South Financial — Merger or Acquisition (June 2010)
43 slides from South Financial's merger presentation, Jun 4, 2010
Slide 1: TD Bank Financial Group Investor Overview Presentation June 2010
TD Bank Financial Group Investor Overview Presentation June 2010
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements From time to time, the Bank makes written and oral forward-looking statements, including in this presentation, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission (SEC), and in other communications. In addition, repres
Slide 3: Additional Information
Additional Information The proposed merger transaction involving The Toronto-Dominion Bank and The South Financial Group, Inc. will be submitted to The South Financial Group, Inc.'s shareholders for their consideration. Shareholders are encouraged to read the proxy statement/prospectus regarding the
Slide 4: Contents
Contents Canadian Economy and Financial System Other Information Overview Key Businesses Credit Portfolio TD Bank Financial Group
Slide 5: Key Takeaways
Key Takeaways Simple Strategy, Consistent Focus Building the Better Bank Franchise Businesses Repeatable and growing earnings stream Focus on customer-driven products and services Operating a franchise dealer of the future Consistently reinvest in our competitive advantages Retail Earnings Focus Lea
Slide 6: A Top Bank in North America
TD Bank Financial Group A Top 10 Bank in North America Q2 20101 (In U.S.$B)2 Compared to: Compared to: Q2 20101 (In U.S.$B)2 Canadian Peers7 North American Peers8 Total Assets $571 2nd 6th Total North American Deposits $402 1st 4th Market Cap3 $60.7 2nd 6th Adj. Net Income4 (Trailing 4 Quarters) $4.
Slide 7: Financial Results
Financial Results Strong performance through tough economic conditions Adjusted results are defined on slide #5. (C$MM)1 Q2 2010 QoQ YoY F2009 YoY Revenue $ 4,767 -5% 10% $ 17,860 22% Provision for Credit Losses 365 -29% -53% 2,480 133% Expenses 2,953 -1% -3% 12,211 29% Adjusted Net Income $ 1,234 -
Slide 8: Lower Risk Retail Focus
Canadian P&C Global Wealth TD AMTD U.S. P&C Wholesale Q2 2010 761 111 56 245 220 Lower Risk Retail Focus1 Based on adjusted results as described on slide #5. "P&C" refers to Personal and Commercial Banking. "Global Wealth" and "TD Ameritrade" make up the Wealth Management business segment. TDBFG has
Slide 9: Strong Focus on Risk-Return
Strong Focus on Risk-Return Return on Risk-Weighted Assets1,2,3 TD Canadian Peers U.S. Peers East 0.0257 0.0203 0.0118 TD based on Q2/10 adjusted results, as described on slide #5. Return on risk-weighted assets is adjusted net income available to common shareholders divided by average RWA. Canadian
Slide 10: Managing through Current Environment
TD Bank Financial Group: Managing through Current Environment Get across the recession valley Carefully manage capital, funding, liquidity and risk Keep our business model intact Preserve our performance, convenience and service culture Emerge with momentum on our side Continue to invest in our core
Slide 11: Strong, Consistent Dividend History
Strong, Consistent Dividend History 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 0.02 0.02 0.02 0.02 0.02 0.03 0.03
Slide 12: Simple Strategy, Consistent Focus, Superior Execution
Simple Strategy, Consistent Focus, Superior Execution 2004 2005 2006 2007 2008 2009 Q2 2010 YTD Canadian P&C 1450 1702 1966 2253 2424 2472 1481 Wealth Management 352 432 590 762 769 597 311 U.S. P&C 0 158 255 359 806 909 472 Wholesale Banking 588 551 664 824 65 1137 592 Total 2485 2861 3376 4189 381
Slide 13: Key Takeaways
Key Takeaways Building the Better Bank Franchise Businesses Retail Earnings Focus Risk Discipline North American
Slide 14: Contents
Contents Canadian Economy and Financial System Other Information Overview Key Businesses Credit Portfolio TD Bank Financial Group
Slide 15: Key Businesses At a Glance
Key Businesses At a Glance "P&C" refers to Personal and Commercial Banking. TDBFG had a reported investment in TD Ameritrade of 44.8% as at April 30, 2010. Wholesale Wealth Management Global Wealth TD Ameritrade2 Wholesale U.S. Retail Canadian Retail Canadian P&C1 U.S. P&C1 Business Segments Earning
Slide 16: Canadian Personal and Commercial Banking Overview
Canadian Personal and Commercial Banking Overview Key Businesses Canadian Banking Personal Banking Retail operations provide a full range of financial products and services Over 11 million personal and small business customers More than 1,100 branches across Canada More than 2,700 automated teller m
Slide 17: Canadian Personal and Commercial Banking Key Messages
Canadian Personal and Commercial Banking Key Messages Lead in customer service and convenience Rated #1 by J.D. Power1 and Synovate2, year after year More than 50% longer branch hours than peers3 Integrated product offerings #1 or #2 market share in most retail products4 Client referrals and product
Slide 18: Canadian Personal and Commercial Banking Performance
Canadian Personal and Commercial Banking Performance 2004 2005 2006 2007 2008 2009 Q2 2010 YTD Canadian P&C 1450 1702 1966 2253 2424 2472 1481 Earnings ($MM) See slide #5 for definition of adjusted results. 5-year CAGR is calculated based on compound annual growth from 2004 to 2009. Also see the Can
Slide 19: Wealth Management Overview
Wealth Management Overview Key Businesses Online Brokerage Canada U.S. - 45% reported equity investment in TD Ameritrade Europe U.K., Ireland Luxembourg: Internaxx Advice-Based Businesses Canada Financial Planning Private Investment Advice Full service brokerage Private Client Group Private banking,
Slide 20: Wealth Management Key Messages
Wealth Management Key Messages Leading market positions #1 online brokerage in Canada1 #1 in long-term mutual fund sales in Canada2 #1 execution-only brokerage in the U.K.3 Integrated wealth organization Financial Planners based in retail bank branches Client referrals from TDBFG retail businesses a
Slide 21: Wealth Management Performance
Wealth Management Performance 2004 2005 2006 2007 2008 2009 Q2 2010 YTD Canadian Wealth Management 267 324 410 501 480 345 212 U.S. Wealth Management 85 108 180 261 289 252 99 Total 352 432 590 762 769 597 311 Earnings ($MM) Global Wealth Management Investment in TD Ameritrade2 See slide #5 for defi
Slide 22: U.S. Personal and Commercial Banking Overview
U.S. Personal and Commercial Banking Overview Key Businesses Personal Banking Over 1,100 stores More than 2,700 ATMs 24/7 live customer support More than 6.5 million customers Commercial Banking Offers a broad range of products and services to meet customers' financing, investment, cash management,
Slide 23: U.S. Personal and Commercial Banking Key Messages
U.S. Personal and Commercial Banking Key Messages Lead in customer service and convenience Rated "Highest in Customer Satisfaction" with Small Business Banking three years in a row1 Unique positioning and culture that is difficult for others to replicate Significant scale and enviable footprint Oper
Slide 24: U.S. Personal and Commercial Banking Performance
U.S. Personal and Commercial Banking Performance 2005 2006 2007 2008 2009 Q2 2010 YTD USD 158 255 359 806 909 472 Total 158 255 359 806 909 472 Adjusted Earnings1 (C$MM) See slide #5 for definition of adjusted results. 4-year CAGR is calculated based on compound annual growth from 2005 to 2009. Also
Slide 25: Wholesale Banking Overview
Wholesale Banking Overview Key Businesses Investment Banking Advisory, underwriting, and corporate lending Equities Trading, facilitation, execution services, and research Rates and Foreign Exchange Trading, facilitation, execution services, trade finance, and cash management services As at Q2 2010
Slide 26: Wholesale Banking Key Messages
Wholesale Banking Key Messages Focus on client-driven franchise businesses Presence in key global financial centres Strategic decisions before financial crisis to reduce corporate lending risk profile and exit global structured products Leveraging strength of TD brand and partners to grow U.S. fixed
Slide 27: Wholesale Banking Performance
Wholesale Banking Performance 2004 2005 2006 2007 2008 2009 Q2 2010 YTD Wholesale 588 551 664 824 65 1137 592 Security Gains Total 588 551 664 824 65 1137 592 Adjusted Earnings1 ($MM) See slide #5 for definition of adjusted results. Also see the Wholesale segment discussion in the Business Segment A
Slide 28: Contents
Contents Canadian Economy and Financial System Other Information Overview Key Businesses Credit Portfolio TD Bank Financial Group
Slide 29: Gross Lending Portfolio: Loans and Acceptances
Gross Lending Portfolio: Loans and Acceptances Residential Mtgs/HELOC Other Personal Commercial Banking (incl. Small Business Banking) Residential Mtgs/Home Equity Other Personal Commercial Real Estate Commercial and Industrial Covered Loans Wholesale Other2 113.2 30.3 30.6 16.76565295 4.369230769 1
Slide 30: Credit Quality
Credit Quality (In %)1 GILs / Avg Loans + BAs Allowance for Credit Losses / GILs NCOs / Avg Loans + BAs 0.84 117.3 0.66 Cdn Peer Avg 1.66 76.4 0.60 U.S. Peer Avg 3.26 109.3 4.21 Well-positioned loan portfolio TD and Canadian Peers results are as of Q2/10. U.S. peers results are as of Q1/10. Canadian
Slide 31: Contents
Contents Canadian Economy and Financial System Other Information Overview Key Businesses Credit Portfolio TD Bank Financial Group
Slide 32: Why Canadian Economy Outperforms
Why Canadian Economy Outperforms One of the 10 most competitive economies1 Soundest banking system in the world1 Canadian economy outperformed over last decade Average annual real GDP growth of 2.7% from 1997 to 2009 Canadian economy beginning to show signs of recovery Strong Canadian housing market
Slide 33: Solid Financial System in Canada
Solid Financial System in Canada Strong retail and commercial banks Conservative lending standards All major wholesale dealers owned by Canadian banks, with stable retail earnings base to absorb any wholesale write-offs Responsive government and central bank Proactive policies and programs to ensure
Slide 34: Canada vs U.S. Mortgage Products and Underwriting
Canada U.S. Product Conservative product offerings: Fixed or variable interest rate option Outstanding mortgages include earlier exotic products (interest only, options ARMs) Product New regulations on default insured mortgages implemented in April 2010 have moved the qualifying rate to a 5 year fix
Slide 35: Canadian Economy Strengths
Canadian Economy Canadian Strengths Canadian economy outperformed over last decade Canadian economy out of recession and global economic recovery will spur demand for commodities from emerging markets Average Annual Real GDP1 Growth, 1997 - 2009 Seasonally adjusted, chained figures used; Source: Nat
Slide 36: Canadian Economy Near Term Slowdown
Canadian Economy Near Term Slowdown Commodity prices have corrected from record high levels, but have most likely bottomed out Canadian housing market correction not severe; U.S. real estate market is recovering Index of 18 Canadian resources commodity prices in USD; Source: TD Economics; Last actua
Slide 37: Canadian Economy Long Term Support
Canadian Economy Long Term Support Unemployment rate has peaked and will remain below prior recessionary peaks Government finances in sound shape relative to other countries, and fiscal stimulus will provide boost to economy Forecast by TD Economics as at May 2010; Source: Statistics Canada Source:
Slide 38: Contents
Contents Canadian Economy and Financial System Other Information Overview Key Businesses Credit Portfolio TD Bank Financial Group
Slide 39: Comparison to Global Banks
TD Bank Financial Group Comparison to Global Banks Q2 20101 (U.S.$B)2 Q2 20101 (U.S.$B)2 SAN BBVA RBS BNP CBA Total Assets $571 $1,540 $747 $2,398 $3,175 $551 Total Deposits $402 $724 $457 $991 $1,175 $327 Market Cap3 $60.7 $82.8 $39.6 $39.3 $68.7 $65.9 Tier 1 Capital Ratio 12.0% 10.3% 9.5% 13.7% 10
Slide 40: Credit Ratings
Credit Ratings As at May 27, 2010. Moody's: Issuer Rating, S&P: LT Foreign Issuer Credit, Fitch: LT Issuer Default Rating, DBRS: Senior Unsecured Debt. Strong credit ratings Moody's S&P Fitch DBRS Aaa AA- AA- AA Rating1
Slide 41: Managing Environmental, Social, Governance Risks & Opportunities
Managing Environmental, Social, Governance Risks & Opportunities One of the top 100 most sustainable companies in the world1 For the second year in a row One of only 5 companies in Canada Recognized by sustainability indices Dow Jones Sustainability Index North America Jantzi Social Index KLD Global
Slide 42: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: tdir@td.com Website: www.td.com/investor Best Investor Relations by Sector: Financial Services Best Retail Investor Communications
Slide 43: Communication sent to employees of TD Bank
THE FOLLOWING IS A COMMUNICATION SENT TO EMPLOYEES OF TD BANK, AMERICA’S MOST CONVENIENT BANK AND THE TORONTO-DOMINION BANK ON JUNE 4, 2010
South Financial Group — Merger or Acquisition (June 2010) on 6ix