Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — The Toronto-Dominion Bank — Q3 2021 Earnings Presentation
37 slides from Toronto-dominion Bank's earnings presentation, Aug 26, 2021
Slide 1: Quarterly Results Presentation
Quarterly Results Presentation a Ss ° J o aS c io} a a) - August 26, 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 Forward Focused Purpose-Driven Deliver consistent earnings grow
Slide 4: Proven Business Model
Proven Business Model Diversification and scale, underpinned by a strong risk culture ▪ Reported earnings of $3.5B, up $1.3B (adjusted earnings of $3.6B, up $1.3B)1 ▪ Reported EPS of $1.92 (adjusted EPS of $1.96)1 ▪ PCL recovery of $37MM versus provision of $2.2B in the prior year ▪ Strong revenue a
Slide 5: Forward Focused
Forward Focused Shaping the future of banking U.S. Retail Bank Ranked Canadian Retail Delivering Customer TD Double Up Card #1 in Security and Recognized for Value Through Strategic Off to a Strong Start Reputation in Insider Digital Leadership Card Relationships in the U.S. Market Intelligence's Di
Slide 6: 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 +230 +380 bpsbps YoY YoY +8.0% YoY +12.5% YoY -80 bps +860 bpsYoY YoY 62.3 6.3 92.8 61.3 6.2 Canadian 92.0 Retail1 59.0 5.8 91.9 Q3
Slide 7: Purpose Driven
7 Purpose Driven Centered on our vision, purpose and shared commitments US$100MM Equity Fund TD and Canada Post TD Launches For Minority-Owned Enter Strategic Alliance to TD Essential Banking to Small Businesses Improve Access to Financial Expand Offerings for Services for Canadians Unbanked or Unde
Slide 8: Purpose Driven: ESG Highlights
8 Purpose Driven: ESG Highlights Centered on our vision, purpose and shared commitments Environment Social Governance – Global Climate Action Plan, launched in 2020: – Committed to 50% increase in minority – Created Senior Executive Team (SET) Forum to – Target of net-zero greenhouse gas (GHG) execu
Slide 9: Q3 2021 Highlights
Q3 2021 Highlights Total Bank Reported Results (YoY) Financial Highlights ($MM) Reported Q3/21 QoQ YoY EPS of $1.92, up 59% Revenue 10,712 5% 0% ▪ Adjusted1 EPS of $1.96, up 57% PCL (37) +$340 ($2,225) Revenue flat Expenses 5,616 (2%) 6% ▪ Strong volume and fee income growth, offset by lower Net Inc
Slide 10: Canadian Retail
Canadian Retail Highlights (YoY) P&L ($MM) Reported Q3/21 QoQ YoY Net income up $862MM (up $837MM adj1.) Revenue 6,579 9% 9% PCL 100 +$137 ($851) Revenue up 9% PCL Ratio 0.08% +11 bps (78 bps) ▪ Higher fee-based revenue and strong volume growth, Insurance Claims 836 90% 4% offset by lower deposit ma
Slide 11: U.S. Retail
U.S. Retail Highlights US$MM (YoY) P&L (US$MM) (except where noted) Reported Q3/21 QoQ YoY Net income of $1,052MM, up $562MM Revenue 2,180 5% 5% PCL (74) +$99 ($729) Revenue up 5% Expenses 1,233 (3%) 2% ▪ Loan volumes down 5% on continued paydowns U.S. Retail Bank Net Income 891 4% +$631 and lower c
Slide 12: Wholesale Banking
Wholesale Banking Highlights (YoY) P&L ($MM) Reported Q3/21 QoQ YoY Net income down 25% Revenue 1,083 (6%) (22%) PCL 2 +$65 ($121) Revenue down 22% Expenses 635 (10%) (5%) ▪ Trading-related revenue of $467MM, down 50% Net Income 330 (14%) (25%) ROE 15.7% (430 bps) (400 bps) PCL higher by $65MM QoQ ▪
Slide 13: Corporate Segment
Corporate Segment Highlights (YoY) P&L ($MM) Reported Q3/21 Q2/21 Q3/20 Reported loss of $205MM Net Income (205) (186) (130) Adjustment for items of note ▪ Adjusted1 loss of $122MM Amortization of Acquired Intangibles before income 68 69 63 taxes Acquisition and integration 24 19 - charges related t
Slide 14: Capital
Capital Common Equity Tier 1 ratio of 14.5% Common Equity Tier 1 Ratio Q2 2021 CET 1 Ratio 14.2% Internal capital generation 45 Risk-Weighted Assets up 2% QoQ Acquisitions (15) Increase in RWA (net of FX)1 and other (5) Leverage Ratio of 4.8% Q3 2021 CET 1 Ratio 14.5% Liquidity Coverage Ratio of 124
Slide 15: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Business Segment Highlights GIL Formations1: $MM and Ratios2 ▪ Gross impaired loan formations 23 decreased across all segments, remaining at cyclically low levels. $1,708 15 16 14 $40 / 5 bps 11 bps $1,203 $1,125 $13 / 2 bps $904 / 38 bps $36 / 6 bps $1,010 $47 / 8
Slide 16: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Business Segment GIL1: $MM and Ratios2 Highlights ▪ Gross impaired loans continued to decline, reflecting the ongoing 51 impact of: – Support programs 42 42 $3,821 – Customer resilience 38 $343 / 52 bps 35 bps – The economic recovery $3,157 $3,057 $97 / 17 bps $2,803 $1
Slide 17: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Business Segment Highlights PCL1: $MM and Ratios2 ▪ The PCL recovery this quarter reflects: $2,189 – A performing allowance release $123 – Partially offset by continued low $217 impaired provisions. $898 $921 $100 $316 Wholesale $20 $16 ($373) ($35) $951 $576 Cor
Slide 18: Provision for Credit Losses (PCL): Impaired and Performing
Provision for Credit Losses (PCL) 1,2 Impaired and Performing Highlights PCL ($MM) Q3/20 Q2/21 Q3/21 ▪ Impaired PCL remained at cyclically low levels, decreasing across all segments Total Bank 2,189 (373) (35) quarter-over-quarter Impaired 832 385 244 Performing 1,357 (758) (279) ▪ The smaller perfo
Slide 19: Allowance for Credit Losses (ACL)
Allowance for Credit Losses (ACL) ACL1: $B and Ratios2 124 126 122 108 103 bps 103 Highlights $9.2 $9.4 $8.9 74 $7.9 $8.0 $7.7 ▪ ACL decreased by $258MM quarter- over-quarter, reflecting: United States 59% 60% $5.3 59% – Continued improvement in credit Canada 62% 58% 58% conditions 61% 41% 40% 41% ▪
Slide 20: Appendix
Appendix 20
Slide 21: Q3 2021: Items of Note
Q3 2021: Items of Note Revenue/ ($MM) EPS ($)1 Segment Expense Line Item5 Pre Tax After Tax Reported net income and EPS (diluted) 3,545 1.92 Items of note Amortization of acquired intangibles2 68 61 0.03 Corporate page 12, line 14 Acquisition and integration charges related to Schwab3 24 22 0.01 Cor
Slide 22: 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 23: Total Bank PTPP & Operating Leverage
Total Bank PTPP1 & Operating Leverage2 (Modified for partners' share of PCL for the SCP, FX and insurance fair value change) 1. Pre-tax, pre-provision earnings (PTPP) is a non-GAAP measure that is typically calculated by subtracting expenses from revenues. At the total bank level, TD calculates PTPP
Slide 24: Canadian Retail
Canadian Retail Net Interest Margin Average Deposits $B2 428 437 448 396 413 37 39 38 33 35 143 150 155 161 2.71% 136 2.68% 2.65% 2.61% 2.61% 228 234 240 243 249 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 Personal Business Wealth Efficiency Ratio1 Average Loans $B2 447 454 460 473 4
Slide 25: Canadian Retail Wealth
Canadian Retail Wealth Wealth Revenue $MM Wealth Assets $B1 1500 1,448 1,402 1,415 160 538 1,237 155 169 1,222 514 1200 484 145 150 346 245 306 434 433 420 397 234 210 380 366 358 900 600 1001 941 942 843 877 300 0 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 Fee & Other Transaction N
Slide 26: U.S. Retail
U.S. Retail Net Interest Margin1,2 Average Deposits US$B5 353 368 378 378 343 153 153 146 142 144 2.50% 2.27% 2.24% 2.15% 2.16% 105 108 96 100 102 106 109 113 120 124 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 4 Personal Business IDAs Efficiency Ratio3 Average Loans US$B5 176 174 17
Slide 27: U.S. Retail Wealth and Schwab
U.S. Retail Wealth and Schwab TD Wealth Assets US$B1 Schwab2 – Q3 2021 TD’s share of Schwab’s net income was C$170MM3 on a 44 reported basis, of which C$197MM (US$161MM) was 43 41 recorded in the U.S. Retail segment 40 39 ▪ TD's share of Schwab's net income was C$222MM on an adjusted basis4 29 26 27
Slide 28: Schwab Equity Pickup: Reconciliation
Schwab Equity Pickup: Reconciliation U.S. Retail P&L ($MM)1 TDBG Corporate Segment $C $US Reported Schwab Equity Pickup2 170 197 161 (27) Amortization of Acquired Intangibles3 34 0 0 34 Acquisition and Integration Charges3,4 18 0 0 18 Adjusted Schwab Equity Pickup 222 197 161 25 Financial Statement
Slide 29: Wholesale Banking
Wholesale Banking Revenue Loans1 Q3 2021 6% Q3 2021 6% 26% 33% $1.1B $59.9B 61% 68% Corporate and Other2 Global Markets Canada United States International Investment Banking Highlights ▪ Our Global Markets business continued to perform well as market activity normalized compared to last year ▪ Our C
Slide 30: COVID-19 Industries of Focus
COVID-19 Industries of Focus Total Gross Loans & Acceptances: $747B Highlights (Q3 2021) ▪ Gross loans and acceptances to industries of heightened focus were $42 billion Residential Mortgages & – Representing ~5.7% of Total Bank HELOC, gross loans and acceptances 49.9% ▪ Lending portfolio remained w
Slide 31: Gross Lending Portfolio Includes B/As
Gross Lending Portfolio Includes B/As Balances ($B unless otherwise noted) Q2/21 Q3/21 Canadian Retail Portfolio 466.8 479.2 Personal 378.9 387.4 Residential Mortgages 220.5 226.3 Home Equity Lines of Credit (HELOC) 97.7 99.9 Indirect Auto 27.4 27.6 Credit Cards 14.5 14.9 Other Personal 18.8 18.7 Un
Slide 32: Canadian Real Estate Secured Lending Portfolio
Canadian Real Estate Secured Lending Portfolio Highlights (Q3 2021) Quarterly Portfolio Volumes ($B) $300 $308 $312 $319 $328 Canadian RESL credit quality remained strong Uninsured Insured 72% 73% 74% 75% 76% ▪ Uninsured and insured portfolio loan-to- value rates decreased reflecting higher 28% 27%
Slide 33: Canadian Personal Banking
Canadian Personal Banking Canadian Personal Banking (Q3/21) Highlights Gross Loans ($B) GIL ($MM) GIL/Loans (%) ▪ Gross impaired loans Residential Mortgages 226.3 260 0.11 continued to decline across all Home Equity Lines of Credit (HELOC) 99.9 139 0.14 key asset classes Indirect Auto 27.6 45 0.16 C
Slide 34: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Highlights Canadian Commercial and Wholesale Banking (Q3/21) Gross Loans/ GIL GIL/Loans ▪ Quarter-over-quarter gross BAs ($B) ($MM) (%) impaired loan decrease Commercial Banking1 91.8 478 0.52 largely reflected in: Wholesale 60.0 68 0.11 – Commercial Banking
Slide 35: U.S. Personal Banking (USD)
U.S. Personal Banking (USD) Highlights U.S. Personal Banking1 (Q3/21) ▪ Gross impaired loans further Gross Loans GIL GIL/Loans decreased quarter-over- ($B) ($MM) (%) quarter Residential Mortgages 28.6 325 1.13 Home Equity Lines of Credit (HELOC)2 7.3 286 3.94 Indirect Auto 25.0 165 0.66 Credit Cards
Slide 36: U.S. Commercial Banking (USD)
U.S. Commercial Banking (USD) Highlights U.S. Commercial Banking1 (Q3/21) Gross Loans/ GIL GIL/Loans ▪ Gross impaired loans BAs ($B) ($MM) (%) decrease quarter-over-quarter Commercial Real Estate (CRE) 24.9 146 0.59 reflected in the Commercial & Non-residential Real Estate 17.3 108 0.62 Industrial p
Slide 37: Investor Relations Contacts
Investor Relations Contacts Phone: (416) 308-9030 or 1 (866) 486-4826 Email: tdir@td.com Website: www.td.com/investor 37
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