Stage three mortgages (impaired) decreased QoQ, from 2.3% to 1.7% of mortgages. However, for conservatism, management raised loan loss allowances by 0.2 pp QoQ to 2.73% of mortgages, aligning with our estimate. We believe the portfolio’s risk profile has decreased due to lower stage three mortgages, and enhanced geographical diversification. The company is pursuing a $50M bond financing. We believe this financing is indicative of the company’s robust pipeline of mortgages. Bondholders will participate on a pari passu (equal) basis with shareholders. BCF’s lending rates have started declining following the Bank of Canada’s recent rate cuts. Today, the BoC lowered its benchmark rate by 25 bp, marking its third consecutive cut since June. With cooling inflation and a softer jobs market, we expect further rate cuts, and a boost in BCF’s transaction volumes in H2-2024. In our May 2024 report, we predicted a rally in MIC/financial stocks driven by lower rates, and sector multiples have since risen by 8%. We remain bullish on MIC and financial stocks, expecting further rallies with additional rate cuts. Price and Volume (1-year) YTD 12M BCF 5% 4% TSXV -1% -7% Portfolio Details Mortgage advancements were down 1% YoY; repayments were up 8% YoY. Mortgage receivables (net) remained flat QoQ at $31M; we are lowering our year-end estimate by 2% to $35M We will incorporate the impact of the ongoing bond financing on our models upon completion. First mortgages decreased, implying higher risk Increased exposure to AB, and decreased exposure to B.C. as management is observing more attractive opportunities and fewer competitors in AB Remains focused on single-family units (construction). The average mortgage size was down 7% QoQ, implying lower risk LTV was up 2.7 pp QoQ, implying higher risk The average lending rate declined slightly, primarily due to the BoC’s rate cut in June. Stage three mortgages (impaired) decreased QoQ, from 2.3% to 1.7% of