Toronto-Dominion Bank · TSX:TD
Toronto-Dominion Bank — TD Bank Group — Q1 2013 Earnings Presentation
34 slides from Toronto-Dominion Bank's earnings presentation, Feb 28, 2013
Slide 1: TD Bank Group Q1 2013 Investor Presentation
TD Bank Group Q1 2013 Investor Presentation Thursday February 28th, 2013
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements From time to time, the Bank makes written and/or oral forward-looking statements, including in this document, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission, and in other communications. In addition, representativ
Slide 3: Strategic Overview
Strategic Overview Strong record quarter ─ Adjusted1,2 earnings of $1.9B, up 9% versus Q1 2012; Adjusted EPS up 8% ─ Record retail results, with strength in all businesses ─ Softer result in Wholesale, but underlying client business is strong Encouraging signs in the macro environment, but maint
Slide 4: Q1 2013 Highlights
Q1 2013 Highlights Key Themes Net Income $MM (Adjusted, where applicable) Strong adjusted1 EPS growth of Q1/13 QoQ YoY 8% YoY Retail2 $ 1,706 16% 10% Wholesale 159 -49% -18% Record performance driven by Corporate 51 n/a +100% retail businesses Adjusted Net Income $ 1,916 9% 9% Volume growth wa
Slide 5: Q1 2013 Earnings: Items of Note
Q1 2013 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $1,790 $1.86 Pre Tax After Tax Items of Note EPS (MM) (MM) Amortization of intangibles1 $87 $56 $0.06 Change in fair value of derivatives hedging the reclassified available-for-sale $(31) $(24) $(0.03) securities portfolio
Slide 6: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Key Themes P&L $MM1 Q1/13 QoQ YoY Strong adjusted1 net income Revenue $ 2,723 -1% 5% Adjusted operating leverage of 80 bps PCL 244 -20% -14% 1,194 -9% 5% Good loan and deposit growth Expenses (adjusted) Net Income (adjusted) $ 944 14% 11% Retail lending
Slide 7: Wealth and Insurance
Wealth and Insurance Key Themes P&L $MM Q1/13 QoQ YoY Record quarter for both Wealth and Revenue $ 1,077 12% 8% Insurance Expenses 670 -1% 5% Wealth earnings up 15% YoY Net Income, Wealth $ 165 11% 15% Net Income, Insurance $ 165 76% 10% Mostly due to continued growth in client assets Net Inco
Slide 8: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Key Themes P&L US$MM1 Q1/13 QoQ YoY Strong adjusted1 earnings Revenue (adjusted) $ 1,539 0% 5% Strong volume and fee growth PCL (adjusted) 177 -12% 14% Gains on sales of securities ($82MM) Expenses (adjusted) 903 -3% 4% Lower effective tax rate Net Income (
Slide 9: Wholesale Banking
Wholesale Banking Key Themes P&L $MM Q1/13 QoQ YoY Solid quarter from core businesses Revenue $ 599 -17% -12% Benefited from lower non-interest PCL (5) n/a n/a expenses YoY and a PCL recovery Expenses 393 5% -3% Lower trading-related revenue, but Net Income $ 159 -49% -18% inline with guidance
Slide 10: Corporate Segment
Corporate Segment Key Themes P&L $MM1 Q1/13 QoQ YoY Higher adjusted net income YoY Net Corporate Expenses $ (134) -30% 46% Gains in treasury and hedging activities Other 159 17% 92% Reduction of the allowance for incurred Non-Controlling Interests 26 0% 0% but not identified credit losses rela
Slide 11: Expenses
Expenses Highlights Efficiency Ratio – Adjusted Adjusted expenses1 down 6% 59.0% QoQ, up 4% YoY 56.8% 55.6% 55.3% 55.4% Higher costs YoY due to business growth and timing of expenses Expect better distribution of expenses across 2013 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Targeting core expense2 grow
Slide 12: Capital
Capital Highlights Basel III Common Equity Tier 11 8.8% Basel III Common Equity Tier 1 7.4% 7.7% 8.2% 7.1% ratio of 8.8% as of Jan 31, 2013 Exceeded 7% regulatory requirement on a fully phased-in basis Includes 30 bps of temporary relief from OSFI on treatment of CVA Discount on the dividend
Slide 13: Credit Portfolio Highlights
Credit Portfolio Highlights Highlights PCL Ratio (bps)1 48 Strong credit performance across 46 46 all portfolios as evidenced by: 42 Decreased delinquencies in the Canadian Personal portfolios 35 Return to normal levels of Gross Impaired Loan formations YoY improvement of 148 bps for combine
Slide 14: Appendix
ID Appendix
Slide 15: Q1 2013 Earnings: Items of Note
Q1 2013 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $1,790 $1.86 Revenue/ Pre Tax After Tax Items of note EPS Segment Expense Line (MM) (MM) Item2 Amortization of intangibles1 $87 $56 $0.06 Corporate pg 13, line 15 Change in fair value of derivatives hedging the reclassified
Slide 16: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Highlights Net Interest Margin Margin on average earning assets On Average Earning Assets of 2.79% was flat YoY 2.87% 2.86% Q1 2013 included on additional 2.79% 2.83% 2.79% month of MBNA On Loans 1.94% 1.92% 1.91% 1.84% 1.85% On Deposits 1.46% 1.44% 1.42% 1
Slide 17: Canadian Personal & Commercial Banking: Deposit Growth
Canadian Personal & Commercial Banking Deposit Growth Highlights Average Deposits ($ billions) 8% Growth Personal deposit volumes YoY increased 7% YoY Business deposit volumes $219 $222 increased 8% YoY $215 $206 $209 $70 $71 $66 $69 $66 $143 $146 $149 $151 $140 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Per
Slide 18: Canadian Personal & Commercial Banking: Loan Growth
Canadian Personal & Commercial Banking Loan Growth Highlights Average Loans ($ billions) 6% Growth Good personal lending volume YoY growth Real estate secured lending volume increased 5% YoY $300 $302 $285 $289 $293 Strong business lending volume $39 $42 $42 $37 $38 growth $15 $15 $15 $14 $15
Slide 19: Wealth and Insurance
Wealth and Insurance Highlights Revenue $MM Wealth revenues of $728 million $1,048 $1,077 were up 3% versus Q4/12 $999 $1,009 $963 Higher fee-based revenue from continuous asset growth in asset $349 management and advice businesses $345 $324 $323 $257 Insurance revenues of $349 million $118 $1
Slide 20: Wealth
Wealth Performance Metrics AUA1 ($B) AUM2 ($B) $270 $211 $204 $207 $258 $202 $250 $196 $249 $245 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Mutual Funds AUM2 ($B) Retail vs. Institutional AUM ($B) $70.7 $109 $113 $114 $115 $115 $68.1 $89 $90 $93 $96 $87 $65.4 $65.6 $63.2 Q1/12 Q2/12
Slide 21: TD Ameritrade
TD Ameritrade Highlights TD Bank Group’s Share of TD Ameritrade’s Net Income1 TD’s share of TD Ameritrade’s net US$MM income was C$47 million in Q1/13, down 15% YoY mainly due to: $54 $55 Tax related items $51 Lower TD Ameritrade earnings $47 $47 Stronger Canadian dollar TD Ameritrade Result
Slide 22: U.S. Personal & Commercial Banking: Deposit Growth
U.S. Personal & Commercial Banking Deposit Growth Highlights Average Deposits (US$ billions) 8% Growth Average deposits, excluding TD YoY Ameritrade IDAs1 and Government deposits were up 9% YoY 10% growth in personal deposit volume $178 6% growth in business deposit volume $169 $172 $164 $165
Slide 23: U.S. Personal & Commercial Banking: Loan Growth
U.S. Personal & Commercial Banking Loan Growth Highlights Average Loans (US$ billions) 16% Growth Average personal loans increased YoY 23% YoY Average business loans increased $93 $90 10% YoY $87 $83 $80 $48 $47 $46 $45 $44 $41 $43 $45 $36 $38 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Personal Commercial 23
Slide 24: Canadian Housing Market
Canadian Housing Market Highlights The Canadian housing market continues to moderate Canadian RESL credit quality remains strong Loss rate for the trailing 4-quarter period was 2 bps Gross Impaired Loans decreased $17MM over Q4/12 Topic TD Positioning Canadian RESL $219 billion portfolio (
Slide 25: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q4/12 Q1/13 Canadian Personal & Commercial Portfolio $ 299.8 $ 301.6 Personal $ 258.1 $ 258.0 Residential Mortgages 154.3 155.2 Home Equity Lines of Credit (HELOC) 64.2 63.5 Indirect Auto 14.0 13.8 Unsecured Lines of Credit
Slide 26: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio GIL Formations1: $MM and Ratios2 Highlights $1,218 Gross Impaired Loan $12 / 6 bps formations returned to normal $1,061 levels after the one-time $996 $981 $1,041 $6 NM $38 / 17 bps reclassifications in Q4/12 $4 / NM $395 / 46 bps U.S. P&C GIL formatio
Slide 27: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights Gross Impaired Loans $2,530 $2,518 $2,494 decreased $24MM or 1 bp $3 / NM $2,363 $2,367 $3 / NM $3 / NM over Q4/12 $41 / 17 bps $3 / NM $3 / NM $76 / 39 bps $38 / 18 bps $45 / 20 bps $79 / 34 bps U.S. P&C GIL ratio decrease
Slide 28: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio PCL1: $MM and Ratios2 Highlights PCL decreased $129MM or $489 13bps over Q4/12 and $41MM $454 $4 / 7 bps or 7bps since Q1/12 $433 $401 $1 / NM $16 / 28 bps $25MM release of allowance in $6 / 11 bps $360 Corporate Segment due to $175 / 82 bps $147 /
Slide 29: Canadian Personal Banking
Canadian Personal Banking Q1/13 Canadian Personal Banking1 Gross Loans ($B) GIL/ Loans GIL ($MM) PCL2 ($MM) Highlights Residential Mortgages 155 0.30% 471 2 Continued strong credit Home Equity Lines of Credit (HELOC) 64 0.50% 318 3 performance Indirect Auto 14 0.30% 42 35 Impact of one-time Unse
Slide 30: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Q1/13 Canadian Commercial and Gross Highlights GIL PCL1 Loans/BAs Wholesale Banking ($B) ($MM) ($MM) The Canadian Commercial Commercial Banking2 44 134 13 and Wholesale Banking Wholesale 21 38 (9) portfolio continues to Total Canadian Commercial and Wholes
Slide 31: U.S. Personal Banking
U.S. Personal Banking Q1/13 Highlights Gross Loans GIL/ GIL U.S. Personal Banking1 ($B) Loans ($MM) PCL2 Gross Impaired Loans for the ($MM) Residential Mortgages 18 1.27% 234 - Residential Secured portfolio Home Equity Lines of Credit (HELOC)3 10 2.24% 227 17 increased $61MM over Q4/12 primarily a
Slide 32: U.S. Commercial Banking
U.S. Commercial Banking Q1/13 U.S. Commercial Banking1 Gross Loans/BAs GIL PCL2 Highlights ($MM) ($MM) ($B) Commercial Real Estate (CRE) 13 351 12 Overall credit quality Non-residential Real Estate 10 219 11 continued its positive trend Residential Real Estate 3 132 1 Impaired loans and new Comm
Slide 33: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: Grand Prix for Best Overall Investor Relations: Large Cap [email protected] Best Investor Relations by Sector: Financial Services Website: Best Investor Relations www.td.com/investor by a CEO: Large Cap Best Investor Relations by a C
Slide 34: TD Bank Group Q1 2013 Investor Presentation
TD Bank Group Q1 2013 Investor Presentation Thursday February 28th, 2013