[March 25, 2024]

Accord Financial Announces Fourth Quarter and Fiscal 2023 Financial Results

Accord Financial Corp. ("Accord" or the "Company") (TSX - ACD) today released its financial results for the fourth quarter and year ended December 31, 2023. The financial figures presented in this release are reported in Canadian dollars and have been prepared in accordance with International Financial Reporting Standards.

Accord generated steady top line performance in 2023, with finance receivables and loans ("funds employed") averaging $472 million during the year, up 4.9% 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 totaled $13.1 million by year end, impacting the Company's tangible equity.

The Company's President and CEO, Mr. Simon Hitzig, commented: "After forty-six years of successfully financing SMEs, 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^th, to address the effect of our reduced equity capital."

Leading up to the fourth quarter headwinds, Accord's funds employed grew 9% from January 1^st to $493.6 million at September 30, 2023 as business conditions shifted in favor 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 U.S. 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 funding 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 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 our unique combination of financial strength, deep experience and independent thinking, we craft winning financial solutions for small and medium-sized businesses, simply delivered, so our clients can thrive.

Note: Non-IFRS measures

The Company's financial statements have been prepared in accordance with IFRS. The Company uses a number of other financial measures to monitor its performance and believes that these measures may be useful to investors in evaluating the Company's operating performance and financial position. These measures may not have standardized meanings or computations as prescribed by IFRS that would ensure consistency between companies using these measures and are, therefore, considered to be non-IFRS measures. The non-IFRS measures presented in this press release are as follows:

Forward-Looking Statements

This news release contains certain "forward-looking statements" and certain "forward-looking information" as defined under applicable Canadian securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology. Forward-looking statements in this news release include, but are not limited to, statements, management's beliefs, expectations or intentions regarding the financial position of the Company, the collectability of the account under investigation described above, the effect the foregoing may have on the funding available to maintain the Company's current pace of portfolio growth, and the duration of the suspension of the quarterly dividend announced in November 2023. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements are subject to various risks and uncertainties including risks associated with the collectability of the account under investigation, the ability of the Company to reinstate dividends and those risks identified in the Accord's periodic filings with Canadian securities regulators. See Accord's most recent annual information form and most recent management's discussion and analysis of results of operations and financial condition for a detailed discussion of the risk factors affecting Accord. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.

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