Laurentian Bank Of Canada · TSX:LB
Laurentian Bank Of Canada — Q1 2023 Earnings Presentation
32 slides from Laurentian Bank Of Canada's earnings presentation, Feb 28, 2023
Slide 1: Investor Presentation First Quarter 2023
Investor Presentation First Quarter 2023 February 28, 2023
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements From time to time, Laurentian Bank of Canada and, as applicable its subsidiaries (collectively referred to as the “Bank”) will make written or oral forward-looking statements within the meaning of applicable Canadian and United States (U.S.) securities le
Slide 3: Non-GAAP financial and other measures
Non-GAAP financial and other measures In addition to financial measures based on generally accepted accounting principles (GAAP), management uses non-GAAP financial measures to assess the Bank’s underlying ongoing business performance. Non-GAAP financial measures presented throughout this document a
Slide 4: Rania Llewellyn: FY23 Priorities
Rania Llewellyn President & Chief Executive Officer FY23 Priorities
Slide 5: Strategic Plan Update | Q1/23 Results
Strategic Plan Update | Q1/23 Results Adjusted Net Income(1) $54.3 Highlights Reported Net Income $51.9 Adjusted EPS(2) $1.15 ✓ Delivered good results against our strategic plan and priorities Reported EPS $1.09 ✓ Revenue growth year-over-year, Adjusted Efficiency Ratio(2) 69.4% despite volatile fin
Slide 6: Strategic Plan | 5-Point Plan for Future Growth
Strategic Plan | 5-Point Plan for Future Growth Build One Winning Make Size Our Think Customer Make the Better Simplify Team Advantage First Choice Culture Commercial Banking Capital Markets Personal Banking Our Driving Force Our Growth Engine Focused & Aligned Offering Repositioning for Growth Unde
Slide 7: FY23 Priorities | Positioned for Growth
FY23 Priorities | Positioned for Growth As we enter the second year of our plan, we are focusing on three priorities in 2023 1 2 3 Delivering excellent Driving Efficiencies Growing Deposits Through Simplification customer service We will leverage data from We will grow deposits We will continue to m
Slide 8: Q1 Accomplishments | Customer Service
Q1 Accomplishments | Customer Service Delivering Excellent Customer Service ✓ Take targeted actions to remove World-Class Net Reimagined VISA Mortgage Financing pain points Promoter Score (NPS) Experience Centre ✓ Leverage data Improved our NPS in Launched our Established (NPS) to make Equipment Fin
Slide 9: Q1 Accomplishments | Growing Deposits
Q1 Accomplishments | Growing Deposits Growing Deposits ✓ Grow core deposits to maintain strong balance sheet and Strategic Partnership Scorecard Deepening support loan growth Deposits Alignment Relationships ✓ Deepen customer Increased strategic Included deposit Created additional relationships and
Slide 10: Q1 Accomplishments | Driving Efficiencies
Driving Q1 Accomplishments | Driving Efficiencies Efficiencies through Simplification ✓ Reduce complexity Paperless Robotics Process Process Statements Automation Automation ✓ Streamline internal processes and Launched e-statement Implemented Robotics Introduced process operations campaign for retai
Slide 11: Q1 Accomplishments | Culture & ESG
Q1 Accomplishments | Culture & ESG Culture & ESG ✓ Culture is our Corporate Donations GHG Emissions Zero-Emission driving force Strategy Reduction Buses ✓ We are focused on Launched “Giving Established a 35% Supported Quebec living up to our Beyond Numbers” reduction target in our school bus operato
Slide 12: Yvan Deschamps: Financial Review
Yvan Deschamps Executive Vice President & Chief Financial Officer Financial Review
Slide 13: Revenue Growth Despite Economic Uncertainty
Financial Review | Revenue Growth Despite Economic Uncertainty Y/Y Highlights Reported ($MM) Q1/23 Y/Y Q/Q • Total revenue up by $2.5MM, due to a $6.2MM increase in NII mostly Total revenue $ 260.1 +1% +1% from commercial loans, partly offset by lower Other Income, down by Provision for credit losse
Slide 14: Net Interest Income Drives Revenue Growth
Financial Review | Net Interest Income Drives Revenue Growth Net Interest Income and Margin ($MM, %) Key Assets ($B) Q1/23 Y/Y Q/Q Liquid assets(1) $ 11.4 +12% -3% 1.88% 1.87% 1.83% 1.77% 1.77% Personal loans $ 3.1 -13% -6% Residential mortgage loans $ 16.2 +5% +1% $180.9 $180.1 $188.5 $183.8 $187.1
Slide 15: Other Income Impacted by Market Volatility
Financial Review | Other Income Impacted by Market Volatility Other Income ($MM) Q1/23 Y/Y Q/Q Y/Y Highlights Lending fees • Other income decreased by $3.7MM, mainly due to volatile $ 16.3 -6% -6% market conditions unfavourably impacting financial markets Fees and securities brokerage related revenu
Slide 16: Non-Interest Expenses (NIE) Support Growth
Financial Review | Non-Interest Expenses (NIE) Support Growth NIE ($MM) Q1/23 Y/Y Q/Q Y/Y Highlights Salaries and employee benefits $ 103.9 +6% +16% • Adjusted NIE increased by $7.9MM, mainly due to salary increases, talent Premises and technology $ 47.1 +5% -% acquisition and higher technology cost
Slide 17: Diversified & Cost-Effective Sources of Funding
Financial Review | Diversified & Cost-Effective Sources of Funding Funding(1) ($B) Y/Y Highlights 42.4 42.8 Total funding increased by $4.4B Shareholders' equity 2.8 2.8 38.4 • Debt related to securitization increased by $0.8B 0.3 0.3 2.7 Subordinated debt • Total deposits increased by $3.4B 0.3 12.
Slide 18: Strong Capital Position
Financial Review | Strong Capital Position Common Equity Tier 1 Capital Ratio (CET1)(1) Risk-Weighted Assets (RWA) ($B)(1) 23.5 23.9 23.9 21.2 22.6 9.8% 9.3% 9.1% 9.1% 9.1% Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Evolution of the CET1 Ratio (%) Y/Y Highlights • CET1 ratio went fr
Slide 19: Strong and Diversified Commercial Loan Portfolio
Financial Review | Strong and Diversified Commercial Loan Portfolio Commercial Loan Portfolio ($B)(1) A Pan-Canadian Portfolio and a U.S. 18.2 18.3 Presence (as at January 31, 2023) 15.4 Commercial Lending ($B) 4% British Columbia & Territories 4.3 4.5 5% 2.6 Inventory financing 24% Alberta & Prairi
Slide 20: Strong Commercial Real Estate Portfolio
Financial Review | Strong Commercial Real Estate Portfolio Commercial Real Estate Portfolio Loan to Value (LTV) on Term Lending and (as at January 31, 2023) Multi-residential Mortgage Portfolios 9% Insured Term Loans - Multi-Residential 5% Conventional Term Loans - Multi-Residential • LTV on term lo
Slide 21: Diversified Inventory Financing Portfolio
Financial Review | Diversified Inventory Financing Portfolio Inventory Finance Main Product Lines Inventory Finance Overview (as at January 31, 2023) ➢ 5,400+ dealers in the U.S. and Canada 15% Marine Recreational Vehicle ➢ $800,000 average dealer line utilization 11% 32% Trailer 15% Manufactured Ho
Slide 22: High Quality Residential Mortgage Loan Portfolio
Financial Review | High Quality Residential Mortgage Loan Portfolio More than 80% of our residential mortgage portfolio is fixed rate of which >75% will mature in 2025 or later Insured vs Uninsured A Pan-Canadian Portfolio(2) (as at January 31, 2023) 4% 31% 10% 35% 33% British Columbia Conventional
Slide 23: Allowances for Credit Losses
Financial Review | Allowances for Credit Losses Allowances for Credit Losses (ACL) ($MM) Y/Y Highlights 208.9 • ACL decreased by $5.4MM mostly due to fully provisioned impaired 196.9 201.2 203.5 193.2 loans being written-off, partly offset by higher performing loans 88.0 52.3 50.4 68.6 53.4 Q/Q High
Slide 24: Provision for Credit Losses
Financial Review | Provision for Credit Losses Provision for Credit Losses (PCL) ($MM) Y/Y Highlights • PCL increased by $6.0 million, mainly as a result of write-offs in personal loans and the uncertain economic outlook 16.6 17.8 15.4 • PCL as a % of average loans and acceptances increased by 5 bps
Slide 25: Impaired Loans
Financial Review | Impaired Loans Net Impaired Loans ($MM, bps) Gross Impaired Loans ($MM, bps) 62 37 52 33 32 43 45 29 28 42 214.2 126.2 119.6 120.1 188.1 105.7 159.0 157.7 170.6 105.4 63.9 61.1 48.6 65.7 145.2 124.4 51.1 94.8 97.3 109.5 51.4 50.0 47.5 45.0 41.8 53.5 52.1 50.4 47.6 44.0 15.5 11.5 1
Slide 26: Rania Llewellyn: Strategic Outlook
Rania Llewellyn President & Chief Executive Officer Strategic Outlook
Slide 27: Strategic Outlook | Delivering Shareholder Value
Strategic Outlook | Delivering Shareholder Value Focused on delivering against our strategic plan and our three core priorities We will continue to introduce new products and services, like our reimagined VISA offering, to improve the customer experience The upcoming launch of our digital onboarding
Slide 28: Appendices
si Appendices
Slide 29: Appendices | Adjusting Items
Appendices | Adjusting Items Q1/23 Q4/22 Q1/22 Pre-Tax After-Tax Impact Pre-Tax After-Tax Impact Pre-Tax After-Tax Impact Impact Impact ($ / Impact Impact ($ / Impact Impact ($ / ($MM) ($MM) Share) ($MM) ($MM) Share) ($MM) ($MM) Share) Strategic review-related $— $— $— -$0.2 -$0.2 $— $2.3 $1.7 $0.04
Slide 30: Appendices | Non-GAAP Financial Measures
Appendices | Non-GAAP Financial Measures In $MM Q1/23 Q4/22 Q1/22 Income before income taxes $61.0 $65.1 $70.2 Provision for credit losses 15.4 17.8 9.4 Pre-tax pre-provision (PTPP) income(1) 76.4 83.0 79.6 Pre-tax impact of adjusting items(1) 3.2 2.9 5.4 Adjusted PTPP income $79.6 $85.9 $85.0 Net i
Slide 31: Appendices | Key Performance Indicators
Appendices | Key Performance Indicators ⚫ On track ⚫ Behind ⚫ At Risk 2024 2024 Culture 2021 2022 Progress Commercial Banking 2021 2022 Progress Target Target Employee Engagement Index 74% 77% ⚫ ≥80% Loan Growth ($) $14B $18B ⚫ >$18B Employee Turnover 27% 25% ⚫ <20% % of Commercial loans in U.S. 14%
Slide 32: Investor Relations Contact
Investor Relations Contact Andrew Chornenky Vice President, Investor Relations (416) 846-4845 Andrew.Chornenky@lbcfg.ca www.lbcfg.ca/investors-centre
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