“Our CML portfolio scheduled maturities over the next three years are very manageable, 10% in 2024 13% in 2025 and 16% in 2026.”

In context

“ot been under the pressure seen in the office sector. Not surprisingly, the average LTV increased only slightly as a result with our CML portfolio now at an average LTV of 63%, up from 62% in the second quarter of 2023 and an average debt service coverage ratio of 2.3 times, which represents no change versus 2Q 2023. The modest increase in LTVs and stable debt service coverage ratio are further indicators of the disciplined approach we take to investing in this asset class. The quality of our CML portfolio remains strong with only 1.6% of loans having LTVs more than 80% and DSCRs less than one times. With regards to CML loan maturities, we now have successfully resolved almost 90% of the portfolio scheduled to mature in 2023 and our expectation remains for minimal losses on the portfolio. Our CML portfolio scheduled maturities over the next three years are very manageable, 10% in 2024 13% in 2025 and 16% in 2026. Now, let's switch gears to discuss expenses on page 10. This chart shows a comparison of our direct expense ratio for the full year of 2022 as well as the first three quarters of 2023. In Q3 of 2023, the ratio was 12.3%. As we have highlighted previously, we believe our full year direct expense ratio is the best way to measure performance due to fluctuations in quarterly results. Our Q3 direct expense ratio benefited from solid top line growth and ongoing expense discipline. While we would expect our direct expense ratio to be higher in Q4 consistent with the seasonality of our business, we are confident we will beat our full year direct expense ratio target of 12.6% in 2023 despite the challenging inflationary environment. We believe this demonstrates our consistent execution and focus o”