Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Group — Q4 2014 Earnings Presentation
35 slides from Toronto-dominion Bank's earnings presentation, Dec 4, 2014
Slide 1: TD Bank Group Quarterly Results Presentation Q4 2014
TD Bank Group Quarterly Results Presentation Q4 2014 Thursday December 4th, 2014
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements From time to time, the Bank makes written and/or oral forward-looking statements, including in this document, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission, and in other communications. In addition, representativ
Slide 3: Strategic Overview
Strategic Overview Strong performance in 2014 Achieved 8% adjusted1 EPS growth and adjusted1 Net Income growth2 Dividends paid per share up 14%; Total shareholder return of 20% Record results in Canadian and U.S. Retail; very strong year for Wholesale Recent acquisitions performed well H
Slide 4: Fiscal 2014 Highlights
Fiscal 2014 Highlights Key Themes Net Income $MM Adjusted, where applicable1 Adjusted1 Canadian Retail earnings 2014 2013 YoY up 17% Canadian Retail $ 5,490 $ 4,681 17% Adjusted1 earnings up 8% after adding back U.S. Retail 2,110 1,852 14% insurance charges in 2013 Good growth in loans, deposi
Slide 5: Q4 2014 Highlights
Q4 2014 Highlights Key Themes Net Income $MM Adjusted, where applicable1 Adjusted1 EPS growth of 3% YoY Q4/14 QoQ YoY Earnings were impacted by Funding Retail2 $ 1,867 -7% 7% Valuation Adjustments, elevated expenses Wholesale 160 -26% 31% and higher tax rate Corporate (165) n/a n/a Retail earn
Slide 6: Q4 2014 Earnings: Items of Note
Q4 2014 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $1,746 $0.91 Pre Tax After Tax Items of Note EPS (MM) (MM) Amortization of intangibles1 $70 $62 $0.04 Integration charges relating to the acquisition of the credit card portfolio of $73 $54 $0.03 MBNA Canada Excluding Items
Slide 7: Canadian Retail
Canadian Retail Key Themes P&L $MM Adjusted, where applicable1 Adjusted1 net income up 7% YoY Q4/14 QoQ YoY Revenue up 7% YoY Revenue $ 4,920 0% 7% Good volume growth, higher Wealth assets, PCL 250 10% 12% Insurance business growth and the addition of Insurance Claims 720 -7% 1% Aeroplan Net
Slide 8: U.S. Retail
U.S. Retail P&L $MM Key Themes Adjusted, where applicable1 Q4/14 QoQ YoY Adjusted1 net income up 1% YoY Revenue $ 1,851 -2% -2% Revenue down 2% YoY PCL 125 6% -29% Strong loan and deposit growth Expenses (adjusted) 1,249 2% -2% Lower security gains2 Net Income, U.S. Retail Bank (adjusted) $
Slide 9: Wholesale Banking
Wholesale Banking Key Themes P&L $MM Net income up 31% YoY Q4/14 QoQ YoY Revenue $ 604 -11% 0% Revenue stable YoY PCL -1 -120% -120% Higher underwriting volumes and M&A Expenses 381 -3% -10% fees Net Income $ 160 -26% 31% Funding Valuation Adjustment charge of $65 million pre-tax impacted tr
Slide 10: Corporate Segment
Corporate Segment Key Themes P&L $MM1 Q4/14 Q3/14 Q4/13 Adjusted1 net income down YoY Net Corporate Expenses $ (233) $ (170) $ (142) and QoQ Other 41 90 59 Reflects ongoing investment in enterprise Non-Controlling Interests 27 27 27 projects and initiatives and lower positive tax items Net Incom
Slide 11: Expenses
Expenses Highlights Efficiency Ratio, Adjusted3 Core expenses1 up 5.5% versus Q4/13 and 4.9% versus FY2013 56.2% 55.4% Excluding variable compensation, core expenses grew 5.0% and 3.7% respectively 52.8% 52.3% Increased expenses were primarily due to 52.5% higher investment in regulatory and g
Slide 12: Capital
Capital Highlights Basel III Common Equity Tier 11 Basel III Common Equity Tier 1 ratio 9.4% 9.4% 9.3% 9.2% Increase of 10 bps QoQ reflects 9.0% 8.9% solid organic capital generation partially offset by increase in risk- weighted assets Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Remain Greatwell-positioned q
Slide 13: Credit Portfolio Highlights
Credit Portfolio Highlights Highlights PCL Ratio (bps)1 Loss rates remain at cyclically low levels 40 Favourable U.S. Retail performance 38 resulted in full year PCL reduction 35 33 Ongoing strong performance across all 28 portfolios Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 GIL Ratio (bps)2 62 60 59 56 5
Slide 14: Appendix
Appendix
Slide 15: Q4 2014 Earnings: Items of Note
Q4 2014 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $1,746 $0.91 Revenue/ Pre Tax After Tax Items of note EPS Segment Expense (MM) (MM) Line Item2 Amortization of intangibles1 $71 $62 $0.04 Corporate pg 9, line 10 Integration charges relating to the acquisition of the credit
Slide 16: Canadian Retail: Net Interest Margin
Canadian Retail Net Interest Margin Highlights Net Interest Margin Margin on average earning assets On Average Earning Assets of 2.92%, down 6 bps QoQ and 2.97% 2.98% YoY 2.92% 2.94% 2.92% Primarily due to decline in deposit margins, competitive pricing and seasonality On Loans 1.92% 2.00% 2.00%
Slide 17: Canadian Retail: Deposit Growth
Canadian Retail Deposit Growth Highlights Average Deposits $B 4% Growth Average personal deposit volumes YoY increased 2% YoY Chequing and savings accounts up 11%, partially offset by lower term deposits 255 246 248 247 250 Average business deposit volumes 17 17 17 17 18 increased 7% YoY 77 76
Slide 18: Canadian Retail: Loan Growth
Canadian Retail Loan Growth Highlights Average Loans $B 6% Growth Solid personal lending volume YoY growth of 5% YoY Real estate secured lending growth of 4% YoY 335 325 329 317 321 Strong business lending volume 52 49 50 51 growth of 10% YoY 47 19 16 17 19 19 16 Credit card balances up 21%
Slide 19: Canadian Retail: Personal and Commercial Banking
Canadian Retail Personal and Commercial Banking 25 Revenue Average Card Balances $MM $B 18.7 20 2,919 2,906 3,024 3,035 15.4 2,831 14.9 15 723 729 739 755 680 10 8.3 2,151 2,196 2,177 2,285 2,280 5 0 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 2011 2012 2013 2014 Net Interest Income Non-interest Income Net Income
Slide 20: Canadian Retail: Wealth
Canadian Retail Wealth Revenue AUA1 and AUM2 $MM $B 825 837 754 778 786 293 115 116 285 285 112 278 115 116 264 131 122 136 135 138 227 227 219 211 202 536 579 599 503 527 AUA AUM Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Wealth Fee & Other Wealth Transaction Wealth NII Net Income
Slide 21: Canadian Retail: Insurance
Canadian Retail Insurance Revenue Gross Originated Insurance $MM Premiums 1,085 $MM 1,078 1,012 1,048 1,026 986 993 932 950 839 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Net Income Insurance Claims and Related $MM Expenses $MM 141 92 149 132 136 711 771 720 683 659 Q4/13 Q1/14 Q2/1
Slide 22: U.S. Retail: Deposit Growth
U.S. Retail Deposit Growth Highlights Average Deposits US$B 5% Growth Average personal deposit volumes YoY up 6% YoY Average business deposit volumes 201 up 7% YoY 191 194 197 197 Average TD Ameritrade IDAs1 up 3% YoY 73 73 72 75 73 56 57 57 58 54 64 65 67 68 68 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 P
Slide 23: U.S. Retail: Loan Growth
U.S. Retail Loan Growth Highlights Average Loans US$B 8% Growth Average personal loans increased YoY 3% YoY Average business loans increased 114 14% YoY 107 108 111 105 56 58 51 53 54 54 54 54 55 56 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Personal Commercial 23
Slide 24: TD Ameritrade
TD Ameritrade Highlights TD Bank Group’s Share of TD Ameritrade’s Net Income1 TD’s share of TD Ameritrade’s net US$MM income was C$83 million in Q4/14, up 8% YoY mainly due to: Increased earnings in TD Ameritrade and $77 FX translation, partially offset by reduced $73 $70 $69 ownership in TD Ame
Slide 25: Canadian Housing Market
Canadian Housing Market Highlights Canadian RESL credit quality remains solid Portfolio Q4/14 Gross Loans Outstanding $235 B Canadian RESL Percentage Insured 62% Uninsured Residential Mortgages Current LTV1 60% Condo Borrower Gross Loans Outstanding $30 B (Residential Mortgages) Percentage Insured
Slide 26: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q3/14 Q4/14 Canadian Retail Portfolio $ 332.5 $ 337.9 Personal $ 280.2 $ 285.0 Residential Mortgages 170.9 175.3 Home Equity Lines of Credit (HELOC) 59.8 59.4 Indirect Auto 15.7 16.5 Unsecured Lines of Credit 8.6 9.1 Credit
Slide 27: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio GIL Formations1: $MM and Ratios2 Highlights $1,210 $1,233 GIL formations remain at $1,163 satisfactory levels and are $22 / 11 bps $1,125 $1,092 stable over 2013 $476 / 42 bps $476 / 45 bps $452 / 36 bps $403 / 34 bps $397 / 33 bps $712 / 23 bps $757 / 2
Slide 28: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights Gross Impaired Loans ratio continues within acceptable $2,861 $2,746 $2,731 ranges $2,692 $41 / 19 bps $2,636 $41 / 18 bps $12 / 5 bps $69 / 32 bps $21 / 9 bps $1,610 / 137 bps $1,465 / 136 bps $1,523 / 130 bps $1,607 / 126 b
Slide 29: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio PCL1: $MM and Ratios2 Highlights PCL remains at low levels Full year PCL rate was 34 bps, a $454 4 bps reduction over 2013 $420 $395 $397 $ 1 / 2 bps $3 / NM $329 $3 / NM $236 / 84 bps $197 / 75 bps $174/ 62 bps $164 / 53 bps $119 / 40 bps $228 / 28
Slide 30: Canadian Personal Banking
Canadian Personal Banking Q4/14 Canadian Personal Banking1 Gross Loans ($B) GIL/ Loans GIL ($MM) PCL2 ($MM) Highlights Residential Mortgages 175 0.25% 441 4 Credit quality remains strong in Home Equity Lines of Credit (HELOC) 60 0.45% 268 3 the Canadian Personal portfolio Indirect Auto 16 0.24% 39
Slide 31: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Q4/14 Canadian Commercial and Gross GIL PCL1 Highlights Loans/BAs Wholesale Banking ($B) ($MM) ($MM) Canadian Commercial and Commercial Banking2 53 130 21 Wholesale Banking portfolios Wholesale 26 12 (2) continue to perform well Total Canadian Commercial a
Slide 32: U.S. Personal Banking
U.S. Personal Banking Q4/14 Highlights Gross Loans GIL/ GIL U.S. Personal Banking1 ($B) Loans ($MM) PCL2 Increased GIL due to court ($MM) Residential Mortgages 23 1.34% 311 2 related foreclosure delays and full implementation of Home Equity Lines of Credit (HELOC)3 12 2.95% 344 7 regulatory guidan
Slide 33: U.S. Commercial Banking
U.S. Commercial Banking Q4/14 U.S. Commercial Banking1 Gross Loans/BAs GIL PCL2 Highlights ($MM) ($MM) ($B) Commercial Real Estate (CRE) 18 253 0 Sustained portfolio quality in Non-residential Real Estate 14 168 (1) U.S. Commercial Banking Residential Real Estate 4 85 1 Return to normal PCL leve
Slide 34: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: tdir@td.com Grand Prix for Best Overall Investor Relations: Large Cap Best Investor Relations by Website: Sector: Financial Services www.td.com/investor Best Investor Relations by a CEO: Large Cap Best Investor Relations by a C
Slide 35: TD Bank Group Quarterly Results Presentation Q4 2014
TD Bank Group Quarterly Results Presentation Q4 2014 Thursday December 4th, 2014