Laurentian Bank Of Canada · TSX:LB
Laurentian Bank Of Canada — Q4 2020 Earnings Presentation
25 slides from Laurentian Bank Of Canada's earnings presentation, May 28, 2020
Slide 1: Investor Presentation Fourth Quarter 2020
20200528 – V21 INVESTOR PRESENTATION Fourth Quarter 2020 1
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements We may, from time to time, make written or oral forward-looking statements within the meaning of applicable securities legislation, including in this document and the documents incorporated by reference herein, and in other documents filed with Canadian r
Slide 3: Presenters: Rania Llewellyn and François Laurin
RANIA LLEWELLYN President and Chief Executive Officer FRANÇOIS LAURIN Executive Vice-President and Chief Financial Officer 3
Slide 4: Financial Results
FINANCIAL RESULTS 4
Slide 5: Fiscal 2020 Financial Performance
Fiscal 2020 Financial Performance ($ millions, except per share amount and percentages) 2020 Y/Y 2020 Highlights Adjusted Net Income (1) $ 138.2 -28% • Variation in profitability was mainly due to higher PCL, primarily driven by severe economic conditions resulting from the global pandemic Adjusted
Slide 6: Q4/20 Financial Performance
Q4/20 Financial Performance ($ millions, except per share amount and percentages) Q4/20 Q/Q Y/Y Q/Q Highlights Adjusted Net Income (1) $ 42.3 -10% -12% • Lower net interest income reflecting the impact of lower inventory financing volumes, partly as a result of COVID-19, due to: Adjusted Diluted EPS
Slide 7: Adjusting Items in 2020 and Q4/20
Adjusting Items in 2020 and Q4/20 ($ millions, except per share amounts) Q4/20 2020 Q3/20 Before After Before After Before After EPS EPS EPS taxes taxes taxes taxes taxes taxes Adjusting items Restructuring charges Severance charges $ 2.3 $ 1.7 $ 0.04 $ 12.3 $ 9.1 $ 0.21 $ 7.1 $ 5.2 $ 0.12 Other res
Slide 8: Total Revenue
Total Revenue Q4/20 Q/Q Y/Y Q/Q Highlights ($ millions) • Total revenue decreased by $5.1M to $243.5M, compared with $248.6M for Q3/20 Net interest income $169.3 -2% -2% • Net interest income decreased by $4.2M to $169.3M, compared Other income 74.2 -1% 8% with $173.5M in Q3/20, mainly resulting fro
Slide 9: Net Interest Margin (NIM)
Net Interest Margin (NIM) Q/Q Highlights Net Interest Margin • NIM was 1.82%, a decrease of 4 bps compared with Q3/20 (on average earning assets) • Decrease mainly due to a reduction in higher-yielding loans to 1.88% 1.86% business customers partly as a result of COVID-19 1.84% 1.81% 1.82% Q4/19 Q1/
Slide 10: Other Income
Other Income Q/Q Highlights • Other income decreased by $0.9M, compared with $75.1M in Q3/20 ($ millions) Q4/20 Q/Q Y/Y • Mainly due to: Lending fees $ 16.9 8% 2% • Lower contribution from capital markets from a record level in Fees and securities brokerage Q3/20 commissions 12.6 -1% 5% • Partly off
Slide 11: Adjusted Non-Interest Expenses (NIE)
Adjusted Non-Interest Expenses (NIE) Q/Q Highlights Adjusted NIE Q4/20 Q/Q Y/Y • Adjusted non-interest expenses increased by $1.1M compared with ($ millions) $169.2M in Q3/20 Salaries and employee benefits $ 88.8 -4% 5% • Adjusted salaries and employee benefits decreased by $3.7M, mainly due to lowe
Slide 12: Well Diversified and Stable Sources of Funding
Well Diversified and Stable Sources of Funding • Personal deposits represent 79% of total deposits as at Funding Shareholders' equity October 31, 2020 and contributed to our good liquidity ($ billions) position 37.5 36.9 37.1 Subordinated debt 2.6 2.6 2.6 Q/Q Highlights 0.3 0.3 0.3 • Funding stood a
Slide 13: Positioning the Bank for Profitable Growth
Positioning the Bank for Profitable Growth Common Equity Tier 1 Capital Ratio Risk-Weighted Assets (RWA) ($ billions) (CET1) (1) (1) 9.6% 9.4% 9.0% 9.0% (1) 20.4 20.6 20.9 8.8% 19.9 19.7 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Evolution of the CET1 Ratio (in %) 9.6 - 9.4 0.2 0.1
Slide 14: Risk Review
RISK REVIEW 14
Slide 15: Improving Portfolio Mix to Drive Revenue Growth
Improving Portfolio Mix to Drive Revenue Growth Loan Portfolio Mix Q/Q Highlights ($ billions) • Total loans stood at $33.2B, an increase of $0.4B or 1% compared with $32.8B in Q3/20 • Commercial loans were stable 33.7 33.2 32.8 • Residential mortgage loans increased by $0.5B or 3% • Personal loans
Slide 16: Residential Mortgage Loan Portfolio – High Quality
Residential Mortgage Loan Portfolio – High Quality Insured, Uninsured & Loan to Value (LTV) Insured vs Uninsured by Province – Conservative LTV’s 37% 35% % of Residential Mortgage Loan 45% Conventional Portfolio LTV %(1) Prime Insured As at October 31, 2020 Uninsured Insured 55% 57% Alt-A 48% Britis
Slide 17: Commercial Loan Portfolio: Strong and Diversified
Commercial Loan Portfolio: Strong and Diversified Commercial Loan Portfolio(1) A pan-Canadian Portfolio (In $ billions) and a U.S. Presence 13.0 12.7 12.7 (As a % of commercial loan portfolio) Commercial (As at October 31, 2020) 2.2 1.7 1.6 Inventory financing 1.4 1.5 1.5 Equipment financing 2.6 2.4
Slide 18: Payment deferrals
Payment deferrals Significant decrease in loan payment deferrals during the quarter to 0.7% of the loan portfolio • Payment deferrals on personal loans are less than $1M • Payment deferrals on residential mortgage loans decreased 86% during the quarter and stood at $200M or 1.2% of loan portfolio •
Slide 19: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL Q/Q Highlights Q4/20 Q3/20 Q4/19 ($ millions) • PCL increased $1.9M Q/Q, mainly reflecting the forward-looking Personal Loans potential impact of the second wave of the pandemic Stage 1 and 2 $ (1.2) $ (6.1) $ 2.4 • Stage 1 and 2 PCL for Residential Mortgage Loa
Slide 20: Impaired Loans
Impaired Loans Net Impaired Loans (NIL)(1) Q/Q Highlights (As a % of loans and acceptances) • Net impaired loans stood at $196.3M, a decrease of 0.62% 0.59% 0.53% $6.6M or 3% 0.40% 0.42% • Gross impaired loans stood at $272.7M, a decrease of $1.6M or 1% • Allowances for loan losses against impaired
Slide 21: Appendices
APPENDICES 21
Slide 22: High Quality Mortgage Loan Portfolio – Low Loan-to-Value
High Quality Mortgage Loan Portfolio – Low Loan-to-Value Loan-to-Value Distribution We target the high end of the Alt-A market (As at October 31, 2020) through low LTV ratios 75% • Vast majority of uninsured and Alt-A mortgages 49% 39% have LTVs of 75% or less 25% 30% • 91% of Conventional portfolio
Slide 23: High Quality Mortgage Loan Portfolio - High Beacon Scores
High Quality Mortgage Loan Portfolio - High Beacon Scores Beacon Distribution We target high end of the Alt-A market through (As at October 31, 2020) high beacon scores 89% 78%74% • Vast majority of Alt-A and uninsured portfolios with beacon scores > 650 • 89% of Conventional portfolio • 87% of Alt-
Slide 24: Non-GAAP Measures
Non-GAAP Measures ($ millions, except per share amounts) Q4/20 Q3/20 Q4/19 2020 2019 Reported net income $ 36.8 $ 36.2 $ 41.3 $ 114.1 $ 172.7 Adjusting items, net of income taxes(1) Restructuring charges Severances charges 1.7 5.1 1.3 9.1 4.8 Other restructuring charges 1.4 3.0 2.7 4.4 4.5 3.1 8.1 4
Slide 25: Investor Relations Contact
Investor Relations Contact Susan Cohen Director, Investor Relations (514) 970-0564 susan.cohen@lbcfg.ca 25
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