Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Group — Q4 2010 Earnings Presentation
35 slides from Toronto-dominion Bank's earnings presentation, Dec 2, 2010
Slide 1: TD Bank Group Q4 2010 Investor Presentation
TD Bank Group Q4 2010 Investor Presentation Thursday December 2nd, 2010
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements From time to time, the Bank makes written and/or oral forward-looking statements, including in this presentation, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission, and in other communications. In addition, represent
Slide 3: Strategic Overview: Fiscal 2010
Strategic Overview: Fiscal 2010 1. Record adjusted earnings1 of over $5 billion 2. Lower-risk Retail2 franchise delivered record performance 3. U.S. P&C surpasses $1 billion in adjusted earnings1 4. Strong performance in Wholesale Banking 1. The Bank’s financial results/earnings releases prepared in
Slide 4: 2010 Highlights
2010 Highlights Net income $MM 2009 2010 YoY 1 Canadian Retail $ 2,817 $ 3,542 26% 2 U.S. Retail (adjusted) 1,161 1,236 6% Total Retail 3,978 4,778 20% Wholesale (adjusted) 1,137 987 -13% Corporate (adjusted) (399) (537) 35% 3 Adjusted net income $ 4,716 $ 5,228 11% Reported EPS (diluted) $ 3.47 $ 5
Slide 5: Q4 2010 Highlights
Q4 2010 Highlights Net income $MM Q4/09 Q3/10 Q4/10 QoQ YoY 1 Canadian Retail $ 719 $ 958 $ 891 -7% 24% 1 U.S. Retail (adjusted) 270 349 316 -9% 17% Total Retail 989 1,307 1,207 -8% 22% Wholesale 372 179 216 21% -42% Corporate (adjusted) (54) (182) (163) -10% 202% 2 Adjusted net income $ 1,307 $ 1,3
Slide 6: Q4 2010 Earnings: Items of Note
Q4 2010 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $994 $1.07 Pre Tax After Tax Items of note EPS (MM) (MM) 1 1 Amortization of intangibles $147 $115 $0.14 Change in fair value of derivatives hedging $7 $8 $0.01 the reclassified portfolio Integration and restructuring charg
Slide 7: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking P&L $MM Q4/09 Q3/10 Q4/10 QoQ YoY Revenue $ 2,434 $ 2,646 $ 2,668 1% 10% PCL 313 236 239 1% -24% Expenses 1,226 1,222 1,331 9% 9% Net Income $ 622 $ 841 $ 773 -8% 24% Efficiency ratio 50.4% 46.2% 49.9% 370bps (50)bps 1 NIM 2.88% 2.92% 2.91% (1)bp 3bps • Record
Slide 8: Wealth Management
Wealth Management P&L $MM Q4/09 Q3/10 Q4/10 QoQ YoY Revenue $ 587 $ 616 $ 639 4% 9% Expenses 444 447 468 5% 5% Net Income (Global Wealth) $ 97 $ 117 $ 118 1% 22% 1 Equity in NI of TD AMTD 59 62 33 -47% -44% Net Income $ 156 $ 179 $ 151 -16% -3% Efficiency ratio 75.6% 72.6% 73.2% 60bps (240)bps 2 AUM
Slide 9: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking P&L $MM (U.S. dollars) (adjusted, where applicable) Q4/09 Q3/10 Q4/10 QoQ YoY Revenue $ 1,036 $ 1,176 $ 1,183 1% 14% PCL 201 126 142 13% -29% 1 Expenses 623 688 714 4% 15% 1 Net Income $ 196 $ 276 $ 275 0% 40% 1 Net Income (C$) $ 211 $ 287 $ 283 -1% 34% 1 Efficienc
Slide 10: Wholesale Banking
Wholesale Banking P&L $MM (adjusted, where applicable) Q4/09 Q3/10 Q4/10 QoQ YoY Revenue $ 886 $ 576 $ 677 18% -24% 1 PCL 7 (16) 23 NM 229% Expenses 347 323 324 0% -7% 2 Net Income $ 372 $ 179 $ 216 21% -42% • Strong return on invested capital on a quarterly and full-year basis • Results delivering
Slide 11: Corporate Segment
Corporate Segment Corporate segment includes unallocated: Costs related to certain central risk and control costs Benefits and costs related to tax, treasury, liquidity, capital and balance sheet management activities (eg. securitization) Greater adjusted loss vs. Q4/09 due to: Higher net co
Slide 12: Credit Portfolio Highlights
Credit Portfolio Highlights Canadian Personal Loss rates continued downward trend Canadian Commercial and Wholesale Continued solid credit performance U.S. Personal Results in the U.S. Personal portfolio continue to be acceptable Default rates trended down in the Residential Mortgage p
Slide 13: Appendix
ID Appendix
Slide 14: Q4 2010 Earnings: Items of Note
Q4 2010 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $994 $1.07 Revenue/ Pre Tax After Tax Items of note1 EPS Segment Expense (MM) (MM) 3 Line Item 2 2 Amortization of intangibles $147 $115 $0.14 Corporate pg 13, line 13 Change in fair value of derivatives $7 $8 $0.01 Corpora
Slide 15: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Net interest margin % Notes • Net interest margin on NIM on average earning assets average earning assets was flat QoQ 2.88% 2.93% 2.92% 2.92% 2.91% NIM on loans 1.89% 1.92% 1.90% 1.87% 1.73% 1.52% 1.46% 1.49% 1.42% 1.43% NIM on deposits Q4/09 Q1/10 Q2/10 Q3/10
Slide 16: Wealth Management
Wealth Management Revenue $MM Notes Revenue $639 million: $639 $612 $616 Up 9% from Q4/09 and 4% $587 $590 $79 $93 $97 compared to Q3/10 NII $67 $66 YoY Increase driven by $139 higher fees from: $152 $155 $143 Transaction $166 Higher AUA1 and AUM2 which drove strong growth in advice- based a
Slide 17: Wealth Management
Wealth Management Performance Metrics AUA1 ($B) AUM2 ($B) $224 $214 $211 $171 $172 $175 $174 $183 $200 $97 $96 $96 $97 $101 Institutional $191 Retail $74 $76 $79 $78 $82 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Mutual Funds AUM2 ($B) Advisors & Planners $59 Investment 736 751 728
Slide 18: TD Ameritrade
TD Ameritrade TD Bank Group’s Share of Highlights TD Ameritrade’s Net Income1 TD’s share of TD Ameritrade’s US$MM net income: C$33 million in Q4/10 $60 $54 $54 TD Ameritrade’s net income US$114 million in Q4/10 $41 Average trades per day: 318,000; down 23% YoY and $32 23% QoQ Total client as
Slide 19: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Store openings Highlights 13 Expect to open 30+ stores in 2011 Conversion 11 Opened 3 new stores in Rhode Island in Q4/10 About 21% of total stores are maturing1 and have significant embedded deposit growth2 5 5 Account for about 36% of YoY deposit growth 3
Slide 20: U.S. Personal & Commercial Banking: Deposit Growth
U.S. Personal & Commercial Banking: Deposit Growth Average Deposits 22% Highlights 22% (US$ billions) Growth Growth YoY YoY Personal deposit growth from maturing stores, high-rate $134 savings promotion and $124 $129 $117 acquisitions $110 $44 Strong growth in TD Ameritrade $41 $43 $36 $30 IDAs1
Slide 21: U.S. Personal & Commercial Banking: Loan Growth
U.S. Personal & Commercial Banking: Loan Growth Average Loans Highlights (US$ billions) 13% Growth in high-quality 13% Growth Growth residential mortgages YoY YoY continued Commercial portfolio growth $60 $54 $57 mainly due to acquisitions $53 $53 Excluding impact of $36 $38 acquisitions, tota
Slide 22: Tier 1 Capital Ratio
Tier 1 Capital Ratio 12.5% Highlights 12.0% 12.2% 11.5% Strong capital position 11.3% Continued organic growth in capital Well-positioned for evolving regulatory environment Lower-risk, franchise wholesale dealer More than 1/3 of total assets in low or no-risk assets About 75% of Tier 1
Slide 23: Impact of regulatory reforms
Impact of regulatory reforms1 Key areas of impact Market-Risk RWA expected to increase 3-4 times for Wholesale Banking (effective Q1/12) Basel III RWA increase primarily related to Credit Valuation Adjustment Net incremental capital deductions mainly related to investments in TD Ameritrade and
Slide 24: Q4 Expense Overview
Q4 Expense Overview Adjusted Expenses up $278 million or 10% QoQ mainly due to: Canadian P&C +$109 million Project cancellation ($26MM) Depreciation accounting change Higher marketing costs and project-related timing Corporate +$127 million Symcor write-down ($22MM) Higher Risk/Control
Slide 25: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q3/10 Q4/10 Canadian Personal & Commercial Portfolio $ 178.8 $ 182.9 Personal1 $ 147.6 $ 151.1 Residential Mortgages 57.8 60.6 Home Equity Lines of Credit (HELOC) 58.8 2/3 insured 59.0 Unsecured Lines of Credit 9.2 9.2 Credi
Slide 26: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio Highlights GIL Formations1: $MM and Ratios2 Gross Impaired Loan formations increased $83MM in $1,062 Q4, but decreased $56MM YoY $974 $23 / 12 bps $9 / NM U.S. P&C formations increased $918 $852 $66MM (US$68MM) over Q3 $835 Increase attributed to a s
Slide 27: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights Gross Impaired Loan rates $2,315 $2,253 have continued downward $2,218 $2,177 $2,070 $206 / 108 bps $84 / 46 bps trend since Q1 $2 / NM $190 / 100 bps $91 / 51 bps $180 / 89 bps Gross Impaired Loans have remained stable ove
Slide 28: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio PCL1: $MM and Ratios2 Highlights Year over year, Q4 PCL decreased $90MM or 19% $507 $480 $4 / NM PCL in all segments, with the $417 exception of Wholesale, was flat over Q3 as credit quality $2 / NM $340 $390 $188 / 133 bps $209 / 147 bps $1 / NM co
Slide 29: Canadian Personal Banking
Canadian Personal Banking Q4/10 Canadian Personal Banking Gross Loans GIL/ GIL Specific PCL1 Highlights ($B) Loans ($MM) ($MM) Residential Mortgages 61 0.50% 301 3 While Default Rates increased Home Equity Lines of Credit (HELOC) 59 0.21% 124 3 moderately in the Real Estate Secured Lending (RESL)
Slide 30: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Q4/10 Highlights Gross Specific Canadian Commercial and Wholesale GIL PCL1 Banking Loans/BAs ($MM) While PCL of $40MM was ($B) ($MM) recognized in Q4, credit Commercial Banking2 32 165 24 quality continues to Wholesale 18 84 16 outperform historical norms
Slide 31: U.S. Personal Banking
U.S. Personal Banking Q4/10 Highlights Specific Gross Loans GIL/ GIL U.S. Personal Banking1 ($B) Loans ($MM) PCL2 Specific PCL has remained ($MM) Residential Mortgages 9 1.68% 158 6 stable over Q3 Home Equity Lines of Credit (HELOC)3 9 0.91% 85 18 Gross Impaired Loans and Indirect Auto 3 0.18% 6
Slide 32: U.S. Commercial Banking: Commercial Real Estate
U.S. Commercial Banking Commercial Real Estate (CRE) Q4/10 Gross GIL Specific PCL2 Highlights 1 U.S. Commercial Banking Loans/BAs ($MM) ($MM) ($B) Commercial Real Estate credit Commercial Real Estate (CRE) 14 644 62 metrics are well within Non-residential Real Estate 10 273 27 expectations Residen
Slide 33: U.S. Commercial Banking: Commercial & Industrial
U.S. Commercial Banking Commercial & Industrial (C&I) Q4/10 Gross GIL Specific PCL2 Highlights U.S. Commercial Banking1 Loans/BAs ($MM) ($MM) ($B) PCL in the Commercial & Commercial Real Estate (CRE) 14 644 62 Industrial portfolio increased Non-residential Real Estate 10 273 27 $23MM (US$23MM) QoQ
Slide 34: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: tdir@td.com Website: www.td.com/investor Best Investor Relations by Sector: Financial Services Best Retail Investor Communications 34
Slide 35: TD Bank Group
TD Bank Group Q4 2010 Investor Presentation Thursday December 2nd, 2010