Laurentian Bank Of Canada · TSX:LB
Laurentian Bank Of Canada — Q3 2023 Earnings Presentation
32 slides from Laurentian Bank Of Canada's earnings presentation, Aug 31, 2023
Slide 1: Investor Presentation Third Quarter 2023
Investor Presentation Third Quarter 2023 August 31, 2023
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Caution Regarding Forward-Looking Statements From time to time, Laurentian Bank of Canada and, as applicable its subsidiaries (collectively referred to as the "Bank") may make written or oral forward-looking statements, These forwarcllooking
Slide 3: Rania Llewellyn, President & CEO: FY23 Priorities
Rania Llewellyn President & Chief Executive Officer FY23 Priorities
Slide 4: Strategic Plan Update | Key Topical Subjects
Strategic Plan Update | Key Topical Subjects The Bank’s Board of Directors and Management Team are conducting a review of strategic options to maximize shareholder and stakeholder value While the review is underway, the Bank remains committed to executing on its strategy and fiscal 2023 priorities w
Slide 5: Strategic Plan Update | Q3/23 Results
Strategic Plan Update | Q3/23 Results Adjusted Net Income) Reported Net Income Adjusted EPS?) Reported EPS Adjusted Efficiency Ratio!) Reported Efficiency Ratio’) Adjusted PTPP Income) Reported PTPP Income(') Adjusted ROE) Reported ROE®) CET1 capital ratio) Net Interest Margin) | —_ $57.6MM $49.3MM
Slide 6: Strategic Plan | 5-Point Plan for Future Growth
Strategic Plan | 5-Point Plan for Future Growth eo @@® @ 2) Build One Winning Make Size Our Think Customer simplify Make the Better Team Advantage First P Choice Culture Commercial Banking Capital Markets Personal Banking Our Driving Force Our Growth Engine Focused & Aligned Offering Repositioning f
Slide 7: FY23 Priorities | Positioned for Growth
FY23 Priorities | Positioned for Growth We are focusing on three priorities in FY2023 Delivering excellent Deposits and Optimizing Driving Efficiencies customer service Funding Structure Through Simplification We will leverage data from We will optimize our We will continue to manage our NPS program
Slide 8: Delivering Excellent Customer Service
Delivering Excellent Customer Service Take targeted actions to remove pain points Leverage data (NPS) to make informed decisions on improving the customer experience Put the customer at the centre of all organizational decisions Q3 Accomplishments | Customer Service eo TN. N / \ l \ { \ \ | \ / \ /
Slide 9: Deposits & Funding
Deposits & Funding Grow core deposits to maintain strong balance sheet and support loan growth Deepen customer relationships and target new customers Issue long-term, cost-efficient securitizations Q3 Accomplishments | Deposits & Funding N N Z N / \ / \ v4 = \ / / 1 ‘@ (aly ‘(B) | \ / \ / \ / \. ra
Slide 10: Q3 Accomplishments | Driving Efficiencies
Q3 Accomplishments I Driving Efficiencies Driving Efficiencies through @ J my: Simplification Reduce complexity Branch Relocation Contac Digital : Harmonization Documentation Streamline internal processes and Relocated a few Harmonized Introduced digitization operations branches with expiring contra
Slide 11: Q3 Accomplishments | Culture & ESG
Q3 Accomplishments | Culture & ESG Culture —m © O 0 Culture is our A 1 Empl L tian Bank i driving force nnual Employee Sustainalytics Score as Survey the Community We are focused on living up to our Completed our third Improved our Launched our 3 annual annual employee Sustainalytics ESG Laurentian
Slide 12: Yvan Deschamps, CFO: Financial Review
Yvan Deschamps Executive Vice President & Chief Financial Officer Financial Review
Slide 13: Solid Financial Results
Financial Review | Solid Financial Results Reported ($MM) Q3/23 YN aiq Y/Y Highlights Total revenue $ 260.8 -% +1% + Solid financial results with total revenue relatively in line to last year, as Provision for credit losses (PCL) $133 20% 18% a result of strong loan growth in Commercial Banking Non-
Slide 14: Net Interest Income and Net Interest Margin
Financial Review | Net Interest Income and Net Interest Margin Net Interest Income and Margin ($MM, %) Key Assets ($B) Q3/23 YIY qa iqui (1) 4.83% 177% 177% 1.80% 1.84% Liquid assets' $12.2 +3% +6% eo =O Personal loans $2.7 -20% 6% Residential mortgage loans $16.4 +4% -% $188.5] Commercial loans) $1
Slide 15: Optimizing Funding Structure and Costs
Financial Review | Optimizing Funding Structure and Costs Funding) ($B) 42.1 3 42.3 2.8 0.3 0.3 0.3 Shareholders’ equity 12.6 = Subordinated debt 2.0 25 19 = Debt related to securitization ™ Deposits - Business, banks and other - 10.8 10.5 Wholesale Deposits - Business, banks and other - Business 3.
Slide 16: Other Income Impacted by Market Volatility
Financial Review | Other Income Impacted by Market Volatility Other Income ($MM) Q3/23 YY Qiq Lending fees $16.9 1% +1% Fees and securities brokerage commissions $9.3 -13% -15% Income from mutual funds $10.9 5% 1% Service charges $7.0 4% -3% Income from financial instruments $6.7 -30% -26% Card serv
Slide 17: Non-Interest Expenses (NIE) Support Growth
Financial Review | Non-Interest Expenses (NIE) Support Growth NIE ($MM) Q3/23 YIY qa Y/Y Highlights Salaries and employee benefits $98.6 1% -2% + Reported NIE increased by $12.6MM due mostly to restructuring and Premises and technology $ 49.2 +11% 41% strategic-review related charges of $8.2MM Other
Slide 18: Strong Capital Position
Financial Review | Strong Capital Position Common Equity Tier 1 Capital Ratio (CET1)) Risk-Weighted Assets (RWA) ($B) 9.8% 9.3% 9.1% 9.1% 9.1% 23.5 23.9 23.9 23.8 aap e 2 eo . Q3/22 4/22 Q1/23 Q2/23 Q3/23 Q3/22 4/22 Q1/23 Q2/23 Q3/23 Evolution of the CET1 Ratio (%) Y/Y Highlights + CET1 ratio up 70
Slide 19: Strong and Diversified Commercial Loan Portfolio
Financial Review | Strong and Diversified Commercial Loan Portfolio Commercial Loan Portfolio ($B) A Pan-Canadian Portfolio and a U.S. 18.6 Presence ¢s at Juy 31, 2023) 173 17.8 Commercial Lending ($B) British Columbia & Territories = Inventory financing = Alberta & Prairies = Equipment financing On
Slide 20: Diversified Inventory Financing Portfolio
Financial Review | Diversified Inventory Financing Portfolio . . Inventory Finance Main Product Lines Inventory Finance Overview (as at July 31, 2023) > 5,600+ dealers in the U.S. and Canada = Marine . ue + Re tional Vehicl > $700,000 average dealer line utilization mecreational Vehicle = Trailer ™
Slide 21: Strong Commercial Real Estate Portfolio
Financial Review | Strong Commercial Real Estate Portfolio Commercial Real Estate Portfolio Portfolio Overview (as at July 31, 2023) * 65% of our portfolio is residential: 55% Multi- minsured Term Loans - Multi-Residential Residential and 10% Condos » LTV on uninsured multi-residential = Conventiona
Slide 22: High Quality Residential Mortgage Loan Portfolio
Financial Review | High Quality Residential Mortgage Loan Portfolio More than 80% of our residential mortgage portfolio is fixed rate of which ~80% will mature in 2025 or later Insured vs Uninsured A Pan-Canadian Portfolio!) (2s at suy 1, 2023) British Columbia =Alberta & Prairies ™ Conventional = P
Slide 23: Allowances for Credit Losses
Financial Review | Allowances for Credit Losses Allowances for Credit Losses (ACL) ($MM) Y/Y Highlights 211.6 217.1 + ACL increased by $23.9MM, mostly as a result of higher provisions on 193.2 201.1 203.5 - : : 607 commercial loans related to volume growth and macroeconomic 53.4 52.3 50.4 0. uncerta
Slide 24: Provision for Credit Losses
Financial Review | Provision for Credit Losses Provision for Credit Losses (PCL) ($MM) Y/Y Highlights + PCL decreased by $3.3MM, mostly reflecting lower provisions on performing loans, partly offset by higher provisions on impaired loans 16.6 78 15.4 16.2 13.3 + PCLas a % of average loans and accept
Slide 25: Impaired Loans
Financial Review | Impaired Loans Gross Impaired Loans ($MM, bps) Net Impaired Loans ($MM, bps) 55 38 49 _—e 32 34 “ “ a —e * 28 141.4 o —~@— ie6 184-1 202.1 420.1 129.6 159.0 157.7 . 105.7 105.4 o 90.6 94 g 109.5 126.4 48.6 51. ' 79.2 70 oa! 47.5 8 33.7 38.4 20.2 Q3/22 4/22 Q1/23 Q2/23 Q3/23 Q3/22
Slide 26: Rania Llewellyn, President & CEO: Strategic Outlook
Rania Llewellyn President & Chief Executive Officer Strategic Outlook
Slide 27: Strategic Outlook | Delivering Shareholder Value
Strategic Outlook | Delivering Shareholder Value i Focused on delivering against our strategic plan and our three core priorities We will continue to take actions to improve the customer experience Deposits and an optimized funding structure remain a priority, supported by our digital account onboar
Slide 28: Appendices
Appendices
Slide 29: Appendices | Adjusting Items
Appendices | Adjusting Items Q3/23 Q2/23 Q3/22 Pre-Tax After-Tax Impact Pre-Tax After-Tax Impact Pre-Tax After-Tax Impact Impact Impact ($/ Impact Impact ($/ Impact Impact ($/ ($MM) ($MM) Share) ($MM) ($MM) Share) ($MM) ($MM) Share) ee tees $3.2 $24 $0.05 | $3.2 s24 0.05 | $3.1 $2.3 0.06 Restructuri
Slide 30: Appendices | Non-GAAP Financial Measures
Appendices | Non-GAAP Financial Measures In $MM Q Q Q Income before income taxes $57.4 $58.5 $65.8 Provision for credit losses 13.3 16.2 16.6 Pre-tax pre-provision (PTPP) income(’) 70.8 74.7 82.5 Pre-tax impact of adjusting items“) 11.4 3.2 3.1 Adjusted PTPP income $82.1 $77.9 $85.5 Net income $49.3
Slide 31: Appendices | Key Performance Indicators
Appendices | Key Performance Indicators @ Ontrack @ Behind @ AtRisk Culture 2021 2022 Progress aire Commercial Banking 2021 2022 Progress aps Target Target Employee Engagement Index 74% 77% @ 280% Loan Growth ($) $14B $18B e >$18B Employee Turnover 27% 25% e <20% % of Commercial loans in U.S. 14% 24
Slide 32: Investor Relations
Investor Relations Contact Andrew Chornenky Vice President, Investor Relations (416) 846-4845 Andrew.Chornenky@lbcfg.ca www.I|bcfg.ca/investors-centre
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