Toronto-dominion Bank · TSX:TD

Toronto-dominion Bank — The Toronto-Dominion Bank — Q4 2024 Earnings Presentation

61 slides from Toronto-dominion Bank's earnings presentation, Dec 5, 2024

1. Slide 1: Quarterly Results Presentation

   Quarterly Results Presentation TD Bank Group Q4 2024 December 5, 2024

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: U.S. AML Remediation

   U.S. AML Remediation A strong foundation in place to support a multi-year effort to build long-term sustainable risk mitigation People & Talent: Overhauled the U.S. BSA/AML program leadership and talent with emphasis on specific experience and subject matter expertise Governance & Structure: Strengt

4. Slide 4: Proven Business Model

   Proven Business Model Diversification and scale, underpinned by a strong risk culture Net Income EPS2 PTPP1,3 Growth (YoY) Total Assets Reported: $3.6B Reported: $1.97 Reported: 34.5% $2.1T Adjusted1: $3.2B Adjusted1: $1.72 Adjusted1: (2.4)% Efficiency Ratio2 ROE2 ROTCE2 CET 14 Reported: 51.9% Repor

5. Slide 5: Proven Business Model: Customer Activity

   Proven Business Model Customer Activity Canadian Personal and Commercial U.S. Retail Average Volumes Global Wealth Assets2 Banking Average Volumes ($B) (US$B)1 ($B) 2 Year CAGR 11% 600 5% 300 1,200 123 4% 500 117 250 -2% 1,000 107 112 710 400 454 166 200 106 6% 102 800 413 164 436 159 567 586 300 15

6. Slide 6: Forward Focused

   Forward Focused Shaping the future of banking Healthcare team ranked #1 Extended Nordstrom lender for healthcare credit card program professionals by Forbes agreement to 2032 for 2nd consecutive year TD Securities joint lead on TD's TD Cowen's research platform TD Securities recognized in four secon

7. Slide 7: Forward Focused: Digital Metrics

   Forward Focused: Digital Metrics Canadian P&C1 U.S. Retail1 Innovating for our Customers Digital Adoption (% of total customers)2  Launched the Digital Customer +149 bps +154 bps Assistance Portal which enables 63.7 65.2 57.0 Canadian credit card customers with 55.5 overdue accounts to process paym

8. Slide 8: Purpose Driven: Q4 2024 ESG Highlights

   Purpose Driven: Q4 2024 ESG Highlights  Certified by Great Place To Work in the U.S. for the 9th year in a row  Named a Top 50 Community-Minded Business by Chamber of Commerce for Greater Philadelphia and Points of Light  Announced US$500,000 in contributions to support local relief efforts in pa

9. Slide 9: Fiscal 2024 Highlights

   Fiscal 2024 Highlights Challenging Year EPS of $4.72, down 14% YoY  Adjusted1 EPS of $7.81, down 1% YoY P&L ($MM) Revenue up 13% YoY (Adj1 up 9%) Reported 2024 2023 YoY  Reported revenue includes impact of terminated FHN acquisition-related Revenue 57,223 50,690 13% capital hedging strategy in pri

10. Slide 10: Q4 2024 Highlights

    Q4 2024 Highlights Challenging Quarter EPS of $1.97, up 33% YoY P&L ($MM)  Adjusted1 EPS of $1.72, down 5% YoY Reported Q4/24 QoQ YoY Revenue up 18% YoY (Adj1 up 12% YoY) Revenue 15,514 9% 18%  Reported revenue includes gain on sale of Schwab Insurance Service 2,364 42% 76% shares and loss from U.

11. Slide 11: Canadian Personal & Commercial Banking

    Canadian Personal & Commercial Banking Strong quarter with record revenue and positive operating leverage P&L ($MM) Reported Q4/24 QoQ YoY Net income up 9% YoY Revenue 5,064 1% 7% Revenue up 7% YoY PCL 430 -$5 +$40  Volume growth and higher deposit margins, partially offset Impaired 456 +$118 +$182

12. Slide 12: U.S. Balance Sheet Restructuring

    U.S. Balance Sheet Restructuring1 Strategy Progress Update ~10% Asset Reduction ~10% Asset Reduction  Create capacity to serve our customers while  October 31 total assets of ~US$431B (vs asset limitation maintaining buffer to asset limitation of US$434B)2  Manage down non-scalable / non-core por

13. Slide 13: U.S. Retail

    U.S. Retail Challenging quarter Net income down 32% (Adj1 down 14%) Revenue down 9% YoY (Adj1 down 1%) P&L (US$MM) (except where noted)  Reported revenue includes impact of balance sheet restructuring Reported Q4/24 QoQ YoY  Lower deposit volumes partially offset by higher deposit margins, Revenue

14. Slide 14: Wealth Management & Insurance

    Wealth Management & Insurance Strong underlying performance offset by severe weather events P&L ($MM) Reported Q4/24 QoQ YoY Net income down 29% YoY Revenue 3,937 18% 33% Revenue up 33% YoY (of which 24% driven by Insurance Service Expenses 2,364 42% 76% (ISE) reinsurance recoveries for catastrophe

15. Slide 15: Wholesale Banking

    Wholesale Banking Strength of combined franchise P&L ($MM) Net income up >100% YoY (Adj1 up 68% YoY) Reported Q4/24 QoQ YoY Revenue up 19% YoY Revenue 1,771 (1%) 19% Global Markets 1001 (4%) 12%  Higher lending revenue, underwriting fees and Investment Banking 751 (3%) 20% trading-related revenue P

16. Slide 16: Corporate Segment

    Corporate P&L ($MM) Segment Reported Q4/24 Q3/24 Q4/23 Reported net income of $365MM Net Income (Loss) 365 (525) (591)  Adjusted1 loss of $361MM Adjustments for items of note Amortization of acquired intangibles2 60 64 92 Acquisition and integration charges related to 35 21 31 the Schwab transactio

17. Slide 17: Capital

    Capital1 Strong capital and liquidity management supporting future growth Common Equity Tier 1 Ratio (bps) Q3 2024 CET 1 Ratio 12.8% Common Equity Tier 1 ratio of 13.1% Internal capital generation 14 Leverage Ratio of 4.2% Increase in RWA (excluding impact of FX)2 (3) Sale of Schwab shares 54 Liquid

18. Slide 18: Gross Impaired Loan Formations

    Gross Impaired Loan Formations By Business Segment GIL Formations1: $MM and Ratios2 Highlights 22 28 bps  Gross impaired loan formations 18 21 22 increased 6 basis points quarter- over-quarter, driven by: $2,657 – A small number of borrowers $292 / across the Canadian and U.S. 30 bps Commercial and

19. Slide 19: Gross Impaired Loans (GIL)

    Gross Impaired Loans (GIL) By Business Segment GIL1: $MM and Ratios2 Highlights 52 bps  Gross impaired loans 40 41 44 increased 8 basis points 36 quarter-over-quarter, largely recorded in: $4,949 $5 / 6 bps – The Canadian and $4,170 U.S. Commercial and $343 / $3,895 $5 / 7 bps Wholesale Banking $3,

20. Slide 20: Provision for Credit Losses (PCL)

    Provision for Credit Losses (PCL) By Business Segment PCL1: $MM and Ratios2,3,4 Highlights Wealth Management & Insurance  PCL stable quarter-over-quarter Wholesale Banking $1,109 $1,071 $1,072 $1,001 Canadian Personal & Commercial Banking $10 $55 $134 $118 U.S. Retail (net) $878 Corporate $57 (U.S.

21. Slide 21: Provision for Credit Losses (PCL): Impaired and Performing

    Provision for Credit Losses (PCL) Impaired and Performing PCL1,2 ($MM) Highlights Q4/23 Q3/24 Q4/24  Impaired PCL increase quarter- Total Bank 878 1,072 1,109 over-quarter reflected in the Impaired 719 920 1,153 Canadian and U.S. Commercial and Wholesale lending Performing 159 152 (44) portfolios C

22. Slide 22: Allowance for Credit Losses (ACL)

    Allowance for Credit Losses (ACL) ACL1: $B and Coverage Ratios2 Highlights 93 95 bps 89 91  ACL increased $303 million 89 74 quarter-over-quarter, due to: United States $9.1 – Higher impaired allowance in Canada $8.6 $8.8 $8.2 $8.3 the Business & Government lending portfolios 56% 56% 56% $5.3 57% 5

23. Slide 23: Appendix

    Appendix 23

24. Slide 24: Fiscal 2024: Items of Note

    Fiscal 2024: Items of Note Revenue/ ($MM) EPS ($) Segment Expense Line Item1 Pre-Tax After Tax Reported net income and EPS (diluted) 8,842 4.72 Items of note Amortization of acquired intangibles2 290 249 0.14 Corporate Page 4, L13, L29 & L44 Acquisition and integration charges related to the Schwab

25. Slide 25: Q4 2024: Items of Note

    Q4 2024: Items of Note Revenue/ ($MM) EPS ($) Segment Expense Line Item1 Pre-Tax After Tax Reported net income and EPS (diluted) 3,635 1.97 Items of note Amortization of acquired intangibles2 60 52 0.03 Corporate Page 4, L13, L29 & L44 Acquisition and integration charges related to the Schwab transa

26. Slide 26: U.S. Strategic Card Portfolio: Accounting

    U.S. Strategic Card Portfolio: Accounting Illustrative Example Values below are shown for illustrative purposes only. The percent share is representative of the agreements with the retailer card partners, but the exact split differs by partner. Illustrative Example $MM Credit Card Portfolio 1,000 Me

27. Slide 27: Fiscal 2024: PTPP & Operating Leverage

    1,2 Fiscal 2024: PTPP & Operating Leverage 1,3 Modified for partners' share of SCP PCL, FX and Insurance Service Expense FY 2024 FY 2023 FY 2022 TOTAL BANK SFI Reference Revenue Expenses Revenue Expenses Revenue Expenses Reported Results ($MM) 57,223 35,493 50,690 29,855 49,032 24,641 Page 2, L3 & L

28. Slide 28: Q4 2024: PTPP & Operating Leverage

    1,2 1,3 Q4 2024: PTPP & Operating Leverage Modified for partners' share of SCP PCL, FX and Insurance Service Expense Q4 2024 Q3 2024 Q4 2023 TOTAL BANK SFI Reference Revenue Expenses Revenue Expenses Revenue Expenses Reported Results ($MM) 15,514 8,050 14,176 11,012 13,178 7,628 Page 2, L3 & L6 1 PT

29. Slide 29: Net Interest Income Sensitivity (NIIS)

    Net Interest Income Sensitivity (NIIS) Strong deposit base and disciplined ALM management 25 bps change in short-term interest rates 100 bps change in interest rates across the curve  25 bps increase: $105MM increase in NII over a 12-month  100 bps increase: $720MM increase in NII over a 12-month

30. Slide 30: Well-Diversified Deposit Base

    Well-Diversified Deposit Base Deposit Concentration by Top Depositors $516B $325B $141B $982B 28% 19% 11% 6% 5% 3% 3% 4% 3% 4% 2% 4% CAD P&C + WM&I U.S. Retail 1 Wholesale Banking Total Bank 2 1, 3, 4 Top 5 Top 10 Top 20 Total Business Deposit Concentration by Industry5, $B Insured / Secured Deposit

31. Slide 31: Canadian Personal & Commercial Banking: Margins, Volumes and Efficiency

    Canadian Personal & Commercial Banking Margins, Volumes and Efficiency Net Interest Margin (NIM) Average Loans $B1 552 560 564 572 578 2.84% 2.84% 2.81% 2.80% 117 119 121 122 123 2.78% 436 441 444 450 454 Q4/23 Q1/24 Q2/24 Q3/24 Q4/24 Q4/23 Q1/24 Q2/24 Q3/24 Q4/24 Personal Business Efficiency Ratio

32. Slide 32: U.S. Retail: Margins, Volumes and Efficiency

    U.S. Retail Margins, Volumes and Efficiency Net Interest Margin (NIM)1,2 Average Loans US$B3 188 191 192 193 193 3.07% 95 96 98 97 96 3.03% 3.02% 3.01% 2.99% 93 95 95 96 97 2.77% Q4/23 Q1/24 Q2/24 Q3/24 Q4/24 Q4/23 Q1/24 Q2/24 Q3/24 Q4/24 NIM Excl. Liquidity Actions Personal Business Efficiency Rati

33. Slide 33: TD AMCB Financial Impact of Balance Sheet Restructuring and AML Remediation

    TD AMCB Financial Impact of Balance Sheet Restructuring and AML Remediation1 F'25 will be a transition year with higher costs to invest in a stronger core franchise focused on the financial needs of our customers  Undertake balance sheet restructuring in F'25 to create capacity to continue to serve

34. Slide 34: U.S. Retail: Wealth Assets and Schwab EPU

    U.S. Retail Wealth Assets and Schwab EPU Schwab1 – Q4 2024 TD’s share of Schwab’s net income was C$178MM on a reported basis, of which C$154MM (US$114MM) was recorded in the U.S. Retail segment  TD's share of Schwab's net income was C$207MM on an adjusted2 basis 43 40 40 40 41 Schwab Q3 2024 result

35. Slide 35: Schwab Equity Pickup

    Schwab Equity Pickup Q4 2024 Reconciliation U.S. Retail P&L ($MM)1 TDBG Corporate Segment $C $US Reported Schwab Equity Pickup2 178 154 114 24 Amortization of acquired intangibles3 27 0 0 27 Acquisition and integration charges related 2 0 0 2 to the Schwab transaction3,4 Adjusted5 Schwab Equity Pick

36. Slide 36: Wealth Management & Insurance: Volumes and Efficiency

    Wealth Management & Insurance Volumes and Efficiency Insurance Premiums ($MM) Average Loans $B 1,853 1,831 6.9 1,616 1,460 6.7 1,337 6.5 6.4 6.2 Q4/23 Q1/24 Q2/24 Q3/24 Q4/24 Q4/23 Q1/24 Q2/24 Q3/24 Q4/24 Efficiency Ratio Average Deposits $B 70.4% 65.7% 59.4% 59.2% 55.0% 33.4% 28.1 28.1 32.4% 33.0%

37. Slide 37: Wealth Management & Insurance

    Wealth Management & Insurance Wealth Revenue $MM Wealth Assets $B 1,600 1,594 600 1,558 1,481 1,409 236 233 651 1,344 632 217 201 596 198 576 184 188 1,200 531 523 530 185 157 489 141 500 479 441 448 800 418 415 400 400 358 355 1,137 1,160 1,051 1,079 1,019 0 300 Q4/23 Q1/24 Q2/24 Q3/24 Q4/24 Q4/23

38. Slide 38: Wholesale Banking

    Wholesale Banking Revenue Loans1 Q4 2024 Q4 2024 1% 4% 4% 34% 42% $1.8B $97.0B 57% 62% 62% Corporate and Canada United States International Global Markets Other2 Investment Banking 38

39. Slide 39: Gross Lending Portfolio

    Gross Lending Portfolio Includes B/As Period-End Balances ($B unless otherwise noted) Q3/24 Q4/24 Canadian Personal & Commercial Portfolio 577.8 583.1 Personal 452.4 457.0 Residential Mortgages 269.1 270.9 Home Equity Lines of Credit (HELOC) 121.2 123.0 Indirect Auto 29.4 29.9 Credit Cards 20.2 20.5

40. Slide 40: Commercial Real Estate (CRE)

    Commercial Real Estate (CRE) Commercial Real Estate Portfolio Overview: Highlights $96B  Commercial Real Estate represents $96B or 10% of Total Bank gross loans and acceptances1 Office Retail – Portfolio is well diversified across 11% 18% geographies and sub segments Other 5% – 56% of CRE portfolio

41. Slide 41: Canadian Real Estate Secured Lending Portfolio

    Canadian Real Estate Highlights Secured Lending Portfolio  Total Canadian real estate secured lending portfolio at $396B Maturity Schedule ($B)1 – 92% of RESL portfolio is amortizing4, of $111.7 $113.2 which 73% of HELOC portfolio is $78.0 $30.1 amortizing $46.4 Variable Rate $7.6 – 34% variable in

42. Slide 42: Canadian Personal Banking

    Canadian Personal Banking Canadian Personal Banking (Q4/24)1 Highlights Gross Loans ($B) GIL ($MM) GIL/Loans (%)  Gross impaired loans Residential Mortgages 270.9 275 0.10 increased in the consumer Home Equity Lines of Credit (HELOC) 123.0 185 0.15 lending portfolios quarter- Indirect Auto 29.9 132

43. Slide 43: Canadian Commercial and Wholesale Banking

    Canadian Commercial and Wholesale Banking Canadian Commercial and Wholesale Banking (Q4/24) Highlights Gross Loans/ GIL GIL/Loans BAs ($B) ($MM) (%)  Gross impaired loans Commercial Banking1 126.1 1,090 0.86 increased quarter-over- Wholesale Banking 99.2 343 0.35 quarter driven by a small number of

44. Slide 44: U.S. Personal Banking

    U.S. Personal Banking U.S. Personal Banking (Q4/24) Highlights Gross Loans GIL GIL/Loans In USD unless otherwise specified ($B) ($MM) (%)  Good continued asset quality Residential Mortgages 42.1 353 0.84 in U.S. Personal Banking Home Equity Lines of Credit (HELOC)1 8.3 203 2.45 Indirect Auto 30.9 2

45. Slide 45: U.S. Commercial Banking

    U.S. Commercial Banking U.S. Commercial Banking (Q4/24) Highlights Gross Loans/ GIL GIL/Loans In USD unless otherwise specified BAs ($B) ($MM) (%)  Gross impaired loans Commercial Real Estate (CRE) 29.0 431 1.49 increased quarter-over- Non-residential Real Estate 19.4 286 1.47 quarter driven by a s

46. Slide 46: Endnotes on Slide 3

    Endnotes on Slide 3 Slide 3 1. On October 10, 2024, the Bank and certain of its U.S. subsidiaries consented to orders with the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (FRB), and the Financial Crimes Enforcement Network (FinCEN) and entered into plea agreements with

47. Slide 47: Endnotes on Slides 4-5

    Endnotes on Slides 4-5 Slide 4 1. The Bank prepares its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS), the current generally accepted accounting principles (GAAP), and refers to results prepared in accordance with IFRS as the “reported” resul

48. Slide 48: Endnotes on Slides 7-10

    Endnotes on Slides 7-10 Slide 7 1. Canadian Personal and Commercial: based on Canadian Personal & Small Business banking. U.S. Retail: based on U.S. Retail and Small Business banking. 2. Active digital users as a percentage of total customer base. Canadian Personal & Small Business Banking excludes

49. Slide 49: Endnotes on Slides 11-12

    Endnotes on Slides 11-12 Slide 11 1. Please refer to Slide 4, Endnote 1. 2. Net interest margin (NIM) is calculated by dividing net interest income by average interest-earning assets. Average interest-earning assets used in the calculation of NIM is a non-GAAP financial measure. NIM and average inte

50. Slide 50: Endnotes on Slides 13-15

    Endnotes on Slides 13-15 Slide 13 1. Please refer to Slide 4, Endnote 1. 2. Net interest margin is calculated by dividing U.S. Retail segment’s net interest income by average interest-earning assets. For the U.S. Retail segment, this calculation excludes the impact related to sweep deposits arrangem

51. Slide 51: Endnotes on Slide 16

    Endnotes on Slide 16 Slide 16 1. Please refer to Slide 4, Endnote 1. 2. Amortization of acquired intangibles relates to intangibles acquired as a result of asset acquisitions and business combinations, including the after-tax amounts for amortization of acquired intangibles relating to the share of

52. Slide 52: Endnotes on Slides 17-21

    Endnotes on Slides 17-21 Slide 17 1. Capital and liquidity measures are calculated in accordance with OSFI's Capital Adequacy Requirements, Leverage Requirements, and Liquidity Adequacy Requirements guidelines. 2. FX impact on RWA has a negligible impact on the CET 1 ratio, because the CET 1 ratio i

53. Slide 53: Endnotes on Slides 22-24

    Endnotes on Slides 22-24 Slide 22 1. Please refer to Slide 20, Endnote 1. 2. Coverage Ratio: Total allowance for credit losses as a % of gross loans and acceptances. 3. U.S. Strategic Cards Partners' Share represents the retailer program partners' share of the U.S. Strategic Cards Portfolio ACL. 4.

54. Slide 54: Endnotes on Slides 25-27

    Endnotes on Slides 25-27 Slide 25 1. Please refer to Slide 24, Endnote 1. 2. Please refer to Slide 16, Endnote 2. 3. Please refer to Slide 16, Endnote 3. 4. Please refer to Slide 16, Endnote 5. 5. Please refer to Slide 4, Endnote 1. Slide 27 1. Please refer to Slide 4, Endnote 1. 2. Please refer to

55. Slide 55: Endnotes on Slides 28-31

    Endnotes on Slides 28-31 Slide 28 1. Please refer to Slide 4, Endnote 1. 2. Please refer to Slide 4, Endnote 3. 3. Please refer to Slide 27, Endnote 3. 4. Please refer to Slide 27, Endnote 4. 5. Please refer to Slide 27, Endnote 5. 6. Line 12 metrics reflect the adjustments described in lines 8 thro

56. Slide 56: Endnotes on Slides 32-33

    Endnotes on Slides 32-33 Slide 32 1. Please refer to Slide 13, Endnote 2. 2. The impact from certain treasury and balance sheet management activities relating to the U.S. Retail segment is recorded in the Corporate segment. 3. Numbers may not add due to rounding. 4. Insured deposit accounts. Slide 3

57. Slide 57: Endnotes on Slides 34-36

    Endnotes on Slides 34-36 Slide 34 1. TD's share of net income in US$ is the corresponding C$ net income contribution of Schwab to the U.S. Retail segment included in the Bank's 2024 MD&A (www.td.com/investor) for the relevant quarters, divided by the average FX rate. For additional information, plea

58. Slide 58: Endnotes on Slides 37-40

    Endnotes on Slides 37-40 Slide 37 1. Please refer to Slide 14, Endnote 2. Slide 38 1. Average gross lending portfolio includes gross loans and bankers' acceptances relating to Wholesale Banking, excluding letters of credit, cash collateral, credit default swaps, and allowance for credit losses. 2. O

59. Slide 59: Endnotes on Slides 41-42

    Endnotes on Slides 41-42 Slide 41 1. Excludes revolving HELOC, Wholesale mortgage portfolio. 2. RESL Portfolio Current Loan to Value is calculated with the Teranet-National Bank House Price Index™ and weighted by the total exposure, based on outstanding mortgage balance and/or the HELOC authorized c

60. Slide 60: Endnotes on Slides 43-45

    Endnotes on Slides 43-45 Slide 43 1. Includes Small Business Banking and Business Credit Cards. 2. Consumer includes: Food, Beverage and Tobacco; Retail Sector. 3. Industrial/Manufacturing includes: Industrial Construction and Trade Contractors; Sundry Manufacturing and Wholesale Banking. 4. Other i

61. Slide 61: Investor Relations Contacts

    Investor Relations Contacts Phone: (416) 308-9030 or 1 (866) 486-4826 Email: tdir@td.com Website: www.td.com/investor 61

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