Mr. Simon Hitzig reports

ACCORD FINANCIAL ANNOUNCES FOURTH QUARTER AND FISCAL 2023 FINANCIAL RESULTS

Accord Financial Corp. has released its financial results for the fourth quarter and year ended Dec. 31, 2023. The financial figures presented in this release have been prepared in accordance with international financial reporting standards (IFRS).

Accord generated steady top-line performance in 2023, with finance receivables and loans (funds employed) averaging $472-million during the year, up 4.9 per cent over 2022. Driven by portfolio growth and higher average yields, revenue followed suit to an all-time high of $79.7-million, up from $67.5-million in 2022. The company, however, continued to feel the effects of the significant single-account loan loss originally reported with its third quarter results. This fraud-related write-off totalled $13.1-million by year-end, impacting the company's tangible equity.

Simon Hitzig, the company's president and chief executive officer, commented: "After 46 years of successfully financing SMEs [small and medium-sized enterprises], this write-off is an exception to a long history of sound underwriting performance. We continue to manage the effects on our balance sheet, successfully amending our main banking facility, as announced on March 18, to address the effect of our reduced equity capital."

Leading up to the fourth-quarter headwinds, Accord's funds employed grew 9 per cent from Jan. 1 to $493.6-million at Sept. 30, 2023, as business conditions shifted in favour of non-bank lenders, and Accord's product mix specifically. Mr. Hitzig noted, "While we're enjoying a steady increase in new applications, we remain attuned to the challenging credit environment, and continue to be highly selective in onboarding new clients." With the additional challenge of managing with reduced capital in the fourth quarter, the portfolio gave up some growth, settling back to $476.7-million by year-end. Adjusting for one-time items relating to the single account write-off, goodwill write-off and restructuring expenses related to extending the public debentures, the company achieved adjusted net earnings of $5.8-million in 2023, up from $3.5-million in 2022, or 68 cents per common share versus 40 cents last year.

While the top-line and adjusted earnings reflected positive operating performance, net earnings were impacted by several significant non-recurring items. In addition to the single account write-off, the company wrote off the remaining $11.9-million of goodwill on the balance sheet, most of it related to United States acquisitions completed in 2017. With the significant variability in earnings of the U.S. subsidiaries over the last several years, the company made the decision to recognize an impairment loss at the end of the fourth quarter. These non-recurring items contributed to a net loss attributable to shareholders of $14.6-million, or $1.71 per common share, in 2023. Book value per common share closed the year at $9.80.

Given the changes in Accord's equity base and primary bank facility, the company is evaluating additional financing sources, including various private market financing arrangements, to support, replace or add to current debt facilities. In addition, the company is exploring a number of strategic initiatives to generate additional cash and capital to support portfolio growth and create shareholder value.

Looking ahead, Mr. Hitzig added: "Despite the significant one-time items in our 2023 financials, our excellent management team has built meaningful enterprise value. Our challenge in 2024 is to unlock that value for shareholders through balance sheet strategy combined with steady operating performance."

About Accord Financial Corp.

Accord Financial is North America's most dynamic commercial finance company providing fast, versatile financing solutions, including asset-based lending, factoring, inventory finance, equipment leasing, trade finance and film/media finance. By leveraging its unique combination of financial strength, deep experience and independent thinking, Accord Financial crafts winning financial solutions for small and medium-sized businesses, simply delivered, so the company's clients can thrive.

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