Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Group — Q1 2014 Earnings Presentation
35 slides from Toronto-dominion Bank's earnings presentation, Feb 27, 2014
Slide 1: TD Bank Group Quarterly Results Presentation Q1 2014
TD Bank Group Quarterly Results Presentation Q1 2014 Thursday February 27th, 2014
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements From time to time, the Bank makes written and/or oral forward-looking statements, including in this document, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission, and in other communications. In addition, representativ
Slide 3: Strategic Overview
Strategic Overview Strong financial results in Q1 2014 Record adjusted Retail earnings1 Strong Wholesale quarter Announced dividend increase of $0.04, up 9% from last quarter2 Recent acquisitions continue to perform well First full year of Target and Epoch Aeroplan off to a great start
Slide 4: Q1 2014 Highlights
Q1 2014 Highlights Key Themes Net Income $MM Adjusted, where applicable1 Adjusted1 EPS growth of 6% YoY Q1/14 QoQ YoY Retail2 $ 1,832 5% 8% Retail earnings up 8% Wholesale 230 89% 44% Good volume and asset growth in Corporate (38) -32% n/a Canada and the U.S. Adjusted Net Income $ 2,024 12% 6%
Slide 5: Q1 2014 Earnings: Items of Note
Q1 2014 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $2,042 $1.07 Pre Tax After Tax Items of Note EPS (MM) (MM) Amortization of intangibles1 $72 $61 $0.03 Fair value of derivatives hedging the reclassified available-for-sale securities ($22) ($19) ($0.01) portfolio Integratio
Slide 6: Canadian Retail
Canadian Retail Key Themes P&L $MM1 Adjusted1 net income up 5% YoY Q1/14 QoQ YoY Positive adjusted1 operating leverage Revenue $ 4,629 1% 6% PCL 230 2% -6% Revenue up 6% YoY Insurance Claims 683 -4% 15% Strong card, loan and deposit volume and Expenses (adjusted) 1,935 -3% 5% Assets Under Ma
Slide 7: U.S. Retail
U.S. Retail Key Themes P&L US$MM1 Q1/14 QoQ YoY Adjusted1 net income up 8% YoY Revenue $ 1,935 2% 24% YoY impact from Target and Epoch PCL 223 26% 26% Higher contribution from TD Ameritrade Expenses (adjusted) 1,225 -3% 31% Security gains2 of US$30 million vs. Net Income, U.S. Retail Bank (a
Slide 8: Wholesale Banking
Wholesale Banking Key Themes P&L $MM Q1/14 QoQ YoY Earnings up 44% YoY Revenue $ 718 19% 20% Strong trading and fee income PCL - -100% -100% Expenses 411 -3% 5% Revenue up 20% YoY Net Income $ 230 89% 44% Strong fixed income markets ROE 20.6% Expenses up 5% YoY Higher variable compensati
Slide 9: Corporate Segment
Corporate Segment Key Themes P&L $MM1 Q1/14 Q4/13 Q1/13 Lower adjusted1 net income YoY Net Corporate Expenses $ (165) $ (142) $ (136) Lower gains from treasury-related Other 100 59 159 activities, tax items and reduction of Non-Controlling Interests 27 27 26 allowance for incurred but not identi
Slide 10: Expenses
Expenses Highlights Efficiency Ratio, Adjusted2 Core expenses1 up 5.5% YoY Adjusted expenses2 up 16% YoY on Target, Epoch and Aeroplan Increase was also attributable to growth initiatives Higher variable expenses in Wealth and Wholesale accounted for 1.2% of the growth in core expenses Exp
Slide 11: Capital
Capital Highlights Basel III Common Equity Tier 11 Basel III Common Equity Tier 1 ratio 8.9% as of January 31, 2014 Announced a dividend increase of 8.8% 8.8% 8.9% 9.0% 8.9% $0.04 this quarter, up 9% Timing of dividend increases may vary CET 1 capital allocated to business segments increased
Slide 12: Credit Portfolio Highlights
Credit Portfolio Highlights Highlights PCL Ratio (bps)1 Continued stable credit performance Loss rates for Canadian P&C remain 39 40 37 38 historically low 35 Ongoing improvement in the U.S. Commercial portfolio Increase in GIL driven by weaker Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Canadian dollar G
Slide 13: Appendix
Appendix
Slide 14: Q1 2014 Earnings: Items of Note
Q1 2014 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $2,042 $1.07 Revenue/ Pre Tax After Tax Items of note EPS Segment Expense (MM) (MM) Line Item2 Amortization of intangibles1 $72 $61 $0.03 Corporate pg 9, line 10 Change in fair value of derivatives hedging the reclassified
Slide 15: Canadian Retail: Net Interest Margin
Canadian Retail Net Interest Margin Highlights Net Interest Margin Margin on average earning assets On Average Earning Assets of 2.94%, up 2 bps QoQ and 3 bps YoY Primarily due to the addition of Aeroplan On Loans On Deposits 15
Slide 16: Canadian Retail: Deposit Growth
Canadian Retail Deposit Growth Highlights Average Deposits $B 4% Growth Average personal deposit volumes YoY increased 2% YoY Average business deposit volumes increased 8% YoY Average wealth deposit volumes increased 5% YoY 16
Slide 17: Canadian Retail: Loan Growth
Canadian Retail Loan Growth Highlights Average Loans $B 5% Growth Solid personal lending volume YoY growth of 4% YoY Real estate secured lending growth of 4% YoY Strong business lending volume growth of 13% YoY Credit card balances up 14% due to Aeroplan and organic growth 17
Slide 18: Canadian Retail: Personal and Commercial Banking
Canadian Retail Personal and Commercial Banking 25 Revenue Average Card Balances $MM $B 20 17.3 2,919 15.4 2,821 2,831 14.9 2,723 2,665 15 695 680 723 665 655 10 8.3 2,058 2,010 2,126 2,151 2,196 5 0 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 2011 2012 2013 Q1/14 Net Interest Income Non-interest Income Net Incom
Slide 19: Canadian Retail: Wealth
Canadian Retail Wealth Revenue AUA1 and AUM2 $MM $B 754 778 702 724 737 285 115 116 267 270 264 111 112 261 118 136 135 140 136 131 213 205 199 204 197 473 489 503 527 453 AUA AUM Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Wealth Fee & Other Wealth Transaction Wealth NII Net Income
Slide 20: Canadian Retail: Insurance
Canadian Retail Insurance Revenue Gross Originated Insurance $MM1 Premiums $MM 1,012 1,049 993 945 938 930 932 923 807 839 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Net Income Insurance Claims and Related $MM Expenses $MM 1,140 165 153 141 92 711 683 596 609 -243 Q1/13 Q2/13 Q3/13
Slide 21: U.S. Retail: Deposit Growth
U.S. Retail Deposit Growth Highlights Average Deposits US$ B 9% Growth Average personal deposit volumes YoY up 7% YoY Average business deposit volumes up 10% YoY Average TD Ameritrade IDAs up 11% YoY 1. Insured Deposit Accounts 21
Slide 22: U.S. Retail: Loan Growth
U.S. Retail Loan Growth Highlights Average Loans US$ B 15% Growth Average personal loans increased YoY 22% YoY including Target Average business loans increased 9% YoY Excluding Target, average loans were up 9% YoY with a 10% increase in personal and a 9% increase in commercial Loan to depos
Slide 23: U.S. Retail: Description of Adjusted and Reported Results
U.S. Retail Description of Adjusted and Reported Results P&L US$MM1 Q1/14 QoQ YoY Revenue $ 1,935 2% 24% PCL 223 26% 26% Expenses (adjusted) 1,225 -3% 31% Expenses (reported) 1,225 -6% 19% Net Income, U.S. Retail Bank (adjusted) $ 398 3% 5% Net Income, TD AMTD $ 65 -11% 35% Total Net Income (adjuste
Slide 24: TD Ameritrade
TD Ameritrade Highlights TD Bank Group’s Share of TD Ameritrade’s Net Income1 TD’s share of TD Ameritrade’s net US$MM income was C$68 million in Q1/14, up 45% YoY mainly due to: Increased earnings in TD Ameritrade and FX translation TD Ameritrade Results Net income US$192 million in Q1/14 up 3
Slide 25: Canadian Housing Market
Canadian Housing Market Highlights Canadian RESL credit quality remains solid amidst continued resiliency in the Canadian housing market Portfolio Q1/14 Gross Loans Outstanding $226 B Canadian RESL Percentage Insured 65% Uninsured Residential Mortgages Current LTV1 60% Condo Borrower Gross Loans O
Slide 26: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q4/13 Q1/14 Canadian Retail Portfolio $ 318.7 $ 323.7 Personal $ 270.9 $ 274.0 Residential Mortgages 164.7 166.0 Home Equity Lines of Credit (HELOC) 61.3 60.3 Indirect Auto 14.7 14.7 Unsecured Lines of Credit 8.4 8.5 Credit
Slide 27: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio GIL Formations1: $MM and Ratios2 Highlights $1,233 Excluding impact of foreign $1,167 $1,210 exchange, overall GIL $22 / 11 bps $1,111 $17 / 8 bps Formations were stable $1,058 On a USD basis, improving credit $476 / 42 bps $428 / 42 bps $476 / 45 bps
Slide 28: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights Increase in Gross Impaired ratio is due to: $2,861 $2,692 $41 / 19 bps Real Estate foreclosure delays in $2,531 $2,628 New York and New Jersey $2,494 $47 / 23 bps $69 / 32 bps $38 / 18 bps $31 / 13 bps Weaker Canadian dol
Slide 29: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio PCL1: $MM and Ratios2 Highlights Canadian PCL rate remained stable $454 $420 QoQ Increase in U.S. PCL was $402 $407 primarily due to Credit Cards $360 $19 / 34 bps $1/ 2bps - $181 / 79 bps $236 / 84 bps $150 / 68 bps $202 / 80 bps $197 / 75 bps $244
Slide 30: Canadian Personal Banking
Canadian Personal Banking Q1/14 Canadian Personal Banking1 Gross Loans ($B) GIL/ Loans GIL ($MM) PCL2 ($MM) Highlights Residential Mortgages 166 0.30% 494 4 High credit quality continues in Home Equity Lines of Credit (HELOC) 60 0.52% 313 1 the Canadian Personal portfolio Indirect Auto 15 0.31% 46
Slide 31: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Q1/14 Canadian Commercial and Gross GIL PCL1 Highlights Loans/BAs Wholesale Banking ($B) ($MM) ($MM) Commercial (including Small Commercial Banking2 50 118 14 Business Banking) loss rate Wholesale 21 41 (3) for the trailing 4-quarter Total Canadian Commerc
Slide 32: U.S. Personal Banking
U.S. Personal Banking Q1/14 Highlights Gross Loans GIL/ GIL U.S. Personal Banking1 ($B) Loans ($MM) PCL2 Increase in GIL is driven by ($MM) Residential Mortgages 22 1.27% 286 4 foreclosure delays in New York and New Jersey and the Home Equity Lines of Credit (HELOC)3 11 2.31% 263 11 weaker Canadia
Slide 33: U.S. Commercial Banking
U.S. Commercial Banking Q1/14 U.S. Commercial Banking1 Gross Loans/BAs GIL PCL2 Highlights ($MM) ($MM) ($B) Commercial Real Estate (CRE) 17 341 11 Positive momentum continues Non-residential Real Estate 13 227 8 in U.S. Commercial portfolio: Residential Real Estate 4 114 3 Real Estate prices are
Slide 34: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: tdir@td.com Grand Prix for Best Overall Investor Relations: Large Cap Best Investor Relations by Website: Sector: Financial Services www.td.com/investor Best Investor Relations by a CEO: Large Cap Best Investor Relations by a C
Slide 35: TD Bank Group Quarterly Results Presentation Q1 2014
TD Bank Group Quarterly Results Presentation Q1 2014 Thursday February 27th, 2014