Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — The Toronto-Dominion Bank — Q1 2021 Earnings Presentation
35 slides from Toronto-dominion Bank's earnings presentation, Feb 25, 2021
Slide 1: Quarterly Results Presentation
Quarterly Results Presentation a Ss ° J o aS c io} a a) - February 25, 2021
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
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 supporting our customers, communities and colleagues through these challenging times Proven Business Model Purpose-Driven Forward Focused Deliver consistent earnings grow
Slide 4: Proven Business Model
Proven Business Model Diversification and scale, underpinned by a strong risk culture ▪ Reported earnings of $3.3B up 10% (adjusted earnings of $3.4B up 10%)1 ▪ Reported EPS of $1.77 up 10% (adjusted EPS of $1.83 up 10%)1 ▪ Lower provisions for credit losses, improving fee income and continued volum
Slide 5: Purpose Driven
Purpose Driven Centered on our vision, purpose and shared commitments TD's Climate Action Plan TD Ready Challenge Grants 5
Slide 6: Forward Focused
Forward Focused Shaping the future of banking TD Direct Investing TD Asset Management Highest in Dealer Satisfaction WebBroker Investor Education Sustainable Investing (ESG) Among Non-Captive Lenders J.D. Power 2020 U.S. Dealer Financing Satisfaction Study1 1. For J.D. Power 2020 award information,
Slide 7: Forward Focused: Digital Adoption
Forward Focused: Digital Adoption Digital Adoption Active Mobile Users Self-Serve Transactions (% of total customers)2 (millions)3 (as % of all financial transactions)4 +350bps +380 bps YoY YoY +11.0% YoY +12.5% YoY +660 bps +860 bps YoY YoY 59.6 6.1 59.0 92.0 92.1 Canadian 5.9 Retail1 56.1 5.5 85.5
Slide 8: Q1 2021 Highlights
Q1 2021 Highlights Total Bank Reported Results (YoY) Financial Highlights ($MM) Reported Q1/21 Q4/20 Q1/20 EPS of $1.77, up 10% Revenue 10,812 11,844 10,609 ▪ Adjusted1 EPS of $1.83, up 10% PCL 313 917 919 Expenses 5,784 5,709 5,467 Revenue up 2% Net Income 3,277 5,143 2,989 PCL down $604MM QoQ Dilu
Slide 9: Canadian Retail
Canadian Retail Highlights (YoY) P&L ($MM) Reported Q1/21 QoQ YoY Net income up 14% (Up 12% adj1.) Revenue 6,345 5% 1% PCL 142 -$109 -$249 Revenue up 1% PCL Ratio 0.12% (10 bps) (24 bps) ▪ Loan volumes up 4% Insurance Claims 780 24% 0% Expenses 2,654 (1%) 1% ▪ Deposit volumes up 21% Net Income 2,037
Slide 10: U.S. Retail
U.S. Retail P&L (US$MM) (except where noted) Highlights US$MM (YoY) Reported Q1/21 QoQ YoY Net income of $776MM Revenue 2,086 2% (5%) PCL 103 -$330 -$140 Revenue down 5% Expenses 1,313 5% 9% U.S. Retail Bank Net Income 615 53% (14%) ▪ Loan volumes up 5% Schwab/ AMTD Equity Pickup2 161 (37%) 6% ▪ Dep
Slide 11: Wholesale Banking
Wholesale Banking Highlights (YoY) P&L ($MM) Reported Q1/21 QoQ YoY Net income up 56% Revenue 1,310 4% 25% PCL 20 +$26 +$3 Revenue up 25% Expenses 711 22% 9% ▪ Trading-related revenue of $744MM, up 22% Net Income 437 (10%) 56% ROE 21.3% PCL up $26MM QoQ ▪ Impaired: $10MM (+$29MM) ▪ Performing: $10MM
Slide 12: Corporate Segment
Corporate Segment Highlights (YoY) P&L ($MM) Reported Q1/21 Q4/20 Q1/20 Reported loss of $197MM Net Income (197) 1,984 (227) Adjustment for items of note ▪ Adjusted1 loss of $94MM Amortization of Intangibles 74 61 70 before income taxes Acquisition and integration 38 - - charges related to Schwab Ne
Slide 13: Capital
Capital Common Equity Tier 1 ratio of 13.6% Common Equity Tier 1 Ratio Q4 2020 CET 1 Ratio 13.1% Internal capital generation 37 Risk-Weighted Assets down 2% QoQ Actuarial gains on employee benefit plans 9 Unrealized gains on FVOCI securities 5 Leverage ratio of 4.5% Decrease in RWA (net of FX)1 5 Ot
Slide 14: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Business Segment Highlights GIL Formations1: $MM and Ratios2 ▪ Gross impaired loan formations stable quarter-over-quarter 24 24 23 – Continued low gross impaired $1,783 16 bps loan formations reflected the $1,708 15 $1,689 ongoing impact of bank $40 / 5 bps deferral
Slide 15: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Business Segment Highlights GIL1: $MM and Ratios2 ▪ Gross impaired loans stable 51 quarter-over-quarter 47 45 42 42 bps $3,821 $3,606 $3,207 $343 / 52 bps $3,157 $3,057 $341 / 43 bps $142 / 25 bps $97 / 17 bps $18 / 3 bps $2,108 / $2,039 / 91 bps $1,790 / $1,829 / $1,99
Slide 16: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Business Segment Highlights PCL1: $MM and Ratios2 $3,221 ▪ Provision for credit losses of 17 $374 basis points represented a 15 year low, reflecting: $554 $2,189 – The ongoing impact of bank $123 deferral and government $217 economic support programs $1,140 – A p
Slide 17: Provision for Credit Losses: Impaired and Performing
Provision for Credit Losses (PCL) 1,2 Impaired and Performing Highlights PCL ($MM) Q1/20 Q4/20 Q1/21 ▪ Impaired PCL increased quarter-over-quarter, primarily reflected in: Total Bank 923 921 316 – The U.S. credit card portfolios, largely Impaired 810 363 469 recorded in the Corporate segment Perform
Slide 18: Allowance for Credit Losses (ACL)
Allowance for Credit Losses (ACL) ACL1: $B and Ratios2 124 126 122 bps 103 Highlights $9.2 $9.4 $8.9 74 $7.9 ▪ Allowance for Credit Losses decreased $437MM quarter-over-quarter, reflecting: United States 59% 60% $5.3 59% – The impact of foreign exchange Canada 62% – Performing allowance releases in
Slide 19: Appendix
Appendix 19
Slide 20: Q1 2021: Items of Note
Q1 2021: Items of Note Revenue/ ($MM) EPS ($) Segment Expense Line Item4 Pre Tax After Tax Reported net income and EPS (diluted) 3,277 1.77 Items of note Amortization of intangibles1 74 65 0.04 Corporate page 12, line 14 Acquisition and integration charges related to Schwab2 38 38 0.02 Corporate pag
Slide 21: Canadian Retail
Canadian Retail Net Interest Margin Average Deposits $B 2.94% 413 428 396 355 365 35 37 2.83% 33 26 30 136 143 150 2.71% 120 122 2.68% 2.65% 209 213 228 234 240 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Personal Business Wealth Efficiency Ratio1 Average Loans $B 437 440 440 447 454
Slide 22: Canadian Retail Wealth
Canadian Retail Wealth Wealth Revenue $MM Wealth Assets $B1 1,402 1,237 155 1,218 1,222 1,163 484 161 145 150 170 306 434 439 433 210 406 238 234 380 136 365 366 358 346 941 857 843 877 819 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Fee & Other Transaction NII AUA AUM 1. Canadian Re
Slide 23: U.S. Retail
U.S. Retail Net Interest Margin1,2 Average Deposits US$B 343 353 368 306 3.07% 279 2.93% 144 153 142 111 130 2.50% 100 102 79 96 2.27% 74 2.24% 94 97 106 109 113 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 4 Personal Business IDAs Efficiency Ratio3 Average Loans US$B 167 176 174 172
Slide 24: U.S. Retail Wealth and Schwab
U.S. Retail Wealth and Schwab TD Wealth Assets US$B1 Schwab2 – Q1 2021 TD’s share of Schwab’s net income was C$169MM3 on a 44 reported basis, of which C$209MM (US$161MM) was 43 recorded in the U.S. Retail segment 40 39 38 ▪ TD's share of Schwab's net income was C$241MM on an adjusted basis4 26 Schwa
Slide 25: Schwab Equity Pickup: Reconciliation
Schwab Equity Pickup: Reconciliation U.S. Retail P&L ($MM)1 TDBG Corporate Segment $C $US Reported Schwab Equity Pickup2 169 209 161 (40) Amortization of Intangibles3 35 0 0 35 Acquisition and Integration Charges3,4 37 0 0 37 Adjusted Schwab Equity Pickup 241 209 161 32 Financial Statement Reference
Slide 26: U.S. Strategic Card Portfolio: Accounting
U.S. Strategic Card Portfolio: Accounting 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 Mechanics: TD collects
Slide 27: Wholesale Banking
Wholesale Banking Revenue Loans1 Q1 2021 -1% Q1 2021 5% 24% 23% $1.3B $58.7B 72% 77% Corporate and Other2 Global Markets Canada United States International Investment Banking Highlights ▪ Our Global Markets business delivered strong trading-related revenue, reflecting high levels of client activity
Slide 28: Gross Lending Portfolio Includes B/As
Gross Lending Portfolio Includes B/As Balances ($B unless otherwise noted) Q4/20 Q1/21 Canadian Retail Portfolio 451.1 456.7 Personal 367.4 371.5 Residential Mortgages 211.7 215.3 Home Equity Lines of Credit (HELOC) 94.5 95.2 Indirect Auto 27.4 27.2 Credit Cards 15.6 14.6 Other Personal 18.2 19.2 Un
Slide 29: COVID-19 Industries of Focus
COVID-19 Industries of Focus Total Gross Loans & Acceptances: $735B Highlights (Q1 2021) ▪ Gross loans and acceptances to industries of heightened focus were $45 billion Residential Mortgages & – Representing ~6.2% of Total Bank HELOC, gross loans and acceptances 48.9% ▪ Lending portfolio remained w
Slide 30: Canadian Real Estate Secured Lending Portfolio
Canadian Real Estate Secured Lending Portfolio Highlights (Q1 2021) Quarterly Portfolio Volumes ($B) $293 $297 $300 $308 $312 Canadian RESL credit quality remained strong Uninsured 70% 71% 72% 73% 74% Insured ▪ Uninsured and insured portfolio loan-to- 30% 29% 28% 27% 26% value rates stable Q1/20 Q2/
Slide 31: Canadian Personal Banking
Canadian Personal Banking Canadian Personal Banking (Q1/21) Highlights Gross Loans ($B) GIL ($MM) GIL/Loans (%) ▪ Gross impaired loans Residential Mortgages 215.3 347 0.16 decreased quarter-over- Home Equity Lines of Credit (HELOC) 95.2 181 0.19 quarter Indirect Auto 27.2 73 0.27 Credit Cards 14.6 9
Slide 32: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Highlights Canadian Commercial and Wholesale Banking (Q1/21) Gross Loans/ GIL GIL/Loans ▪ Gross impaired loans BAs ($B) ($MM) (%) decreased largely due to Commercial Banking1 85.2 468 0.55 resolutions in the Wholesale Wholesale 57.1 18 0.03 lending portfolio
Slide 33: U.S. Personal Banking (USD)
U.S. Personal Banking (USD) Highlights U.S. Personal Banking1 (Q1/21) ▪ Gross impaired loans Gross Loans GIL GIL/Loans increased quarter-over- ($B) ($MM) (%) quarter but remained below Residential Mortgages 28.9 342 1.18 pre-COVID levels. Home Equity Lines of Credit (HELOC)2 7.9 310 3.93 Indirect Au
Slide 34: U.S. Commercial Banking (USD)
U.S. Commercial Banking (USD) Highlights U.S. Commercial Banking1 (Q1/21) Gross Loans/ GIL GIL/Loans ▪ Gross impaired loans BAs ($B) ($MM) (%) increased quarter-over- Commercial Real Estate (CRE) 25.9 145 0.56 quarter, largely reflected in the Non-residential Real Estate 18.2 106 0.58 Commercial Rea
Slide 35: Investor Relations Contacts
Investor Relations Contacts Phone: (416) 308-9030 or 1 (866) 486-4826 Email: tdir@td.com Website: www.td.com/investor 35
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