Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Group — Q2 2010 Earnings Presentation
32 slides from Toronto-dominion Bank's earnings presentation, May 27, 2010
Slide 1: Q2 2010 Investor Presentation
Q2 2010 Investor Presentation Thursday May 27, 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: Strategic Overview
Strategic Overview Exceptional performance in Canadian Retail Credit environment stabilizing Wholesale earnings beginning to normalize 3
Slide 4: Q2 2010 Highlights
Q2 2010 Highlights Net income $MM Q2/09 Q1/10 Q2/10 QoQ YoY Canadian Retail1 $ 667 $ 821 $ 872 6% 31% U.S. Retail1 (adjusted) 256 270 301 11% 18% Total Retail 923 1,091 1,173 8% 27% Wholesale 173 372 220 -41% 27% Corporate (adjusted) (80) (33) (159) 382% 99% Adjusted net income2,3 $ 1,016 $ 1,430 $
Slide 5: Q2 2010 Earnings: Items of Note
Q2 2010 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $1,176 $1.30 Pre Tax After Tax Items of note EPS (MM) (MM) 1 1 Amortization of intangibles $149 $123 $0.14 Change in fair value of derivatives $(34) $(23) $(0.03) hedging the reclassified portfolio Change in fair value of C
Slide 6: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking P&L $MM Q2/09 Q1/10 Q2/10 QoQ YoY Revenue $ 2,276 $ 2,539 $ 2,518 -1% 11% PCL 286 315 256 -19% -10% Expenses 1,143 1,194 1,187 -1% 4% Net Income $ 589 $ 720 $ 761 6% 29% Efficiency ratio 50.2% 47.0% 47.1% 10bps (310)bps NIM1 2.94% 2.93% 2.92% (1)bp (2)bps • Cus
Slide 7: Wealth Management
Wealth Management P&L $MM Q2/09 Q1/10 Q2/10 QoQ YoY Revenue $ 528 $ 590 $ 612 4% 16% Expenses 414 446 452 1% 9% Net Income (Global Wealth) $ 78 $ 101 $ 111 10% 42% Equity in NI of TD AMTD1 48 43 56 30% 17% Net Income $ 126 $ 144 $ 167 16% 33% Efficiency ratio 78.4% 75.6% 73.9% (170)bps (450)bps AUM2
Slide 8: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking P&L $MM (US dollars) (adjusted, where applicable) Q2/09 Q1/10 Q2/10 QoQ YoY Revenue $ 1,029 $ 1,087 $ 1,145 5% 11% PCL 256 191 162 -15% -37% Expenses1 600 641 659 3% 10% Net Income1 $ 166 $ 216 $ 241 12% 45% Net Income 1 (C$) $ 208 $ 227 $ 245 8% 18% Efficiency rat
Slide 9: Wholesale Banking
Wholesale Banking P&L $MM Q2/09 Q1/10 Q2/10 QoQ YoY Revenue $ 620 $ 913 $ 708 -22% 14% PCL 59 8 10 25% -83% Expenses 356 376 372 -1% 4% Net Income $ 173 $ 372 $ 220 -41% 27% • Wholesale earnings beginning to normalize • Solid contributions from key businesses 9
Slide 10: Corporate Segment
Corporate Segment • Corporate segment includes unallocated: - Costs related to certain central risk and control costs - Benefits and costs related to tax, treasury, liquidity, capital and balance sheet management activities (eg. securitization) • Increased loss this quarter due to: - vs. Q2/09 – low
Slide 11: Tier 1 Capital Ratio
Tier 1 Capital Ratio 11.3% 11.5% 12.0% Highlights 10.8% 11.1% • Strong capital position ̶ Organic growth in capital • Well-positioned for evolving regulatory environment ̶ Lower-risk, franchise wholesale dealer ̶ More than 1/3 of total assets in low or no-risk assets ̶ About 75% of Tier 1 capital in
Slide 12: Gross Impaired Loans (GIL) by Portfolio
Gross Impaired Loans (GIL) by Portfolio GIL1: $MM and Ratios2 Highlights $2,315 $2,218 $97MM decline in Gross $2,070 $206 / 108 bps Impaired Loans as defaults $1,947 $190 / 100 bps $1,875 $2 / NM stabilized across most $180 / 89 bps $37 / NM $2 / NM portfolios $231 / 109 bps $211 / 87 bps U.S. P
Slide 13: Provision for Credit Losses (PCL) by Portfolio
Provision for Credit Losses (PCL) by Portfolio PCL1: $MM and Ratios2 Highlights $546 PCL was down $90MM (18%) QoQ $5 / NM $492 $507 and $129M (24%) YoY $48 / 78 bps $480 $4 / NM $21 / 38 bps $417 Canadian P&C was down $52MM $2 / NM (18%) due to improvements across $1 / NM $223 / 147 bps $188 / 1
Slide 14: Portfolio Highlights
Portfolio Highlights Canadian Personal Loss rates across the portfolio continue to decline with further reductions expected as the economy improves Canadian Commercial and Wholesale Both portfolios performed well through the downturn Loss rates in the Commercial portfolio continue to hold at h
Slide 15: Appendix
Building the better bank every day D Bank Financial Group Appendix
Slide 16: Q2 2010 Earnings: Items of Note
Q2 2010 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $1,176 $1.30 Revenue/ Pre Tax After Tax Items of note1 EPS Segment Expense Line (MM) (MM) Item3 2 2 Amortization of intangibles $149 $123 $0.14 Corporate pg 13, line 13 Change in fair value of derivatives $(34) $(23) $(0.03
Slide 17: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Net interest margin % Notes NIM on average earning assets • Net interest margin on average earning assets down 2bps YoY: 2.96% ̶ Improved loan margins in RESL 2.94% 2.88% 2.93% 2.92% offset by declining deposit spreads in low rate environment NIM on loans 1.89%
Slide 18: Wealth Management
Wealth Management Revenue $MM Notes • Revenue $612 million: $612 ̶ Up 16% from Q2/09 and up 4% $587 $590 compared to Q1/10 $562 $79 $528 $67 $66 NII $65 ̶ Increase driven by higher fees $63 $152 $155 from: $166 $165 Transaction $154 • Higher average client assets due to recovery in markets • Strong
Slide 19: Wealth Management
Wealth Management Performance Metrics AUA1 ($B) AUM2 ($B) $200 $214 $188 $191 $172 175 $174 $168 $164 $171 Institutional $101 $91 $97 $96 $96 Retail $67 $72 $74 $76 79 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Mutual Funds AUM2 ($B) Advisors & Planners $51 $53 $54 $57 $47 717 728 7
Slide 20: TD Ameritrade
TD Ameritrade TDBFG’s Share of TD Ameritrade’s Net Income1 US$MM Highlights $58 $54 $54 • TDBFG’s share of TD Ameritrade’s net income: C$56 million in Q2/10 $39 $41 • TD Ameritrade’s net income US$163 million in Q2/102 • Average trades per day: 379,000; up 17% YoY and flat QoQ C$ $77 $48 $68 $59 $56
Slide 21: U.S. Personal & Commercial Banking: De-Novo Strategy
U.S. Personal & Commercial Banking De-Novo De-Novo Strategy Strategy Maturing Stores (<5yrs) • Deposits consistently and significantly outpace mature 13 store deposit growth ̶ 23% of stores are maturing but account 11 for about 40% of growth Conversion 10 • New stores meeting or exceeding planned de
Slide 22: U.S. Personal & Commercial Banking: Deposit Growth
U.S. Personal & Commercial Banking Deposit Growth Average Deposits 26% 26% (US$ billions) Growth Growth YoY YoY • Core deposit growth from maturing stores and $124 $117 seasonality/tax refunds $110 $104 $99 $41 • TD’s strong reputation driving $36 $25 $30 business deposit growth $20 • Growth of high
Slide 23: U.S. Personal & Commercial Banking: Loan Growth
U.S. Personal & Commercial Banking Loan Growth Average Loans 4% 4% (US$ billions) Growth Growth YoY YoY • Growth in high-quality $53 $53 $53 $54 residential mortgages $52 continued $34 • Commercial lending $35 $34 $34 $35 continued to slow due to reduced demand • Continued to outperform $17 $18 $19
Slide 24: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q1/10 Q2/10 Canadian Personal & Commercial Portfolio $ 174.0 $ 174.1 Personal1 $ 144.0 $ 143.5 Residential Mortgages 57.5 54.8 2/3 insured Home Equity Lines of Credit (HELOC) 57.2 58.4 Unsecured Lines of Credit 9.4 9.3 Credi
Slide 25: Gross Impaired Loan Formations by Portfolio
Gross Impaired Loan Formations by Portfolio GIL Formations1: $MM and Ratios Highlights $1,062 $969 $974 $23 / 12 bps Gross Impaired Loan formations, $927 $9 / NM a leading indicator of credit $32 / NM $51 / 23 bps $852 performance, were down across $59 / 23 bps all portfolios $526 / 92 bps $417 /
Slide 26: Canadian Personal Banking
Canadian Personal Banking Q2/10 Gross Specific Canadian Personal Banking Loans GIL/Loans GIL PCL1 Highlights ($MM) ($B) ($MM) Residential Mortgages 55 0.46% 249 (1) Quality of Real Estate Secured Home Equity Lines of Credit (HELOC) 58 0.16% 93 2 Lending (RESL) portfolio remains strong Unsecured Li
Slide 27: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Q2/10 Gross Specific Canadian Commercial and Loans/BAs GIL PCL1 Highlights Wholesale Banking ($B) ($MM) ($MM) Commercial Banking2 31 222 33 Portfolios continued to Wholesale 19 190 1 perform well Total Canadian Commercial and Wholesale $50 $412 $34 Comme
Slide 28: U.S. Personal Banking
U.S. Personal Banking Q2/10 Gross Specific U.S. Personal Banking1 Loans GIL/Loans GIL ($MM) PCL2 Highlights ($B) ($MM) Residential Mortgages 8 1.74% 142 (1) Default rates stable or down Home Equity Lines of Credit (HELOC)3 9 0.83% 71 7 across all portfolios Indirect Auto 3 0.16% 5 10 Specific PC
Slide 29: U.S. Commercial Banking: Commercial Real Estate
U.S. Commercial Banking Commercial Real Estate (CRE) Q2/10 Gross Specific GIL U.S. Commercial Banking1 Loans/BAs ($MM) PCL2 ($B) ($MM) Highlights Commercial Real Estate (CRE) 13 560 35 Non-residential Real Estate 9 165 10 Commercial Real Estate credit Residential Real Estate 4 395 25 metrics were
Slide 30: U.S. Commercial Banking: Commercial & Industrial
U.S. Commercial Banking Commercial & & Industrial Industrial (C&I) (C&I) Q2/10 Gross Specific GIL U.S. Commercial Banking1 Loans/BAs PCL2 ($B) ($MM) ($MM) Highlights Commercial Real Estate (CRE) 13 560 35 Non-residential Real Estate 9 165 10 Gross Impaired Loans in the Commercial & Industrial Resi
Slide 31: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: tdir@td.com Website: Best Investor Relations by Sector: Financial Services www.td.com/investor Best Retail Investor Communications 31
Slide 32: Q2 2010 Investor Presentation
Q2 2010 Investor Presentation Thursday May 27, 2010