Earnings call transcript: ECN Capital misses Q2 2025 earnings forecast

ECN Capital reported its Q2 2025 earnings, revealing lower-than-expected results. The company posted earnings per share (EPS) of $0.04, falling short of analysts’ forecast of $0.0501, marking a negative surprise of 20.16%. Revenue also came in below expectations at $61.2 million, compared to the anticipated $70.1 million, resulting in a revenue surprise of -12.67%. Despite these misses, ECN Capital’s stock experienced a slight increase of 0.96% in after-hours trading, closing at $3.14. According to InvestingPro analysis, ECN Capital currently appears undervalued based on its Fair Value calculation, with the company maintaining a FAIR overall financial health score of 2.37 out of 5.

Key Takeaways

• ECN Capital’s Q2 EPS and revenue both missed analyst expectations.
• Managed assets grew by 15%, reaching over $6 billion.
• Manufactured housing chattel originations surged by 71.5%.
• The company is overfunded by approximately $1.5 billion.

Company Performance

ECN Capital showcased significant growth in several areas despite missing earnings expectations. The company’s managed assets increased to over $6 billion, representing a 15% year-over-year growth. Additionally, manufactured housing chattel originations rose by 71.5% in Q2 2025, highlighting ECN’s strong position in this market. The firm’s total originations were reported at $84 million for the quarter. InvestingPro data reveals the company maintains strong liquidity with a current ratio of 2.05, while its debt-to-equity ratio stands at a manageable 0.38.

Financial Highlights

• Revenue: $61.2 million, up from $58 million in the prior year quarter.
• EPS: $0.04, below the forecasted $0.0501.
• Adjusted EBITDA: $31.5 million.
• Adjusted operating income: $17 million.
• Adjusted net income to common shareholders: $10 million.

Earnings vs. Forecast

ECN Capital’s Q2 2025 earnings per share of $0.04 fell short of the projected $0.0501, resulting in a 20.16% negative surprise. The revenue of $61.2 million also missed the forecast of $70.1 million by 12.67%. This shortfall contrasts with the company’s previous performance, where it often met or exceeded expectations.

Market Reaction

Despite the earnings miss, ECN Capital’s stock price rose by 0.96% in after-hours trading, closing at $3.14. This movement is within the company’s 52-week range of $1.96 to $3.52, suggesting a resilient investor sentiment. The stock’s slight increase may reflect confidence in ECN’s strategic initiatives and future growth potential. InvestingPro subscribers can access additional insights, including 8 more ProTips and comprehensive valuation metrics. Notable among these is ECN’s consistent dividend payment track record of 10 consecutive years, with a current dividend yield of 4.15%.

Outlook & Guidance

Looking ahead, ECN Capital provided a consolidated adjusted EPS guidance of $0.18 to $0.23. The company expects further acceleration in its RV business in Q3 2025 and continues to implement upgrade strategies across its business segments. For FY+1 and FY+2, ECN projects EPS of $0.51 and $0.62, respectively, with revenue forecasts of $3.945 billion and $4.151 billion. InvestingPro analysis indicates net income is expected to grow this year, with the company maintaining profitability over the last twelve months. Get detailed insights and access to ECN Capital’s comprehensive Pro Research Report, along with 1,400+ other top stocks, exclusively on InvestingPro.

Executive Commentary

Stephen Hudson, CEO of ECN Capital, emphasized the success of the company’s upgrade strategies, stating, "80% of the company-wide upgrade strategies have been successfully completed." He also highlighted ECN’s strong financial position, noting, "We are now in a position of being overfunded by approximately $1,500,000,000."

Risks and Challenges

• Potential market volatility affecting asset values.
• Competition in the manufactured housing and RV sectors.
• Economic downturns impacting consumer financing.
• Regulatory changes in the financial sector.

Q&A

During the earnings call, analysts inquired about the ongoing Champion Homes joint venture and changes in the sales team and strategy. ECN Capital addressed these concerns, clarifying the potential for growth in its commercial business and explaining its accounting for servicing rights.

Full transcript - ECN Capital Corp (ECN) Q2 2025:

Conference Operator: Thank you for standing by. This is the conference operator. Welcome to the ECN Capital Second Quarter twenty twenty five Results Conference Call. As a reminder, all participants are in a listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions.

I would now like to turn the meeting over to Catherine Moradillos, Vice President of Finance and Investor Relations. Please go ahead, Catherine.

Catherine Moradillos, Vice President of Finance and Investor Relations, ECN Capital: Thank you, Jen. Good afternoon, everyone, and thank you all for joining this call. Joining us today on the call are Stephen Hudson, Chief Executive Officer of ECN Capital Jackie Weber, Chief Financial Officer of ECN Capital Lance Hull, Co CEO and Vice Chairman of Triad Financial Cody Pierce, Co CEO of Triad Financial and James Ferry, Chief Financial Officer of Triad. A news release summarizing these results was issued this afternoon, and the financial statements and MD and A for the three month period ended 06/30/2025, have been filed with SEDAR plus These documents are available on our website at www.ecncapitalcorp.com. Presentation slides to be referenced during the call are accessible in the webcast as well as in PDF format under the Presentations section of the company’s website.

Before we begin, I want to remind our listeners that some of the information we are sharing with you today includes forward looking statements. These statements are based on assumptions that are subject to significant risks and uncertainties. I will refer you to the Cautionary Statements section of the MD and A for a description of such risks, uncertainties and assumptions. Although management believes that the expectations reflected in these statements are reasonable, we can obviously give no assurance that the expectations of any forward looking statements will prove to be correct. You should note that the company’s earnings release, financial statements, MD and A and today’s call include references to non IFRS measures, which we believe will help to present the company and its operations in ways that are useful to investors.

A reconciliation of these non IFRS measures to IFRS measures can be found in our MD and A. All figures are presented in U. S. Dollars unless explicitly noted. With these introductory remarks, I will now turn the call over to Steven Hudson, Chief Executive Officer.

Stephen Hudson, Chief Executive Officer, ECN Capital: Thank you, Kathy, and good evening. Welcome to our second quarter call. Turning to Slide five, I’d like to reference four highlights for you. The first is to report $04 of adjusted per share income, which is in line with consensus. The second highlight is in the second quarter, originations of $436,000,000 reflect the best quarter ever in Triad history and a 40% year over year increase.

The third highlight is managed assets. Our service business grew to over $6,000,000,000 a 15% increase in Q2. Just by background, our servicing business was at $1,900,000,000 when we acquired Triad. Today, it’s at $6,000,000,000 which represents a 16% CAGR over the past seven years. Servicing revenue, as you know, is a source of strong recurring revenue and now represents 20% of the company’s total revenue.

And finally, the fourth highlight is in mid second quarter, we commenced with Source One, a upgrade strategy mirroring the similar successful Triad upgrade strategy, where the early results of that Source One strategy are encouraging with $60,000,000 of originations in July for Source One. Turning to Page six. Since mid-twenty twenty three, we have implemented a four phased upgrade strategy at Triad. The first was Lance Hall being hired as President. Lance, as you know, has twenty five years twenty five years of industry experience.

He is a proven leader, including experience with twenty first Mortgage. During the past two years and actually this afternoon, the senior presents Lance’s second anniversary. Congratulations, Lance.

Cody Pierce, Co CEO, Triad Financial: Thank you. He

Stephen Hudson, Chief Executive Officer, ECN Capital: has implemented successfully improved systems and processes with several successes. One I like to call out is the application to funding ratio, which is impressive with an 18% growth rate. Well done. The second phase was Lance Hall, who was promoted to Triad Co CEO and Vice Chairman. His scope includes operations servicing, technology, human resources and corp development.

Two additional successes under Lance leadership include the $6,000,000,000 servicing business I just referenced and $2,000,000,000 of incremental funding capacity. Third phase is Cody Pierce has been hired as Triad’s Co CEO. He has twenty five years of industry experience like Lance. He is the founder of Cascade and most recently the senior officer of YES Communities, the second largest US manufactured housing REIT. His scope includes sales culture, loan origination, product menu and corp development.

The final phase, now that we have a battle ready back end business, is to complete the building the fortress on our front end business under Cody’s watch and leadership, which is a review of sales culture strategy and go to market team. Turning to Page seven, Source One has commenced a similar upgrade strategy based upon Triad’s successful program. It’s comprised of four phases. The first is improved sales team structure and culture. We’ve recruited a very recognized and successful Chief Growth Officer.

We’ve enhanced reporting to track and manage sales representatives as well as providing better sales tools, incentive structures and a warrior attitude. Second phase is product and underwriting enhancements. I’d call out two major product additions, our two forty month amortizing product as well as our seasonal incentives. We also have dramatically improved our decisioning time. Our turnaround time used to be two to three days.

It’s now two to three hours while the customer is still in the deal room. The third phase has been an aggressive marketing push to land new dealers, which we’ve successfully done, as well as tailoring loan campaigns and extended promos for these dealer groups, as well as increased visibility at RV shows. And the final phase is improving flow programs, which are optimizing origination margins in the 2025. With that, I’ll pass to you, Lance.

Lance Hull, Co CEO and Vice Chairman, Triad Financial: Thank you, Steve. If I could have you turn to Slide 10 for the manufacturing housing highlights. There’s a lot of information on this slide, but I want to focus on three successes in the quarter and then provide some clarity regarding origination revenue margins and adjusted operating income. First, as Steve highlighted, our origination growth in the quarter resulted in an all time record at four thirty six million dollars Second, we’ve grown our managed assets to more than $6,000,000,000 As a result, our diversified business model continues to strengthen with recurring revenue from servicing alone representing 28% of our total revenue in the quarter. And based on our progress at 17,200,000 in adjusted operating income, Triad now represents more than 80% of the total revenue of ECM.

Now pointing to revenue margins and operating incomes. Origination revenue margin was slightly below target for the quarter and the lighter growth relative to the top line originations is primarily attributed to just two factors. First, in the quarter, we had a lower mix of sales to our higher margin bank and credit union partners, in line with our plan. And second, performance through the Champion Financing JV continues to outperform relative to plan. As a reminder, while Triad’s reported originations include both Triad and JV loan production, our pro rata share in the JV is recorded in other revenue and not origination revenue.

While Q2 margin came in slightly below target, we are tracking to 6.3% on a year to date basis and we are maintaining the 6.5% guidance for the second half of the year based on the outlook for mix, sales channels and JV performance. And lastly, the lower adjusted operating income in Q2 twenty twenty five versus last year is partly due to the allocation of public company overhead costs in connection with the previously announced corporate simplification plan. Turning over to Slide 11. Chattel originations continue to exceed plan. We first broke through the $100,000,000 in a single month in March and since then have broken monthly origination records chattel in each of the last four months, with July setting the high mark at $133,000,000 Chattel comprised 85% of originations in Q2 versus 70% in Q2 of last year.

In line with our plan and as a result of our expanded flow arrangements with our institutional partners, bank and credit union sales accounted for just 17% of our total sales in Q2, down from 30% in the prior quarter. And with the prior two years dedicated to upgrading our platform and building a solid foundation to support growth, we are now actively pursuing more aggressive go to market initiatives and key resources for H2 in the years ahead. And to lead that effort, as Steve mentioned in his opening remarks, we’ve had the opportunity to have Cody Pierce join us as our Co CEO. I’ve known Cody for more than fifteen years, and his twenty six years of experience in the industry and success in building strong sales teams and effective results is unparalleled. We are certainly glad to have him in the company.

I’ve known him as a competitor and as a friend and now as a partner. And with that, I’ll introduce Cody. Cody?

Cody Pierce, Co CEO, Triad Financial: Thank you, Lance. I’m truly excited to join the Triad team. As mentioned, Lance and I have known each other for many years, and I have tremendous respect for his leadership, values and integrity that he brings to the organization. I’m looking forward to working collaboratively to continue growing both the business and the team. Turning to Slide 12, our chattel loan originations.

Chattel originations continue to show strong momentum, increasing 71.5% in Q2 and 72% in July. Applications, approvals and fundings are all trending ahead of plan. This performance reflects the strong foundation that Lance and his team have built. Since Lance joined TRAD, application volume has grown by 38% signaling significant market share expansion. Additionally, our applications to funding ratio has improved by 18% reinforcing our confidence in future growth and supporting our guidance.

These are all strong leading indicators for continued performance and a testament to Triad’s ability to capture market share. Turning to Slide 13 for a commercial update. I was brought in to complement this retail growth with a dedicated focus on commercial expansion. In Q2, balances totaled $446,000,000 which is relatively flat compared to the $452,000,000 in the prior year. However, we are still gaining floor plan market share despite overall inventory levels declining across the industry.

As part of our commercial upgrade strategy, we are implementing targeted initiatives to reignite growth and to expand our footprint in the space. Now turning to Slide 14, our joint venture with Champion Homes continues to perform ahead of plan. We’re seeing increasing penetration at captive stores, which reflects the strength of the partnership and the alignment of incentives between Triad and Champion. With that, I will turn it back over to Lance.

Lance Hull, Co CEO and Vice Chairman, Triad Financial: Thank you, Cody. If you turn with me to Slide 15, please. Taking a look at our portfolio credit trends, our credit performance remains within plan with core delinquency falling and net charge offs holding steady. And as mentioned previously, our managed assets grew to just over $6,000,000,000 in the quarter. And I want to take this time to thank Eric Lamins and the entire servicing team at Triad for their hard work leading to this strong performance.

On Slide 16, we are confirming our guidance for the year. And then if you would flip with me to Slide 17,

Stephen Boland, Analyst, Raymond James: this is

Lance Hull, Co CEO and Vice Chairman, Triad Financial: a slide that we’ve included most every quarter and and it’s a picture of historic originations. And normally, we just pass through it. But today, do want to just take again a moment to thank the origination team at Triad for all their hard work and congratulate them on a record quarter. And with that, I’ll turn it back to Steve.

Stephen Hudson, Chief Executive Officer, ECN Capital: Thanks, Lance. Turning to Slide 19. The second quarter adjusted operating income for RV and Marine was approximately 3,100,000.0 assets for Source One in the 2025, which impacted income. IFG, however, was not impacted and is in budget and has successfully completed its upgrade strategy under the strong leadership of Hans Cross. Turning to Source One on Page 23 highlights I’d like to make.

First is that June originations and July originations have rebounded and are evidenced in the early results of Source One’s upgrade strategy. Second highlight is year to date has been impacted by lower volumes and budget, a slight compression to margins and the delayed sale of an asset delayed asset sale I referred to just a moment ago. There are four specific components of Source One’s upgrade strategy I’d like to call out. The first is a sales team structure. The second is product and underwriting enhancements.

The third is an aggressive marketing push to dealers. And the fourth has been improved flow programs. All four of those components will drive increased profitability in the 2025 and into 2026. Turning to IFG’s business. Four highlights I’d like to reference.

First, our June originations up 24% and July up 26%. IFG continues to take market share through strong relationships and regional expansion. This is all in the light of a new U. S. Boat registration, which are down 12%, yet the business originations are up 12%.

That 24% gap is due to the leadership and execution of Hans Cross and his team. Congratulations. The fourth item is in the growing industrial headwinds that the sorry, that the upgrade strategy has been completed by IFG. Turning to Slide 22, let me recap our V and Marine 2025 guidance. As I mentioned a moment ago, H1 was impacted by industrial headwinds and a delayed sale of assets at Source One.

2025 adjusted operating income before tax ECN share of 14,000,000 to $18,000,000 was from the original 16,000,000 to $26,000,000 The $5,000,000 the average $5,000,000 of earnings reduction was due to the lower volume and the related reduced asset sales. Jackie?

Jackie Weber, Chief Financial Officer, ECN Capital: Thanks, Steve. Turning to Page 25 for consolidated results. Total originations were $8.00 $4,000,000 for the second quarter, with adjusted EBITDA of $31,500,000 and adjusted operating income of 17,000,000 Adjusted net income to common shareholders was $10,000,000 or $04 per share. Turning to Page 26. Our total asset and debt levels remain consistent with the 2025 and down from the prior year quarter, as we’ve continued to maintain total finance asset balances below $450,000,000 for the 2025.

Turning to Page 27. Total adjusted revenue increased to $62,200,000 up from $58,000,000 in the prior year quarter, which is driven by higher originations revenue and higher servicing revenue at both different segments. Interest income and interest expense each decreased as a result of lower on balance sheet finance assets in 2025. Operating expenses increased year over year to $30,700,000 which we’ll visit on the next slide. And adjusted operating income increased to $17,000,000 up from $14,500,000 in the prior year quarter.

On Page 28, manufactured housing operating expenses of $22,700,000 were up modestly from Q1 with the growth in the business. RV and marine operating expenses increased $7,900,000 from $7,000,000 in the 2025, which was due to the growth in originations as well as investments in the upgrade strategy that Steve previously spoke to. Turning to Page 29. We continue to maintain held for trading assets below $250,000,000 with the second quarter ending at $240,000,000 And lastly, turning to Page 30. As Steve previously mentioned, we’re updating our RV and Marine guidance, and we expect adjusted operating income for RV and Marine to be in the range of 14,000,000 to $18,000,000 As a result, our consolidated adjusted EPS range is now $52,000,000 to $64,000,000 or $0.18 to $0.23 per share.

Back to Steve.

Stephen Hudson, Chief Executive Officer, ECN Capital: Thanks, Jackie. Turning to Slide 32. I would like to comment on three items in closing. The first is 80% of the company wide upgrade strategies have been successfully completed, and the remaining 20% will be completed in the 2025. The company has been materially improved.

The second, on guidance, we’re reaffirming the MH Finance guidance of $0.78 to $0.90 We are narrowing the RV Marine guidance to $0.14 to $0.18 and the we are tightening consolidated EPS guidance to $0.18 to $0.23 Finally, notwithstanding Q2 specific RV slowdown, Triad has met or exceeded my expectations and the RV business is accelerating as we start the third quarter. With that, operator, we will take questions.

Conference Operator: Thank you. We will now take analyst questions from the telephone lines. You will hear a tone acknowledging your request. If you’re using a speakerphone, please lift your handset before pressing any keys. To withdraw your question, please press pound then 1.

There’ll be a brief pause while the participants register for questions. Thank you for your patience. And our first question will come from Stephen Boland with Raymond James.

Stephen Boland, Analyst, Raymond James: Thanks. Steve, could you just provide any update on the discussions with Champion and the standstill and, you know, any possible corporate development there?

Stephen Hudson, Chief Executive Officer, ECN Capital: Yeah. Our our joint venture is is meeting or actually exceeding both parties’ expectations on the operating side, Steve. I can’t comment on on the investor rights agreement, as you know. Its end date is the September. I have to leave it at that, Steve.

Stephen Boland, Analyst, Raymond James: Okay. And then, Nina, I I understand the RV Marine, you know, the changes, you know, this this upgrade you’re talking about, Steve. I mean, is this, you know, the management, know, changing sales? I think you added Crimker as the head of sales there. You know, is that part of the the like, I’m just wondering what the operating leverage or, you know, expense growth there.

Like, what what’s the impact of doing all these these changes?

Stephen Hudson, Chief Executive Officer, ECN Capital: Yeah. I think, you know, Mike opt it’s a good question, Steve. Thanks for it. Mike opts has done a great job seeing this business, and he’s there beside you mentioned Joe Grimker. Joe Grimker has got a very established and proven record of turning around sales finance businesses in the specialty finance sector.

So we’re happy to have him as the as the chief revenue officer. I would say his impact, Steve, in the last two months has been dramatic. Know, we’ve we’ve landed two new large dealer groups that we didn’t have before. He’s spent a lot of time rejigging the sales team. It’d be this type of turnaround time I referred to of two to three days to two to three hours is is Joe and the people around them that we we brought in.

So I’ve been very impressed, and they know the proof will be q three, but the the July start of 60,000,000 was a number that almost met our budget. My budget was aggressive for this business. So I’m happy with his with his his enhancement to the sales team, his product development, his execution on process, I. E, decreasing the the on time and the book ratios up. So things are moving in the right direction.

As you know, Steve, I in downturns, I think there’s some really great competitive teams you can hire. Like, we have at ING, and we have done at Triad, and we’re doing the same thing here.

Stephen Boland, Analyst, Raymond James: Okay. Let’s go. I’ll one more. Sorry. And maybe it’s probably for Jackie.

You know, I I asked this last question about this this on the cash flow statement, this change in retained servicing rights. And I I thought it had something to do with discount rates and, you know, maybe interest rates, something to that. I I can’t remember. Apologize. But it looks like the number went up again.

So can you just remind me what what impacts that that that number? Because it it does go into income. Right?

Jackie Weber, Chief Financial Officer, ECN Capital: It it does go into income, and there are two components. There’s so you have your cash well, servicing revenue in total, you have cash, and then you have your intangibles for your servicing. Right? If you’re looking specifically at the cash flow statement, Steve, the increase in the current quarter is really just the higher volume at Triad. So as they have higher asset sales and servicing rights related to those, it’ll tend to tick up.

There have been no changes to any assumptions underpinning how those are recognized in the current quarter.

Stephen Boland, Analyst, Raymond James: Okay. So we should expect this to be a like, this should be an ongoing like it’s it’s recurring, basically, at this point. Is that what we should expect? I’m just thinking about modeling this out a little bit more.

Jackie Weber, Chief Financial Officer, ECN Capital: Yeah. You yeah. You will have a noncash revenue item in there each quarter.

Stephen Boland, Analyst, Raymond James: Okay. Alright. That’s it for me. Thanks, guys.

Conference Operator: And we’ll move next to Jamie Goin with National Bank Financial.

Jamie Goin, Analyst, National Bank Financial: Yes. Thanks. Good evening. Question on the the on Triad and looking forward to seeing some of the results of the co CEOs. Just curious on the sales side, the origination side.

I mean, results have looked pretty good over the past few quarters here. So just wondering now, you know, where are the where are the gaps? Where do you see, inefficiencies, I guess? And and what, what are you looking to implement here in the near term? I guess, question is for Cody.

Sorry.

Cody Pierce, Co CEO, Triad Financial: Well, I’ve been in the seat for thirty days. What Lance and team have built is impressive. We’re seeing tremendous growth on the retail side. I see great opportunity on the commercial side and that’s what I’m going to be heavily focused on.

Stephen Hudson, Chief Executive Officer, ECN Capital: I think Jamie, it’s Steve. I would I don’t think there’s a single person who’s happy with the the the flat growth in the commercial business. And Cody has a deep expertise in that both at Cascade and at YES Community. So I think you there are a series of initiatives coming on that specific business to to turn back on the growth.

Jamie Goin, Analyst, National Bank Financial: Okay. And then with respect to the

Stephen Hudson, Chief Executive Officer, ECN Capital: the

Jamie Goin, Analyst, National Bank Financial: Blackstone relationship, it looks like it was renewed this quarter. Can you give us a little, I guess, more color on that deal as in terms of like size, maturity of the the deal, maybe a little bit more color to as to your discussions with your other key funding partners here for the Triad business?

James Ferry, Chief Financial Officer, Triad Financial: Sure. So this is James. So all our funding agreements are substantially similar and we don’t go into details on the specifics. But effectively, we’re offering kind of these bespoke investment portfolios that meet their targeted returns. So they vary slightly in terms of the product mix and also on the program side.

But there’s they’re materially similar, especially from a margin standpoint and they typically have terms of twelve months to twenty four months.

Stephen Hudson, Chief Executive Officer, ECN Capital: Would add one thing to James’ comment was that we are having started these flow programs approximately we’re now in BX4, so four years ago. We’re now in a position of being overfunded by approximately $1,500,000,000 So we have it’s a nice position to be in. So now we’re faced with decisions on how to allocate our product flow. I think it’s fair to assume that we will get better pricing going forward given excess demand for home improvements. There is only one platform to buy home improvement loans sorry, manufactured homes and MH loans in The U.

S, and that’s from the Triad platform. Clayton stuff from twenty first and Vanderbilt flows into the Berkshire Hathaway family. So it’s nice four years later to see this strong excess demand and having established a new asset category for U. S. Life goals.

Jamie Goin, Analyst, National Bank Financial: Okay. And staying in Triad for one more, just looking at the origination revenue margin below 6%, I get the full year is close to the six and a half guidance. But it seems to have been mix driven, which, on a on a separate slide, you know, seems to indicate that the mix in q two was more in line with forecasted mix. So I guess the, you know, the question is like, what shift or what change should we see in in the second half to bring that that 5.8 back closer to the six and a half?

James Ferry, Chief Financial Officer, Triad Financial: So I think the bigger driver was more of the sales channel on a year over year basis. So like there was slightly more sales to institutional partners in Q2 twenty twenty five. And then as Lance was explaining, the outperformance of the JV also has an impact on margin. So I think when we look at the second half of the year and we’re looking at product mix, sales channel and also where we see the JV going, I think we’re comfortable with the 6.5%. And the other data point that I would share is like we’re just wrapping up our July reporting cycle and the margin for that month was 6.4%.

So again, it’s recalibrating back to the 6.5% on a full year basis.

Jamie Goin, Analyst, National Bank Financial: Okay. That’s helpful. And then just last one, going to the RV Marine upgrade strategy. I’m not sure if you disclosed it in the MD and A or somewhere else, but the costs associated to launching that strategy and implementing that strategy, that seems to be the biggest driver of the, the operating income before tax mess in the the business line in q one and q two. Can can you quantify those costs?

Are those costs disappearing in h two, or should they continue? Yeah. Maybe just a little bit more to help us on that side.

Stephen Hudson, Chief Executive Officer, ECN Capital: Yeah. I would I would I would put the cost of the of the program of between $7.57 $50,000 and a million dollars. A chunk of that has been incurred in h one. Approximately 6% of it. The rest will be incurred in H2.

But the H2 stuff will be offset with increased originations and margins. So it will have less of an impact in H2 than it did in the first half of the year.

Jamie Goin, Analyst, National Bank Financial: Okay. So not actually, not as much as I would have expected if we’re gonna go from about, you know, four just over 4,000,000 of AOI in the ’25 to about 14,000,000 or more of AOI in the second half.

Stephen Hudson, Chief Executive Officer, ECN Capital: Yeah. Well, you you do have a bit of seasonality in this business. The third quarter is always the strongest. The first quarter is is very little that happens in the winter. It’s it’s we we we we had a volume miss that was significant in the first half, Jamie.

And the other part, that when you have a volume miss, you also impacts the you you have less assets assets to sell through, which impacts that as well as there’s less servicing rights. So it it’s a multiple impact on when you miss miss volume. The good news is the start of h two is strong.

Jamie Goin, Analyst, National Bank Financial: Yep. Great. And then the the last one, and I’ll turn it over. Thanks for being patient here. The the asset sales from Source One that have been delayed or like, are they are they just deferred, or are they are they gone?

They’re like, you’re not able to sell them or you’re have to sell them for, you know, pennies pennies on a dollar, let’s say, in terms of, like, an origination fee.

Stephen Hudson, Chief Executive Officer, ECN Capital: Yeah. There’s there’s when I say delay, Jimmy, maybe that’s the wrong term, is that we had less originations in the first half, so we had less assets to sell. That impacted the asset sales. We have about, you know, 40,000,000 on our balance sheet that will move in h two at better margins. We have a new funding party partner coming on, which will help.

But, you know, less originations begets you less sales.

Jamie Goin, Analyst, National Bank Financial: Okay. Okay. Understood. Thank you very much.

Conference Operator: And our next question will come from Tom MacKinnon with BMO Capital.

Jamie Goin, Analyst, National Bank Financial: Yeah. My question was asked and answered as part of James’ laundry list of questions. Thanks.

Conference Operator: Thank you. And as a reminder, if you have a question, you can signal by pressing star one at this time. We’ll pause for just a moment to allow everyone an opportunity to signal.

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