Laurentian Bank Of Canada · TSX:LB
Laurentian Bank Of Canada — Q1 2021 Earnings Presentation
32 slides from Laurentian Bank Of Canada's earnings presentation, 2021
Slide 1: Investor Presentation Q1 2021
Investor Presentation Q1 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: Laurentian Bank at a Glance – Q1 2021 Highlights
Laurentian Bank at a Glance – Q1 2021 Highlights $247.4 $47.6 $1.03 o 7th largest Canadian bank2 Revenue Adjusted Net Income1 Adjusted Diluted ($ millions) ($ millions) Earnings per Share1 o 175 years strong o More than 2,900 employees $45.2 $44.8 $0.96 Total Assets Net Income Diluted Earnings per (
Slide 4: Well Diversified Operations
Well Diversified Operations Loan Portfolio Mix Geographic Footprint Multiple Funding Sources A good proportion of higher margin Loans across Canada and the Well-diversified funding sources commercial loans in the Bank mix United States to support our growth 7% 12% 2% 6% 8% 1% 19% 8% 40% 28% Q1-2021
Slide 5: Solid Financial Foundation
Solid Financial Foundation A healthy capital position A strong and liquid balance sheet Common Equity Tier 1 capital ratio (in %) ($ billions) $45.2 B $45.2 B 9.6 9.8 9.0 9.0 7.9 7.0 10.5 Demand & notice deposits Liquid assets 2017 2018 2019 2020 Q1-2021 Term deposits & wholesale funding Loans, net
Slide 6: Laurentian Bank’s Businesses
Laurentian Bank’s Businesses Commercial Personal Capital Markets Setting us apart: Setting us apart - a three-pronged Setting us apart: approach to personal banking: • In-depth industry knowledge • Focused effort originating, and expertise • 100% Advice – a focused offering selling and trading Canad
Slide 7: Charting a New Path Forward: Laurentian Bank’s Executive Team
Charting a New Path Forward: Laurentian Bank’s Executive Team RANIA SÉBASTIEN WILLIAM (LIAM) YVAN LLEWELLYN BÉLAIR MASON DESCHAMPS President and Chief EVP, Chief Human EVP, Chief Incoming EVP, Executive Officer Resources Officer Risk Officer Chief Financial Officer Rania Llewellyn was appointed Pres
Slide 8: 2021 Priorities
2021 Priorities Renewing the senior Increasing our efforts on cost Conducting a thorough review leadership team and discipline while pivoting to of all of Laurentian Bank’s organizational structure to structural cost containment operations and developing a enable Laurentian Bank’s opportunities, in
Slide 9: Putting Strategy into Action
Putting Strategy into Action Renewing Senior Leadership Team • Three external hires and two internal promotions Re-organizing Personal and Commercial Banking into two operating units • To better position each unit for success Conducting a thorough review of the Bank’s operations and assessing key pr
Slide 10: Three Strategic Pillars to Guide Our Efforts and Actions
Three Strategic Pillars to Guide Our Efforts and Actions Cultivating a Driving an “Agile Engaging and “Customer First” and Innovative” empowering our Culture Mindset employees to work as “One Team” 10
Slide 11: Loan Portfolios
Loan Portfolios FRANÇOIS LAURIN 11
Slide 12: Strong and Diversified Commercial Loan Portfolio
Strong and Diversified Commercial Loan Portfolio Commercial Loan Portfolio(1) ($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 13: 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 14: Investment Highlights
Investment Highlights 1 Healthy capital and liquidity positions • CET 1 ratio (standardized) at 9.8%, representing about $300 million of excess capital • Liquid assets total 23% of all assets 2 Sound credit quality • PCL to loan ratio stood at 20 bps • High quality commercial portfolio: disciplined
Slide 15: Appendices
Appendices FRANÇOIS LAURIN 15
Slide 16: Financial Performance Q1 2021
Financial Performance Q1 2021 FRANÇOIS LAURIN 16
Slide 17: Q1/21 Financial Performance
Q1/21 Financial Performance Y/Y Highlights Reported ($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 18: 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 Q3/20
Slide 19: 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 $1.9MM in card Fees and securities brokerage commissions 14.1 +33%
Slide 20: Adjusted Non-Interest Expenses (NIE)
Adjusted Non-Interest Expenses (NIE) Adjusted NIE ($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 21: 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) ($/Share) Severance charges 0.3 0.2 − 2.3 1.7 0.04 2.8 2.1 0.05 Other restructuri
Slide 22: Credit
Credit FRANÇOIS LAURIN 22
Slide 23: Allowances for Credit Losses
Allowances for Credit Losses Allowances for Credit Losses (ACL) ($MM) Y/Y Highlights 185.0 193.6 • ACL increased by $83.5MM driven by severe economic conditions 169.2 155.7 resulting from the global pandemic 110.1 76.4 86.5 59.7 71.5 45.9 Q/Q Highlights 108.5 107.1 64.1 96.0 97.8 • ACL increased by
Slide 24: Provision for Credit Losses
Provision for Credit Losses Provision for Credit Losses (PCL) ($MM) Maintaining a Prudent Approach to Provisioning 54.9 Y/Y Highlights • PCL increased $1.9MM, mainly driven by higher provisions from residential 23.5 mortgages reflecting the end of the payment deferral program and an upward 22.3 24.2
Slide 25: Impaired Loans
Impaired Loans Gross Impaired Loans ($MM, bps) Net Impaired Loans ($MM, bps) 84 82 82 62 59 56 70 52 56 42 202.9 196.3 274.3 272.7 274.1 187.6 175.6 235.2 140.8 186.7 119.3 115.2 174.6 170.8 178.1 104.3 112.8 152.9 70.4 109.1 66.8 65.8 66.3 65.2 62.2 61.3 58.7 55.7 57.7 56.7 20.8 23.6 33.0 36.1 29.8
Slide 26: Liquidity, Funding and Capital
Liquidity, Funding and Capital FRANÇOIS LAURIN 26
Slide 27: Well Diversified and Stable Sources of Funding
Well Diversified and Stable Sources of Funding Y/Y Highlights Funding ($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 $1.9B to optimize overall 37.2 funding and align with loan volumes 2.6 2.6 2.6 Sh
Slide 28: Strong Capital Position
Strong Capital Position Common Equity Tier 1 Capital Ratio (CET1) Risk-Weighted Assets (RWA) ($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 29: ESG
ESG FRANÇOIS LAURIN 29
Slide 30: Laurentian Bank’s ESG Journey
Laurentian Bank’s ESG Journey Environment Social Governance Carbon Footprint Disclosure Equity, Diversity & Inclusion within our Workforce Special CEO Search Committee • Calculated Greenhouse Gas emissions – scope 1 & • 55% are women • Key board mandate in 2020: CEO search 2 – based on The GHG Proto
Slide 31: 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
Slide 32: Investor Relations Contact
Investor Relations Contact Susan Cohen Director, Investor Relations (514) 970-0564 susan.cohen@lbcfg.ca 32
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