Laurentian Bank Of Canada · TSX:LB
Laurentian Bank Of Canada — Q1 2022 Earnings Presentation
30 slides from Laurentian Bank Of Canada's earnings presentation, Mar 2, 2022
Slide 1: Investor Presentation First Quarter 2022
Investor Presentation First Quarter 2022 March 2, 2022 Seeing Beyond Numbers 1
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements From time to time, Laurentian Bank of Canada (the "Bank") will make written or oral forward-looking statements within the meaning of applicable securities legislation, including such as those contained in this presentation (and in the documents incorporat
Slide 3: Non-GAAP financial and other measures
Non-GAAP financial and other measures Management uses financial measures based on generally accepted accounting principles (GAAP) and non-GAAP financial measures to assess the Bank’s performance. Non-GAAP financial measures presented throughout this document are referred to as “adjusted” measures an
Slide 4: Rania Llewellyn: Strategic Direction
Rania Llewellyn President & Chief Executive Officer Strategic Direction Seeing Beyond Numbers 4
Slide 5: Q1/22 Financial Highlights
Adjusted Net Income Adjusted Diluted EPS(2)(4) Adjusted PCL (bps)(3)(4) ($MM)(1)(4) Efficiency Ratio(2)(4) +25% +22% -190bps -9bps Q1/22 Financial YoY YoY YoY YoY Highlights $ 59.5 $ 1.26 30 68.9% $ 47.8 $ 1.03 $ 1.06 $ 47.6 67.0% 20 65.5% 11 • Strong performance in Commercial Banking Q1 21 Q4 21 Q1
Slide 6: A 5-point Strategy for Future Growth
Strategic Direction | A 5-point Strategy for Future Growth Build One Winning Make Size Our Think Customer Make the Better Team Advantage First Simplify Choice Culture Commercial Bank Capital Markets Personal Bank Our Driving Force Our Growth Engine Focused & Aligned Offering Repositioning for Growth
Slide 7: Strategic Plan: Commercial Bank | Our Growth Engine
Strategic Plan: Commercial Bank | Our Growth Engine Commercial Bank Key developments in Q1 2022 Priorities 1 Continue to focus on our specialized sectors 2 Diversify Grew our Expanded our Generated close Maintained a net geographically Inventory Real Estate to $200MM of promoter score and by industr
Slide 8: Strategic Plan: Capital Markets | Our Focused & Aligned Offering
Strategic Plan: Capital Markets | Our Focused & Aligned Offering Capital Markets Key developments in Q1 2022 Priorities 1 Be an alternative to large banks 2 Expand capabilities to further align with Commercial Hired new talent in our Hired a new real estate Participated in multiple Banking diversifi
Slide 9: Strategic Plan: Personal Bank | Repositioning For Growth
Strategic Plan: Personal Bank | Repositioning For Growth Personal Bank Key developments in Q1 2022 Priorities 1 Create one performance- oriented Personal Bank 2 Enhance focus products and Launched a new Announced a new Experienced strong processes customer loyalty team strategic partnership customer
Slide 10: Strategic Direction | Culture and ESG
Strategic Direction | Culture and ESG Key developments in Q1 2022 1 Reduced 2 Appointed Bindu 3 Published First- corporate office Cudjoe as Chief ever ESG Report space as part of Legal Officer and Future of Work Corporate strategy Secretary Seeing Beyond Numbers 10
Slide 11: Yvan Deschamps: Financial Review
Yvan Deschamps Executive Vice President & Chief Financial Officer Financial Review Seeing Beyond Numbers 11
Slide 12: Q1/22 Financial Performance
Financial Review | Q1/22 Financial Performance Reported ($MM) Q1/22 Y/Y Q/Q Y/Y Highlights Total revenue $ 257.5 +4% +3% • Total revenue up by $10.2MM, with NII accounting for $7.8MM, Provision for credit losses (PCL) $ 9.4 -44% -62% and other income accounting for $2.3MM • PCL down by $7.4MM as low
Slide 13: Net Interest Income
Financial Review | Net Interest Income Net Interest Income and Margin ($MM, %) Key Assets ($B) Q1/22 Y/Y Q/Q 1.84% 1.88% 1.86% 1.83% 1.88% Liquid assets(1) $ 10.2 -3% +3% Personal loans $ 3.5 -11% -4% Residential mortgage loans $ 15.5 -4% -2% $173.1 $171.5 $174.7 $173.1 $180.9 Commercial loans(2) $
Slide 14: Other Income
Financial Review | Other Income ($MM) Q1/22 Y/Y Q/Q Y/Y Highlights Other income increased by $2.3MM, mainly from: Lending fees • An increase of $1.5MM in commissions from sales of mutual $ 17.3 +8% -1% funds Fees and securities brokerage commissions $ 12.7 -10% -25% • An increase of $1.6MM from the
Slide 15: Non-Interest Expenses (NIE)
Financial Review | Non-Interest Expenses (NIE) NIE ($MM) Q1/22 Y/Y Q/Q Y/Y Highlights Salaries and employee benefits $ 97.7 +2% +11% • Adjusted NIE increased by $2.2MM, mainly from: Premises and technology • An increase of $2.3MM in salaries and employee benefits, mostly $ 45.0 -7% -1% due to higher
Slide 16: Well Diversified and Stable Sources of Funding
Financial Review | Well Diversified and Stable Sources of Funding Funding ($B) Y/Y Highlights Total funding increased by $1.2B and total assets increased by $0.9B 38.4 Shareholders' equity 37.2 37.2 2.7 • Debt related to securitization increased by $0.7B, mainly as the 2.6 2.6 Subordinated debt Bank
Slide 17: Strong Capital Position
Financial Review | Strong Capital Position Common Equity Tier 1 Capital Ratio (CET1)(1) Risk-Weighted Assets (RWA) ($B)(1) 10.3% 10.2% 10.1% 19.7 21.2 9.8% 9.8% 19.7 19.7 20.0 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Evolution of the CET1 Ratio (%) Y/Y Highlights • CET1 ratio was
Slide 18: Strong and Diversified Commercial Loan Portfolio
Financial Review | Strong and Diversified Commercial Loan Portfolio Commercial Loan Portfolio(1) A Pan-Canadian Portfolio and a U.S. Presence (as at January 31, 2022) 15.4 Commercial Lending ($B) 14.1 4% 13.2 17% 5% British Columbia & 2.6 Inventory financing 1.9 Territories 1.9 1.5 Equipment financi
Slide 19: High Quality Residential Mortgage Loan Portfolio
Financial Review | High Quality Residential Mortgage Loan Portfolio Insured vs Uninsured A Pan-Canadian Portfolio (as at January 31, 2022) 3% 34% 35% 35% 10% British Columbia Conventional Prime insured 37% 14% Alberta & Prairies Alt-A Ontario 57% 56% 56% Quebec 36% 9% 9% 9% Atlantic Provinces Q1/21
Slide 20: Allowances for Credit Losses
Financial Review | Allowances for Credit Losses Allowances for Credit Losses (ACL) ($MM) Y/Y Highlights 193.6 202.6 208.9 • ACL increased by $15.3MM mostly due to higher ACL on performing 185.5 183.3 loans as the Bank had recorded a $19.3MM provision in Q4/21 in 88.0 relation to its investment loan
Slide 21: Provision for Credit Losses
Financial Review | Provision for Credit Losses Provision for Credit Losses (PCL) ($MM) Y/Y Highlights 24.9 2.9 • PCL decreased by $7.4MM as lower provisions on impaired loans and a 16.8 lower level of write-offs were partly offset by higher provisions on 2.4 5.4 9.4 performing loans 17.7 -3.6 22.0 3
Slide 22: Impaired Loans
Financial Review | Impaired Loans Gross Impaired Loans ($MM, bps) Net Impaired Loans ($MM, bps) 82 81 56 77 75 53 51 49 62 274.1 265.9 187.6 255.3 250.9 166.8 175.9 37 163.9 214.2 126.2 178.1 112.8 99.5 112.1 165.0 185.2 176.5 103.2 145.2 63.9 66.3 67.3 62.6 61.3 57.5 57.7 54.0 51.4 58.2 53.5 29.8 2
Slide 23: Rania Llewellyn: Closing Remarks
Rania Llewellyn President & Chief Executive Officer Closing Remarks Seeing Beyond Numbers 23
Slide 24: Closing Remarks | Key Takeaways
Closing Remarks | Key Takeaways Strong results this The Bank’s capital We continue to focus Our One Winning Our year of quarter, building and liquidity on cost optimization, Team is engaged execution is off to a momentum into Q2 positions are strong, with the adjusted and focused on strong start as
Slide 25: Appendices
Appendices Seeing Beyond Numbers 25
Slide 26: Appendices | Adjusting Items
Appendices | Adjusting Items Q1/22 Q4/21 Q1/21 Pre-Tax After-Tax Impact Pre-Tax After-Tax Impact Pre-Tax After-Tax Impact Impact Impact ($ / Impact Impact ($ / Impact Impact ($ / ($MM) ($MM) Share) ($MM) ($MM) Share) ($MM) ($MM) Share) Strategic review-related $ 2.3 $ 1.7 $ 0.04 $ 96.1 $ 70.6 $ 1.78
Slide 27: Appendices | Non-GAAP Financial Measures
Appendices | Non-GAAP Financial Measures In $MM Q1-2022 Q4-2021 Q1-2021 Income (loss) before income taxes $ 70.2 $ -130.9 $ 56.5 Provision for credit losses 9.4 24.9 16.8 Pre-tax pre-provision (PTPP) income (loss)(1) 79.6 -106.0 73.3 (2) Pre-tax impact of adjusting items 5.4 192.4 3.7 Adjusted PTPP
Slide 28: Appendices | Financial Roadmap
Appendices | Financial Roadmap ⚫ On track ⚫ Behind ⚫ At Risk Financial Targets 2021 Actual 2022 Target YTD Results Progress Medium Term Adjusted diluted EPS growth +56% >5% +22%(1) ⚫ 7-10% Adjusted ROE 8.3% >8.5% 9.2% ⚫ >10% Adjusted efficiency ratio 68.2% <68% 67.0% ⚫ <65% Adjusted operating levera
Slide 29: Appendices | Annual Key Performance Indicators
Appendices | Annual Key Performance Indicators ⚫ On track ⚫ Behind ⚫ At Risk Culture Targets Commercial Banking Targets 2021 Progress 2022 2024 2021 Progress 2022 2024 Employee Engagement index 74% ⚫ 75% ≥80% Loan Growth ($) $14B ⚫ $15B >$18B Employee turnover 27% ⚫ 25% <20% % of Commercial loans in
Slide 30: Investor Relations Contact
Investor Relations Contact Susan Cohen Head, Investor Relations (514) 970-0564 susan.cohen@lbcfg.ca www.lbcfg.ca/investors-centre Seeing Beyond Numbers 30
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