earnings per share are non-IFRS ratios. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 50 of the Company’s MD&A year ended December 31, 2021. Items used to calculate adjusted net income and adjusted earnings per share for the three-month period and year ended December 31, 2021 and 2020 include those indicated in the chart below:

	Three Months Ended				Year Ended
($ in 000’s except earnings per share)	December 31,2021		December 31,2020		December 31,2021		December 31,2020
Net income as stated	49,961		48,911		244,943		136,505
Impact of adjusting items
Operating expenses before depreciation and amortization
Transaction costs1	-		-		7,615		-
Integration costs2	3,447		-		5,047		-
Bad debts
Day one loan loss provision on the acquired loans3	-		-		14,252		-
Amortization of intangible assets
Amortization of intangible assets acquired through the Acquisition4	3,277		-		8,735		-
Other income5	(8,371	)	(16,040	)	(114,876	)	(21,740	)
Finance costs
Transaction costs1	-		-		1,726		-
Total pre-tax impact of adjusting items	(1,647	)	(16,040	)	(77,501	)	(21,740	)
Income tax impact of above adjusting items	(670	)	2,125		7,317		2,881
After-tax impact of adjusting items	(2,317	)	(13,915	)	(70,184	)	(18,859	)
Adjusted net income	47,644		34,996		174,759		117,646
After-tax impact of Debentures	-		-		-		1,586
Fully diluted adjusted net income	47,644		34,996		174,759		119,232
Weighted average number of diluted shares outstanding	17,233		15,589		16,757		15,757
Diluted earnings per share as stated	2.90		3.14		14.62		8.76
Per share impact of adjusting items	(0.14	)	(0.90	)	(4.19	)	(1.19	)
Adjusted diluted earnings per share	2.76		2.24		10.43		7.57

Adjusting items related to the LendCare Acquisition1 Transaction costs including advisory and consulting costs, legal costs, and other direct transaction costs related to the acquisition of LendCare reported under Operating expenses before depreciation and amortization and loan commitment fees related to the acquisition of LendCare reported under Finance costs.2 Integration costs related to advisory and consulting costs, employee incentives, representation and warranty insurance cost, other integration-related costs related to the acquisition of LendCare and the write off of certain software as a result of the integration with LendCare. Integration costs were reported under Operating expenses before depreciation and amortization.3 Bad debt expense related to the day one loan loss provision on the acquired loan portfolio from LendCare.4 Amortization of $131 million intangible asset related to the acquisition of LendCare with an estimated useful life of ten years.Adjusting item related to other income5 For the three-month period and year ended December 31, 2021, realized and unrealized fair value gains mainly related to investments in Affirm and TRS. For the three-month period and year ended December 31, 2020, unrealized fair value gains mainly related to investments in PayBright.

Adjusted Operating Income and Adjusted Operating Margin

Adjusted quarterly and annual operating income are non-IFRS measures, while adjusted quarterly and annual operating margin are non-IFRS ratios. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 50 of the Company’s MD&A year ended December 31, 2021. Items used to calculate adjusted operating income and adjusted operating margins for the three-month period and year ended December 31, 2021 and 2020 include those indicated in the chart below:

	Three Months Ended
($ in 000’s except percentages)	December 31,2021		December 31,2021 (adjusted)		December 31,2020
Operating income	79,629		79,629		61,277
Operating expenses before depreciation and amortization
Integration costs1	-		3,447		-
Amortization of intangible assets
Amortization of intangible assets acquired through the Acquisition1	-		3,277		-
Adjusted operating income	79,629		86,353		61,277
Divided by revenue	234,430		234,430		173,219
Total operating margin	34.0	%	36.8	%	35.4	%

1 For explanation of adjusting items, refer to the “Adjusting Net Income and Adjusting Diluted Earnings Per Share” section above.

	Year Ended
($ in 000’s except percentages)	December 31,2021		December 31,2021 (adjusted)		December 31,2020
Operating income	281,003		281,003		216,436
Operating expenses before depreciation and amortization
Transaction costs1	-		7,615		-
Integration costs1	-		5,047		-
Bad debts
Day one loan loss provision on the acquired loans1	-		14,252		-
Amortization of intangible assets
Amortization of intangible assets acquired through the Acquisition1	-		8,735		-
Adjusted operating income	281,003		316,652		216,436
Divided by revenue	826,722		826,722		652,922
Total operating margin	34.0	%	38.3	%	33.1	%

1 For explanation of adjusting items, refer to the “Adjusting Net Income and Adjusting Diluted Earnings Per Share” section above.

Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and EBITDA Margin

Quarterly and annual EBITDA are non-IFRS measures, while quarterly and annual EBITDA margin are non-IFRS ratios. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 50 of the Company’s MD&A year ended December 31, 2021. Items used to calculate EBITDA and EBITDA margin for the three-month period and year ended December 31, 2021 and 2020 include those indicated in the chart below:

	Three Months Ended				Year Ended
($ in 000’s except percentages)	December 31,2021		December 31,2020		December 31,2021		December 31,2020
Net income as stated	49,961		48,911		244,943		136,505
Finance cost	22,281		13,343		79,025		54,992
Income tax expense	15,758		15,063		71,911		46,679
Depreciation and amortization, excluding depreciation of lease assets	12,508		7,772		43,042		28,953
EBITDA	100,508		85,089		438,921		267,129
Divided by revenue	234,430		173,219		826,722		652,922
EBITDA margin	42.9	%	49.1	%	53.1	%	40.9	%

Free Cash Flow from Operations before Net Growth in Gross Consumer Loans Receivable

Quarterly and annual free cash flow from operations before net growth in gross consumer loans receivable are non-IFRS measures. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 50 of the Company’s MD&A year ended December 31, 2021. Items used to calculate free cash flow from operations before net growth in gross consumer loans receivable for the three-month period and year ended December 31, 2021 and 2020 include those indicated in the chart below:

	Three Months Ended				Year Ended
	December 31,2021		December 31,2020		December 31,2021		December 31,2020
Cash provided by (used in) operating activities	(74,171	)	(23,059	)	(78,875	)	74,412
Net growth in gross consumer loans receivable during the period	133,623		64,039		783,499		136,207
Less: Gross loans purchased1	-		-		(444,520	)	-
Adjusted net growth in gross consumer loans receivable during the period	133,623		64,039		338,979		136,207
Free cash flows from operations before net growth in gross consumer loans receivable	59,452		40,980		260,104		210,619

1 Gross loans purchased during the second quarter of 2021 through the acquisition of LendCare.

Adjusted Return on Assets

Quarterly and annual adjusted return on assets are non-IFRS ratios. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 50 of the Company’s MD&A year ended December 31, 2021. Items used to calculate adjusted return on assets for the three-month period and year ended December 31, 2021 and 2020 include those indicated in the chart below:

	Three Months Ended
($ in 000’s except percentages)	December 31,2021		December 31,2021 (adjusted)		December 31,2020		December 31,2020 (adjusted)
Net income as stated	49,961		49,961		48,911		48,911
After-tax impact of adjusting items1	-		(2,317	)	-		(13,915	)
Adjusted net income	49,961		47,644		48,911		34,996
Multiplied by number of periods in year	X 4		X 4		X 4		X 4
Divided by average total assets for the period	2,533,945		2,533,945		1,434,596		1,434,596
Return on assets	7.9	%	7.5	%	13.6	%	9.8	%

1 For explanation of adjusting items, refer to the “Adjusting Net Income and Adjusting Diluted Earnings Per Share” section above.

	Year Ended
($ in 000’s except percentages)	December 31,2021		December 31,2021 (adjusted)		December 31,2020		December 31,2020 (adjusted)
Net income as stated	244,943		244,943		136,505		136,505
After-tax impact of adjusting items1	-		(70,184	)	-		(18,859	)
Adjusted net income	244,943		174,759		136,505		117,646
Divided by average total assets for the period	2,126,594		2,126,594		1,389,540		1,389,540
Return on assets	11.5	%	8.2	%	9.8	%	8.5	%

1 For explanation of adjusting items, refer to the “Adjusting Net Income and Adjusting Diluted Earnings Per Share” section above.

Adjusted Return on Equity

Adjusted quarterly and annual return on equity are non-IFRS ratios. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 50 of the Company’s MD&A year ended December 31, 2021. Items used to calculate adjusted return on equity for the three-month period and year ended December 31, 2021 and 2020 include those indicated in the chart below:

	Three Months Ended
($ in 000’s except percentages)	December 31,2021		December 31,2021 (adjusted)		December 31,2020		December 31,2020 (adjusted)
Net income as stated	49,961		49,961		48,911		48,911
After-tax impact of adjusting items1	-		(2,317	)	-		(13,915	)
Adjusted net income	49,961		47,644		48,911		34,996
Multiplied by number of periods in year	X 4		X 4		X 4		X 4
Divided by average shareholders’ equity for the period	798,620		798,620		426,868		426,868
Return on equity	25.0	%	23.9	%	45.8	%	32.8	%

1 For explanation of adjusting items, refer to the “Adjusting Net Income and Adjusting Diluted Earnings Per Share” section above.

	Year Ended
($ in 000’s except percentages)	December 31,2021		December 31,2021(adjusted)		December 31,2020		December 31,2020(adjusted)
Net income as stated	244,943		244,943		136,505		136,505
After-tax impact of adjusting items1	-		(70,184	)	-		(18,859	)
Adjusted net income	244,943		174,759		136,505		117,646
Divided by average shareholders’ equity for the period	667,962		667,962		377,842		377,842
Return on equity	36.7	%	26.2	%	36.1	%	31.1	%

1 For explanation of adjusting items, refer to the “Adjusting Net Income and Adjusting Diluted Earnings Per Share” section above.

Return on Tangible Common Equity

Reported and adjusted quarterly and annual return on tangible common equity are non-IFRS ratios. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 50 of the Company’s MD&A year ended December 31, 2021. Items used to calculate reported and adjusted return on tangible common equity for the three-month period and year ended December 31, 2021 and 2020 include those indicated in the chart below:

	Three Months Ended
($ in 000’s except percentages)	December 31,2021		December 31,2021 (adjusted)		December 31,2020		December 31,2020 (adjusted)
Net income as stated	49,961		49,961		48,911		48,911
Amortization of acquired intangible assets	3,277		3,277		-		-
Income tax impact of the above item	(868	)	(868	)	-		-
Net income before amortization of acquired intangible assets, net of income tax	52,370		52,370		48,911		48,911
Impact of adjusting items1
Operating expenses before depreciation and amortization
Integration costs	-		3,447		-		-
Other income	-		(8,371	)	-		(16,040	)
Total pre-tax impact of adjusting items	-		(4,924	)	-		(16,040	)
Income tax impact of above adjusting items	-		198		-		2,125
After-tax impact of adjusting items	-		(4,726	)	-		(13,915	)
Adjusted net income	52,370		47,644		48,911		34,996
Multiplied by number of periods in year	X 4		X 4		X 4		X 4
Average shareholders’ equity	798,620		798,620		426,868		426,868
Average goodwill	(180,923	)	(180,923	)	(21,310	)	(21,310	)
Average acquired intangible assets2	(123,904	)	(123,904	)	-		-
Average related deferred tax liabilities	32,835		32,835		-		-
Divided by average tangible common equity	526,628		526,628		405,558		405,558
Return on tangible common equity	39.8	%	36.2	%	48.2	%	34.5	%

1 For explanation of adjusting items, refer to the “Adjusting Net Income and Adjusting Diluted Earnings Per Share” section above.2 Excludes intangible assets relating to software.

	Year Ended
($ in 000’s except percentages)	December 31,2021		December 31,2021(adjusted)		December 31,2020		December 31,2020 (adjusted)
Net income as stated	244,943		244,943		136,505		136,505
Amortization of acquired intangible assets	8,735		8,735		-		-
Income tax impact of the above item	(2,314	)	(2,314	)	-		-
Net income before amortization of acquired intangible assets, net of income tax	251,364		251,364		136,505		136,505
Impact of adjusting items1
Operating expenses before depreciation and amortization
Transaction costs	-		7,615		-		-
Integration costs	-		5,047		-		-
Bad debts
Day one loan loss provision on the acquired loans	-		14,252		-		-
Other income	-		(114,876	)	-		(21,740	)
Finance costs
Transaction costs	-		1,726		-		-
Total pre-tax impact of adjusting items	-		(86,236	)	-		(21,740	)
Income tax impact of above adjusting items	-		9,631		-		2,881
After-tax impact of adjusting items	-		(76,605	)	-		(18,859	)
Adjusted net income	251,364		174,759		136,505		117,646
Average shareholders’ equity	667,962		667,962		377,842		377,842
Average goodwill	(116,860	)	(116,860	)	(21,310	)	(21,310	)
Average acquired intangible assets2	(75,325	)	(75,325	)	-		-
Average related deferred tax liabilities	19,961		19,961		-		-
Divided by average tangible common equity	495,738		495,738		356,532		356,532
Return on tangible common equity	50.7	%	35.3	%	38.3	%	33.0	%

1 For explanation of adjusting items, refer to the “Adjusting Net Income and Adjusting Diluted Earnings Per Share” section above.2 Excludes intangible assets relating to software.

easyhome Financial Revenue

easyhome financial revenue is a non-IFRS measure. It’s calculated as total company revenue less easyfinancial revenue and leasing revenue. The Company believes that easyhome financial revenue is an important measure of the performance of the easyhome segment. Items used to calculate easyhome financial revenue for the three-month period ended December 31, 2021 and 2020 include those indicated in the chart below:

($ in 000’s)	Three Months Ended
	December 31, 2021		December 31, 2020
Total company revenue	234,430		173,219
Less: easyfinancial revenue	(196,015	)	(136,523	)
Less: leasing revenue	(29,456	)	(30,470	)
easyhome financial revenue	8,959		6,226

Total Yield on Consumer Loans as a Percentage of Average Gross Consumer Loans Receivable

Total yield on consumer loans as a percentage of average gross consumer loans receivable is a non-IFRS ratio. See description in section “Portfolio Analysis” on page 39 of the Company’s MD&A year ended December 31, 2021. Items used to calculate total yield on consumer loans as a percentage of average gross consumer loans receivable for the three-month period and year ended December 31, 2021 and 2020 include those indicated in the chart below:

	Three Months Ended				Year Ended
($ in 000’s except percentages)	December 31,2021		December 31,2020		December 31,2021		December 31,2020
Total Company revenue	234,430		173,219		826,722		652,922
Less: Leasing revenue	(29,456	)	(30,470	)	(119,585	)	(120,677	)
Financial revenue	204,974		142,749		707,137		532,245
Multiplied by number of periods in year	X 4/1		X 4/1		X 4/4		X 4/4
Divided by average gross consumer loans receivable	1,982,680		1,225,737		1,680,328		1,169,001
Total yield on consumer loans as a percentage of average gross consumer loans receivable (annualized)	41.4	%	46.6	%	42.1	%	45.5	%

Net Debt to Net Capitalization

Net debt to net capitalization is a capital management measure. Refer to “Financial Condition” section on page 61 of the Company’s MD&A year ended December 31, 2021.

Average Loan Book Per Branch

Average loan book per branch is a supplementary financial measure. It is calculated as gross consumer loans receivable held by easyfinancial branch locations divided by number of total easyfinancial branch locations.

Weighted Average Interest Rate

Weighted average interest rate is a supplementary financial measure. It Is calculated as the sum of individual loan balance multiplied by interest rate divided by gross consumer loans receivable.

Same Store Revenue Growth

Same store revenue growth (easyhome) and same store revenue growth (overall) are supplementary financial measures. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 50 of the Company’s MD&A year ended December 31, 2021.

Potential Monthly Leasing Revenue

Potential monthly leasing revenue is a supplementary financial measure. Refer to “Portfolio Analysis” section on page 39 of the Company’s MD&A year ended December 31, 2021.