Toronto-dominion Bank · TSX:TD

Toronto-dominion Bank — The Toronto-Dominion Bank — Q1 2022 Earnings Presentation

44 slides from Toronto-dominion Bank's earnings presentation, Mar 3, 2022

  1. Slide 1: Q1 2022

    o S ° - 10) a c 5 a a | el = hn 22 hen ir > o Cw Q1 2022 March 3 , 2022

  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: Our Strategy

    Our Strategy We're in this together – Anchored by our proven business model and propelled by our forward-focused strategy, we are helping our customers, colleagues and communities thrive in a changing world Proven Business Model Forward Focused Purpose-Driven Deliver consistent earnings growth, Shap

  4. Slide 4: Proven Business Model

    Proven Business Model Diversification and scale, underpinned by a strong risk culture  Reported earnings of $3.7B, up 14% (adjusted1 $3.8B, up 13%)  Reported EPS of $2.02, up 14% (adjusted1,2 $2.08, up 14%)  Revenue growth and strong volumes across all businesses  Common Equity Tier 1 ratio of 1

  5. Slide 5: Proven Business Model: Strong Customer Activity

    roven Business Model ong Customer Activity Canadian Personal and Commercial U.S. Retail Average Volumes Total Wealth Assets Average Volumes ($B) (US$B)4 ($B) 6% 14% 250 (0.5%) 20% 1,200 10% 500 97 114 1,000 200 400 82 85 170 102 150 390 800 598 300 351 120 363 150 74 95 518 87 85 468 600 200 257 100

  6. Slide 6: Forward Focused: Shaping the future of banking

    Forward Focused Shaping the future of banking Establishing an enterprise level data platform Multi-year agreement to unlock data at scale TD Direct Investing top among Canadian Banks in The Globe and Mail's Digital Broker Ranking ~2MM redemptions in TD's Amazon Shop Agreement to acquire First with P

  7. Slide 7: Forward Focused: Digital Adoption

    orward Focused: Digital Adoption Digital Adoption Active Mobile Users Self-Serve Transactions (% of total customers)8 (millions)9 (as % of all financial transactions)10 + +100 bps YoY +7.4% YoY 0 bps YoY 6.5 61.6 6.4 92.1 Canadian 92.1 92.0 Retail7 60.9 6.1 60.6 Q1/21 Q4/21 Q1/22 Q1/21 Q4/21 Q1/22 Q

  8. Slide 8: Purpose Driven

    Purpose Driven Centered on our vision, purpose and shared commitments TD Ready Challenge Grants TD Labs developed Equity, Diversity & Inclusion Resource Hub 8

  9. Slide 9: Purpose Driven: Strong ESG Profile

    urpose Driven ong ESG Profile Environment Social Governance – Continued to participate in evolving industry – TD announced additional enhancements to its – Formally established the ESG Centre of initiatives including joining the Net-Zero Banking overdraft policies and services in the US to Expertise

  10. Slide 10: Q1 2022 Highlights

    Q1 2022 Highlights Strong start to the year, on higher revenue and volume growth EPS of $2.02, up 14% YoY P&L ($MM)  Adjusted1 EPS of $2.08, up 14% Reported Q1/22 QoQ YoY Revenue 11,281 3% 4% Revenue up 4% YoY PCL 72 +$195 ($241)  Higher volumes and fee-based revenue in the Impaired 329 +$109 ($13

  11. Slide 11: Canadian Retail

    Canadian Retail Record revenue, continued investment in the business Net income up 11% YoY P&L ($MM) Reported Q1/22 QoQ YoY Revenue up 6% YoY Revenue 6,718 3% 6%  Higher fee-based revenue in the banking and PCL 33 ($20) ($109) wealth businesses and continued growth in loan, Impaired 150 + $10 ($17)

  12. Slide 12: U.S. Retail (US$)

    U.S. Retail (US$) Strong earnings growth on rising customer activity Net income up 30% YoY P&L (US$MM) (except where noted) Reported Q1/22 QoQ YoY Revenue up 6% YoY Revenue 2,201 0% 6%  Higher deposit volumes and margins, increased earnings on investment portfolio, and higher fee PCL 17 +$79 ($86)

  13. Slide 13: Wholesale

    Wholesale Strong performance, continued investment in USD strategy Net income down 1% YoY P&L (MM) Reported Q1/22 QoQ YoY Revenue up 3% YoY Revenue 1,346 17% 3%  Business activity and markets remained robust, Trading-related revenue 726 42% (2%) resulting in strong revenue performance (TEB)2,15 PCL

  14. Slide 14: Corporate Segment

    Corporate Segment Reported loss of $227MM P&L ($MM)  Adjusted1 loss of $127MM Reported Q1/22 Q4/21 Q1/21 Net Income (227) (150) (197) Adjustments for items of note Amortization of acquired 67 74 74 intangibles before income taxes Acquisition and integration 50 22 38 charges related to Schwab Impact

  15. Slide 15: Capital

    16 Capital Robust capital and liquidity positions Common Equity Tier 1 ratio of 15.2% Common Equity Tier 1 Ratio Q4 2021 CET 1 Ratio 15.2% Internal capital generation 45 Risk-Weighted Assets up 2.3% QoQ Repurchase of common shares (17) Increase in RWA (net of FX)17 (13) Leverage Ratio of 4.4% Decrea

  16. Slide 16: Gross Impaired Loan Formations

    Gross Impaired Loan Formations By Business Segment Highlights GIL Formations18: $MM and Ratios19  Gross impaired loan formations increased 5 basis points quarter- over-quarter, driven by: – U.S. Commercial, primarily 16 16 bps 14 related to government 11 11 guaranteed Paycheck $1,203 $13 / 2 bps $1

  17. Slide 17: Gross Impaired Loans (GIL)

    Gross Impaired Loans (GIL) By Business Segment GIL20: $MM and Ratios21 Highlights  Gross impaired loans were stable quarter-over-quarter, remaining at cyclically low 42 levels 38 35 32 33 bps $3,057 $18 / 3 bps $2,803 $69 / 12 bps $2,651 $2,560 $68 / 11 bps $2,411 $7 / 1 bp $12 / 2 bps $1,829 / 84

  18. Slide 18: Provision for Credit Losses (PCL)

    Provision for Credit Losses (PCL) By Business Segment Highlights PCL22: $MM and Ratios23  PCL increased quarter-over-quarter, $313 reflecting: $20 – Higher impaired PCLs Wholesale $16 – A smaller performing allowance Corporate ($37) release $135 U.S. Retail $2 $72 ($123) $23 Canadian Retail $142 $2

  19. Slide 19: Provision for Credit Losses: Impaired and Performing

    Provision for Credit Losses (PCL)22,26 Impaired and Performing Highlights PCL ($MM) Q1/21 Q4/21 Q1/22  Impaired PCL increased from cyclically low levels, reflecting: Total Bank 313 (123) 72 – Some normalization of credit performance, Impaired 466 220 329 including the reemergence of seasonal Perfor

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

    Allowance for Credit Losses (ACL) ACL22: $B and Coverage Ratios27 124 126 122 Highlights 103 108 103 97 $9.2 $9.4 93 bps $8.9  ACL decreased quarter-over-quarter, 74 $7.9 $8.0 $7.7 $7.3 reflecting: $7.1 United States 59% 60% – A more favourable economic outlook $5.3 59% 58% Canada 62% 58% 57% 57% –

  21. Slide 21: Appendix

    Appendix 21

  22. Slide 22: Q1 2022: Items of Note

    Q1 2022: Items of Note Revenue/ ($MM) EPS ($)30 Segment Expense Line Item31 Pre After Tax Tax Reported net income and EPS (diluted) 3,733 2.02 Items of note Amortization of acquired intangibles32 67 59 0.03 Corporate Page 4, L13, L18 & L25 Acquisition and integration charges related to Schwab33 50 4

  23. Slide 23: 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

  24. Slide 24: Q1 2022: PTPP & Operating Leverage

    Q1 2022: PTPP1,34 & Operating Leverage1,35 Modified for partners' share of SCP PCL, FX and Insurance Fair Value Change Q1 2022 Q4 2021 Q1 2021 TOTAL BANK SFI Reference Revenue Expenses Revenue Expenses Revenue Expenses 1 Reported Results ($MM) 11,281 5,967 10,941 5,947 10,812 5,784 Page 2, L3 & L6 2

  25. Slide 25: Net Interest Income Sensitivity (NIIS)

    Net Interest Income Sensitivity (NIIS) Well positioned for higher rates with strong deposit base, disciplined ALM management  25 bps increase in short-term interest rates  100 bps increase in interest rates across the – $394MM increase in NII over a 12-month period from curve a 25 bps rise in shor

  26. Slide 26: Canadian Retail: Volumes, Margins and Efficiency

    Canadian Retail Volumes, Margins and Efficiency Net Interest Margin (NIM) Average Loans $B41 473 484 494 454 460 91 94 97 85 87 2.65% 2.61% 2.61% 2.57% 2.53% 398 369 373 382 390 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Personal Business Efficiency Ratio Average Deposits $B41 448 4

  27. Slide 27: Canadian Retail: Wealth Revenue and Assets

    Canadian Retail Wealth Revenue and Assets Wealth Revenue $MM Wealth Assets12 $B 1,600 600 1,499 1,448 1,428 1,402 1,415 557 557 181 538 160 172 155 169 514 484 1,200 244 245 214 427 429 346 420 500 397 306 380 490 800 464 457 445 400 410 400 941 1,001 1,042 1,075 942 0 300 Q1/21 Q2/21 Q3/21 Q4/21 Q1

  28. Slide 28: U.S. Retail: Volumes, Margins and Efficiency

    U.S. Retail Volumes, Margins and Efficiency NII and NIM14,42 Average Loans US$B41 2.24% 2.15% 2.16% 2.21% 2.21% 172 170 167 163 162 8.2 9.3 8.7 4.8 2.4 2.13% 2.11% 2.01% 2.02% 2.05% 1,673 1,671 87 86 84 83 82 1,579 1,619 1,548 108 65 70 99 86 1,520 1,565 1,606 77 75 74 76 77 1,509 1,462 Q1/21 Q2/21

  29. Slide 29: U.S. Retail: Wealth Assets and Schwab EPU

    U.S. Retail Wealth Assets and Schwab EPU TD Wealth Assets12 US$B Schwab46 – Q1 2022 TD’s share of Schwab’s net income was C$231MM on a 44 reported basis, of which C$252MM (US$200MM) was 43 41 41 recorded in the U.S. Retail segment 40  TD's share of Schwab's net income was C$278MM on an adjusted bas

  30. Slide 30: Schwab Equity Pickup: Q1 2022 Reconciliation

    Schwab Equity Pickup Q1 2022 Reconciliation U.S. Retail P&L ($MM)48 TDBG Corporate Segment $C $US Reported Schwab Equity Pickup49 231 252 200 (21) Amortization of Intangibles50 34 0 0 34 Acquisition and Integration Charges50,51 13 0 0 13 Adjusted Schwab Equity Pickup1 278 252 200 25 Financial Statem

  31. Slide 31: Wholesale Banking

    Wholesale Banking Revenue Loans52 Q1 2022 Q1 2022 6% -1% 34% 29% $1.3B $59.2B 67% 65% Corporate and Global Markets Other53 Canada United States International Investment Banking Highlights  Global Markets business generated strong trading-related revenue  Corporate and Investment Banking business h

  32. Slide 32: Gross Lending Portfolio

    Gross Lending Portfolio Including B/As Balances ($B unless otherwise noted) Q4/21 Q1/22 Canadian Retail Portfolio 488.1 499.0 Personal 394.6 400.5 Residential Mortgages 230.5 234.9 Home Equity Lines of Credit (HELOC) 102.1 103.9 Indirect Auto 27.6 27.2 Credit Cards 15.2 15.0 Other Personal 19.2 19.5

  33. Slide 33: Canadian Real Estate Secured Lending Portfolio

    Canadian Real Estate Secured Lending Portfolio Highlights (Q1 2022) Quarterly Portfolio Volumes ($B) $312 $319 $328 $334 $340 Canadian RESL credit quality remained strong Uninsured Insured 74% 75% 76% 77% 78%  Uninsured and insured portfolio loan-to value rates stable 26% 25% 24% 23% 22% Q1/21 Q2/2

  34. Slide 34: Canadian Personal Banking

    Canadian Personal Banking Canadian Personal Banking (Q1/22) Highlights Gross Loans ($B) GIL ($MM) GIL/Loans (%)  Gross impaired loans were Residential Mortgages 234.9 216 0.09 stable quarter-over-quarter Home Equity Lines of Credit (HELOC) 103.9 114 0.11 remaining at cyclically low Indirect Auto 27

  35. Slide 35: Canadian Commercial and Wholesale Banking

    Canadian Commercial and Wholesale Banking Highlights Canadian Commercial and Wholesale Banking (Q1/22) Gross Loans/ GIL GIL/Loans  Gross impaired loans stable BAs ($B) ($MM) (%) quarter-over-quarter Commercial Banking59 98.5 414 0.42 Wholesale 64.4 7 0.01 Total Canadian Commercial and Wholesale 162

  36. Slide 36: U.S. Personal Banking (USD)

    U.S. Personal Banking (USD) Highlights U.S. Personal Banking63 (Q1/22)  Gross impaired loans increase Gross Loans GIL GIL/Loans quarter-over-quarter reflects: ($B) ($MM) (%) – An increase in U.S. RESL, Residential Mortgages 30.6 371 1.21 related to loans exiting Home Equity Lines of Credit (HELOC)5

  37. Slide 37: U.S. Commercial Banking (USD)

    U.S. Commercial Banking (USD) Highlights U.S. Commercial Banking63 (Q1/22) Gross Loans/ GIL GIL/Loans  Gross impaired loans stable BAs ($B) ($MM) (%) quarter-over-quarter, as Commercial Real Estate (CRE) 23.9 79 0.33 – Higher new formations, Non-residential Real Estate 16.7 58 0.35 mainly attributa

  38. Slide 38: Endnotes

    Endnotes 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” results. The Bank also util

  39. Slide 39: Endnotes

    Endnotes 12. Wealth assets includes assets under management (AUM) and assets under administration (AUA). 13. 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 financ

  40. Slide 40: Endnotes

    Endnotes 26. PCL-impaired represents Stage 3 PCL under IFRS 9, performing represents Stage 1 and Stage 2 on financial assets, loan commitments, and financial guarantees 27. Coverage Ratio: Total allowance for credit losses as a % of gross loans and acceptances. 28. U.S. Strategic Cards Partners' Sha

  41. Slide 41: Endnotes

    Endnotes 37. Adjusts for fair value changes in investments supporting insurance claims liabilities, as reported on page 6, line 14 of the Bank's Q1 2022 Supplementary Financial Information package (Income (loss) from Financial Instruments designated at FVTPL – Related to Insurance Subsidiaries). 38.

  42. Slide 42: Endnotes

    Endnotes 48. The Bank's share of Schwab's earnings is reported with a one-month lag. 49. Includes the net impact of internal management adjustments which are reclassified to other reporting lines in the Corporate segment. 50. The after-tax amounts for amortization of acquired intangibles and the Ban

  43. Slide 43: Endnotes

    Endnotes 62. Other includes: Power and Utilities; Telecommunications, Cable and Media; Transportation; Professional and Other Services; Other. 63. Excludes acquired credit-impaired loans. 64. Loan To Value based on authorized credit limit and Loan Performance Home Price Index as of November 2021. FI

  44. Slide 44: Investor Relations Contacts

    Investor Relations Contacts Phone: (416) 308-9030 or 1 (866) 486-4826 Email: tdir@td.com Website: www.td.com/investor 44

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