Laurentian Bank Of Canada · TSX:LB
Laurentian Bank Of Canada — Q2 2022 Earnings Presentation
30 slides from Laurentian Bank Of Canada's earnings presentation, Jun 1, 2022
Slide 1: Investor Presentation Second Quarter 2022
Investor Presentation Second Quarter 2022 June 1, 2022 Seeing Beyond Numbers 1
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements From time to time, Laurentian Bank of Canada (the "Bank") will make written or oral forward-looking statements within the meaning of applicable securities legislation, including such as those contained in this presentation (and in the documents incorporat
Slide 3: Non-GAAP financial and other measures
Non-GAAP financial and other measures In addition to financial measures based on generally accepted accounting principles (GAAP), management uses non-GAAP financial measures to assess the Bank’s underlying ongoing business performance. Non-GAAP financial measures presented throughout this document a
Slide 4: Strategic Direction
Rania Llewellyn Rania Llewellyn President & Chief Executive Officer Strategic Direction Seeing Beyond Numbers 4
Slide 5: Q2/22 Financial Highlights
Adjusted Net Income ($MM)(1)(4) Net Income ($MM) Adjusted PTPP Income ($MM)(1)(4) Q2/22 Financial +9% YoY $ 61.6 +12% YoY +20% YoY Highlights $ 59.5 $ 59.5 $85.0 $90.3 $ 55.5 $75.1 $ 53.1 $ 56.7 • Highest Adjusted Net Q2 21 Q1 22 Q2 22 Q2 21 Q1 22 Q2 22 Q2 21 Q1 22 Q2 22 Income since Q2 2018 Adjuste
Slide 6: A 5-point Strategy for Future Growth
Strategic Direction | A 5-point Strategy for Future Growth Build One Winning Make Size Our Think Customer Make the Better Team Advantage First Simplify Choice Culture Commercial Bank Capital Markets Personal Bank Our Driving Force Our Growth Engine Focused & Aligned Offering Repositioning for Growth
Slide 7: Strategic Plan: Commercial Banking
Strategic Plan: Commercial Banking | Our Growth Engine Commercial Banking Key developments in Q2 2022 Priorities 1 Continue to focus on our specialized sectors 2 Diversify geographically Inventory Financing Real Estate Financing Equipment Financing and by industry was up by over grew by over $300MM
Slide 8: Strategic Plan: Capital Markets
Strategic Plan: Capital Markets | Our Focused & Aligned Offering Capital Markets Key developments in Q2 2022 Priorities 1 Be an alternative to large banks 2 Expand capabilities to further align with Commercial Improved our Achieved our goal to Integrated new real Banking syndicate position provide c
Slide 9: Strategic Plan: Personal Bank
Strategic Plan: Personal Bank | Repositioning for Growth Personal Bank Key developments in Q2 2022 Priorities 1 Create one performance- oriented Personal Bank 2 Enhance focus products and Launched contactless Announced strategic Reduced redundant processes tap debit card, closing a partnership with
Slide 10: Strategic Direction | Culture and ESG
Strategic Direction | Culture and ESG 1 Added four new 2 Introduced “Green 3 Launched 4 Employee ESG themed Teams” to make “Lifespeak”, a appreciation events mutual funds the Bank more mental health and to thank employees environmentally wellness resource for being our driving friendly for employees
Slide 11: Financial Review
Rania Llewellyn Yvan Deschamps Executive Vice President & Chief Financial Officer Financial Review Seeing Beyond Numbers 11
Slide 12: Q2/22 Financial Performance
Financial Review | Q2/22 Financial Performance Y/Y Highlights Reported ($MM) Q2/22 Y/Y Q/Q • Total revenue up by $9.8MM, with NII accounting for $8.6MM, and other income accounting for $1.2MM Total revenue $ 259.6 +4% +1% • PCL up by $10.6MM, mainly due to releases of provisions on Provision for cre
Slide 13: Net Interest Income
Financial Review | Net Interest Income Net Interest Income and Margin ($MM, %) Key Assets ($B) Q2/22 Y/Y Q/Q 1.88% 1.86% 1.83% 1.88% 1.87% Liquid assets(1) $ 11.2 +12% +10% Personal loans $ 3.5 -11% -2% Residential mortgage loans $ 15.7 -1% +1% $171.5 $174.7 $173.1 $180.9 $180.1 Commercial loans(2)
Slide 14: Other Income
Financial Review | Other Income ($MM) Q2/22 Y/Y Q/Q Y/Y Highlights Other income increased by $1.2MM, mainly from: Lending fees $ 17.3 +1% -% • An increase of $3.7MM in income from financial instruments • Partly offset by a decrease of $2.9MM in fees and securities Fees and securities brokerage broke
Slide 15: Non-Interest Expenses (NIE)
Financial Review | Non-Interest Expenses (NIE) NIE ($MM) Q2/22 Y/Y Q/Q Y/Y Highlights Salaries and employee benefits $ 98.8 +1% +1% • Adjusted NIE decreased by $5.3MM, mainly from: Premises and technology • A decrease of $6.2MM in premises and technology costs, mostly due $ 43.7 -12% -3% to lower am
Slide 16: Well Diversified and Stable Sources of Funding
Financial Review | Well Diversified and Stable Sources of Funding Funding ($B) Y/Y Highlights 40.4 Total funding increased by $3.5B 38.4 Shareholders' equity 2.7 36.9 • Debt related to securitization increased by $0.9B 2.7 2.7 0.7 0.3 Subordinated debt • Total deposits increased by $2.3B 0.3 11.8 De
Slide 17: Strong Capital Position
Financial Review | Strong Capital Position Common Equity Tier 1 Capital Ratio (CET1)(1) Risk-Weighted Assets (RWA) ($B)(1) 10.3% 10.2% 10.1% 22.6 9.8% 19.7 21.2 9.3% 19.7 20.0 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Evolution of the CET1 Ratio (%) Y/Y Highlights • CET1 ratio went
Slide 18: Strong and Diversified Commercial Loan Portfolio
Financial Review | Strong and Diversified Commercial Loan Portfolio Commercial Loan Portfolio(1) A Pan-Canadian Portfolio and a U.S. Presence (as at April 30, 2022) 16.7 15.4 Commercial Lending ($B) 4% British Columbia & Territories 3.4 5% 13.2 2.6 Inventory financing 21% Alberta & Prairies 1.7 1.5
Slide 19: High Quality Residential Mortgage Loan Portfolio
Financial Review | High Quality Residential Mortgage Loan Portfolio Insured vs Uninsured A Pan-Canadian Portfolio (as at April 30, 2022) 3% 34% 35% 34% 10% British Columbia Conventional Prime insured 36% 14% Alberta & Prairies 56% Alt-A Ontario 57% 56% Quebec 37% 9% 9% 10% Atlantic Provinces Q2/21 Q
Slide 20: Allowances for Credit Losses
Financial Review | Allowances for Credit Losses Allowances for Credit Losses (ACL) ($MM) Y/Y Highlights 208.9 • ACL increased by $11.4MM mostly due to higher ACL on performing 202.6 196.9 185.5 183.3 loans, partly offset by lower ACL on impaired loans 87.0 88.0 68.6 88.5 90.0 Q/Q Highlights • ACL de
Slide 21: Provision for Credit Losses
Financial Review | Provision for Credit Losses Provision for Credit Losses (PCL) ($MM) Y/Y Highlights 24.9 2.9 • PCL increased by $10.6MM mainly as the prior year included releases of provisions on performing loans of $9.9MM 2.4 13.0 5.4 9.4 • PCL as a % of average loans and acceptances increased by
Slide 22: Impaired Loans
Financial Review | Impaired Loans Gross Impaired Loans ($MM, bps) Net Impaired Loans ($MM, bps) 81 77 75 53 51 49 62 255.3 265.9 250.9 52 166.8 175.9 37 163.9 33 214.2 188.1 126.2 119.5 165.0 185.2 176.5 99.5 112.1 103.2 145.2 124.4 63.9 61.1 67.3 62.6 58.2 53.5 57.5 57.7 54.0 51.4 50.0 52.1 23.0 18
Slide 23: Closing Remarks
Rania Llewellyn Rania Llewellyn President & Chief Executive Officer Closing Remarks Seeing Beyond Numbers 23
Slide 24: Key Takeaways
Closing Remarks | Key Takeaways Strong results this Redeployed capital Continue to apply Our credit quality is Our One Winning quarter, building accumulated during strong cost sound and we are Team is engaged momentum into Q3 the pandemic to discipline across the confident in our and focused on sust
Slide 25: Appendices
Rania Llewellyn Appendices Seeing Beyond Numbers 25
Slide 26: Adjusting Items
Appendices | Adjusting Items Q2/22 Q1/22 Q2/21 Pre-Tax After-Tax Impact Pre-Tax After-Tax Impact Pre-Tax After-Tax Impact Impact Impact ($ / Impact Impact ($ / Impact Impact ($ / ($MM) ($MM) Share) ($MM) ($MM) Share) ($MM) ($MM) Share) Strategic review-related $ -0.3 $ -0.2 $- $ 2.3 $ 1.7 $ 0.04 $-
Slide 27: Non-GAAP Financial Measures
Appendices | Non-GAAP Financial Measures In $MM Q2-2022 Q1-2022 Q2-2021 Income before income taxes $ 74.5 $ 70.2 $ 67.8 Provision for credit losses 13.0 9.4 2.4 Pre-tax pre-provision (PTPP) income(1) 87.5 79.6 70.2 (2) Pre-tax impact of adjusting items 2.8 5.4 4.9 Adjusted PTPP income(1) $ 90.3 $ 85
Slide 28: Financial Roadmap
Appendices | Financial Roadmap ⚫ On track ⚫ Behind ⚫ At Risk Financial Targets 2021 Actual 2022 Target YTD Results Progress Medium Term Adjusted diluted EPS growth +56% >5% +17%(1) ⚫ 7-10% Adjusted ROE 8.3% >8.5% 9.7% ⚫ >10% Adjusted efficiency ratio 68.2% <68% 66.1% ⚫ <65% Adjusted operating levera
Slide 29: Annual Key Performance Indicators
Appendices | Annual Key Performance Indicators ⚫ On track ⚫ Behind ⚫ At Risk Culture Targets Commercial Banking Targets 2021 Progress 2022 2024 2021 Progress 2022 2024 Employee Engagement index 74% ⚫ 75% ≥80% Loan Growth ($) $14B ⚫ $15B >$18B Employee turnover 27% ⚫ 25% <20% % of Commercial loans in
Slide 30: Investor Relations Contact
Investor Relations Contact Andrew Chornenky Vice President, Investor Relations (416) 846-4845 Andrew.chornenky@lbcfg.ca www.lbcfg.ca/investors-centre Seeing Beyond Numbers 30
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