Laurentian Bank Of Canada · TSX:LB
Laurentian Bank Of Canada — Q4 2021 Earnings Presentation
28 slides from Laurentian Bank Of Canada's earnings presentation, Dec 10, 2021
Slide 1: Investor Presentation Fourth Quarter 2021
INVESTOR PRESENTATION Fourth Quarter 2021 December 10, 2021 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: Strategic Direction
RANIA LLEWELLYN President and Chief Executive Officer Strategic Direction 4
Slide 5: 2021 Financial Highlights
Adjusted Net Adjusted Diluted Adjusted PCL (bps)(3)(4) Income($MM)(1)(4) EPS(2)(4) Efficiency Ratio(2)(4) 2021 Financial +53% +56% -410bps -20bps Highlights YoY YoY $ 4.57 YoY YoY $ 211.2 72.3% 35 68.2% $ 138.2 $ 2.93 • Impairment and restructuring 15 charges impacted results • Adjusted Net Income u
Slide 6: Q4/21 Financial Highlights
Adjusted Net Adjusted Diluted Adjusted PCL (bps) (3)(4) Income ($MM)(1)(4) EPS(2)(4) Efficiency Ratio(2)(4) Q4/21 Financial +13% +16% -440bps +1bp Highlights YoY YoY YoY YoY $ 59.0 $ 1.25 69.9% 30 $ 1.06 29 $ 47.8 $ 0.91 68.4% $ 42.3 • Impairment and restructuring 65.5% charges impacted results 7 •
Slide 7: Q4 Key Developments
Q4 Key Developments Inventory financing Y-o-Y loan growth of 18% Capital Markets closed largest ever M&A advisory mandate Increased dividend by 10% and established a new 2% normal course issuer bid Launched the Laurentian Bank Mobile app in less than seven months 7
Slide 8: Three Strategic Pillars
Three Strategic Pillars Cultivating a Driving an “Agile Engaging and “Customer and Innovative” empowering our First” Culture Mindset employees to work as “One Team” 8 8
Slide 9: Priorities
2021 Renewed the senior Increased our efforts on cost Conducted a thorough review Priorities leadership team and discipline while pivoting to of all of Laurentian Bank’s operations organizational structural cost and developed a structure opportunities new strategic plan In 2021, we focused on three
Slide 10: Launching: A New Mobile App
Launching: A New Mobile App 10
Slide 11: Financial Review
YVAN DESCHAMPS Executive Vice President and Chief Financial Officer Financial Review 11
Slide 12: 2021 Financial Performance
2021 Financial Performance Reported ($MM) 2021 Y/Y 2021 Highlights Total revenue $ 1,002.5 +3% • PCL down by $66.8MM mainly due to higher provisions on performing loans in 2020 reflecting the impact of COVID-19 Provision for credit losses (PCL) $ 49.5 -57% • Total revenue up by $31.4MM, driven by NI
Slide 13: Q4/21 Financial Performance
Q4/21 Financial Performance Reported ($MM) Q4/21 Y/Y Q/Q Y/Y Highlights Total revenue $ 250.4 +3% -2% • Total revenue up by $6.9MM, with NII accounting for $3.7MM, and Provision for credit losses (PCL) $ 24.9 +3% +361% other income accounting for $3.1MM Non-interest expenses (NIE) $ 356.5 +101% +109
Slide 14: Net Interest Income
Net Interest Income Net Interest Income and Margin ($MM, %) Key Assets ($B) Q4/21 Y/Y Q/Q 1.88% Liquid assets (1) $ 9.9 +3% -5% 1.82% 1.84% 1.86% 1.83% Personal loans $ 3.7 -11% -2% Residential mortgage loans $ 15.9 -3% +1% $169.3 $173.1 $171.5 $174.7 $173.1 Commercial loans (2) $ 14.1 +11% +5% Q4/2
Slide 15: Other Income
Other Income ($MM) Q4/21 Y/Y Q/Q Y/Y Highlights Lending fees $ 17.6 +4% -6% Other income increased by $3.1MM, mainly from: Fees and securities brokerage commissions • An increase of $4.3MM in fees and securities brokerage commissions $ 16.9 +34% +5% driven by higher Capital Markets activity Commissi
Slide 16: Non-Interest Expenses (NIE)
Non-Interest Expenses (NIE) NIE ($MM) Q4/21 Y/Y Q/Q Y/Y Highlights Salaries and employee benefits $ 87.7 -1% -2% • NIE increased by $178.9MM, mainly from impairment and restructuring charges Premises and technology $ 45.4 -9% -8% • Adjusted NIE decreased by $6.2MM and adjusted efficiency ratio Other
Slide 17: Well Diversified and Stable Sources of Funding
Well Diversified and Stable Sources of Funding Funding ($B) Y/Y Highlights Shareholders' equity • An increase in debt related to securitization of $1.1B to optimize funding 37.1 37.0 37.2 sources and align deposits with loan volumes, was offset by: 2.6 2.7 2.6 Subordinated debt • a decrease of $1.1B
Slide 18: Strong Capital Position
Strong Capital Position Common Equity Tier 1 Capital Ratio (CET1)(1) Risk-Weighted Assets (RWA) ($B)(1) 10.3% 10.2% 10.1% 19.7 19.7 19.7 19.7 20.0 9.6% 9.8% Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 Evolution of the CET1 Ratio (%) Y/Y Highlights • CET1 ratio increased by 60 bps Y/Y
Slide 19: Strong and Diversified Commercial Loan Portfolio
Strong and Diversified Commercial Loan Portfolio Commercial Loan Portfolio(1) A Pan-Canadian Portfolio and a U.S. 13.5 14.1 Presence (as at October 31, 2021) 12.7 1.4 1.9 5% Commercial Lending ($B) 14% 1.6 British Columbia & Territories 1.4 1.4 6% Inventory financing Alberta & Prairies 1.5 3% 2.2 2.
Slide 20: High Quality Residential Mortgage Loan Portfolio
High Quality Residential Mortgage Loan Portfolio Insured vs Uninsured A Pan-Canadian Portfolio(as at October 31, 2021) 3% 35% 35% 35% 10% Conventional British Columbia Prime insured 37% 14% Alberta & Prairies 57% 56% 56% Alt-A Ontario Quebec 8% 9% 9% 36% Atlantic Provinces Q4/20 Q3/21 Q4/21 Credit Q
Slide 21: Allowances for Credit Losses
Allowances for Credit Losses Allowances for Credit Losses (ACL) ($MM) Y/Y Highlights 193.6 202.6 • ACL increased by $17.6MM mostly due to higher ACL on commercial 185.0 185.5 183.3 impaired loans, as well as the increase in ACL for performing loans resulting from a strategic review of the investment
Slide 22: Provision for Credit Losses
Provision for Credit Losses Provision for Credit Losses (PCL) ($MM) Y/Y Highlights 24.2 24.9 2.9 • PCL for Q4/21 reflected the strategic review of investment loans and 16.8 13.1 increased by $0.7MM above the Q4/20 level that was impacted by 2.4 5.4 COVID-19 17.7 22.0 12.3 -3.6 11.1 -0.9 -9.9 9.0 Q/Q
Slide 23: Impaired Loans
Impaired Loans Gross Impaired Loans ($MM, bps) Net Impaired Loans ($MM, bps) 82 82 81 59 77 56 75 51 53 49 196.4 187.7 272.7 274.2 265.9 175.9 255.3 250.9 166.7 163.9 115.2 112.8 170.8 178.1 165.0 185.2 99.5 112.1 176.5 103.2 65.8 66.3 62.2 61.3 67.3 62.6 58.2 57.5 57.7 54.0 36.1 29.8 23.0 18.1 16.2
Slide 24: Key Takeaways
Key Takeaways 1 Strong year with 53% growth in adjusted net income year-over-year We have a renewed management team and employees that are focused on our 2 customers Returning capital to shareholders with dividend increase of 10% and newly 3 established 2% normal course issuer bid program Solid capi
Slide 25: Appendices
Appendices LAURENTIAN 2% BANK
Slide 26: Adjusting Items
Adjusting Items Q4/21 Q3/21 Q4/20 2021 2020 Pre- After- After- After- Pre- After- After- Impact Pre-Tax Impact Pre-Tax Impact Impact Pre-Tax Impact Tax Tax Tax Tax Tax Tax Tax ($ / Impact ($ / Impact ($ / ($ / Impact ($ / Impact Impact Impact Impact Impact Impact Impact Share) ($MM) Share) ($MM) Sha
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures In $MM Q4-2021 Q3-2021 Q4-2020 2021 2020 Income (loss) before income taxes $ -130.9 $ 79.2 $ 41.6 $ 72.6 $ 120.3 Less: Provision for credit losses 24.9 5.4 24.2 49.5 116.3 Pre-tax pre-provision (PTPP) income (loss)(1) -106.0 84.6 65.8 122.1 236.6 (2) Less: Pre-tax impact
Slide 28: Investor Relations Contact
Investor Relations Contact Susan Cohen Head, Investor Relations (514) 970-0564 susan.cohen@lbcfg.ca www.lbcfg.ca/investors-centre 28
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