Accord Financial (ACD) 2024年年度報告「TSX」.pdf

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1、Annual Report 2024 Keepi ng Busi ness Li qui dTable of Contents 1 Flexible Financing Solut ions fr om Accor d 2 Let t er To Our Shar eholder s 4 Management s Discussion and Analysis 28 Appendix t o MD&A:Non-IFRS Measur es and Rat ios 31 Ten Year Financial Summar y 2015-2024 32 Management s Repor t t

2、 o t he Shar eholder s 33 Independent Audit or s Repor t t o t he Shar eholder s 37 Consolidat ed St at ement s of Financial Posit ion 38 Consolidat ed St at ement s of Loss 38 Consolidat ed St at ement s of Compr ehensive Loss 39 Consolidat ed St at ement s of Changes in Equit y 40 Consolidat ed St

3、 at ement s of Cash Flows 41 Not es t o Consolidat ed Financial St at ement s Inside back cover Cor por at e Infor mat ion Accord Financial is one of North America s most dynamic commercial finance companies providing fast,flexible financing solutions to companies from coast to coast.Our range of le

4、nding programs is unrivaled,including asset-based lending,factoring,inventory finance,equipment finance(in Canada),as well as unique Canadian small-business solutions.Whether our clients ar e shif ting into gr owth mode,or r estr uc tur ing and r ebuilding,Ac c or d is ther e keeping business liquid

5、.Fueled by Ac c or ds c ommitment and c apital,our clients develop innovative pr oduc ts,dr ive c osts down,nur tur e the next gener ation of talent,and deliver the pr omise of pr ogr ess.While our pr ogr ams ar e tailor ed to the needs of each client,our goal r emains the same:to boost our clients

6、f inancial liquidity,setting the stage f or the next phase of gr owth.Our unique c ombination of deep exper ienc e and c r eative thinking makes us the lender of choic e f or pr ivate equity par tner s,f inanc e pr of essionals and their client c ompanies looking to seize oppor tunity and dr ive suc

7、 c ess.Keeping Business LiquidAnnual Report 2024|1Asset-based Lendi ng Ac c or ds asset-based lending ser ves c ompanies of all sizes acr oss Nor th Amer ic a.Our f lexible ABL solutions allow clients to unlock wor king c apital f r om their ac c ounts r ec eivable,inventor y and equipment.Ac c or d

8、 also pr ovides f inanc ing solutions to other lending c ompanies,enabling them to gr ow mor e quickly than they would with tr aditional f unding.For ty-seven year s of super ior ser vic e c ombined with exc eptional f inancial str ength makes us the most r eliable f inanc e par tner f or companies

9、positioning f or their next phase of gr owth.Smal l Busi ness Fi nance Ac c or d pr ovides a var iety of f inancing solutions f or Canadian small businesses,including equipment leasing and f lexible wor king c apital f acilities.Under the Ac c or dExpr ess banner,we of f er a r ange of innovative pr

10、 ogr ams designed with a str eamlined appr oval pr oc ess and f ast f unding.These pr ogr ams deliver up to$250,000 of wor king c apital,and up to$3 million when backed by r ec eivables or equipment c ollater al,all with f lexible ter ms designed to spur gr owth in 2025.Factori ng Ac c or d has been

11、 f ac tor ing small-and medium-sized c ompanies f or mor e than f or ty year s.Fac tor ing buying clients ac c ounts r ec eivable ac c eler ates c ash f low by unlocking the value of r ec eivables f or c ash.I n addition to impr oving liquidity,f ac tor ing also saves management time of ten tied up

12、with c ash f low planning,cr edit analysis and c ollec tions.Our exper ienc ed team has wor ked with c ompanies in vir tually ever y industr y,which allows us to pr ovide quick cr edit appr ovals f or c ompanies in tr ansition or shif ting into gr owth mode.Equi pment Fi nanci ng Ac c or d f inanc e

13、s equipment f or small-and medium-sized businesses,ser ving a br oad base of Canadas most dynamic industr ies,f r om f or estr y and ener gy,to c onstr uc tion and manuf ac tur ing.Wer e equally c omf or table f inancing incr emental c apex or business expansion,or r ef inancing existing assets to o

14、ptimize balanc e sheet str ength.Our suc c ess has been built on our c ommitment to suppor ting equipment leasing br oker s,f inanc e pr of essionals and SMEs dir ec tly.Flexible Financing Solutions from AccordThe Companys f inancial statements have been pr epar ed in ac c or danc e with I FRS.The C

15、ompany uses a number of other f inancial measur es to monitor its per f or manc e and believes that these measur es may be usef ul to investor s in evaluating the Companys oper ating per f or manc e and f inancial position.These measur es may not have standar dized meanings or c omputations as pr es

16、cr ibed by I FRS that would ensur e c onsistency between c ompanies using these measur es and ar e,ther ef or e,c onsider ed to be non-I FRS measur es.The non-I FRS measur es pr esented in the Ten Y ear Financ ial Summar y,Letter to Our Shar eholder s,Managements Disc ussion and Analysis and elsewhe

17、r e in this annual r epor t ar e summar ized on pages 4,5 and 6 of this Annual Repor t,as well as set out in detail on pages 28 to 31.Such non-I FRS measur es include adj usted net ear nings,adj usted ear nings per shar e,book value per shar e,r etur n on aver age equity,adj usted r etur n on aver a

18、ge equity,aver age f unds employed,etc.Please r ef er to the above noted pages.As described in the 2023 Annual Report and subsequent reporting,throughout 2024 Accord focused on a series of strategic initiatives to generate additional cash and capital to strengthen the balance sheet,position for futu

19、re growth,and unlock shareholder value.These initiatives included exploring alternative funding sources to reduce reliance on our bank syndicate,as well as the opportunity to divest one or more non-core subsidiaries,aiming to streamline the business and reposition for success going forward.We made p

20、rogress on these initiatives last year and continue to explore further moves in 2025.I n the sec ond quar ter the Company established two new f inancing ar r angements,one f or BondI t Media Capital,and another f or our c or e Canadian business a$40 million pr ivate sec ur itization f ac ility with

21、a r espec ted lif e insur anc e c ompany.Both f acilities pr ovide a mor e c ompetitive c ost of f unds c ompar ed to the f unding they r eplac ed.The thir d quar ter br ought c ontinued suc c essf ul execution,closing the sale of the AEF leasing por tf olio on September 30th,an impor tant step in r

22、 ef ocusing on the Companys c or e businesses.Gr oss pr oc eeds of the tr ansac tion wer e$61.1 million(US$45.2 million),r epr esenting a healthy pr emium over the por tf olio c ar r ying value of$55.8 million(US$41.2 million).This tr ansac tion r einf or c ed the mar ket value of Ac c or ds assets,

23、and its 2|Accord Financial Corp.platf or m,despite the challenges f acing Ac c or d sinc e late 2023.While the Company gr appled with a challenging cr edit envir onment thr oughout the year (with associated loan wr ite-of f s),the sale of AEF mitigated the ef f ec t on tangible book value per shar e

24、,which closed at$9.44 at Dec ember 31st,essentially f lat f r om$9.45 at the star t of the year.While Ac c or d c ontinues to see a steady f low of loan applic ations,we r emain attuned to the dif f icult cr edit envir onment and selec tive in onboar ding new clients.The unc er tain business envir o

25、nment is weighing on many c ompanies in our c or e mar kets.Pr oviding some r elief,the inter est r ate cycle has tur ned down,however,many SMEs ar e f acing c onditions they havent dealt with bef or e,including shif ting public policy moves in Canada and the U.S.and a volatile tr ade envir onment.V

26、isibility into near ter m business c onditions is cloudy at best.I n addition to dampening our cr edit appetite,these c onditions have af f ec ted the Companys loan por tf olio,with the pr ovision f or cr edit losses c ontinuing above histor ic al nor ms.The Company also c ontinues to wor k with a s

27、uboptimal bank f acility,which is the pr imar y sour c e of f unds f or new loans.Less f lexibility and higher c ost c ombine to make gr owth and pr of itability dif f icult to achieve.The sec ond Letter to Our ShareholdersSi mon Hi tzi gquar ter secur itization,and the Companys decr eased lever age

28、 in r ec ent quar ter s,ar e helpf ul in c ontr olling bor r owing c osts,however,the main bank f acility doesnt pr ovide the f lexibility to suppor t str ong gr owth.The bank f ac ility matur es in late July,and we ar e ac tively assessing r ef inancing alter natives,including with member s of our

29、existing bank syndic ate.The Companys r educ ed lever age and mor e f oc used por tf olio sets the stage f or negotiations.While we have a long histor y of suc c essf ully r ef inancing our debt,the outc ome r emains unc er tain.Following the sale of the AEF por tf olio,Ac c or ds f inanc e r ec eiv

30、ables and loans(“por tf olio”)closed at$366 million on Dec ember 31,2024,down f r om$477 million at the star t of the year.Aver age f unds employed dur ing 2024 slipped to$423 million c ompar ed to$472 million in 2023.Despite the year-over-year decline in aver age f unds employed,higher aver age yie

31、lds and the gain on sale of leasing assets dr ove 2024 r evenue up to$83.1 million c ompar ed to$79.7 million in 2023.The Company also made pr ogr ess r educing over head,with gener al and administr ative expenses c oming down by$1.3 million year-over-year despite incur r ing near ly$2.0 million of

32、pr of essional f ees r elated to bank negotiations.I nter est expense,however,still pr esents a headwind.Higher r ates,c ombined with amendment f ees inc ur r ed in the f ir st quar ter (amor tizing thr ough July 2025),c ontinue to weigh on r esults.The pr ovision f or cr edit Annual Report 2024|3 l

33、osses,while substantially impr oved f r om 2023(which had an unusual f r aud-r elated loss in the f our th quar ter),c ame in at$16.2 million,lar gely due to specif ic ac c ounts at AFCC and BondI t wr itten of f in the f our th quar ter.While the sale of AEF assets c ontr ibuted a gain,and the Comp

34、anys c ost-c ontr ol measur es took hold,the pr ovision f or cr edit losses tipped the Company to a 2024 net loss attr ibutable to shar eholder s of$3.1 million,an impr ovement f r om the net loss of$14.6 million in 2023.Adj usted net loss c ame in at$1.4 million,or 16 c ents per c ommon shar e.And

35、as noted,tangible book value per shar e held r elatively steady over the year,closing at$9.44 on Dec ember 31st.As Ac c or d navigates todays business challenges,and c ontinues to explor e str ategic initiatives,our c or e mission c ontinues.For f or ty-seven year s Ac c or d has been keeping busine

36、ss liquid,deliver ing much-needed c apital to c ompanies f r om c oast to c oast.Simon Hitzig Pr esident&Chief Executive Of f ic er Apr il 8,2025 OVERVIEW The following discussion and analysis explain trends in Accord Financial Corp.s(“Accord”or the“Company”)results of operations and financial condi

37、tion for the year ended December 31,2024 compared with the year ended December 31,2023.It is intended to help shareholders and other readers understand the dynamics of the Company s business and the factors underlying its financial results.Where possible,issues have been identified that may impact f

38、uture results.This Managements Discussion and Analysis(“MD&A”),which has been pr epar ed as at Apr il 8,2025,should be r ead in c onj unc tion with the Companys 2024 audited c onsolidated f inancial statements(the“Statements”)4|Accord Financial Corp.Management s Discussion&Analysis of Results of Ope

39、rations&Financial Condition(“MD&A”)and notes ther eto,the Ten Y ear Financial Summar y (see page 31)and the Letter to Our Shar eholder s,all of which f or m par t of this 2024 Annual Repor t.All amounts discussed in this MD&A ar e expr essed in thousands of Canadian dollar s exc ept per shar e amoun

40、ts and as other wise stated and have been pr epar ed in ac c or danc e with I FRS Ac c ounting Standar ds(“I FRS”)as issued by the I nter national Ac c ounting Standar ds Boar d(“I ASB”).Please r ef er to the Cr itic al Ac c ounting Policies and Estimates sec tion below and note 2 and 3 to the State

41、ments r egar ding the Companys use of ac c ounting estimates in the pr epar ation of its Statements in ac c or danc e with I FRS.Additional inf or mation per taining to the Company,including its Annual I nf or mation For m,is f iled under the Companys pr of ile with SEDAR at www.sedar plus.c a.FINAN

42、CIAL HIGHLIGHTS (in thousands of Canadian dollar s,exc ept values per shar e,or other wise noted)Y ear s ended Dec ember 312024 2023 Aver age f unds employed(millions)$423$472 Revenue 83,056 79,705 Loss bef or e inc ome tax (3,093)(27,191)Net loss attr ibutable to shar eholder s (3,139)(14,625)Gain

43、on of AEF equipment lease por tf olio (1,068)Net single ac c ount wr ite-of f and associated c osts 3,188 14,913 Restr uc tur ing and other expenses 310 1,023 Tax impac t f r om adj ustments (644)(7,370)Adj usted net ear nings(loss)(1,353)5,817 Loss per c ommon shar e(basic and diluted)(0.37)(1.71)A

44、dj usted ear nings(loss)per c ommon shar e(basic and diluted)(0.16)0.68 Book value per shar e$9.44$9.80 Year ended December 31,2024 compared with year ended December 31,2023 The f ollowing disc ussion c ontains c er tain f or war d-looking statements that ar e subj ec t to signif ic ant r isks and u

45、nc er tainties that c ould c ause ac tual r esults to dif f er mater ially f r om histor ic al r esults and per c entages.Fac tor s that may impac t f utur e r esults ar e discussed in the Risks and Unc er tainties sec tion below.NON-IFRS FINANCIAL MEASURES AND RATIOS I n addition to the I FRS pr ep

46、ar ed r esults and balanc es pr esented in the Statements and notes ther eto,the Company uses a number of other f inancial measur es to monitor its per f or manc e and some of these ar e pr esented in this MD&A.These measur es may not have standar dized meanings or c omputations as pr escr ibed by I

47、 FRS that would ensur e c onsistency and c ompar ability between c ompanies using them and ar e,ther ef or e,c onsider ed to be non-I FRS measur es.The Company pr imar ily der ives these measur es f r om amounts pr esented in its Statements,which wer e pr epar ed in ac c or danc e with I FRS.The Com

48、panys f ocus c ontinues to be on I FRS measur es and any other inf or mation pr esented her ein is pur ely supplemental to help the r eader better under stand the key per f or manc e indic ator s used in monitor ing its oper ating per f or manc e and f inancial position.The non-I FRS measur es pr es

49、ented in this MD&A and elsewher e in its 2024 Annual Repor t ar e def ined as f ollows:i)Return on average equi ty(“ROE”)this is a pr of itability measur e that pr esents net ear nings attr ibutable to shar eholder s(“shar eholder s net ear nings”)as an annualized per c entage of the aver age shar e

50、holder s equity employed in the per iod to ear n the inc ome.The Company includes Annual Report 2024|5 all c omponents of shar eholder s equity,as shown on the Companys balanc e sheet,c alculated on a month-by-month basis to c alculate the aver age ther eof;i i)Adj usted net earni ngs,adj usted earn

51、i ngs per common share and adj usted ROE adj usted net ear nings pr esents shar eholder s net ear nings bef or e goodwill impair ment,gain on Ac c or d CapX LLC(doing business as Ac c or d Equipment Financ e(“AEF”)sale,net single ac c ount wr ite of f and associated c osts,stock-based c ompensation,

52、business ac quisition expenses(namely,business tr ansac tion and amor tization of intangibles)and r estr uc tur ing expenses.The Company c onsider s these items to be non-oper ating expenses.Management believes adj usted net ear nings is a mor e appr opr iate measur e of ongoing oper ating per f or

53、manc e than shar eholder s net ear nings as it exc ludes items whic h do not dir ec tly r elate to ongoing oper ating ac tivities.Adj usted(basic and diluted)ear nings per c ommon shar e is adj usted net ear nings divided by the(basic and diluted)weighted aver age number of c ommon shar es outstandi

54、ng in the per iod(see note 17 to theStatements),while adj usted ROE is adj usted net ear nings f or the per iod expr essed as an annualized per c entage of the aver age shar eholder s equity employed in the per iod;i i i)Book val ue per share book value is def ined as shar eholder s equity,as shown

55、on the Companys balanc e sheet,and is the same as the net asset value of the Company(c alculated as total assets minus total liabilities)less non-c ontr olling inter ests in subsidiar ies.Book value per shar e is the book value,Irene Eddyor shar eholder s equity,divided by the number of c ommon shar

56、 es outstanding as of a par ticular date;i v)Average funds empl oyed f unds employed is another name that the Company uses f or its f inanc e r ec eivables and loans(also r ef er r ed to as“Loans”in this MD&A),an I FRS measur e.Aver age f unds employed ar e the aver age f inanc e r ec eivables and l

57、oans,c alculated on a month-by-month basis,over a def ined per iod r elevant in the appendix.v)Profi tabi l i ty,yi el d and effi ci ency rati os Table 1 on page 9 pr esents c er tain pr of itability measur es.I n addition to ROE and adj usted ROE,net r evenue(r evenue minus inter est expense)expr e

58、ssed as a per c entage of aver age assets,and oper ating expenses c ompr ising gener al and administr ative expenses(“G&A”)and depr eciation expr essed as a per c entage of aver age assets is shown,as is oper ating expenses as a per c entage of r evenue,which is also r ef er r ed to as the ef f icie

59、ncy r atio.These r atios ar e pr esented over a thr ee-year per iod,which enables r eader s to see at a glanc e,tr ends in the Companys pr of itability,yield and oper ating ef f iciency;vi)Fi nanci al condi ti on and l everage rati os T able 2 on page 11 pr esents the f ollowing per c entages:(i)tot

60、al equity expr essed as a per c entage of total assets;(ii)tangible equity(total equity less goodwill,intangible assets)expr essed as a per c entage of total assets;and(iii)debt(bank indebtedness,loans payable,notes payable and debentur es)expr essed as a per c entage of total equity.These per c ent

61、ages pr ovide inf or mation on tr ends in the Companys f inancial c ondition and lever age;and vi i)Credi t qual i ty Table 3 on page 14 pr esents inf or mation on wr ite-of f s and expec ted cr edit quality of the Companys total por tf olio,namely,its f inanc e r ec eivables and loans.I t pr esents

62、 the Companys year-end allowanc es f or expec ted cr editlosses(“ECL”)as a per c entage of its total por tf olio and its annual net wr ite-of f s.I t also pr esents net wr ite-of f s as a per c entage of r evenue.The c alculations of the above noted non-I FRS f inancial measur es and r atios f or th

63、e last 3 year s ar e set out in the Appendix to this MD&A on pages 28 to 31 of this 2024 Annual Repor t.ACCORDS BUSINESS Ac c or d is one of Nor th Amer ic as leading independent f inanc e c ompanies ser ving c lients thr oughout the United States and Canada.Ac c or ds f lexible f inanc e pr ogr ams

64、 c over the f ull spec tr um of asset-based lending(“ABL”),including r ec eivables and inventor y f inanc e,equipment and tr ade f inanc e,wor king c apital f inanc e,as well as f ilm and media f inanc e and supply chain f inancing f or impor ter s.I ts c lients oper ate in a wide var iety of indust

65、r ies,examples of which ar e set out in the Review of Financial Position sec tion below.The Company,f ounded in 1978,oper ates six f inanc e businesses in Nor th Amer ic a,namely,Ac c or d Financial I nc.(“AFI C”),Ac c or d Financial Canada Cor p.(“AFCC”)and Ac c or d Financial Ltd.(“AFL”)in Canada,

66、and Ac c or d Financial,I nc.(“AFI U”),BondI t Media Capital(“BondI t”)and AEF in the United States.Some sec tions of this r epor t pr esent Ac c or ds businesses as c ash gener ating units(“CGUs”),which is simply an aggr egation of subsidiar ies ac c or ding to their c ountr y of oper ation.The Com

67、panys business pr incipally involves:(i)asset-based lending by AFI C and AFI U,whic h entails pur c hasing r ec eivables(“f ac tor ing”)or f inancing r ec eivables on a r ec our se basis,as well as f inanc ing other tangible assets,suc h as inventor y and equipment;(ii)equipment f inanc ing 6|Accord

68、 Financial Corp.(leasing and equipment loans)by AFCC and AEF.AFCC also pr ovides wor king c apital f inancing to small businesses thr ough its Ac c or d Small Business Financ e(“ASBF”)subsidiar y;(iii)f ilm and media pr oduc tion f inancing by BondI t.As par t of the tr ansac tion descr ibed below,A

69、EF is no longer or iginating new equipment leases.SALE OF AEF EQUIPMENT LEASE PORTFOLIO As descr ibed in the Companys sec ond quar ter r epor t,management has been evaluating a r ange of str ategic initiatives including divesting one or mor e non-c or e subsidiar ies to gener ate c apital to suppor

70、t por tf olio gr owth and unlock shar eholder value.The c atalyst f or the evaluation of str ategic initiatives,a signif ic ant wr ite-of f of a single ac c ount due to a c ar ef ully c onc ealed f r aud(“single ac c ount loss”),which led to a signif ic ant decr ease in the Companys equity,was r epo

71、r ted in the Companys thir d quar ter r epor t f r om 2023.As a r esult,the Company was f ac ed with less f avor able ter ms under its bank f ac ility,whic h is the pr imar y sour c e of f unds f or new loans.Less f lexibility,higher c osts,and a mandate to keep bank bor r owings under$260 million b

72、y Januar y 2,2025,wer e the key changes included in an amendment to the Companys pr imar y cr edit f acility agr eement on Mar ch 15,2024(“Mar ch Amendment”).I n the c our se of evaluating str ategic initiatives,the Companys U.S.por tf olio of leases was identif ied as a non-c or e pr oduc t that ha

73、d the potential to pr oduc e a net positive r etur n if sold to a str ategic investor.On September 30,2024,the Company closed the sale of the AEF equipment lease por tf olio with a net asset value of US$41.2 million($55.8 million),in exchange f or an amount equal to US$45.2 million($61.1 million)whi

74、ch is net of client secur ity deposits of US$1.6 million($2.2 million),(the“AEF Sale”).The pr oc eeds wer e c ompr ised of US$44.2 million($59.8 million)in c ash and US$1.0 million($1.3 million)of c ontingent c onsider ation,whic h was r ec eived on Dec ember 4,2024 upon satisf ac tion of c er tain

75、c onditions.The gain on sale was US$0.8 million($1.1 million)net of tr ansac tion expenses of appr oximately US$1.0 million($1.3 million)and the elimination of AEF-r elated intangible assets of US$2.2 million($3.0 million).The gain is inc luded in Other I nc ome in the statements of c ompr ehensive

76、loss.The pr oc eeds of the sale,net of tr ansac tion expenses and client secur ity deposits,have been used to r educ e the Companys outstanding bank indebtedness,by US$43.2 million($58.5 million).Pur suant to the Mar ch Amendment,the r evolving c ommitment was r educ ed f r om$300 million to$260 mil

77、lion c oincident with the closing of this tr ansac tion.The c ompletion of the AEF Sale is one in a ser ies of steps the Company has under taken to r ef ocus on the c or e business and cr eate shar eholder value.RESULTS OF OPERATIONS Year ended December 31,2024 compared with year ended December 31,2

78、023 Shar eholder s net loss in 2024 was$3,139 c ompar ed to net loss of$14,625 in 2023.Shar eholder s net loss r ec over ed mainly as a r esult of decr ease in pr ovision f or cr edit losses and absenc e of a goodwill wr ite-of f in 2024,as the impair ment was r ec or ded in 2023.Basic and diluted l

79、oss per c ommon shar e(“LPS”)was$0.37 c ompar ed to basic and diluted LPS of$1.71 last year.The Companys ROE was-3.7%in 2024 c ompar ed to -14.8%in 2023.Adj usted net loss was$1,353 in 2024 c ompar ed to last year s adj usted net ear nings of$5,817.Adj usted LPS was$0.16 in 2024 c ompar ed to adj us

80、ted ear nings per shar e(“EPS”)of$0.68 in 2023.Adj usted ROE was-1.6%Annual Report 2024|7 8|Accord Financial Corp.in 2024 c ompar ed to 5.9%in 2023.Please r ef er to the Appendix to the MD&A r egar ding these non-I FRS me asur es.Revenue r ose by 4.2%or$3,351 to a r ec or d$83,056 in 2024 c ompar ed

81、 to$79,705 in 2023.I nter est inc ome dec lined by 1.7%or$1,167 to$67,573 in 2024 c ompar ed to$68,740 in 2023 on a 10.2%decr ease in aver age f unds employed due in par t f r om the AEF Sale on September 30th.Other inc ome incr eased by 41.2%or$4,518 to$15,483 c ompar ed to$10,965 in 2023 mainly du

82、e to r oyalty inc ome of$2,913 at BondI t,gain f r om the AEF Sale of$1,068 and higher f ees at AFCC.Aver age f unds employed in 2024 decr eased to$423.4 million c ompar ed to$471.7 million in 2023.Total expenses decr eased by 19.4%or$20,747 to$86,149 c ompar ed to$106,896 in 2023.I nter est expense

83、 r ose 2.0%or$707 to$36,006 f r om$35,299 in 2023 despite lower aver age outstanding bank indebtedness,due to higher aver age inter est r ates and c osts assoc iated with the Mar ch Amendment.The pr ovision f or cr edit losses decr eased by$8,295 to$16,181.I n 2023,the pr ovision of cr edit losses w

84、as signif ic antly higher due to a lar ge pr ovision associated with a single ac c ount of$14,125.G&A decr eased by 3.6%or$1,249 f r om 2023.The Company has tr immed over head in an ef f or t to of f set RESULTS OF OPERATIONS%of%of Y ear s ended Dec ember 31 2024 revenue 2023 r evenue Revenue I nter

85、 est$67,573 81.4%$68,740 86.2%Other inc ome 15,483 18.6%10,965 13.8%83,056 100.0%79,705 100.0%Operating expens es I nter est expense 36,006 43.4%35,299 44.3%Gener al and administr ative 33,296 40.1%34,545 43.3%Pr ovision f or cr edit losses 16,181 19.5%24,476 30.7%I mpair ment of goodwill 0.0%11,876

86、 14.9%Depr ec iation 562 0.7%563 0.7%Amor tization of intangible assets 104 0.1%137 0.2%86,149 103.7%106,896 134.1%Loss bef or e inc ome tax (3,093)(3.7%)(27,191)(34.1%)I nc ome tax r ec over y (647)(0.8%)(11,798)(14.8%)Net Los s (2,446)(2.9%)(15,393)(19.3%)Net ear nings(loss)attr ibutable to non-c

87、ontr olling inter ests in subsidiar ies 693 0.8%(768)(1.0%)Net los s attributable to s hareholders$(3,139)(3.8%)$(14,625)(18.3%)Goodwill impair ment 0.0%11,876 14.9%Gain on sale of AEF equipment lease por tf olio (1,068)(1.3%)0.0%Net single ac c ount wr ite of f and associated c osts 3,188 3.8%14,91

88、3 18.7%Restr uc tur ing and other expenses 310 0.4%1,023 1.3%Tax impac t f r om adj ustments (644)(0.8%)(7,370)(9.2%)Adjus ted net earnings$(1,353)(1.6%)$5,817 7.3%Bas ic and diluted los s per common s hare$(0.37)$(1.71)Adjus ted bas ic and diluted earnings (los s)per common s hare$(0.16)$0.68higher

89、 inter est and$2.0 million of pr of essional f ees ar ising f r om the Mar ch 15 bank f acility amendments.G&A expenses ar e c ompr ised of per sonnel c osts,which r epr esent the maj or ity of the Companys G&A c osts,as well as pr of essional f ees,por tf olio ser vicing c osts,and inf or mation te

90、chnology expenses,among other s.The Company c ontinues to manage its c ontr ollable expenses closely.The pr ovision f or cr edit losses decr eased by$8,295 to$16,181 c ompar ed to$24,476 in 2023.I n 2023,$14,125 of the pr ovision is attr ibutable to the wr ite-of f of a single ac c ount.The pr ovisi

91、on f or losses is c ompr ised of:Twelve months ended Dec ember 312024 2023 Net wr ite-of f s$15,298$8,941 I ncr ease(decr ease)in allowanc e f or expec ted cr edit losses(299)1,410 Net single ac c ount wr ite-of f1,182 14,125 Total pr ovision f or cr edit losses$16,181$24,476 Total net wr ite-of f s

92、 excluding the single ac c ount loss incr eased by$6,357 to$15,298 in 2024 c ompar ed to$8,941 in the pr ior year and the non-c ash allowanc e f or ECL dec r eased by$1,709.Higher net wr ite-of f s exc luding the single ac c ount loss ar e associated with(i)sever al lar ge wr ite-of f s totalling$7,

93、415,c ompr ised of$3,955 f r om AFCC,$2,910 f r om BondI t and$560 at AFI C and (ii)the small business loan por tf olio at AFCC.While the Company manages its por tf olio of Loans closely,as noted in the Risks and Unc er tainties sec tion below,f inancial r esults c an be impac ted by individually si

94、gnif ic ant insolvencies or losses.Ther e was no impair ment of goodwill taken in 2024 c ompar ed to the impair ment of goodwill of$11,876 in 2023 r elated to goodwill at the Companys U.S.oper ations.Ther e wer e no impair ment char ges taken in 2024(2023$nil)r elated to assets held f or sale.Depr e

95、ciation expense decr eased by$1 to$562(2023$563)in 2024.Depr eciation of$416(2023$409)was char ged on the Companys r ight-of-use assets in 2024,while the balanc e of the expense r elated to c apital assets.Business ac quisition expenses in 2024 totalled$104(2023$137).I nc ome tax r ec over y dec lin

96、ed by$11,151 to a r ec over y of$647 c ompar ed to a r ec over y of$11,798 in 2023.I nc ome tax r ec over y declined on a$24.1 million incr ease in the Companys shar e of pr e-tax ear nings.The Companys ef f ec tive tax r ate was-20.9%.TABLE 1 PROFITABILITY,YIELD AND EFFICIENCY RATIOS (as a per c en

97、tage)2024 2023 Retur n on aver age equity (3.7%)(14.8%)Adj usted r etur n on aver age equity (1.6%)5.9%Net r evenue/aver age assets 10.1%8.7%Oper ating expenses*/aver age assets 7.3%6.9%Oper ating expenses*/r evenue 40.8%44.0%*G&A and depreciation Table 1 highlights the Companys pr of itability in t

98、er ms of r etur ns on its aver age assets and equity.Canadian oper ations net of inter c ompany amounts r epor ted a shar eholder s net loss of$17,843 c ompar ed to net loss of$14,347 last year.Revenue decr eased by$5,435 or 11.0%to$43,472.Total expenses decr eased by$7,248 to$61,222.I nter est expe

99、nse and depr eciation incr eased by$778 and$10 r espec tively.The pr ovision f or c r edit losses and G&A dec r eased by$6,684 and$1,348.I nc ome tax r ec over y decr eased by$5,309 to an expense of$93.Pr e-tax loss in 2024 was$17,750,or$1,813 lower than the pr e-tax loss of$19,563 in 2023.U.S.oper

100、ations net of inter c ompany amounts r epor ted shar eholder s net inc ome of$14,704 c ompar ed to net loss of$278 in 2023.Revenue incr eased by$8,786 or 28.5%to$39,584.Expenses decr eased by$13,499 to$24,927.The lar gest dr iver of the decr ease in expenses Annual Report 2024|9 r esults f r om the

101、absenc e of goodwill impair ment char ge($11,876 in 2023).The pr ovision f or c r edit losses dec r eased by$1,611 to$2,059.I nter est expense decr eased by$67,and G&A expenses inc r eased by$99.I nc ome tax r ec over y decr eased by$5,842 to a r ec over y of$740.Net inc ome attr ibutable to non-c o

102、ntr olling inter ests in subsidiar ies totalled$693 c ompar ed to net loss of$768 in 2023.Fourth Quarter 2024 Quarter ended December 31,2024 compared to quarter ended December 31,2023 Shar eholder s net loss f or the quar ter ended Dec ember 31,2024 was$1,848 c ompar ed to a net loss of$7,575 last y

103、ear.The pr imar y dr iver s of the lower net loss wer e a (i)dec r ease in the pr ovision f or c r edit losses,(ii)absenc e of goodwill impair ment and(iii)lower inter est c osts.The pr ovision f or cr edit losses in the f our th quar ter of last year included an amount r elated to a lar ge single a

104、c c ount cr edit loss.Basic and diluted LPS wer e$0.22 c ompar ed to$0.89 in the f our th quar ter of 2023.Adj usted net loss was$791 in the f our th quar ter of 2024 c ompar ed to adj usted net ear nings of$3,698 last year.Adj usted net LPS was$0.09 c ompar ed to adj usted net EPS of$0.43 in 2023.P

105、lease r ef er to the Appendix to the MD&A r egar ding these non-I FRS measur es.Revenue decr eased by$2,678 or 11.2%to$21,220 in the c ur r ent quar ter c ompar ed to$23,898 in the f our th quar ter of 2023.I nter est inc ome decr eased by$4,671 or 23.9%to$14,907 c ompar ed to$19,578 in the f our th

106、 quar ter of 2023 on a 24.9%decr ease in aver age f unds employed.Other inc ome inc r eased by$1,993 to$6,313 in the c ur r ent quar ter c ompar ed to$4,320 in 2023,mainly due to r oyalty inc ome of$2,913 in the media f inanc e business.Aver age f unds employed in the f our th quar ter of 2024 decr

107、eased to$377.4 million c ompar ed to$502.7 million last year.Total expenses in the f our th quar ter of 2024 decr eased by$16,471 to$23,301 c ompar ed to$39,772 last year.The pr imar y dr iver of the decr ease was the absenc e of an impair ment of goodwill in 2024.Total expenses included a goodwill

108、impair ment of$11,876 in the f our th quar ter last year.The pr ovision f or c r edit losses dec r eased by$568 to$7,738 in the f our th quar ter c ompar ed to a pr ovision of$8,306 in the f our th quar ter of 2023.Thr ee months ended Dec ember 312024 2023 Net wr ite-of f s$10,849$17,744 Decr ease i

109、n allowanc e f or expec ted cr edit losses(3,111)(9,438)Total pr ovision f or c r edit losses$7,738$8,306 I nter est expense decr eased by 22.9%or$2,285 to$7,695 f or the quar ter,pr imar ily due to lower aver age bank indebtedness,par tially of f set by c osts associated with the Mar ch Amendment.G

110、&A decr eased by 17.7%or$1,671 f r om the f our th quar ter of 2023.The Company c ontinues to manage its c ontr ollable expenses closely.No impair ment was r ec or ded f or assets held f or sale in the f our th quar ter of 2024(2023$nil).I nc ome tax r ec over y declined by$6,833 to a r ec over y of

111、$1,148 in the cur r ent quar ter c ompar ed to a r ec over y of$7,981 in the f our th quar ter of 2023 as pr e-tax losses decr eased by$13,793.The Companys ef f ec tive tax r ate was-20.9%.REVIEW OF FINANCIAL POSITION Shar eholder s equity at Dec ember 31,2024 was$80.8 million c ompar ed to$83.9 mil

112、lion at Dec ember 31,2023.Book value per c ommon shar e was$9.44 at Dec ember 31,2024 c ompar ed to$9.80 at Dec ember 31,2023.10|Accord Financial Corp.Annual Report 2024|11 SUMMARY OF QUARTERLY RESULTSQuar ter s ended 2024 2023(in thousands unless other wise stated)Dec.31 Sep.30 Jun.30 Mar.31 Dec.31

113、 Sep.30 Jun.30 Mar.31 Average funds employed(millions)$377$427$428$460$503$478$455$451 Revenue I nter est and other inc ome$21,220$21,213$19,957$20,666$23,898$19,430$17,933$18,444 Expens es I nter est 7,695 8,988 9,368 9,955 9,980 9,131 8,275 7,913 Gener al and administr ative 7,752 7,865 8,162 9,51

114、5 9,423 8,051 8,557 8,514 Pr ovision f or cr edit losses 7,738 4,682 3,350 411 8,306 14,435 1,269 466 I mpair ment of goodwill 11,876 Depr ec iation 116 153 147 146 153 138 119 153 Business ac quisition expenses 35 35 34 34 34 35 34 23,301 21,723 21,062 20,061 39,772 31,789 18,225 17,080 Earnings (l

115、os s)before income tax (2,081)(510)(1,105)605 (15,874)(12,359)(322)1,364 I nc ome tax expense(r ec over y)(1,148)99 216 186 (7,981)(3,342)72 (547)Net earnings (los s)(933)(609)(1,321)419 (7,893)(9,017)(394)1,911 Non-c ontr olling inter ests in net ear nings(loss)915 163 (172)(213)(318)(211)(131)(108

116、)Net earnings (los s)attributable to s hareholders$(1,848)$(772)$(1,149)$632$(7,575)$(8,806)$(263)$2,019 Adjus ted net earnings (los s)$(791)$(1,329)$(764)$1,532$3,698$127$(166)$2,156 Earnings (los s)per common s hare*(cents)(22)(9)(13)7 (89)(103)(3)24 Adjus ted net earnings (los s)per common s hare

117、*(cents)(9)(16)(9)18 43 1 (2)25 *Due to rounding the total of the four quarters may not agree with the reported total for a fiscal year.*Basic and diluted Total assets wer e$413.9 million at Dec ember 31,2024,19.4%lower than the$513.5 million at Dec ember 31,2023.Total assets ar e lar gely c ompr is

118、ed of Loans(f unds employed).Excluding inter-c ompany loans,identif iable assets loc ated in the United States wer e 49.1%of total assets at Dec ember 31,2024 c ompar ed to 43.4%at Dec ember 31,2023(see note 21 to the Statements).TABLE 2 FINANCIAL CONDITION AND LEVERAGE(as a per c entage)Dec.31,2024

119、 Dec.31,2023 Tangible equity/assets 20.9%16.7%Equity/assets 20.9%17.3%Debt*/total equity 3.59x 4.65x *Bank indebtedness,loans payable,notes payable and debentures Gr oss f inanc e r ec eivables and loans(also r ef er r ed to as Loans or f unds employed),bef or e the allowanc e f or ECL ther eon,decr

120、 eased 23.3%to$365.6 million at Dec ember 31,2024 c ompar ed to$476.7 million at Dec ember 31,2023.As detailed in the Statements,the Companys Loans c ompr ised:Dec.31,2024 Dec.31,2023 Wor king c apital loans$92,333$116,128 Rec eivable loans 81,723 90,128 I nventor y&equipment loans 86,018 113,287 Me

121、dia loans 102,450 85,246 Lease r ec eivables 3,061 71,885 Financ e r ec eivables and loans,gr oss 365,585 476,674 L ess allowanc e f or expec ted c r edit losses 8,031 10,551 Financ e r ec eivables and loans,net$357,554$466,123 additionally r equir e f ocus on the per f or manc e of other c ollater

122、al types(inventor y,equipment and in c er tain c ases r eal estate)as well as the under lying c ash f lows of the bor r ower.AFCCs and AEFs lease r ec eivables and equipment and wor king c apital loans ar e usually str uc tur ed as ter m loans with payments spr ead out evenly over the ter m of the l

123、ease or loan,with ter ms up to 60 months.AFCC also has r evolving loan pr oduc ts,including a r evolving equipment loan pr oduc t,which have no f ixed r epayment ter ms and c an be r epaid at any time.The Company uses a c r edit r isk r ating system f or assessing obligor and tr ansac tion r isk f o

124、r f inanc e r ec eivables and loan exposur es.Risk r ating models use inter nal and exter nal data to assess and assign r atings to bor r ower s,pr edic t f utur e per f or manc e and manage limits f or existing loans and c ollec tion ac tivities.The cr edit r ating of the bor r ower is used(in addi

125、tion to other cr iter ia)to assess the pr edic ted c r edit r isk f or eac h initial c r edit appr oval or signif ic ant ac c ount management ac tion.Cr edit r atings impr ove cr edit decision quality,adj udic ation time f r ames and c onsistency in the cr edit decision pr oc ess and f acilitate r i

126、sk-based pr icing.Please see note 5 to the Statements which pr esents tables summar izing the Companys f inanc e r ec eivables and loans,by the thr ee-stage cr edit cr iter ia of I FRS 9,Financial I nstr uments(“I FRS 9”),as well as an aged analysis ther eof.Cr edit r isk is managed by ensur ing tha

127、t,as f ar as possible,the r ec eivables f inanc ed ar e of good quality and any inventor y,equipment or other assets sec ur ing loans ar e appr opr iately appr aised.Collater al is monitor ed and managed on an on-going basis to mitigate cr edit r isk.I n its asset-based lending and equipment f inanc

128、 e oper ations,the Company assesses the f inancial str ength of its clients and its clients customer s and the industr ies in which they oper ate on a r egular and ongoing basis.Cash f lows f r om a clients ongoing business oper ations r epr esent the pr imar y sour c e of r epayment.12|Accord Finan

129、cial Corp.The Companys Loans pr incipally r epr esent advanc es made by its asset-based lending subsidiar ies,AFI C and AFI U,to appr oximately 32 clients(2023 46)in a wide var iety of industr ies,as well as AFCCs and AEFs lease r ec eivables and equipment and wor king c apital loans to appr oximate

130、ly 843 clients(2023 1,082)and BondI ts media f inanc e loans to appr oximately 50 media pr oduc tions(2023 57).The lar gest client in the loan por tf olio c ompr ised 7.0%(2023 4.0%)of gr oss Loans.Cr edit appr oval f or tr ansac tions suppor ted by management in the Companys six oper ating business

131、es is delegated to a staf f of senior c r edit of f ic er s within eac h business.Tr ansac tions in exc ess of$1.0 million(US$1.0 million f or U.S.Gr oup c ompanies),ar e appr oved by the Cor por ate Cr edit Committee.Tr ansac tions in exc ess of$2.5 million(US$2.5 million in the c ase of U.S.gr oup

132、 c ompanies)ar e appr oved by the Cr edit Committee of the Boar d of Dir ec tor s,which c ompr ises thr ee member s of its Boar d.The Company monitor s and c ontr ols its r isks and exposur es thr ough f inanc ial,c r edit and legal systems and,ac c or dingly,believes that it has pr oc edur es in pl

133、ac e f or evaluating and limiting the cr edit r isks to which it is subj ec t.Cr edit r isk is subj ec t to ongoing management r eview.Never theless,f or a var iety of r easons,ther e will inevitably be def aults by clients or their customer s.For its f ac tor ing pr oduc ts,the Companys pr imar y f

134、 ocus c ontinues to be on the c r editwor thiness and c ollec tability of its clients r ec eivables.The clients customer s have var ying payment ter ms depending on the industr ies in which they oper ate,although most customer s have payment ter ms of 30 to 60 days f r om invoic e date.Rec eivables

135、bec ome“ineligible”f or lending pur poses when they r each a c er tain pr e-deter mined age,typic ally 75 to 90 days f r om invoic e date,and ar e usually c har ged back to clients,ther eby limiting the Companys cr edit r isk on older r ec eivables.Asset-based lending pr oduc ts The Companys cr edit

136、 exposur e r elating to its f inanc e r ec eivables and loans by industr ial sec tor and geogr aphic loc ations wer e as f ollows:Dec.31,2024 Gros s finance receivables%of Indus trial s ector and loans total Media$109,312 29.9 Wholesale Tr ade 64,651 17.7 Manuf ac tur ing 44,213 12.1 Financ e and I

137、nsur anc e 40,576 11.1 Mining 17,935 4.9 Constr uc tion 17,064 4.7 Waste Management and Remediation Ser vic es 13,320 3.6 Retail Tr ade 12,466 3.4 Tr anspor tation and War ehousing 11,624 3.2 Real Estate Rental and Leasing 9,676 2.6 Pr of essional,Scientif ic,and Technic al Ser vic es 7,741 2.1 Othe

138、r 17,007 4.7$365,585 100.0 Dec.31,2023 Gr oss f inanc e r ec eivables%of I ndustr ial sec tor and loans total Media$92,693 19.4 Wholesale Tr ade 53,408 11.2 Manuf ac tur ing 68,481 14.4 Financ e and I nsur anc e 40,839 8.6 Mining 15,861 3.3 Constr uc tion 57,920 12.2 Waste Management and Remediation

139、 Ser vic es 20,894 4.4 Retail Tr ade 29,826 6.3 Tr anspor tation and War ehousing 23,938 5.0 Real Estate Rental and Leasing 20,652 4.3 Pr of essional,Scientif ic,and Technic al Ser vic es 13,922 2.9 Other 38,240 8.0$476,674 100.0 The Company also manages cr edit r isk by limiting the maximum amount

140、that it will lend to any one client,enf or cing str ic t advanc e r ates,disallowing c er tain types of r ec eivables,applying c onc entr ation limits,char ging bac k or making r ec eivables ineligible f or lending pur poses as they bec ome older,and taking c ash c ollater al in c er tain c ases.The

141、 Company will also c onf ir m the validity of the r ec eivables that it pur chases or lends against.I n its f ac tor ing oper ations,the Company administer s and c ollec ts the maj or ity of its clients r ec eivables allowing it to quickly identif y pr oblems as and when they ar ise and ac t pr ompt

142、ly to minimize cr edit and loan losses.I n AFCC,the Companys Canadian small business f inanc e oper ations,secur ity deposits ar e usually obtained in r espec t of equipment leases or loans,while a maj or ity of AFCCs wor king c apital loans have the benef it of a str ong f inancial guar antor guar

143、anteeing between 75%to 80%of the loan balanc e in the event of a loss.As detailed in note 5 to the Statements,the Company had past due f inanc e r ec eivables and loans of$42,333 at Dec ember 31,2024,of whic h$27,432 r elated to BondI t,the Companys media f inanc e subsidiar y,and$14,589 r elated to

144、 AFCC.As of Dec ember 31,2024,20.2%or$73,890 of total f inanc e r ec eivables and loans wer e c onsider ed to have had a signif ic ant incr ease in cr edit r isk(“SI CR”).At Dec ember 31,2024,the Company had impair ed f inanc e r ec eivables and loans of$5,288 which r epr esented 1.4%of total f unds

145、 employed.The impair ed loans,most of which have been wr itten down to estimated f air value,ar e mainly secur ed by r ec eivables,inventor y and equipment,the estimated f air value of which was$4,350 at Dec ember 31,2024.As the vast maj or ity of the Companys f inanc e r ec eivables and loans ar e

146、secur ed,past due or impair ed ac c ounts do not nec essar ily lead to signif ic ant ECL based on the f air value of the secur ity,which of ten r esults in a low or no loss given def ault(“LGD”)in r espec t of these ac c ounts.Annual Report 2024|13 The Company maintains an allowanc e f or ECL on its

147、 Loans at amounts which,in managements j udgment,ar e suf f icient to c over ECL ther eon.The Companys allowanc e f or ECL on Loans,c alculated under the ECL cr iter ia of I FRS 9,totalled$8,031 at Dec ember 31,2024 c ompar ed to$10,551 at Dec ember 31,2023.This r epr esents managements best estimat

148、e of ECL based on inf or mation available at those dates.The challenging ec onomic envir onment c ontinues to af f ec t the Companys loan por tf olio to var ying degr ees and the measur ement of the allowanc e c ould f luc tuate substantially in f utur e per iods.The ac tivity in the allowanc e f or

149、 ECL in 2024 and 2023 is set out in note 5 to the Statements.The estimates of the allowanc es f or ECL involve j udgment whic h management c onsider s to be r easonable and suppor table.Assets held f or sale,r epor ted at lower of c ost or f air value less c ost of disposal,totalled$422 at Dec ember

150、 31,2024(2023$440)and c ompr ised c er tain assets sec ur ing def aulted f inanc e r ec eivables and loans f r om a number of clients and r epossessed long-lived assets.Cash inc r eased to$16,674 at Dec ember 31,2024 c ompar ed to$5,914 at Dec ember 31,2023.The Company endeavor s to minimize c ash b

151、alanc es as f ar as possible when it has bank indebtedness outstanding.Fluc tuations in c ash balanc es ar e nor mal.Restr ic ted c ash c ompr ises c ash held as secur ity f or non-r ec our se bor r owings.Restr ic ted c ash totalling 5%of the outstanding loan balanc e is held in a c ash r eser ve a

152、c c ount and is par tially r eleased as the loan balanc e is r epaid.Fur ther,c ash r ec eipts f r om the loan c ollater al secur ing the non-r ec our se bor r owings ar e deposited in a c ash c ollec tion ac c ount and c an only be used to r epay the r elated debt.The Company did not hold any r est

153、r ic ted c ash as at Dec ember 31,2024(2023$3,782).Dec.31,2024 Dec.31,2023 Canada$189,143$263,228 United States 176,442 213,446 Financ e r ec eivables and loans,net$365,585$476,674 TABLE 3 CREDIT QUALITY 2024*(as a per c entage)2024 adjus ted Reser ves*/por tf olio 2.2%2.2%Reser ves*/net wr ite-of f

154、 s and impair ment char ges*45.9%52.5%Net wr ite-of f s and impair ment char ges/r evenue 21.0%18.4%*Reserves comprise the total of the allowance for ECL*Net write-offs against Loans and impairment charges on assets held for sale.*Adjusted net write-offs excluding the single account loss.2023*(as a

155、per c entage)2023 adj usted Reser ves*/por tf olio 2.2%2.2%Reser ves*/net wr ite-of f s and impair ment char ges*47.8%118.0%Net wr ite-of f s and impair ment char ges/r evenue 27.7%11.2%*Reserves comprise the total of the allowance for ECL*Net write-offs against Loans and impairment charges on asset

156、s held for sale.*Adjusted net write-offs excluding the single account loss.Table 3 shows the allowanc e f or ECL at Dec ember 31,as a per c entage of loans,as well as a c ompar ison of the allowanc e to net wr ite-of f s and impair ment char ges f or the year ending Dec ember 31,2024.Net wr ite-of f

157、 s in the Company decr eased to$17,480 in 2024 c ompar ed to$22,066 last year.Adj usting f or the impac t of the single ac c ount loss,ther e was an incr ease in net wr ite-of f s of$6,357(Net wr ite-of f s adj usted f or single ac c ount loss wer e$15,298 in 2024 and$8,941 in 2023).Ther e wer e no

158、impair ment char ges against assets held f or sale in 2024(2023$nil).Af ter the customar y detailed per iod-end r eview of the Companys por tf olio by its Risk Management Committee,it was deter mined that all pr oblem loans and ac c ounts wer e identif ied and pr ovided f or wher e nec essar y.14|Ac

159、cord Financial Corp.Bank indebtedness decr eased by$135,900 or 48.3%to$145,053 at Dec ember 31,2024 c ompar ed to$281,124 at Dec ember 31,2023 due in par t to the applic ation of$58.5 million of pr oc eeds f r om the AEF Sale to r epay bank indebtedness.I n addition,bank indebtedness of$39,866 r ela

160、ted to c er tain r ec eivables was r e-f inanc ed in May.The r emainder of the r educ tion is due to lower f unds employed.The Companys r evolving c r edit f ac ility was amended in Mar ch 2024 r educing the maximum c ommitment f r om$375.0 million to$300.0 million.The maximum c ommitment was f ur t

161、her r educ ed to$260.0 million c oincident with the AEF Sale,on September 30,2024.These r educ tions ar e c onsistent with the size of the Companys cur r ent tangible equity and por tf olio of Loans.Pr icing f or dr awn amounts under the r evolving cr edit f acility ar e pr imar ily based on the Can

162、adian Over night Repo Rate Aver age(“CORRA”)plus a mar gin f or Canadian dollar bor r owings or the sec ur ed over night f inancing r ate(“SOFR”)plus a mar gin f or U.S.dollar bor r owings.The mar gin is based on a measur e of lever age at each month end.The mar gin decr eased by 50 basis points in

163、June as the decr ease in bank indebtedness impr oved the r atio of total debt to tangible net wor th as def ined in the r evolving cr edit agr eement(“Lever age Ratio”).The mar gin decr eased an additional 50 basis points on Oc tober 1,2024 as a r esult of the AEF Sale(25 basis points)and a f ur the

164、r r educ tion in the Lever age Ratio(25 basis points).The Company was not in c omplianc e with one c ovenant in its r evolving cr edit f acility at Dec ember 31,2023.I n addition to r ec eiving a waiver f r om its banking syndic ate f or 2023,c er tain ter ms and c ovenants of the cr edit agr eement

165、 wer e amended as of Mar ch 15,2024.The Company was in c omplianc e with all c ovenants at Dec ember 31,2024.Subj ec t to other debt bor r owings,bank indebtedness pr incipally f luc tuates with the amount of f unds employed.Please r ef er below to Liquidity and Capital Resour c es f or f ur ther de

166、tails.I ntangible assets,net of ac cumulated amor tization,totalled$nil at Dec ember 31,2024 c ompar ed to$2,996 at Dec ember 31,2023.I ntangible assets wer e r elated to AEF and c ompr ised a por tion of the net assets disposed of in c onnec tion with the AEF Sale.Other assets incr eased by$3,167 t

167、o$15,459 at Dec ember 31,2024 c ompar ed to$12,292 at Dec ember 31,2023.The lar gest c omponent of other assets r epr esents$7,573(2023$7,372)due f r om Expor t Development Canada(“EDC”)r elated to claims made on def aulted loans whic h benef it f r om an EDC guar antee of up to 80%.Other assets als

168、o include a r oyalty r ec eivable of$2,974(2023$nil),pr epaid expenses of$2,682(2023$4,587)and an amount held as a secur ity f or non-r ec our se bor r owings of$1,884(2023$nil).I nc ome taxes r ec eivable,and pr oper ty and equipment at Dec ember 31,2024 and 2023 wer e not signif ic ant.Def er r ed

169、 tax assets incr eased by$1,509 to$20,131 at Dec ember 31,2024 c ompar ed to$18,622 at Dec ember 31,2023.The incr ease is due to an incr ease in tempor ar y dif f er enc es between the book value and tax basis of c er tain assets and liabilities.The Company expec ts to gener ate f utur e ear nings t

170、o utilize the def er r ed tax asset balanc e to r educ e inc ome taxes payable.T otal liabilities dec r eased by$97.6 million to$327.2 million at Dec ember 31,2024 c ompar ed to$424.8 million at Dec ember 31,2023.The decr ease is pr imar ily due to a decr ease in bank indebtedness,par tially of f se

171、t by an incr ease in loans payable.Amounts due to clients incr eased by$28 to$172 at Dec ember 31,2024 c ompar ed to$144 at Dec ember 31,2023.Amounts due to clients pr incipally c onsist of c ollec tions of r ec eivables not yet r emitted to clients or secur ity deposits held on ac c ount.Contr ac t

172、ually,the Company r emits c ollec tions within a week of r ec eipt.Fluc tuations in amounts due to clients ar e not unusual.Annual Report 2024|15 c onver sion f eatur e and r emove the r ight of the Company to r epay the debentur es in c ommon shar es.As of Dec ember 31,2023,the Company agr eed with

173、 the holder s of Unlisted Debentur es to extend the matur ity date of the Unlisted Debentur es to July 15,2024,incr ease the inter est r ate to 10.0%,r emove the c onver sion f eatur e and r emove the r ight of the Company to r epay the debentur es in c ommon shar es.The Company per f or med an asse

174、ssment in ac c or danc e with the r equir ements of I FRS 9 and deter mined that r emoving the c onver sion f eatur e r epr esents a substantial modif ic ation,tr igger ing a der ec ognition of the or iginal Listed Debentur es and Unlisted Debentur es,and r ec ognition of new liabilities.On July 8,2

175、024,the Company agr eed with the holder s of the Unlisted Debentur es to extend the matur ity date to Januar y 31,2026.On July 8,2024,$3,250 of the Unlisted Debentur es wer e ac quir ed by a r elated par ty.At Dec ember 31,2024,the debt c omponent of all debentur es totalled$25,678 c ompar ed to$25,

176、717 at Dec ember 31,2023.I nc ome taxes payable,lease liabilities,def er r ed inc ome and net def er r ed tax liabilities at Dec ember 31,2024 and 2023 wer e not mater ial.Capital stock totalled$9,448 at Dec ember 31,2024 and 2023.Ther e wer e 8,558,913 c ommon shar es outstanding at those dates.Con

177、tr ibuted sur plus totalled$1,844 at Dec ember 31,2024(2023$1,774).Retained ear nings decr eased by$3,139 to$62,469 at Dec ember 31,2024 c ompar ed to$65,608 at Dec ember 31,2023.The decr ease in 2024 c ompr ised shar eholder s net loss of$3,139.The Companys ac c umulated other c ompr ehensive inc o

178、me(“AOCI”)ac c ount solely c ompr ises the cumulative Loans payable incr eased by$33,522 to$115,934 at Dec ember 31,2024 c ompar ed to$82,412 at Dec ember 31,2023.Loans payable c onsists of a r evolving loan extended to BondI t whic h inc r eased to$78,452(2023$59,947)and non-r ec our se debt of$37,

179、482($22,465).The incr ease is attr ibutable to:(i)an additional tr anc he of non-r ec our se debt of$42,002 pr ovided by a lif e insur anc e c ompany in May to ASBF,of f set by r epayments of$26,985 and(ii)an incr ease in the outstanding balanc e of the BondI t loan of$18,505.ASBF exper ienc ed a tr

180、 igger event as a r esult of the br eac hed c ovenant under the Companys r evolving cr edit f acility at Dec ember 31,2023,which was waived subsequent to Dec ember 31,2023.ASBF was in c omplianc e with all loan c ovenants at Dec ember 31,2024.BondI t was not in c omplianc e with multiple c ovenants

181、at Dec ember 31,2024 and Dec ember 31,2023.BondI t r ec eived a waiver f or the 2023 br each f r om the lender af ter Dec ember 31,2023.BondI t r ec eived a waiver f or the 2024 br each in Febr uar y 2025.Ac c ounts payable and other liabilities incr eased by$4,190 to$12,246 at Dec ember 31,2024 c o

182、mpar ed to$8,057 at Dec ember 31,2023.Notes payable incr eased by$1,626 to$24,541 at Dec ember 31,2024 c ompar ed to$22,915 at Dec ember 31,2023 as a r esult of ac cr ued inter est.Conver tible debentur es with a f ac e value of$25,650(25,650 c onver tible debentur es of$1,000 each)wer e issued by t

183、he Company in 2018 and 2019.Of these,20,650 debentur es ar e listed f or tr ading(“Listed Debentur es”)on the Tor onto Stock Exchange(“TSX”),while 5,000(“Unlisted Debentur es”)ar e unlisted.All debentur es ar e unsecur ed and pay inter est semi-annually on June 30 and Dec ember 31 each year.On Augus

184、t 10,2023,debentur e holder s appr oved amendments to extend the matur ity date of the Listed Debentur es to Januar y 31,2026,incr ease the inter est r ate to 10.0%,r emove the 16|Accord Financial Corp.c ompletion of the AEF Sale.This pr ovides f or mor e c onser vative lever age over all,but r estr

185、 ic ts gr owth in ear ning assets.Fur ther,the amendment r eset the inter est c over age r atio c ovenant(“I CR c ovenant”)and adds a new EBI TDA per f or manc e metr ic,both of which ar e mor e c onsistent with the Companys 2024 and 2025 oper ating plans.Also,the mar gin added to the applic able in

186、dex r ate f or dr awn amounts under the r evolving f acility was incr eased by 100 basis points.However,sinc e the Mar ch Amendment the mar gin has been r educ ed by 100 basis points,in par t by achieving lower Lever age Ratios in June(50 basis point r educ tion)and September (25 basis points)and cl

187、osing the AEF Sale on September 30,2024(25 basis points).While the Mar ch Amendment pr ovides adequate time and f lexibility f or Ac c or d to manage its level of bor r owings,f or the immediate f utur e,the Company has limited gr owth c apital to invest in new business oppor tunities.I n r esponse,

188、the Company is evaluating a number of str ategic initiatives to gener ate additional c ash and c apital to maximize shar eholder value.I nitiatives under c onsider ation inc lude alter native f inanc ing ar r angements to suppor t,r eplac e or add to c ur r ent debt f ac ilities in the pr ivate mar

189、ket.Additionally,a r eview of the f undamental c or e businesses may r esult in dec isions to c hange pr oduc t mix,and/or divest one or mor e non-c or e subsidiar ies.The Mar c h Amendment also c ontains milestones r elated to initiating disc over y f or c er tain str ategic initiatives.As noted ab

190、ove,the Company closed a new tr anche of non-r ec our se f inancing in May and c ompleted the AEF Sale on September 30,2024 demonstr ating the Companys ability to achieve c er tain of its str ategic initiatives.The Company has met all r equir ed milestones f or the per iod ending as of the date of t

191、his r epor t and c ontinues to wor k towar ds establishing a r e-f inancing plan f or its pr imar y cr edit f acility which matur es in July 2025.unr ealized f or eign exchange inc ome ar ising on the tr anslation of the assets and liabilities of the Companys f or eign oper ations.The AOCI balanc e

192、decr eased slightly to$7,066 at Dec ember 31,2024 c ompar ed to$7,074 at Dec ember 31,2023.Non-c ontr olling inter ests in subsidiar ies totalled$5,851 at Dec ember 31,2024 c ompar ed with$4,759 at Dec ember 31,2023.LIQUIDITY AND CAPITAL RESOURCES As disclosed in the 2023 thir d quar ter r epor t,Ac

193、 c or ds net ear nings wer e impac ted by a signif ic ant pr ovision f or cr edit losses r elated to a single ac c ount.Sinc e the f our th quar ter of 2023,the Company has been explor ing var ious options to addr ess the r educ tion in equity cr eated by the loss.On Mar c h 15,2024,the Company f in

194、alized an amendment to its pr imar y r evolving cr edit f acility which matur es in J uly 2025(the“f ac ility agr eement”).The Mar c h Amendment modif ies c er tain key elements of the f acility agr eement,pr oviding a longer-ter m,mor e stable oper ating sc enar io.The Mar ch Amendment r eset the t

195、otal f acility limit to$300.0 million(f r om$375.0 million)to be mor e appr opr iate to the Companys cur r ent tangible equity and level of bor r owings,and at the same time allows the Company to r educ e its standby f ees f or the unused por tion of the f acility.With the c ompletion of the AEF Sal

196、e,the f acility limit was f ur ther r educ ed to$260.0 million on Oc tober 1,2024.I n addition,a minimum availability r equir ement was amended and is measur ed as the dif f er enc e between eligible c ollater al and the outstanding bank indebtedness.While the Company has histor ic ally c ar r ied e

197、xc ess c ollater al as a matter of c our se,the amendment pr ovides f or specif ic levels that star ted at$15.0 million and incr eased to$25.0 million on Oc tober 1,2024 af ter the Annual Report 2024|17c ompar ed to an outf low of$51,116 last year.The net c ash inf low in 2024 lar gely r esulted f r

198、 om c ollec tions of or pr oc eeds f r om r ef inancing of Loans of$48,569.The net c ash outf low in 2023 lar gely r esulted f unding of Loans of$51,566.Cash inf low f r om investing ac tivities in 2024 totalled$60,253(2023$236)c ompr ised mainly of pr oc eeds f r om the AEF Sale.Net c ash outf low

199、f r om f inanc ing ac tivities totalled$108,171 in 2024 c ompar ed to an inf low of$43,192 last year.The net c ash outf low in 2024 pr imar ily r esulted f r om a dec r ease in bank indebtedness of$136,010 and r epayment of Canadian dollar loans payable of$26,984,par tially of f set by the issuanc e

200、 of Canadian dollar loans payable of$42,002 and net pr oc eeds f r om US dollar loans payable of$13,266.The net c ash inf low in 2023 pr imar ily r esulted f r om an inc r ease in bank indebtedness of$66,470,par tially of f set by a r epayment of Canadian dollar loans payable of$21,903.The ef f ec t

201、 of f or eign exchange r ate changes on c ash c ompr ised a decr ease of$5,669 in 2024 c ompar ed to a decr ease of$399 in 2023.Over all,ther e was a net c ash inf low of$6,978 in 2024 c ompar ed to a net c ash outf low of$8,559 in 2023.RELATED PARTY TRANSACTIONS The Company has bor r owed f unds(no

202、tes payable and debentur es)on an unsecur ed basis f r om shar eholder s,On May 31,2024,BondI t r ef inanc ed its US$50.0 million r evolving line of cr edit with a new r evolving line of cr edit pr ovided by a non-bank lender,which bear s a f ixed r ate of inter est.This r evolving line,whic h is se

203、c ur ed by all of BondI ts assets,has a total c ommitment of US$60.0 million and a matur ity date of May 31,2027.Management believes that cur r ent c ash balanc es and existing cr edit lines,together with c ash f low f r om oper ations,will be suf f ic ient to meet the c ash r equir ements of wor ki

204、ng c apital,c apital expenditur es,oper ating expenditur es,and inter est payments over the next twelve months.Management is evaluating potential alter natives to r ef inanc e its matur ing debt f acilities,including extensions,amendments,or new cr edit ar r angements to maintain f inancial f lexibi

205、lity,and expec ts to maintain ac c ess to suf f ic ient liquidity to suppor t business oper ations.However,ther e is mater ial unc er tainty that the Company will be able to r ef inanc e its matur ing debt f acilities on a timely basis or at all.As par t of the Companys nor mal c our se of oper atio

206、ns,management c ontinually evaluates other sour c es of f unding and liquidity.Fi scal 2024 cash fl ows Year ended December 31,2024 compared with the year ended December 31,2023 Cash inf low f r om net ear nings bef or e c hanges in oper ating assets and liabilities and inc ome tax payments inc r ea

207、sed to$12,830 in 2024 c ompar ed to$10,750 last year.Af ter changes in oper ating assets and liabilities and inc ome tax paid ther e was a net c ash inf low of$60,565 in 2024 18|Accord Financial Corp.CONTRACTUAL OBLIGATIONS AND COMMITMENTS AT DECEMBER 31,2024 Payments due in Les s than 1 year 1 to 3

208、 years 3 to 5 years Thereafter Total Debt obligations$263,521$47,798$59$311,549 Oper ating lease obligations 478 829 644 975 2,926$263,999$48,627$703$975$314,304management,other r elated individuals and thir d par ties.Notes payable totalled$24,541 at Dec ember 31,2024 c ompar ed to$22,915 at Dec em

209、ber 31,2023.Notes payable c ompr ise:(i)unsec ur ed demand notes due on,or within a week of,demand of$4,530(Dec ember 31,2023$4,565);(ii)unsecur ed subor dinated ter m notes(“ter m notes”)totalling$20,011(Dec ember 31,2023$18,350),which ar e r epayable on var ious dates the latest of which is Novemb

210、er 30,2027.Ter m notes totalling$15,697 ar e r epayable within the next 12 months.Notes due on,or within a week of demand,bear inter est at r ates that var y with the bank pr ime r ate,while the ter m notes bear inter est at r ates between 8.75%and 11.00%.Of the notes payable,$20,876(Dec ember 31,20

211、23$20,494)was owing to r elated par ties and$3,665 (Dec ember 31,2023$2,421)to thir d par ties.I nter est expense on these notes in 2024 totalled$2,199(2023$1,523).Please r ef er to note 12(a)to the Statements.$3,250 of Unlisted Debentur es with a matur ity date of Januar y 31,2026 wer e ac quir ed

212、by a r elated par ty in July of 2024.The f ollowing table pr ovides the pr incipal amounts owed to r elated par ties f r om the Company at Dec ember 31,2024.Demand notes payable Relations hip Hitzig Br os.,Har gr eaves&Co.I nc.*Dir ec tor$4,000,000 Ken Hitzig Founder$500,000 Term notes payable Hitzi

213、g Br os.,Har gr eaves&Co.I nc.*Dir ec tor$4,000,000 Hitzig Br os.,Har gr eaves&Co.LLC.*Dir ec tor US$4,000,000 Oakwest Cor por ation I nc.*Dir ec tor$3,000,000 Ken Hitzig Founder$2,500,000 Unlis ted debentures Hitzig Br os.,Har gr eaves&Co.I nc.*Dir ec tor$3,250,000*a director of Accord has an owner

214、ship interest in the company Ac c or d pays a r ate of inter est r elated to Canadian pr ime(as of Dec ember 31,2024,the r ate was 5.45%)on its Canadian dollar unsecur ed demand notes payable.This inter est r ate is typic ally below the inter est r ate the Company pays on its pr imar y r evolving cr

215、 edit f acility,agented by The Bank of Nova Sc otia(“BNS”)r esulting in inter est savings to the Company.The US$4.0 million r elated-par ty ter m notes ar e extended to BondI t and pay inter est r ates between 10.50%and 11.00%.Related-par ty ter m notes of$10.5 million matur e on July 31,2025 and ac

216、 cr ue inter est at a r ate of 10.00%.The Companys pr imar y r evolving cr edit f acility allows these notes to be tr eated as“quasi equity”and be inc luded in the Companys tangible net wor th(“TNW”)f or the pur poses of lever aging its bank line(up to 4.0 x TNW)pr oviding additional bor r owing c a

217、pac ity f or the Company.FINANCIAL INSTRUMENTS Financ ial assets and liabilities ar e r ec or ded at amor tized c ost.Financ ial assets and liabilities,other than the lease r ec eivables and loans to clients in our equipment and small business f inanc e oper ations,ter m loan payable and lease liabi

218、lities,ar e shor t ter m in natur e and,ther ef or e,their c ar r ying values appr oximate f air values.At Dec ember 31,2024 and 2023,ther e wer e no outstanding f or eign exchange c ontr ac ts enter ed into by the Company.CRITICAL ACCOUNTING POLICIES AND ESTIMATE A c r itic al ac c ounting estimate

219、 r epr esents the estimate that is highly unc er tain and f or whic h c hanges in the estimate c ould mater ially impac t the Companys f inanc ial r esults.Annual Report 2024|19 The Company c onsider s the estimate of the allowanc e f or ECL on Loans as cr itic al to its f inancial r esults.The Comp

220、any maintains allowanc es f or ECL at amounts whic h,in managements j udgment,ar e suf f ic ient to c over c r edit losses ther eon.The allowanc es ar e based upon sever al c onsider ations inc luding c ur r ent ec onomic envir onment,c ondition of the loan and r ec eivable por tf olios,typic al ind

221、ustr y loss exper ienc e,macr o-ec onomic f ac tor s and f or war d-looking inf or mation(“FLI”).The key inputs in the measur ement of ECL allowanc es f or each loan ar e as f ollows:(i)the pr obability of def ault(“PD”)which is an estimate of the likelihood of def ault over a given time hor izon;(i

222、i)the LGD which is an estimate of the loss ar ising in the c ase wher e a def ault oc c ur s at a given time;and(iii)the exposur e at def ault(“EAD”)which is an estimate of the exposur e at a f utur e def ault date.These key inputs associated with each loan ar e sensitized to f utur e mar ket and ma

223、cr o-ec onomic c onditions thr ough the inc or por ation of FLI.These estimates ar e par tic ular ly j udgmental,and oper ating r esults may be adver sely af f ec ted by signif ic ant unantic ipated c r edit or loan losses,such as oc cur in a bankr uptcy or insolvency,or may r esult f r om sever e a

224、dver se ec onomic c onditions.The Companys allowanc e f or ECL on its Loans is pr ovided f or under the thr ee-stage c r iter ia set out in I FRS 9,wher e a Stage 1 allowanc e is established to r eser ve against ac c ounts which have not exper ienc ed a SI CR and which c annot be specif ic ally iden

225、tif ied as impair ed on an item-by-item or gr oup basis at a par tic ular point in time.Stage 1 ECL r esults f r om def ault events on the f inancial instr ument that ar e possible within the twelve-month per iod af ter the r epor ting date.Stage 1 ac c ounts ar e c onsider ed to be in good standing

226、.The Companys Stage 2 allowanc es ar e based on a r eview of the loan and c ompr ises an allowanc e f or those f inancial instr uments which have exper ienc ed a SI CR sinc e initial r ec ognition.Lif etime ECL ar e r ec ognized f or all Stage 2 f inancial instr uments.Stage 3 f inancial instr ument

227、s ar e those that the Company has c lassif ied as impair ed.The Company classif ies a f inancial instr ument as impair ed when the f utur e c ash f lows of the f inancial instr ument c ould be adver sely impac ted by events af ter its initial r ec ognition.Evidenc e of impair ment includes indic ati

228、ons that the bor r ower is exper ienc ing signif ic ant f inanc ial dif f ic ulties,or a def ault or delinquency has oc cur r ed.Lif etime ECL ar e r ec ognized f or all Stage 3 f inancial instr uments.I n Stage 3,f inancial instr uments ar e wr itten of f,either par tially or in f ull,against the r

229、 elated allowanc e f or ECL when the Company j udges that ther e is no r ealistic pr ospec t of f utur e r ec over y in r espec t of those amounts af ter the c ollater al has been r ealized or tr ansf er r ed at net r ec over able value.Any subsequent r ec over ies of amounts pr eviously wr itten-of

230、 f ar e cr edited to the r espec tive allowanc e f or ECL.Management believes that its allowanc es f or ECL,which r equir e a high degr ee of r easonable and suppor table j udgment ar e suf f ic ient and appr opr iate.The Companys allowanc es ar e discussed above and in notes 3(d),5 and 22(a)to the

231、Statements.Control envi ronment Ther e have been no c hanges to the Companys disc losur e c ontr ols and pr oc edur es(“DC&P”)and inter nal c ontr ol over f inancial r epor ting(“I CFR”)dur ing 2024 that have mater ially af f ec ted,or ar e r easonably likely to mater ially af f ec t,DC&P or I CFR.I

232、 nter nal c ontr ol systems,no matter how well designed,have inher ent limitations.Ther ef or e,even those systems deter mined to be ef f ec tive c an pr ovide only r easonable assur anc e with r espec t to f inanc ial statement pr epar ation and pr esentation.Also,pr oj ec tions of any evaluation o

233、f ef f ec tiveness to f utur e per iods ar e subj ec t to the r isk that c ontr ols may bec ome inadequate bec ause of changes in c onditions,or that the degr ee of c omplianc e with the polic ies or pr oc edur es may deter ior ate and,as suc h,ther e 20|Accord Financial Corp.c an be no assur anc e

234、that any design will suc c eed in achieving its stated goal under all potential c onditions.Di scl osure control s and procedures The Companys management,inc luding its Pr esident and Chief Financial Of f ic er,ar e r esponsible f or establishing and maintaining the Companys disclosur e c ontr ols a

235、nd pr oc edur es and has designed same to pr ovide r easonable assur anc e that mater ial inf or mation r elating to the Company is made known to it by other s within the Company on a timely basis.The Companys management has evaluated the ef f ec tiveness of its disc losur e c ontr ols and pr oc edu

236、r es(as def ined in the r ules of the Canadian Secur ities Administr ator s(“CSA”)as at Dec ember 31,2024 and has c oncluded that such disclosur e c ontr ols and pr oc edur es ar e ef f ec tive.Managements annual report on i nternal control over fi nanci al reporti ng The f ollowing r epor t is pr o

237、vided by the Companys management,inc luding its Pr esident and Chief Financ ial Of f ic er,in r espec t of the Companys inter nal c ontr ol over f inancial r epor ting(as def ined in the r ules of the CSA):(i)the Companys management is r esponsible f or establishing and maintaining adequate inter na

238、l c ontr ol over f inanc ial r epor ting within the Company.All inter nal c ontr ol systems,no matter how well designed,have inher ent limitations.Ther ef or e,even those systems deter mined to be ef f ec tive c an pr ovide only r easonable assur anc e with r espec t to f inancial statement pr epar

239、ation and pr esentation;(ii)the Companys management has used the Committee of Sponsor ing Or ganizations of the Tr eadway Commission(“COSO”)2013 f r amewor k to evaluate the design of the Companys inter nal c ontr ol over f inancial r epor ting and test its ef f ec tiveness;and (iii)the Companys man

240、agement has designed and tested the ef f ec tiveness of its inter nal c ontr ol over f inanc ial r epor ting as at Dec ember 31,2024 to pr ovide r easonable assur anc e r egar ding the r eliability of f inancial r epor ting and the pr epar ation of the Companys f inanc ial statements f or exter nal

241、pur poses in ac c or danc e with I FRS and advises that ther e ar e no mater ial weaknesses in the design of inter nal c ontr ol over f inancial r epor ting that have been identif ied by management.RISKS AND UNCERTAINTIES THAT COULD AFFECT FUTURE RESULTS Past per f or manc e is not a guar antee of f

242、 utur e per f or manc e,which is subj ec t to substantial r isks and unc er tainties.Management r emains optimistic about the Companys long-ter m pr ospec ts.Fac tor s that may impac t the Companys r esults include,but ar e not limited to,the f ac tor s discussed below.Please r ef er to note 22 to t

243、he Statements,which discuss the Companys pr incipal f inancial r isk management pr ac tic es.The Companys busi ness i s dependent on i ts capi tal resources The Companys ability to oper ate is dependent on f utur e pr of itable oper ations and the f utur e availability of equity and/or debt f inanci

244、ng.The Company will r equir e additional f inancing f r om debt,equity,and/or other alter natives in or der to gr ow the por tf olio and to r ef inanc e its existing debt obligations.A substantial por tion of debt is due f or r ef inancing in 2025 c ontr ibuting to mater ial unc er tainty about the

245、Companys ability to obtain the nec essar y r esour c es in near ter m.I n r esponse,the Company is evaluating a number of str ategic initiatives to gener ate additional c apital,including alter native f inancing ar r angements to suppor t,r eplac e or add to c ur r ent debt f ac ilities in the pr iv

246、ate mar ket.Additionally,a r eview of the f undamental c or e businesses may r esult Annual Report 2024|21 in decisions to change pr oduc t mix or under take divestur es of business lines or assets.Ther e is no assur anc e that any of these initiatives will be suc c essf ul,timely or suf f icient.De

247、teri orati on i n economi c condi ti ons and busi ness uncertai nty The Companys oper ating r esults may be negatively impac ted by var ious ec onomic f ac tor s and business c onditions,including the level of ec onomic ac tivity in Canada and the United States.Pr otec tionist tr ade polic ies and t

248、he imposition of c r oss-bor der tar if f s,whether br oad based or tar geted to spec if ic industr ies,c ould af f ec t input c osts,lower investment and disr upt supply chains.Other potential negative c onditions or signif ic ant events inc lude public health emer genc ies inc luding pandemic s,ge

249、o-politic al or militar y c onf lic ts,sanc tions and other tr ade disr uptions,and r elated or unexpec ted changes in inf lation and bor r owing c osts.To the extent that ec onomic ac tivity or business c onditions deter ior ate,delinquencies and cr edit losses may incr ease.As the Company extends

250、cr edit pr imar ily to small-and medium-sized businesses,many of its customer s ar e par ticular ly susc eptible to ec onomic slowdowns or r ec essions and may be unable to make scheduled lease or loan payments dur ing these per iods.Unf avor able ec onomic c onditions may also make it mor e dif f i

251、cult f or the Company to maintain new or igination volumes and the cr edit quality of new loans at levels pr eviously attained.Unf avor able ec onomic c onditions c ould also incr ease f unding c osts or oper ating c ost str uc tur es,limit ac c ess to c r edit f ac ilities and other c apital mar ke

252、ts f unding sour c es or r esult in a decision by the Companys lender s not to extend f ur ther cr edit.Any of these events c ould have a mater ial adver se impac t on the Companys business,f inanc ial c onditions and r esults of oper ations.Competi ti on from al ternati ve sources of fi nanci ng Th

253、e Company oper ates in an intensely c ompetitive envir onment and its r esults c ould be signif ic antly af f ec ted by the ac tivities of other industr y par ticipants.The Company expec ts this level of c ompetition to per sist in the f utur e as the mar kets f or its ser vic es c ontinue to develo

254、p and as additional c ompanies enter its mar kets.Ther e c an be no assur anc e that the Company will be able to c ompete ef f ec tively with c ur r ent or f utur e c ompetitor s.I f the Companys c ompetitor s engage in aggr essive pr ic ing polic ies with r espec t to ser vic es that c ompete with

255、those of the Companys,the Company would likely lose some c lients or be f or c ed to lower its r ates,both of whic h c ould have a mater ial adver se ef f ec t on the Companys business,f inanc ial c ondition and r esults of oper ations.I n addition,some of the Companys c ompetitor s may have gr eate

256、r ac c ess to c apital or have higher r isk toler anc es or dif f er ent r isk assessments,which c ould allow them to establish mor e or igination sour c es and customer r elationships to incr ease their mar ket shar e.Fur ther,bec ause ther e ar e f ewer bar r ier s to entr y to the mar kets in whi

257、ch the Company oper ates,new c ompetitor s c ould enter these mar kets at any time.Bec ause of all these c ompetitive f ac tor s,the Company may be unable to sustain its oper ations at its cur r ent levels or gener ate gr owth in r evenues or oper ating inc ome,either of which c ould have a mater ia

258、l adver se impac t on the Companys business,f inancial c ondition and r esults of oper ations.Credi t ri sk,i nabi l i ty to underwri te fi nance recei vabl es and l oan appl i cati ons The Company is in the business of f inancing its clients r ec eivables and making asset-based loans,including inve

259、ntor y and equipment f inancings,designed to ser ve small-and medium-sized businesses,which ar e of ten owner-oper ated and have limited ac c ess to tr aditional f inancing.Ther e is a high degr ee of r isk associated with pr oviding f inancing to such par ties as a r esult of their 22|Accord Financ

260、ial Corp.lower cr editwor thiness.Even with an appr opr iately diver sif ied lending business,oper ating r esults c an be adver sely af f ec ted by lar ge bankr uptcies and/or insolvencies.Losses f r om client loans in exc ess of the Companys expec tations c ould have a mater ial adver se impac t on

261、 the Companys business,f inancial c ondition and r esults of oper ations.I n addition,sinc e def aulted loans as well as c er tain delinquent loans c annot be used as c ollater al under the Companys c r edit f ac ilities,higher than anticipated def aults and delinquencies c ould adver sely af f ec t

262、 the Companys liquidity by r educing the amount of f unding available to the Company under these f inancing ar r angements.Fur ther mor e,incr eased r ates of delinquencies or loss levels c ould c ause the Company to be in br eac h of its f inanc ial c ovenants under its cr edit f acilities,and c ou

263、ld also r esult in adver se changes to the ter ms of f utur e f inancing ar r angements available to the Company,including incr eased inter est r ates payable to lender s and the imposition of mor e bur densome c ovenants and incr eased cr edit enhanc ement r equir ements.Interest rate ri sk The Com

264、pany has f loating r ate debt,as well as f ixed r ate debt.The Companys agr eements with its clients(af f ec ting inter est r evenue)and lender s(af f ec ting inter est expense)usually pr ovide f or r ate adj ustments in the event of changes in key inter est r ates,such as Pr ime,SOFR or CORRA.Fluc

265、tuations in inter est r ates may have a mater ial adver se impac t on the Companys business,f inancial c ondition and r esults of oper ations.Forei gn currency ri sk The Company has inter national oper ations in the United States.Ac c or dingly,a signif ic ant por tion of its f inancial r esour c es

266、 ar e held in cur r encies other than the Canadian dollar.I n r ec ent year s,the Company has seen the f luc tuations in the U.S.dollar against the Canadian dollar af f ec t its oper ating r esults when its f or eign subsidiar ies r esults ar e tr anslated into Canadian dollar s.I t has also af f ec

267、 ted the value of the Companys net Canadian dollar investment in its f or eign subsidiar ies,which had,in the past,r educ ed the AOCI c omponent of equity to a loss position,although it is now in a lar ge gain position.No assur anc es c an be made that changes in f or eign c ur r ency r ates will no

268、t have a signif ic ant adver se ef f ec t on the Companys business,f inancial c ondition or r esults of oper ations.External fi nanci ng The Company depends and will c ontinue to depend on the availability of c r edit f r om exter nal f inanc ing sour c es,to c ontinue to,among other things,f inanc

269、e new and r ef inanc e existing loans and satisf y the Companys other wor king c apital needs.I n Mar ch 2024,the Company enter ed an amendment to its c r edit f ac ility whic h,among other things,r educ ed the total f ac ility limit and modif ied oper ating and f inanc ial c ovenants.The Company be

270、lieves that with this amendment,cur r ent c ash balanc es and existing cr edit lines,together with c ash f low f r om oper ations,will be suf f ic ient to meet its c ash r equir ements f or wor king c apital and oper ating expenditur es but expec ts that f or the immediate f utur e the Company will

271、have limited gr owth c apital to invest in new business oppor tunities.Ther e is no guar antee that the Company will c ontinue to have f inancing available to it or if the Company wer e to r equir e additional f inancing that it would be able to obtain it on ac c eptable ter ms or at all.The Company

272、s pr imar y c r edit f ac ility matur es on July 26,2025 and its unsec ur ed subor dinated debentur es matur e on Januar y 31,2026.I f any or all of the Companys f unding sour c es bec ome unavailable on ter ms ac c eptable to the Company or at all,or if any of the Companys c r edit f ac ilities ar

273、e not r enewed or r e-negotiated upon expir ation of their ter ms,the Company may not have ac c ess to the f inanc ing nec essar y to c onduc t its businesses,which would limit the Companys ability to f inanc e its oper ations and c ould Annual Report 2024|23 have a mater ial adver se impac t on its

274、 business,f inanc ial c ondition and r esults of oper ations.Please also see c omments r egar ding business c onditions on page 22 and Liquidity and Capital Resour c es on page 17.Dependence on key personnel Employees ar e a signif ic ant asset of the Company,and the Company depends to a lar ge exte

275、nt upon the abilities and c ontinued ef f or ts of its key oper ating per sonnel and senior management team.I f any of these per sons bec omes unavailable to c ontinue in such c apacity,or if the Company is unable to attr ac t and r etain other qualif ied employees,it c ould have a mater ial adver s

276、e impac t on the Companys businesses(inc luding its ability to or iginate new business oppor tunities),f inanc ial c ondition and r esults of oper ations.Mar ket f or c es and c ompetitive pr essur es may also adver sely af f ec t the ability of the Company to r ecr uit and r etain key qualif ied pe

277、r sonnel.Income tax matters The inc ome tax of the Company must be c omputed in ac c or danc e with Canadian,U.S.and f or eign tax laws,as applic able,and the Company is subj ec t to Canadian,U.S.and f or eign tax laws,all of which may be changed in a manner that c ould adver sely af f ec t the Comp

278、anys business,f inancial c ondition or r esults of oper ation.Recent and future acqui si ti ons and i nvestments I n pr ior year s,the Company has ac quir ed or invested in businesses and may seek to ac quir e or invest in additional businesses in the f utur e that expand or c omplement its c ur r e

279、nt business.Pr ior ac quisitions by the Company have incr eased the size of the Companys oper ations and the amount of indebtedness ser vic ed by the Company and any f utur e ac quisitions by the Company,if they oc c ur,may r esult in f ur ther incr eases in the Companys oper ations and indebtedness

280、.The suc c essf ul integr ation and management of any r ec ently ac quir ed businesses or businesses ac quir ed in the f utur e involves numer ous r isks that c ould adver sely af f ec t the Companys business,f inancial c ondition,or r esults of oper ations,including:(i)the r isk that management may

281、 not be able to suc c essf ully manage the ac quir ed businesses and that the integr ation of such businesses may plac e signif ic ant demands on management,diver ting their attention f r om the Companys existing oper ations;(ii)the r isk that the Companys existing oper ational,f inanc ial,managemen

282、t,due diligenc e or under wr iting systems and pr oc edur es may be inc ompatible with the mar kets in which the ac quir ed business oper ates or inadequate to ef f ec tively integr ate and manage the ac quir ed business;(iii)the r isk that ac quisitions may r equir e substantial f inancial r esour

283、c es that other wise c ould be used to develop other aspec ts of the Companys business;(iv)the r isk that as a r esult of ac quir ing a business,the Company may bec ome subj ec t to additional liabilities or c ontingenc ies(known and unknown);(v)the r isk that the per sonnel of any ac quir ed busine

284、ss may not wor k ef f ec tively with the Companys existing per sonnel;(vi)the r isk that the Company f ails to ef f ec tively deal with c ompetitive pr essur es or bar r ier s to entr y applic able to the ac quir ed business or the mar kets in whic h it oper ates or intr oduc e new pr oduc ts into s

285、uch mar kets;and(vii)the r isk that the ac quisition may not be ac cr etive to the Company.The Company may f ail to suc c essf ully integr ate such ac quir ed businesses or r ealize the anticipated benef its of such ac quisitions,and such f ailur e c ould have a mater ial adver se impac t on the Com

286、panys business,f inancial c ondition and r esults of oper ations.Fraud by borrowers,l essees,vendors or brokers The Company may be a vic tim of f r aud by lessees,bor r ower s,vendor s or br oker s.I n c ases of f r aud,it is dif f ic ult and of ten unlikely that the Company will be able to c ollec

287、t amounts owing under a r ec eivable or loan or r epossess any r elated c ollater al.I nc r eased r ates of f r aud 24|Accord Financial Corp.c ould have a mater ial adver se impac t on the Companys business,f inancial c ondition and r esults of oper ations.Technol ogy and cyber securi ty The Company

288、 r emains f ocused on the c onf identiality,integr ity and availability of the inf or mation and cyber secur ity c ontr ols that pr otec t its networ k,data and inf r astr uc tur e.The c yber sec ur ity r isk landsc ape inc ludes numer ous c yber thr eats suc h as hac king thr eats,identity thef t,d

289、enial of ser vic e,and advanc ed per sistent thr eats.These and other cyber thr eats c ontinue to bec ome mor e sophistic ated,c omplex,and potentially damaging.Thir d par ty ser vic e pr ovider s that the Company uses may also be subj ec t to these r isks,which c an incr ease our r isk of potential

290、 attack.The Company establishes the r equir ements and sets out the over all f r amewor k f or managing cyber and inf or mation secur ity r elated r isks.These include developing and implementing the appr opr iate ac tivities to detec t,r espond to and c ontain the impac t of c yber sec ur ity thr e

291、ats,along with implementing the appr opr iate saf eguar ds to ensur e the deliver y of cr itic al inf r astr uc tur e ser vic es.The Company is c ontinuously impr oving the str ength of its pr ac tic es and c apabilities.I t wor ks closely with our cr itic al cyber secur ity and sof twar e supplier

292、s to ensur e that its technology c apabilities r emain cyber r esilient and ef f ec tive in the event of any unf or eseen c yber attac k.The Company has not exper ienc ed any mater ial cyber secur ity br eaches and has not incur r ed any mater ial expenses with r espec t to the r emediation of such

293、cyber events.Secur ity r isks c ontinue to be ac tively monitor ed and r eviewed,lever aging the exper tise of the Companys ser vic e pr ovider s and vendor s,r eviewing industr y best pr ac tic es and r egular ly r e-assessing c ontr ols in plac e to acknowledge,addr ess and mitigate the r isks ide

294、ntif ied.The Company maintains a c yber sec ur ity insur anc e polic y to pr ovide c over age in the event of c yber sec ur ity inc idents.Data management and pri vacy ri sk Data management and its gover nanc e ar e bec oming incr easingly impor tant as the Company c ontinues to invest in digital so

295、lutions and innovation and the ongoing expansion of business ac tivities.Fur ther mor e,ther e ar e r egulator y c omplianc e r isks associated with data management and pr ivacy.The Company establishes the r equir ements and sets out the over all f r amewor k f or data management and managing pr iva

296、cy r elated r isks.Ri sk of future l egal proceedi ngs The Company is thr eatened f r om time to time with,or is named as a def endant in,or may bec ome subj ec t to,var ious legal pr oc eedings,f ines or penalties in the or dinar y c our se of c onduc ting its businesses.A signif ic ant j udgment o

297、r the imposition of a signif ic ant f ine or penalty on the Company c ould have a mater ial adver se impac t on the Companys business,f inancial c ondition and r esults of oper ation.Signif ic ant obligations may also be imposed on the Company by r eason of a settlement or j udgment involving the Co

298、mpany,as well as r isks per tinent to f inancing f acilities,including ac c eler ation and/or loss of f unding availability.Publicity r egar ding involvement in matter s of this type,especially if ther e is an adver se settlement or f inding in the litigation,c ould r esult in adver se c onsequenc e

299、s to the Companys r eputation that c ould,among other things,impair its ability to r etain existing or attr ac t f ur ther business.The c ontinuing expansion of class ac tion litigation in U.S.and Canadian c our t ac tions has the ef f ec t of incr easing the sc ale of potential j udgments.Def endin

300、g such a class ac tion or other maj or litigation c ould be c ostly,diver t managements attention and r esour c es and have a mater ial adver se impac t on the Companys business,f inancial c ondition and r esults of oper ations.Di vi dends The Company pays dividends if,as and when declar ed by the b

301、oar d of dir ec tor s.The Company suspended Annual Report 2024|25 dividend payments in the f our th quar ter of 2023 as a pr udent measur e to c onser ve c ash and str engthen the Companys c apital base.While the boar d will r eassess the Companys dividend policy in the nor mal c our se,ther e is no

302、 assur anc e that the dividend will be r einstated at the same r ate or at all.OUTLOOK The path to f utur e f inanc ial per f or manc e of the Company hinges on sever al key f ac tor s,inc luding ac c ess to c apital,the over all business envir onment inf luencing gr owth potential and the str ength

303、 of its team and oper ating platf or ms.The Company c ontinues to take positive steps to impr ove ac c ess to c apital,and the Companys team and oper ating platf or ms r emain str ong.The ec onomic envir onment has gr own mor e c omplex due to esc alating tr ade tensions,including discussions of sub

304、stantial U.S.tar if f s on Canadian expor ts and incr eased pr otec tionist policies on both sides of the bor der.The Company has made steady pr ogr ess in setting the f oundation f or impr oved ac c ess to c apital in 2025.However,r educ ed tangible equity in the wake of the 2023 wr ite-of f s,and

305、the Mar c h Amendment to the Companys pr imar y cr edit f acility,have c ontr ibuted to elevated inter est expense,and a dec line in Ac c or ds f unds employed.I n r esponse,thr oughout 2024 Ac c or d has suc c essf ully executed a ser ies of str ategic initiatives to gener ate additional c ash and

306、c apital to str engthen the balanc e sheet,position f or f utur e por tf olio gr owth,and unlock shar eholder value.I n the sec ond quar ter the Company established two new f inancing ar r angements,one f or BondI t Media Capital,and a sec ur itization f ac ility f or the Canadian small business por

307、 tf olio.Both f acilities pr ovide a mor e c ompetitive c ost of f unds c ompar ed to the f unding they r eplac ed.The suc c essf ul sale of the AEF equipment lease por tf olio on September 30th was another signif ic ant step f or war d.While these initiatives str engthen the Companys balanc e sheet

308、,and r educ e bank debt,new loans c ontinue to be f unded by the pr imar y bank f ac ility.The AEF tr ansac tion incr eased the Companys tangible equity and r educ ed its lever age,putting the Company in a str onger position to r ef inanc e its main bank f ac ility on mor e f avor able ter ms in the

309、 3r d quar ter of 2025,which is a key ingr edient f or f utur e gr owth and pr of itability.However,a substantial por tion of debt is due f or r ef inancing in 2025 cr eating mater ial unc er tainty about the Companys ability to obtain the nec essar y r esour c es in near ter m.The Company c ontinue

310、s to explor e additional str ategic initiatives,including r eviewing c or e businesses,which may r esult in changes to pr oduc t mix,and/or f ur ther non-c or e asset sales.These ef f or ts ar e intended to f ur ther str engthen the Companys c apital position,r enew gr owth in the c or e oper ating

311、businesses,and incr ease value f or shar eholder s.Our lending teams c ontinue to manage the oper ating businesses,maximizing oppor tunities within the Companys cur r ent f unding c apacity.The c ur r ent business envir onment has suppor ted steady deal f low f or non-bank lender s,including Ac c or

312、 d,as tr aditional banks c ontinue to tighten their lending ac tivities.However,unc er tainties sur r ounding tr ade r elations,potential tar if f s,and their ef f ec ts on supply chains,inter est r ates,and inf lation c ontr ibute to mar ket volatility,which may impac t the cr edit quality of our p

313、or tf olio.Over all cr edit r isk r emains elevated,and shor t-ter m business c onditions ar e unpr edic table.While we ar e r ec eiving a steady str eam of applic ations,our teams ar e acutely awar e of the challenging cr edit envir onment and ar e maintaining a c autious appr oach to onboar ding n

314、ew clients.I n ear ly 2024,AFCC,the Companys Canadian small business f inanc e division,par tner ed with EDC to launch 26|Accord Financial Corp.the Ac c or d|EDC Tr ade Expansion Lending Pr ogr am(“TELP”).This initiative builds on Ac c or ds suc c ess in tailor ing EDC pr ogr ams spec if ic ally f o

315、r the small business sec tor.Ac c or d|EDC TELP suppor ts c ompanies engaged in the expor t supply c hain(inc luding c ompanies suppor ting expor ter s with goods and ser vic es),of f er ing wor king c apital f r om$250 to$3.0 million thr ough r evolving or ter m loan str uc tur es.However,the evolv

316、ing politic al landsc ape may signif ic antly af f ec t the volume of Canadian expor ts to the U.S.,dir ec tly af f ec ting gr owth tr aj ec tor y of this pr ogr am.The c ur r ent ec onomic c onditions,inc luding an inc r easingly r isk-aver se banking sec tor,ar e c onducive to gr owth of the Compa

317、nys two ABL/f ac tor ing units,AFI C and AFI U.We ar e seeing steady new business oppor tunities in both divisions,however,given the gener al incr ease in c r edit r isk ac r oss numer ous sec tor s,we intend to r emain highly selec tive in closing new tr ansac tions,and as a r esult,expec t modest

318、gr owth.BondI t Media Capital r ef inanc ed its dedic ated senior c r edit f ac ility in the sec ond quar ter of 2024 with a mor e f lexible and lower pr ic ed f acility,which paves the way f or r enewed gr owth and impr oved net inter est mar gins.While its f inancing ar r angement is str onger,Bon

319、dI t is f ac ing an inc r easingly c ompetitive landsc ape,cr eating additional pr essur e on gr owth and pr ic ing.Against this bac kdr op,modest gr owth is anticipated in 2025.AFL is mar keting a new pr ogr am aimed at pr oviding guar antee-r elated ser vic es to Canadian expor ter s.AFL s c ontr

320、ibution has not been f inancially signif ic ant to the Ac c or d gr oup in r ec ent year s,which is not expec ted to change in the near ter m.Thr oughout 2024 the Company has taken steps to str eamline its oper ations.This includes r educ tions in staf f at the Ac c or d Financial Cor p.level,as wel

321、l as the U.S.oper ating business.Cer tain other expenses,inc luding tec hnology-r elated and pr of essional f ees,have also been r educ ed.While these over head impr ovements have been over shadowed by year-to-date pr of essional f ees r elated to bank negotiations,and the Companys pr ovision f or c

322、r edit losses,the mor e str eamlined oper ating platf or m is expec ted to c ontr ibute to f utur e f inanc ial per f or manc e as other less per manent expenses r ec ede.While the Companys platf or ms r emain str ong,the challenging ec onomic envir onment is weakening the payment per f or manc e of

323、 some of the Companys existing clients,in par ticular in the small business por tf olio.While the allowanc e f or expec ted loan losses f ully r ef lec ts our exper t cr edit j udgment and thir d-par ty ec onomic f or ec asts,it is possible that the ec onomy under per f or ms expec tations.And f ina

324、lly,in the c ur r ent envir onment,the Company is f avor ing f inancially str onger clients,which has the ef f ec t of lower ing aver age yields.While ther e ar e ec onomic and business challenges to navigate,the Company is f ocused on positioning f or suc c ess thr ough both balanc e sheet-r elated

325、 and str ategic initiatives f or the r emainder in 2025.For mor e than f our dec ades the Company has suc c essf ully navigated thr ough multiple ec onomic c yc les,giving us valuable per spec tive as the cur r ent envir onment unf olds.I r ene Eddy Senior Vic e Pr esident,Chief Financial Of f ic er

326、 Apr il 8,2025 Annual Report 2024|2728|Accord Financial Corp.Appendix to MD&A:Non-IFRS Measures and Ratios($000s,except percentages,earnings per share and book value per share)Fiscal Year Non-IFRS Calculations Y ear ended Dec.31,2024 2023 2022 Return on Equity Net ear nings(loss)attr ibutable to sha

327、r eholder s$(3,139)$(14,625)$1,427 Weighted aver age shar eholder s equity(note)83,793 98,545 101,981 Retur n on equity (3.7%)(14.8%)1.4%Note:weighted average shareholders equity is the average shareholder s equity calculated for each month of the fiscal year and divided by the number of months in t

328、he period.Y ear ended Dec.31,2024 2023 2022 Adjus ted net earnings (los s)Net ear nings(loss)attr ibutable to shar eholder s$(3,139)$(14,625)$1,427 Adj ustments,net of tax:Goodwill impair ment 8,729 1,384 Gain on sale of AEF equipment lease por tf olio (785)Net single ac c ount wr ite-of f and assoc

329、iated c osts 2,343 10,961 Restr uc tur ing and other expenses 228 752 652 Adj usted net ear nings(loss)attr ibutable to shar eholder s$(1,353)$5,817$3,463 Y ear ended Dec.31,2024 2023 2022 Adjus ted earnings (los s)per s hare Adj usted net ear nings(loss)$(1,353)$5,817$3,463 Weighted aver age number

330、 of c ommon shar es outstanding in the per iod 8,559 8,559 8,559 Adj usted ear nings(loss)per shar e$(0.16)$0.68$0.40 Y ear ended Dec.31,2024 2023 2022 Adjus ted return on equity Adj usted net ear nings(loss)$(1,353)$5,817$3,463 Weighted aver age shar eholder s equity(note)83,793 98,545 101,981 Adj

331、usted r etur n on equity (1.6%)5.9%3.4%Note:weighted average shareholders equity is the average shareholder s equity calculated for each month of the fiscal year,then totalled up and divided by the months in the period.Y ear ended Dec.31,2024 2023 2022 Average funds employed(note)Fisc al year$423,36

332、5$471,713$449,830 Quar ter 1$460,450$451,419$457,395 Quar ter 2$428,146$455,204$454,011 Quar ter 3$427,429$477,524$444,603 Quar ter 4$377,433$502,705$443,310 Note:average funds employed is average finance receivables and loans for each month of the year or quarter divided by the number of months in

333、the related period.Y ear ended Dec.31,2024 2023 2022 Return on average as s ets Net ear nings(loss)attr ibutable to shar eholder s$(3,139)$(14,625)$1,427 Aver age assets(note)$466,256$512,238$492,386 Retur n on aver age assets (0.7%)(2.9%)0.3%Note:average assets is calculated as the average of the opening and closing assets for the fiscal year as taken from the Company s Balance Sheets.Y ear ended