Laurentian Bank Of Canada · TSX:LB
Laurentian Bank Of Canada — Q3 2020 Earnings Presentation
25 slides from Laurentian Bank Of Canada's earnings presentation, May 28, 2020
Slide 1: Investor Presentation Third Quarter 2020
20200528 – V21 INVESTOR PRESENTATION Third Quarter 2020 1
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements In this document and in other documents filed with Canadian regulatory authorities or in other communications, we may, from time to time, make written or oral forward-looking statements within the meaning of applicable securities legislation. Forward-look
Slide 3: Stéphane Therrien and François Laurin
STÉPHANE THERRIEN Interim President and Chief Executive Officer FRANÇOIS LAURIN Executive Vice-President and Chief Financial Officer 3
Slide 4: Financial Results
FINANCIAL RESULTS 4
Slide 5: Q3/20 Financial Performance
Q3/20 Financial Performance Q3/20 Highlights Adjusted(1) Q3/20 Q/Q Y/Y Y/Y Net Income ($M) $ 47.1 295% -9% • Impacted by an increase in provisions for credit losses, driven by an adverse shift in Diluted EPS $ 1.02 410% -11% forward looking economic scenarios related to ROE 7.7% 620 bps -80 bps COVI
Slide 6: Adjusting Items in Q3/20
Adjusting Items in Q3/20 ($ millions, except per share amounts) Q3/20 Q2/20 Q3/19 Before After Before After Before After EPS EPS EPS taxes taxes taxes taxes taxes taxes Adjusting items Restructuring charges Severance charges $ 7.1 $ 5.1 $ 0.12 $ 0.2 $ 0.1 $ 0.01 $ 1.0 $ 0.7 $ 0.02 Other restructurin
Slide 7: Total Revenue
Total Revenue Q3/20 Highlights ($ millions) Q3/20 Q/Q Y/Y Y/Y • Total revenue up by $3.9M, mainly due to a Net interest income $173.5 2% -1% strong contribution from capital markets Other income 75.1 8% 9% • Net interest income down by $2.5M, mainly due to a decrease in loan volumes to personal Tota
Slide 8: Net Interest Margin (NIM)
Net Interest Margin (NIM) Q3/20 Highlights Net Interest Margin Y/Y (on average earning assets) 1.88% 1.86% • NIM up by 1 bp Y/Y mainly due to the change 1.85% 1.84% 1.81% in the loan portfolio mix Q/Q • NIM down by 2 bps mainly due to a lower proportion of higher-yielding loans to business Q3/19 Q4/
Slide 9: Other Income
Other Income ($ millions) Q3/20 Q/Q Y/Y Q3/20 Highlights Lending fees $ 15.6 5% 1% Y/Y • Other income up by $6.5M mainly due to a Fees and securities brokerage commissions 12.6 3% 22% strong contribution of $13.3M from capital markets Commissions from sales of • The increase was partly offset by a d
Slide 10: Adjusted Non-Interest Expenses (NIE)
Adjusted Non-Interest Expenses (NIE) Q3/20 Highlights Adjusted NIE Q3/20 Q/Q Y/Y ($ millions) • Adjusted Y/Y down by $3.4M Salaries and employee benefits $ 92.5 -2% 3% • Salaries and employee benefits up by $2.4M due to higher capital markets Premises and technology 50.1 -1% 3% performance-based com
Slide 11: Well Diversified and Stable Sources of Funding
Well Diversified and Stable Sources of Funding Funding Shareholders' equity ($ billions) Total deposits decreased by 8% Y/Y and 3% Q/Q, mainly as a result of a lower level of term deposits, 37.5 37.5 partly offset by higher volumes of demand deposits 36.9 Subordinated debt 2.6 2.6 2.6 • Institutiona
Slide 12: Regulatory Capital
Regulatory Capital Common Equity Tier 1 Capital Ratio Risk-Weighted Assets (RWA) ($ billions) (CET1) (2) 9.4% 9.0% 9.0% 9.0% 20.4 20.4 20.6 20.9 8.8% 19.9 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Evolution of the CET1 Ratio (in %) 0.4 0.2 0.1 9.4 8.8 (0.1) CET1 as at Variation of
Slide 13: Risk Review
RISK REVIEW 13
Slide 14: Positioning the Bank for Profitable Growth
Positioning the Bank for Profitable Growth Loan Portfolio Mix Total loans decreased by $1.1B Y/Y and $0.9B Q/Q ($ billions) • Commercial loans decreased by 1% Y/Y and 6% Q/Q, mainly due to inventory financing volumes 33.9 33.7 which were impacted by COVID-19 32.8 • Residential mortgage loans decreas
Slide 15: Residential Mortgage Loan Portfolio – High Quality
Residential Mortgage Loan Portfolio – High Quality Insured, Uninsured & Loan to Value (LTV) Insured vs Uninsured by Province – Conservative LTV’s 45% 39% % of Residential Mortgage Loan Portfolio LTV %(1) Conventional Prime Insured As at July 31, 2020 Uninsured Insured 48% 53% Alt-A British Columbia
Slide 16: Commercial Loan Portfolio: Strong, Diversified and Growing
Commercial Loan Portfolio: Strong, Diversified and Growing Commercial Loan Portfolio Commercial Loans A pan-Canadian Portfolio (In $ Billions) (As a % of total loans) and a U.S. Presence 13.0 12.7 (As a % of commercial loan portfolio) Commercial (As at July 31, 2020) 2.2 1.7 Inventory financing 1.4
Slide 17: Payment deferrals
Payment deferrals In millions of Canadian dollars As at April 30,2020 During the quarter As at July 31, 2020 As a % of As a % of loan Loan value New relief Expired Loan Value(2) loan portfolio portfolio Personal loans $ 6 0.1% $ 4 $ 4 $ 6 0.1% Residential Mortgages 3,061 19.3% 265 1,866 1,460 9.2% C
Slide 18: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL Q3/20 Q2/20 Q3/19 ($ millions) Personal Loans Q3/20 Highlights Stage 1 and 2 $ (6.1) $ 9.6 $ (2.2) Y/Y Stage 3 8.2 7.8 5.8 • increased by $10.2 Y/Y, reflecting an 2.1 17.4 3.6 adverse shift in forward-looking economic Residential Mortgage Loans scenarios Stage 1
Slide 19: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) Provision for Credit Losses (PCL) 1.44% (As a % of average loans and acceptances) Q3/20 Highlights • Provision for Credit Loss ratio 0.87% continues to compare favorably to the 6 major 0.67% Canadian banks due to our 0.39% 0.38% disciplined underwriting 0.34% standa
Slide 20: Impaired Loans
Impaired Loans Net Impaired Loans (NIL)(1) 0.62% (As a % of loans and acceptances) 0.53% • Net impaired loans of $202.9M increased by 0.45% 0.42% 0.40% $51.3M Y/Y and $27.3M Q/Q Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Gross Impaired Loans • Gross impaired loans of $274.3M, increased by (As a % of loans and ac
Slide 21: Appendices
APPENDICES 21
Slide 22: High Quality Mortgage Loan Portfolio – Low Loan-to-Value
High Quality Mortgage Loan Portfolio – Low Loan-to-Value Loan-to-Value Distribution We target the high end of the Alt-A market (As at July 31, 2020) through low LTV ratios 71% 52% • Vast majority of uninsured and Alt-A mortgages 37% have LTVs of 75% or less 34% 29% • 90% of Conventional portfolio 21
Slide 23: High Quality Mortgage Loan Portfolio – Low Loan-to-Value
High Quality Mortgage Loan Portfolio – Low Loan-to-Value Beacon Distribution We target high end of the Alt-A market through (As at July 31, 2020) high beacon scores 87% 79% 75% • Vast majority of Alt-A and uninsured portfolios with beacon scores > 650 • 89% of Conventional portfolio • 88% of Alt-A p
Slide 24: Non-GAAP Measures
Non-GAAP Measures ($ millions, except per share amounts) Q3/20 Q2/20 Q3/19 Reported net income $ 36.2 $ 8.9 $ 47.8 Adjusting items, net of income taxes(1) Restructuring charges Severances charges 5.1 0.1 0.7 Other restructuring charges 3.0 0.1 0.6 8.1 0.2 1.3 Items related to business combinations A
Slide 25: Investor Relations Contact
Investor Relations Contact Susan Cohen Director, Investor Relations (514) 970-0564 susan.cohen@lbcfg.ca 25
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