Laurentian Bank Of Canada · TSX:LB
Laurentian Bank Of Canada — Q3 2022 Earnings Presentation
31 slides from Laurentian Bank Of Canada's earnings presentation, Aug 31, 2022
Slide 1: Investor Presentation Third Quarter 2022
Investor Presentation Third Quarter 2022 August 31, 2022
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 Canadian and United States (U.S.) securities legislation, including such as those contained in this document (a
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 President & Chief Executive Officer Strategic Direction
Slide 5: Q3/22 Financial Highlights
Adjusted Net Income ($MM)(1)(4) Net Income ($MM) Adjusted PTPP Income ($MM)(1)(4) -2% Q3/22 Financial YoY -10% YoY +6% YoY Highlights $ 59.0 $ 61.6 $ 58.2 $ 62.1 $ 59.5 90.3 $ 55.9 85.5 80.5 Q3/21 Q2/22 Q3/22 Q3/21 Q2/22 Q3/22 Q3/21 Q2/22 Q3/22 • Strong commercial Adjusted Diluted EPS(2)(4) Diluted
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 Priorities 1 Continue to focus on our specialized sectors 2 Diversify geographically Real Estate Inventory 21% of our commercial and by industry Financing grew by Financing was up loan portfolio is now in over $300MM or 3% by
Slide 8: Strategic Plan: Capital Markets
Strategic Plan: Capital Markets | Our Focused & Aligned Offering Capital Markets Priorities 1 Be an alternative to large banks 2 Expand capabilities to further align with Commercial Further aligned with Participated in six Involved in four ESG- Banking Commercial Banking, bank-issued themed offering
Slide 9: Strategic Plan: Personal Bank
Strategic Plan: Personal Bank | Repositioning for Growth Personal Bank Priorities 1 Create one performance- oriented Personal Bank 2 Enhance focus products and Launched phased Introduced self-service Launched refreshed processes rollout of Digital password resets, and modernized Account Onboarding,
Slide 10: Culture & ESG
Strategic Direction | Culture & ESG 1 Achieved a low-risk 2 Launched Career Path 3 Announced a partnership rating (from medium-risk) planning for Personal with Pride at Work and largest improvement Banking advisors to Canada, to build up and among big banks in sustain our One foster a culture where
Slide 11: 2022 Financial Targets YTD Progress
2022 Financial Targets | YTD Progress Financial Target 2022 Target YTD Results Progress Adjusted diluted earnings per share growth (1)(2) >5% 11% Adjusted return on common shareholders’ equity(2) >8.5% 9.4% Adjusted efficiency ratio(2) <68% 66.4% Adjusted operating leverage (1) Positive 3.9% (1) Com
Slide 12: Financial Review
Yvan Deschamps Executive Vice President & Chief Financial Officer Financial Review
Slide 13: Q3/22 Financial Performance
Financial Review | Q3/22 Financial Performance Y/Y Highlights Reported ($MM) Q3/22 Y/Y Q/Q • Total revenue up by $5.1MM, reflecting an increase in NII of $13.8MM, partly offset by lower Other income, down by $8.7MM Total revenue $ 260.0 +2% -% • PCL up by $11.2MM, mainly as a result of higher provis
Slide 14: Net Interest Income
Financial Review | Net Interest Income Net Interest Income and Margin ($MM, %) Key Assets ($B) Q3/22 Y/Y Q/Q Liquid assets(1) $ 11.9 +13% +6% 1.86% 1.83% 1.88% 1.87% 1.83% Personal loans $ 3.4 -10% -2% Residential mortgage loans $ 15.8 +1% +1% $174.7 $173.1 $180.9 $180.1 $188.5 Commercial loans (2)
Slide 15: Other Income
Financial Review | Other Income ($MM) Q3/22 Y/Y Q/Q Y/Y Highlights • Other income decreased by $8.7MM, mainly due to: Lending fees $ 17.1 -9% -1% • A decrease of $5.4MM in fees and securities brokerage Fees and securities brokerage $ 10.7 -34% -25% commissions commissions • A decrease of $1.6MM in l
Slide 16: Non-Interest Expenses
Financial Review | Non-Interest Expenses (NIE) NIE ($MM) Q3/22 Y/Y Q/Q Y/Y Highlights Salaries and employee benefits $ 100.1 +11% +1% • Adjusted NIE was flat from a year ago, mainly from: Premises and technology • Strategic investments to close key foundational gaps and support $ 44.2 -10% +1% growt
Slide 17: Well Diversified and Stable Sources of Funding
Financial Review | Well Diversified and Stable Sources of Funding Funding ($B) Y/Y Highlights 40.4 41.3 2.7 Shareholders' equity Total funding increased by $4.3B 37.0 2.7 0.7 0.3 • Debt related to securitization increased by $0.8B 2.7 Subordinated debt 0.3 • Total deposits increased by $3.5B 11.6 11
Slide 18: Strong Capital Position
Financial Review | Strong Capital Position Common Equity Tier 1 Capital Ratio (CET1)(1) Risk-Weighted Assets (RWA) ($B)(1) 10.3% 10.2% 23.5 22.6 9.8% 19.7 20.0 21.2 9.3% 9.1% Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Evolution of the CET1 Ratio (%) Y/Y Highlights • CET1 ratio went
Slide 19: 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 July 31, 2022) 16.7 17.3 Commercial Lending ($B) 4% British Columbia & Territories 3.4 3.6 5% 13.5 Inventory financing 21% 1.5 Alberta & Prairies 1.4 1
Slide 20: High Quality Residential Mortgage Loan Portfolio
Financial Review | High Quality Residential Mortgage Loan Portfolio Insured vs Uninsured A Pan-Canadian Portfolio (as at July 31, 2022) 4% 35% 34% 33% 10% British Columbia Conventional 8% Prime insured Alberta & Prairies 38% 56% 56% Alt-A Ontario 56% 40% Quebec 9% 10% 11% Atlantic Provinces Q3/21 Q2
Slide 21: Allowances for Credit Losses
Financial Review | Allowances for Credit Losses Allowances for Credit Losses (ACL) ($MM) Y/Y Highlights 208.9 • ACL increased by $9.9MM mainly as a result of higher provisions on 202.6 196.9 193.2 183.3 commercial loans related to volume growth and the less favourable 88.0 68.6 53.4 macroeconomic ou
Slide 22: Provision for Credit Losses
Financial Review | Provision for Credit Losses Provision for Credit Losses (PCL) ($MM) 24.9 Y/Y Highlights 2.9 • PCL increased by $11.2MM mainly as a result of higher provisions on 16.6 13.0 performing loans due to volume growth and the less favourable 5.7 5.4 22.0 9.4 5.5 macroeconomic outlook 3.9
Slide 23: Impaired Loans
Financial Review | Impaired Loans Gross Impaired Loans ($MM, bps) Net Impaired Loans ($MM, bps) 81 75 53 49 62 265.9 250.9 52 175.9 37 163.9 33 214.2 43 29 188.1 126.2 119.5 159.0 112.1 105.7 185.2 176.5 103.2 145.2 124.4 63.9 61.1 94.8 48.6 62.6 58.2 53.5 50.4 57.7 54.0 51.4 50.0 47.5 52.1 18.1 16.
Slide 24: Closing Remarks
Rania Llewellyn President & Chief Executive Officer Closing Remarks
Slide 25: Key Takeaways
Closing Remarks | Key Takeaways Solid results this Continued execution Our credit quality is Continued to apply Our One Winning quarter against our strategy sound and we are strong cost Team is engaged heading into Q4 confident in our discipline and identify and shown resilience strong underwriting
Slide 26: Appendices
eit Appendices
Slide 27: Adjusting Items
Appendices | Adjusting Items Q3/22 Q2/22 Q3/21 Pre-Tax After-Tax Impact Pre-Tax After-Tax Impact Pre-Tax After-Tax Impact Impact Impact ($ / Impact Impact ($ / Impact Impact ($ / ($MM) ($MM) Share) ($MM) ($MM) Share) ($MM) ($MM) Share) Strategic review-related $- $- $- $ -0.3 $ -0.2 $- $- $- $- char
Slide 28: Non-GAAP Financial Measures
Appendices | Non-GAAP Financial Measures In $MM Q3-2022 Q2-2022 Q3-2021 Income before income taxes $ 65.8 $ 74.5 $ 79.2 Provision for credit losses 16.6 13.0 5.4 Pre-tax pre-provision (PTPP) income(1) 82.5 87.5 84.6 (2) Pre-tax impact of adjusting items 3.1 2.8 -4.2 Adjusted PTPP income(1) $ 85.5 $
Slide 29: Financial Roadmap
Appendices | Financial Roadmap ⚫ On track ⚫ Behind ⚫ At Risk Financial Targets 2021 Actual 2022 Target YTD Results Progress Medium Term Adjusted diluted EPS growth1,2 +56% >5% +11%(1) ⚫ 7-10% Adjusted ROE2 8.3% >8.5% 9.4% ⚫ >10% Adjusted efficiency ratio2 68.2% <68% 66.4% ⚫ <65% Adjusted operating l
Slide 30: 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 31: Investor Relations Contact
Investor Relations Contact Andrew Chornenky Vice President, Investor Relations (416) 846-4845 Andrew.Chornenky@lbcfg.ca www.lbcfg.ca/investors-centre
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