Laurentian Bank Of Canada · TSX:LB
Laurentian Bank Of Canada — Q1 2021 Earnings Presentation
22 slides from Laurentian Bank Of Canada's earnings presentation, Mar 3, 2021
Slide 1: Investor Presentation First Quarter 2021
INVESTOR PRESENTATION First Quarter 2021 March 3, 2021 1
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements The Bank may, from time to time, make written or oral forward-looking statements within the meaning of applicable securities legislation, including in this document and the documents incorporated by reference herein, and in other documents filed with Cana
Slide 3: Strategic Direction
RANIA LLEWELLYN President and Chief Executive Officer Strategic Direction FRANÇOIS LAURIN 3
Slide 4: Q1/21 Financial Highlights
Q1/21 Financial Highlights Adjusted Net Income(1) Adjusted Diluted EPS(1) Adjusted Efficiency PCL(2) Ratio(1) 29% 30% 2bps Strong performance YoY YoY YoY in Capital Markets $47.6MM $1.03 68.9% 20bps Resumption of growth in Commercial Banking 770 bps YoY Strong Cost Discipline with Positive Operating
Slide 5: Three Strategic Pillars
Three Strategic Pillars Cultivating a “Customer First” Culture Driving an “Agile and Innovative” Mindset Engaging and Empowering our employees to work as “One Team” 5
Slide 6: Financial Review
FRANÇOIS LAURIN Executive Vice President and Chief Financial Officer Financial Review FRANÇOIS LAURIN 6
Slide 7: Q1/21 Financial Performance
Q1/21 Financial Performance Y/Y Highlights Reported ($MM) Q1/21 Y/Y Q/Q • Strong contribution from Capital Markets Total revenue $ 247.4 +4% +2% • Higher net interest income mainly due to improved funding costs Provision for credit losses (PCL) $ 16.8 +13% -31% • Increase in PCLs due to higher provi
Slide 8: Net Interest Income
Net Interest Income Net Interest Income and Margin ($MM, %) Key Assets ($B) Q1/21 Y/Y Q/Q 1.81% 1.88% 1.86% 1.82% 1.84% Liquid assets $ 10.5 +12% +9% Personal loans $ 4.0 -11% -4% Residential mortgage loans $ 16.1 +1% -1% $168.8 $170.7 $173.5 $169.3 $173.1 Commercial loans $ 13.2 -% +3% Q1/20 Q2/20
Slide 9: Other Income
Other Income ($MM) Q1/21 Y/Y Q/Q Y/Y Highlights Other income increased by $4.4MM Lending fees $ 16.1 +5% -5% • An increase of $7.8MM mainly from Capital Markets revenues was partly offset by decreases of $2.1MM in service charges and $1.9MM in card Fees and securities brokerage commissions 14.1 +33%
Slide 10: Adjusted Non-Interest Expenses (NIE)
Adjusted Non-Interest Expenses (NIE) Adjusted NIE ($MM) Q1/21 Y/Y Q/Q Y/Y Highlights • Adjusted non-interest expenses decreased by $12.4MM Salaries and employee benefits $ 95.4 -% +7% • Salaries and employee benefits were unchanged as higher performance-based Premises and technology 48.5 -3% -3% com
Slide 11: Well Diversified and Stable Sources of Funding
Well Diversified and Stable Sources of Funding Y/Y Highlights Funding ($B) • An increase in debt related to securitization of $1.7B was offset by a decrease 37.1 37.1 in term deposits sourced from Advisors & Brokers of $1.9B to optimize overall 37.2 funding and align with loan volumes 2.6 2.6 2.6 Sh
Slide 12: Strong Capital Position
Strong Capital Position Common Equity Tier 1 Capital Ratio (CET1) Risk-Weighted Assets (RWA) ($B) (1) (1) 9.8% (1) 9.6% 9.4% 9.0% (1) 20.6 20.9 8.8% 19.9 19.7 19.7 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Evolution of the CET1 Ratio (%) (1) Y/Y Highlights 9.8 • CET1 ratio increase
Slide 13: Strong and Diversified Commercial Loan Portfolio
Strong and Diversified Commercial Loan Portfolio Commercial Loan Portfolio(1) ($B) A pan-Canadian Portfolio and a U.S. Presence(2) 13.2 13.2 12.7 5%4% 1.9 Commercial Lending 14% 2.5 1.6 British Columbia 1.4 Inventory financing 1.4 1.5 Alberta & Prairies 2.2 Equipment financing 2.2 28% Ontario 2.4 Ot
Slide 14: High Quality Residential Mortgage Loan Portfolio
High Quality Residential Mortgage Loan Portfolio Insured vs Uninsured A Pan-Canadian Portfolio(2) 35% 34% 3% 44% 9% Conventional British Columbia 13% Prime insured Alberta & Prairies 39% 57% 57% Alt-A Ontario 50% 36% Quebec 6% 8% 9% Atlantic Provinces Q1/20 Q4/20 Q1/21 Credit Quality ($B) 30 Insured
Slide 15: Allowances for Credit Losses
Allowances for Credit Losses Allowances for Credit Losses (ACL) ($MM) Y/Y Highlights 185.0 193.6 • ACL increased by $83.5MM driven by severe economic conditions 169.2 155.7 resulting from the global pandemic 110.1 76.4 86.5 59.7 71.5 45.9 Q/Q Highlights 108.5 107.1 64.1 96.0 97.8 • ACL increased by
Slide 16: Provision for Credit Losses
Provision for Credit Losses Provision for Credit Losses (PCL) ($MM) Maintaining a Prudent Approach to Provisioning 54.9 Y/Y Highlights • PCL increased $1.9MM, mainly driven by higher provisions from residential 23.5 mortgages reflecting the end of the payment deferral program and an upward 22.3 24.2
Slide 17: Impaired Loans
Impaired Loans Gross Impaired Loans ($MM, bps) Net Impaired Loans ($MM, bps) 84 82 82 62 59 56 70 52 56 42 202.9 196.3 274.3 272.7 274.1 187.6 175.6 235.2 140.8 186.7 119.3 115.2 174.6 170.8 178.1 104.3 112.8 152.9 70.4 109.1 66.8 65.8 66.3 65.2 62.2 61.3 58.7 55.7 57.7 56.7 20.8 23.6 33.0 36.1 29.8
Slide 18: Key Takeaways
Key Takeaways 1 Healthy capital and liquidity positions • CET 1 ratio (standardized) at 9.8%, representing about $300MM of excess capital • Liquid assets total 23% of all assets 2 Sound credit quality • PCL to loan ratio stood at 20 bps • High quality commercial portfolio: disciplined underwriting,
Slide 19: Appendices
Appendices FRANÇOIS LAURIN 19
Slide 20: Adjusting Items
Adjusting Items Q1/21 Q4/20 Q1/20 Pre-Tax After-Tax EPS Pre-Tax After-Tax EPS Pre-Tax After-Tax EPS Effect Effect Effect Effect Effect Effect Effect Effect Effect ($MM) ($MM) ($/Share) ($MM) ($MM) ($/Share) ($MM) ($MM) ($/Share) Severance charges $ 0.3 $ 0.2 $ − $ 2.3 $ 1.7 $ 0.04 $ 2.8 $ 2.1 $ 0.05
Slide 21: Payment Deferrals
Payment Deferrals Significant decrease in loan payment deferrals during the quarter to 0.1% of the loan portfolio • Payment deferrals on personal loans are less than $1MM • Payment deferrals on residential mortgage loans decreased by 91% during the quarter and stood at $18MM or 0.1% of the loan port
Slide 22: Note to Users
Note to Users Management uses both generally accepted accounting principles (GAAP) and non-GAAP measures to assess the Bank’s performance. Results prepared in accordance with GAAP are referred to as “reported” results, except for Pre-tax pre-provision income which is a non-GAAP measure. Non-GAAP mea
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