Toronto-Dominion Bank · TSX:TD
Toronto-Dominion Bank — Q1 2009 Earnings Presentation
33 slides from Toronto-Dominion Bank's earnings presentation, Mar 3, 2009
Slide 1: Investor Presentation
Investor Presentation March 3, 2009
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements From time to time, the Bank makes written and oral forward-looking statements, including in this document, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission (SEC), and in other communications. In addition, the Bank’s
Slide 3: Agenda
Agenda n Q1 2009 Financial Results o TD Bank Financial Group: Overview 3
Slide 4: Q1 2009 Financial Results: Highlights
Q1 2009 Financial Results: Highlights n Solid results o Strong capital position p Outlook: a tough 2009 q Empowering our employees to help customers through these tough times 4
Slide 5: Q1 2009 Financial Results
Q1 2009 Financial Results Adjusted P&L (C$MM)1 Q1 2008 Q4 2008 Q1 2009 QoQ YoY Revenue $ 3,604 $ 3,640 $ 4,150 14% 15% PCL 255 288 537 86% 111% Expenses 2,228 2,367 3,020 28% 36% Net Income $ 1,060 $ 665 $ 1,149 73% 8% Adjusted EPS (diluted) $ 1.45 $ 0.79 $ 1.34 70% -8% Tier 1 Capital 10.9% 9.8% 10.
Slide 6: Q1 2009 Financial Results: Net income
Q1 2009 Financial Results Net income $MM Q1/08 Q4/08 Q1/09 QoQ YoY Ca na dia n Re ta il 1 $ 726 $ 710 $ 659 -7% -9% U.S. Re ta il 1 (a djusted) 215 336 384 14% 79% Tota l Re ta il 941 1,046 1,043 0% 11% Whole sa le 163 (228) 265 216% 63% Corpora te (a djuste d) (44) (153) (159) -4% -261% Adjuste d n
Slide 7: Main Businesses
Main Businesses Adjusted Earnings Breakdown1 Q1 2009 U.S. Retail C$1.1B 29% Global TD Wealth AMTD Canadian Retail 6% 6% U.S. P&C 51% 23% Canadian P&C Wholesale 45% 20% 80% of earnings from retail operations 1. Based on adjusted earnings as described on slide #4. For the purpose of calculating contri
Slide 8: Q1 2009 Earnings: Items of Note
Q1 2009 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $712 $0.82 Pre Tax After Tax Items of note EPS (MM) (MM) Amortization of intangibles $188 $127 $0.14 Change in fair value of CDS hedging $(13) $(12) $(0.01) the corporate loan book Restructuring and integration charges $106
Slide 9: Canadian P&C
Canadian P&C P&L $MM Q1/08 Q4/08 Q1/09 QoQ YoY Revenue $ 2,147 $ 2,283 $ 2,292 0% 7% PCL 172 209 266 27% 55% Expenses 1,096 1,202 1,186 -1% 8% Net Income $ 598 $ 600 $ 584 -3% -2% Efficiency ratio 51.0% 52.7% 51.7% -100bps 70bps NIM 2.98% 2.89% 2.82% -7bps -16bps 9
Slide 10: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Performance Metrics YoY Balance Rank Market Share Growth Personal deposits 1 21.2% 16% Personal lending 2 19.9% 10% Small business loans1 3 17.0% 2% Other business loans1,2 7 8.5% 8% Market share holding steady in a competitive market Personal deposits and Pers
Slide 11: Wealth Management
Wealth Management P&L $MM Q1/08 Q4/08 Q1/09 QoQ YoY Re v e nue $ 570 $ 591 $ 528 -11% -7% Expe nse s 379 428 419 -2% 11% Ne t Incom e ( G l o b a l W e a l t h) $ 128 $ 110 $ 75 -32% -41% Equity in NI of TD AMTD 1 88 60 77 28% -13% Ne t Incom e $ 216 $ 170 $ 152 -11% -30% Efficie ncy ratio 66.5% 72.
Slide 12: TD Ameritrade: Update on Events
TD Ameritrade: Update Update on on Events Events Increased ownership limit in a strong franchise to 45% ̶ Had entered into financial hedge in September 2006 ̶ 27 million shares at approximately US$515MM ̶ Previously consolidated so no material impact on TD earnings or capital Acquisition of thin
Slide 13: U.S. P&C
U.S. P&C P&L $MM (U.S. dollars) (adjusted, where applicable) Q1/08 Q4/08 Q1/09 QoQ YoY Re v e nue $ 461 $ 1,002 $ 985 -2% 114% PCL 26 75 115 53% 342% Expe nse s 1 243 585 573 -2% 136% Ne t Income 1 $ 129 $ 265 $ 253 -5% 96% Ne t Income 1 (C$) $ 127 $ 276 $ 307 11% 142% Efficie ncy ra tio 1 52.7% 58.
Slide 14: Wholesale
Wholesale P&L $MM Q1/08 Q4/08 Q1/09 QoQ YoY Revenue $ 608 $ (114) $ 839 N/M 38% PCL 56 10 66 N/M 18% Expenses 321 306 388 27% 21% Net Income $ 163 $ (228) $ 265 216% 63% 14
Slide 15: Tier 1 Capital Ratio
Tier 1 Capital Ratio Key items: Tier 1 Ratio Q4 2008 9.8% 50% deduction of substantial investments (1.5) $3.3B Tier 1 Capital securities issued 1.7 Other Items 0.1 Q1 2009 10.1% Strong capital position 15
Slide 16: Capital Position Considerations
Capital Position Considerations Tangible assets: do not reflect the lower-risk nature of TD’s balance sheet TD has a large volume of low/no risk assets including: ̶ Canadian government insured mortgages and HELOCs ̶ Canadian government issued securities ̶ Derivatives reduced by master netting an
Slide 17: Additional Information: TD Bank NA Securities Portfolio
Additional Information: TD Bank NA – Securities Portfolio $US, Billions As of Jan. 31/09 Portfolio Ratings Amortized Fair Value FV as a % Aggregate Cost (F/V) of Amortized Unrealized cost Gain/(Loss) AAA AA A Other Government & Agency-Backed 5.5 5.5 100% - 100% Securities Asset-Backed 8.5 7.8 92% (0
Slide 18: Integration Update: Q1 2009
Integration Update: Q1 2009 Rebranding in Commerce legacy footprint and longer hours in TD Banknorth stores and call centres were well received Multibank servicing in 484 stores proven to be successful Continue to launch new products Opened 14 stores this fiscal year – on track for 30 Toge
Slide 19: Special Topics
Special Topics Credit Quality Loan and Deposit Growth Business Philosophy in this Environment Well-positioned during difficult macro environment 19
Slide 20: TD Bank Financial Group
TD Bank Financial Group n The first truly North American bank • Leader in service and convenience in Canada and the U.S. o Lower risk retail focus • 80% adjusted earnings from retail1 • Best return for risk undertaken1 • One of 3 Aaa-rated banks on the NYSE2 p Disciplined execution • Strong credit c
Slide 21: TD Bank Financial Group: In Perspective
TD Bank Financial Group: In Perspective North Canadian (In U.S.$B)1 TDBFG American Peers3 Peers4 Q4 2008 Total Assets $468 2nd 7th Q4 2008 Total Deposits $312 2nd 7th Oct 31, 2008 Market Cap $38.3 2nd 7th Adj. Net Income2 $3.7 3nd 8th Q4 2008 Tier 1 Capital % 9.8% 2nd 2nd Q4 2008 avg. # of FTE ~65,0
Slide 22: Major Businesses
Major Businesses Wholesale 1 Canadian P&C Global Wealth TD Ameritrade U.S. P&C 1. TDBFG has an investment in TD Ameritrade. 22
Slide 23: Canadian Personal and Commercial Banking
Canadian Personal and Commercial Banking Lead in service and convenience • Winner of J.D. Power1, Synovate awards2 • 50% longer branch hours than peers • Excellent brand recognition Strong market position • #1 or #2 market share in most retail products3 • Client referrals through integrated rela
Slide 24: Sustained Canadian P&C Growth
Sustained Canadian P&C Growth Canadian P&C Earnings Growth ($MM) 1 G R 14% ar C A $2,424 5- y e $2,253 $1,966 $1,702 $1,450 $1,242 2003 2004 2005 2006 2007 2008 1. 5-year CAGR is calculated based on compound annual growth from 2003 to 2008. Also see the Canadian P&C segment discussion in the Busines
Slide 25: Wealth Management
Wealth Management Leading market positions • #1 online brokerage1, #2 in mutual fund assets2 • Industry-leading online research tools • Strong client engagement Continue focused investments for the future • Growing advice-based businesses • Strategically growing diversified wealth offerings In
Slide 26: Strong Wealth Management Growth
Strong Wealth Management Growth Wealth Management Earnings Growth ($MM) % 2 $762 $769 AG R 26 ar C 5-ye $590 $261 $289 $432 $180 $352 $108 U.S. Wealth $243 $85 Management1 $501 $61 $410 $324 $480 Canadian Wealth $267 Management $182 2003 2004 2005 2006 2007 2008 1. U.S. wealth management consists of
Slide 27: U.S. Personal and Commercial Banking
U.S. Personal and Commercial Banking Lead in service and convenience • Rated #1 by J.D. Power for Customer Satisfaction1 • 50% longer hours than the competition2 • Unique brand positioning and culture: “America’s Most Convenient Bank” Significant scale and footprint • Integration of two strong P
Slide 28: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking U.S. P&C Adjusted Earnings Growth1 (C$MM) $806 2 2% GR7 ea r CA 3-y $359 $255 $158 2005 2006 2007 2008 1. See slide #3 for definition of Adjusted Earnings. Also see the U.S. P&C segment discussion in the Business Segment Analysis section in the 2008, 2007, and 2006
Slide 29: Wholesale Banking
Wholesale Banking Strategic focus on franchise wholesale business • Build on strong domestic operations • Deep client relationships, cross-sell multiple products and services • Align businesses to support and enhance North American franchise Building a top 3 dealer in Canada • #2 in Government d
Slide 30: Wholesale Banking
Wholesale Banking Wholesale Adjusted Earnings Growth1 ($MM) $824 $664 $588 $529 $551 $65 2003 2004 2005 2006 2007 2008 ROIC 9% 25% 22% 28% 30% 2% 1. See slide #3 for definition of Adjusted Earnings. Also see the Wholesale segment discussion in the Business Segment Analysis section in the 2008, 2007,
Slide 31: Industry Leading Performance
Industry Leading Performance Year-Over-Year Total Bank Adjusted EPS Growth1 -6% TD: Analyst View Canadian Peers -10% (excluding write-downs)2 -15% U.S. Peers -50% (excluding write-downs)3 -64% Canadian Peers (including write-downs)4 -110% U.S. Peers (including write-downs)5 2003 2004 2005 2006 2007
Slide 32: TD Bank Financial Group
TD Bank Financial Group n The first truly North American bank o Lower risk retail focus p Disciplined execution 32
Slide 33: Building the better bank every day
Building the better bank every day D Bank Financial Group
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