Toronto-dominion Bank · TSX:TD

Toronto-dominion Bank — TD Bank Group — Q1 2021 Earnings Presentation

57 slides from Toronto-dominion Bank's earnings presentation, 2021

1. Slide 1: TD Bank Group Investor Presentation Q1 2021

   TD Bank Group Investor Presentation Q1 2021

2. Slide 2: Caution Regarding Forward-Looking Statements

   Caution Regarding Forward-Looking Statements From time to time, the Bank (as defined in this document) makes written and/or oral forward-looking statements, including in this document, in other filings with Canadian regulators or the United States (U.S.) Securities and Exchange Commission (SEC), and

3. Slide 3: TD Bank Group Key Themes

   TD Bank Group Key Themes Top 10 North American Bank 1 5th largest bank by Total Assets1 6th largest bank by Market Cap1 Q1 2020 Financial Results 2 For the three months ended January 31, 2021. Proven Performance, Future Growth Opportunities 3 Delivering solid long term shareholder returns2 Strong Ba

4. Slide 4: Our Strategy

   Our Strategy We're in this together – Anchored by our proven business model and propelled by our forward-focused strategy, we are supporting our customers, communities and colleagues through these challenging times Purpose-Driven Forward Focused Proven Business Model Centre everything we do on our v

5. Slide 5: TD Framework

   TD Framework Execute Own Innovate Think Customer Develop Our Vision Our Purpose Be the better bank To enrich the lives of our customers, communities TD Framework and colleagues Our Shared Commitments Think like a Act like an owner; Execute with Innovate with Develop our customer; lead with integrity

6. Slide 6: TD Snapshot

   TD Snapshot Our Businesses Canadian Retail  Personal banking, credit cards and auto finance  Small business and commercial banking  Direct investing, advice-based wealth businesses, and asset management  Property, casualty, life and health insurance U.S. Retail Q1 20211 Canadian U.S. (C$) Retail

7. Slide 7: Competing in Attractive Markets

   Competing in Attractive Markets Country Statistics Country Statistics  10th largest economy  World’s largest economy  Real GDP of C$2.1 trillion  Real GDP of US$19 trillion  Population of 37 million  Population of 332 million Canadian Banking System U.S. Banking System  One of the soundest ba

8. Slide 8: Top North American Bank

   Top 10 North American Bank Canadian North American Q1 2021 (C$ except otherwise noted) TD Bank Group Ranking4 Ranking5 Total assets $1,736B 1st 5th Total deposits $1,139B 1st 5th Market capitalization $131.6B 2nd 6th Reported net income (trailing four quarters) $12.2B 1st 4th Adjusted net income1 (t

9. Slide 9: Diversified Business Mix

   Diversified Business Mix Three Key Business Lines Fiscal 2020 Reported Earnings Mix1  Canadian Retail Robust retail banking platform in Canada with proven performance  U.S. Retail Top 10 bank4 in the U.S. with significant organic growth opportunities U.S. Retail Bank,2 18%  Wholesale Banking Cana

10. Slide 10: Growing Platform / North American Scale

    Growing Platform / North American Scale 2000-2004 – A Canadian Leader 2005-2010 – Building U.S. Platform 2011-2015 – Acquiring Assets New Capabilities and Partnerships • Acquisition of Canada Trust (2000) • TD Waterhouse USA / Ameritrade • Acquired Chrysler Financial auto • Acquired Epoch (2013) • T

11. Slide 11: Connected Experiences

    Connected Experiences Consistent Strategy Q1 2021 Highlights How we compete:  Enabling seamless interactions 6.1M between customers and the 14.8M 3.8M Active Active Digital Active U.S. entire organization Canadian Mobile Users Users1 Mobile Users  Leveraging our industry-leading Experience Design

12. Slide 12: ESG Performance

    ESG Performance Highlights  TD announced its commitment to a global climate action plan, which includes a target to achieve net-zero greenhouse gas (GHG) emissions associated with its operations and financing activities by 2050, aligned to the associated principles of the Paris Agreement. The $43+B

13. Slide 13: TD's ESG Strategy

    TD's ESG Strategy: TD READY COMMITMENT Working together towards an inclusive and sustainable future | By creating the conditions for economic inclusion and environmental health | Environment Bolster environmental health through sustainable financial products & services, and programs Resource Use Soc

14. Slide 14: TD Bank Group Key Themes

    TD Bank Group Key Themes Top 10 North American Bank 1 5th largest bank by Total Assets1 6th largest bank by Market Cap1 Q1 2021 Financial Results 2 For the three months ended January 31, 2021. Proven Performance, Future Growth Opportunities 3 Delivering solid long term shareholder returns2 Strong Ba

15. Slide 15: Q1 2021 Highlights

    Q1 2021 Highlights Total Bank Reported Results (YoY) Financial Highlights ($MM) Reported Q1/21 Q4/20 Q1/20 EPS of $1.77, up 10% Revenue 10,812 11,844 10,609  Adjusted1 EPS of $1.83, up 10% PCL 313 917 919 Expenses 5,784 5,709 5,467 Revenue up 2% Net Income 3,277 5,143 2,989 PCL down $604MM QoQ Dilu

16. Slide 16: Q1 2021 Segment Highlights

    Q1 2021 Segment Highlights (YoY unless otherwise indicated) Canadian Retail (C$)  Net income for the quarter was $2,037 million, an increase of $248 million, or 14%, compared with the first quarter last year. Revenue increased 1%. Net interest income decreased 6% reflecting lower margins, partially

17. Slide 17: Strong Capital and Liquidity Positions

    Strong Capital and Liquidity Positions Common Equity Tier 1 ratio of 13.6% Common Equity Tier 1 Ratio Q4 2020 CET 1 Ratio 13.1% Internal capital generation 37 Risk-Weighted Assets down 2% QoQ Actuarial gains on employee benefit plans 9 Unrealized gains on FVOCI securities 5 Leverage ratio of 4.5% De

18. Slide 18: High Quality Loan Portfolio

    High Quality Loan Portfolio Balances ($B unless otherwise noted) Q4/20 Q1/21 Canadian Retail Portfolio 451.1 456.7 Personal 367.4 371.5 Residential Mortgages 211.7 215.3 Home Equity Lines of Credit (HELOC) 94.5 95.2 Indirect Auto 27.4 27.2 Credit Cards 15.6 14.6 Other Personal 18.2 19.2 Unsecured Li

19. Slide 19: Provision for Credit Losses (PCL)

    Provision for Credit Losses (PCL) By Business Segment Highlights PCL1: $MM and Ratios2 $3,221  Provision for credit losses of 17 $374 basis points represented a 15 year low, reflecting: $554 $2,189 – The ongoing impact of bank $123 deferral and government $217 economic support programs $1,140 – A p

20. Slide 20: Allowance for Credit Losses (ACL)

    Allowance for Credit Losses (ACL) ACL1: $B and Ratios2 124 126 122 bps 103 Highlights $9.2 $9.4 $8.9 74 $7.9  Allowance for Credit Losses decreased $437MM quarter-over-quarter, reflecting: United States 59% 60% $5.3 59% – The impact of foreign exchange Canada 62% – Performing allowance releases in

21. Slide 21: COVID-19 Industries of Focus

    COVID-19 Industries of Focus Total Gross Loans & Acceptances: $735B Highlights (Q1 2021)  Gross loans and acceptances to industries of heightened focus were $45 billion Residential Mortgages & – Representing ~6.2% of Total Bank HELOC, gross loans and acceptances 48.9%  Lending portfolio remained w

22. Slide 22: TD Bank Group Key Themes

    TD Bank Group Key Themes Top 10 North American Bank 1 5th largest bank by Total Assets1 6th largest bank by Market Cap1 Q1 2021 Financial Results 2 For the three months ended January 31, 2021. Proven Performance, Future Growth Opportunities 3 Delivering solid long term shareholder returns2 Strong Ba

23. Slide 23: Consistent Earnings Growth

    Consistent Earnings Growth Reported Earnings (C$MM)1 5-year CAGR2 Reported Earnings: 8.2% (2.6% adjusted3) Reported EPS: 8.8% (3.1% adjusted3) $11,334 $11,686 $11,895 $10,517 $8,936 $8,024 Corporate Wholesale Banking U.S. Retail Canadian Retail 4 2015 2016 2017 2018 2019 2020 Results in 2020 were si

24. Slide 24: Strong, Consistent Dividend History

    Strong, Consistent Dividend History Dividends Per Share (C$) $3.11 164-year continuous dividend history Dividend yield: 4.5%1 Target payout $0.22 range: 40%-50% Annual Dividend 1. As of Q1/21. Dividend yield is calculated as the dividend per common share divided by the average daily closing stock pr

25. Slide 25: Solid Total Shareholder Returns

    Solid Total Shareholder Returns Canadian North American TD Bank Group Ranking1 Ranking2 One-Year 4.1% 2nd 2nd Three-Year 3.2% 2nd 3rd Five-Year 10.7% 2nd 5th Ten-Year 10.9% 2nd 4th Above North American peer2 average total shareholder return3 for 1, 3, 5 and 10 year periods. 1. Canadian Peer Ranking

26. Slide 26: Canadian Retail

    Canadian Retail Consistent Strategy Reported Net Income (C$MM) How we compete: $7,183 $6,863  Legendary personal connected $6,525 $5,988 $6,026 customer service  Focus on underrepresented products and markets  The power of One TD  Winning culture and team $5,938 $6,525 $7,183 $7,421 $6,124 Highe

27. Slide 27: Canadian Retail

    Canadian Retail Personal Banking Credit Cards  #1 or #2 market share in most retail products1  Dual card issuer of high value brands, including TD First Class Visa  The majority of TD's branches are now open with changes to help and TD Aeroplan Visa, and MBNA World Elite Mastercard safeguard heal

28. Slide 28: U.S. Retail

    U.S. Retail Consistent Strategy Reported Net Income (US$MM) How we compete: $3,750  Legendary service and convenience $3,253  Grow and deepen customer relationships $2,536  Differentiated brand as the “human” bank $2,234 $2,278  Productivity initiatives that enhance both the customer and colleag

29. Slide 29: U.S. Retail

    U.S. Retail Personal & Commercial Banking Wealth  Top 10 bank1 with over 9MM customers, operating retail stores in 15  Serve the wealth management needs of Mass Affluent, High Net states and the District of Columbia Worth and Institutional clients through a network of advisors across  Offer onlin

30. Slide 30: Wholesale Banking

    Wholesale Banking Consistent Strategy Net Income (C$MM) How we compete: $1,418  Continue to build an integrated North American dealer franchise with global reach. $1,054 $1,039 – In Canada, we will be the top-ranked investment dealer. $920 – In the U.S., we will deliver value and trusted advice in

31. Slide 31: Wholesale Banking

    Wholesale Banking Positioned for Growth  Lead mandates and awards highlighting TD Securities' objective to build an integrated North American dealer franchise with global reach include: – Joint Active Bookrunner on Air Canada's C$850 million share offering – Joint Lead Manager European Union's 2nd

32. Slide 32: TD Bank Group Key Themes

    TD Bank Group Key Themes Top 10 North American Bank 1 5th largest bank by Total Assets1 6th largest bank by Market Cap1 Q1 2021 Financial Results 2 For the three months ended January 31, 2021. Proven Performance, Future Growth Opportunities 3 Delivering solid long term shareholder returns2 Strong Ba

33. Slide 33: TD TLAC Requirements

    TD TLAC Requirements  Canadian D-SIBs will be required to meet TD Regulatory Capital Ratios2,3 their regulatory TLAC requirements by the November 1, 2021 implementation date. Notional TLAC: 26.6%  OSFI has stipulated that D-SIBs will be subject to 2 supervisory ratios: Current Risk-based TLAC Rati

34. Slide 34: Industry-Leading Credit Ratings

    Industry-Leading Credit Ratings Issuer Ratings1 Rating Agencies Senior Debt Ratings2 Outlook Moody's Aa3 Stable S&P A Stable DBRS AA Stable Ratings vs. Peer Group1 Moody’s Senior Debt2 / HoldCo5 Rating S&P Senior Debt2 / HoldCo5 Rating Aa1 AA- Aa2 A+ Aa3 A A1 A- A2 BBB+ A3 Baa1 BBB TD Canadian Peers

35. Slide 35: Leading Non-Common Equity Capital Ratings

    Leading Non-Common Equity Capital Ratings NVCC Tier 2 Subordinated Debt Ratings Moody’s S&P A2 A A3 A- Baa1 BBB+ Baa2 BBB Baa3 BBB- Ba1 BB+ TD Peers 2 Canadian Peers TD Canadian Peers TD Canadian TD Canadian Peers2 Additional Tier 1 NVCC Preferred Share Ratings Moody’s S&P A2 A A3 A- Baa1 BBB+ Baa2

36. Slide 36: Robust Liquidity Management

    Robust Liquidity Management Liquidity Risk Management Framework Liquidity Risk Management Framework  Target a 90-day survival horizon under a combined  TD holds a variety of liquid assets commensurate with Bank-specific and market-wide stress scenario, and a liquidity needs in the organization. mi

37. Slide 37: Deposit Overview

    Deposit Overview Domestic Leader in Deposits Large base of personal and business deposits that make up 72% of the Bank's total funding1  TD Canada Trust ("TDCT") ranked #1 in Total Personal Deposits2 – legendary customer service and the power of One TD  U.S. Retail is a top 103 bank in the U.S. wi

38. Slide 38: Low Risk, Deposit Rich Balance Sheet

    Low Risk, Deposit Rich Balance Sheet1 Large base of stable retail and commercial Maturity Profile6,7 (C$B) (To first par redemption date) 50 deposits Issuance Maturity 40  Personal and business deposits are TD's primary sources of 30 funds 20 – Customer service business model delivers stable base o

39. Slide 39: Wholesale Term Debt Composition

    Wholesale Term Debt Composition1 Funding Strategy  Wholesale term funding through diversified sources across domestic and international markets  Well-established C$80 billion Legislative Covered Bond Program is an important pillar in global funding strategy  Programmatic issuance for the establis

40. Slide 40: Canadian Registered Covered Bond Program

    Canadian Registered Covered Bond Program Key Highlights Covered Bond Collateral  Canadian residential real estate property with no more than 4 residential units  Uninsured conventional first lien assets with original loan to value ratio that is 80% or less Housing Market Risks  Latest property va

41. Slide 41: TD Global Legislative Covered Bond Program

    TD Global Legislative Covered Bond Program Highlights Cover Pool as at January 29, 2021  TD has a C$80B legislative covered bond program  High quality, conventional first lien Canadian  Covered bonds issuance for Canadian issuers governed by CMHC-administered guidelines Residential mortgages orig

42. Slide 42: Bail-in Implementation

    Bail-in Implementation Regulation Overview  On April 18, 2018, the Government of Canada published final regulations under the CDIC Act and the Bank Act providing details of the bank recapitalization "bail-in" regime and final Total Loss Absorbing Capacity (TLAC) guideline.  The issuance regulation

43. Slide 43: Bail-in Overview

    Bail-in Overview Scope of Bail-in  In Scope Liabilities. Senior unsecured long-term debt (original term to maturity of 400 or more days) that is tradable and transferable (has a CUSIP, ISIN or other similar identification) and issued on or after September 23, 20181. Unlike other jurisdictions, Cana

44. Slide 44: Appendix: Economic Outlook

    Appendix Economic Outlook

45. Slide 45: TD Economics Update

    TD Economics Update Global Outlook: Vaccine Rollout A Key Driver for Global Recovery  Elevated COVID-19 caseloads and new, more virulent strains of the virus have led to renewed economic lockdowns that are likely to restrain global economic activity in the first quarter of 2021.  Vaccine distribut

46. Slide 46: Interest Rate Outlook

    Interest Rate Outlook Interest Rates, Canada and U.S. % 7 Forecast  The federal funds rate is at the effective lower bound and expected to remain there until calendar U.S. Federal 6 Funds Rate 2023. The Federal Reserve has stated its willingness to allow inflation to push above its 2% long-term tar

47. Slide 47: Appendix: Credit Quality

    Appendix Credit Quality

48. Slide 48: Gross Impaired Loan Formations

    Gross Impaired Loan Formations By Business Segment Highlights GIL Formations1: $MM and Ratios2  Gross impaired loan formations stable quarter-over-quarter 24 24 23 – Continued low gross impaired $1,783 16 bps loan formations reflected the $1,708 15 $1,689 ongoing impact of bank $40 / 5 bps deferral

49. Slide 49: Gross Impaired Loans (GIL)

    Gross Impaired Loans (GIL) By Business Segment Highlights GIL1: $MM and Ratios2  Gross impaired loans stable 51 quarter-over-quarter 47 45 42 42 bps $3,821 $3,606 $3,207 $343 / 52 bps $3,157 $3,057 $341 / 43 bps $142 / 25 bps $97 / 17 bps $18 / 3 bps $2,108 / $2,039 / 91 bps $1,790 / $1,829 / $1,99

50. Slide 50: Credit Quality

    Credit Quality Net impaired loans and PCL ratios (bps) 100 56 52 50 46 48 46 45 39 Q1 2021 38 31 43 32 39 41 38 37 37 34 34 33 Q1 2021 17 IFRS IFRS 9 1 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Net impaired loans as a % of net loans and acceptances (bps) Provision for credit losses as a

51. Slide 51: Provision for Credit Losses (PCL)

    Provision for Credit Losses (PCL) 1,2 Impaired and Performing Highlights PCL ($MM) Q1/20 Q4/20 Q1/21  Impaired PCL increased quarter-over-quarter, primarily reflected in: Total Bank 923 921 316 – The U.S. credit card portfolios, largely Impaired 810 363 469 recorded in the Corporate segment Perform

52. Slide 52: Canadian Personal Banking

    Canadian Personal Banking Canadian Personal Banking (Q1/21) Highlights Gross Loans ($B) GIL ($MM) GIL/Loans (%)  Gross impaired loans Residential Mortgages 215.3 347 0.16 decreased quarter-over- Home Equity Lines of Credit (HELOC) 95.2 181 0.19 quarter Indirect Auto 27.2 73 0.27 Credit Cards 14.6 9

53. Slide 53: Canadian Real Estate Secured Lending Portfolio

    Canadian Real Estate Secured Lending Portfolio Highlights (Q1 2021) Quarterly Portfolio Volumes ($B) $293 $297 $300 $308 $312 Canadian RESL credit quality remained strong Uninsured 70% 71% 72% 73% 74% Insured  Uninsured and insured portfolio loan-to- 30% 29% 28% 27% 26% value rates stable Q1/20 Q2/

54. Slide 54: Canadian Commercial and Wholesale Banking

    Canadian Commercial and Wholesale Banking Highlights Canadian Commercial and Wholesale Banking (Q1/21) Gross Loans/ GIL GIL/Loans  Gross impaired loans BAs ($B) ($MM) (%) decreased largely due to Commercial Banking1 85.2 468 0.55 resolutions in the Wholesale Wholesale 57.1 18 0.03 lending portfolio

55. Slide 55: U.S. Personal Banking (USD)

    U.S. Personal Banking (USD) Highlights U.S. Personal Banking1 (Q1/21)  Gross impaired loans Gross Loans GIL GIL/Loans increased quarter-over- ($B) ($MM) (%) quarter but remained below Residential Mortgages 28.9 342 1.18 pre-COVID levels. Home Equity Lines of Credit (HELOC)2 7.9 310 3.93 Indirect Au

56. Slide 56: U.S. Commercial Banking (USD)

    U.S. Commercial Banking (USD) Highlights U.S. Commercial Banking1 (Q1/21) Gross Loans/ GIL GIL/Loans  Gross impaired loans BAs ($B) ($MM) (%) increased quarter-over- Commercial Real Estate (CRE) 25.9 145 0.56 quarter, largely reflected in the Non-residential Real Estate 18.2 106 0.58 Commercial Rea

57. Slide 57: Investor Relations Contacts

    Investor Relations Contacts Phone: (416) 308-9030 or 1 (866) 486-4826 Email: tdir@td.com Website: www.td.com/investor 57

TD Bank Group — Q1 2021 Earnings Presentation on 6ix