TD Bank Group
Investor Presentation
Q4 2013
1
Caution regarding forward-looking statements
From time to time, the Bank makes written and/or oral forward-looking statements, including in this document, in other filings with Canadian
regulators or the U.S. Securities and Exchange Commission, and in other communications. In addition, representatives of the Bank may
make forward-looking statements orally to analysts, investors, the media and others. All such statements are made pursuant to the ��safe
harbour�� provisions of, and are intended to be forward-looking statements under, applicable Canadian and U.S. securities legislation,
including the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements
made in this document, the Bank��s 2013 MD&A under the headings ��Economic Summary and Outlook��, for each business segment
��Business Outlook and Focus for 2014�� and in other statements regarding the Bank��s objectives and priorities for 2014 and beyond and
strategies to achieve them, and the Bank��s anticipated financial performance. Forward-looking statements are typically identified by words
such as ��will��, ��should��, ��believe��, ��expect��, ��anticipate��, ��intend��, ��estimate��, ��plan��, ��may��, and ��could��.
By their very nature, these forward-looking statements require the Bank to make assumptions and are subject to inherent risks and
uncertainties, general and specific. Especially in light of the uncertainty related to the physical, financial, economic, political, and regulatory
environments, such risks and uncertainties – many of which are beyond the Bank��s control and the effects of which can be difficult to
predict – may cause actual results to differ materially from the expectations expressed in the forward-looking statements. Risk factors that
could cause such differences include: credit, market (including equity, commodity, foreign exchange, and interest rate), liquidity,
operational (including technology), reputational, insurance, strategic, regulatory, legal, environmental, capital adequacy, and other risks.
Examples of such risk factors include the general business and economic conditions in the regions in which the Bank operates; disruptions
in or attacks (including cyber attacks) on the Bank��s information technology, internet, network access or other voice or data
communications systems or services; the evolution of various types of fraud to which the Bank is exposed; the failure of third parties to
comply with their obligations to the Bank or its affiliates relating to the care and control of information; the impact of recent legislative and
regulatory developments; the overall difficult litigation environment, including in the United States; changes to the Bank��s credit ratings;
changes in currency and interest rates; increased funding costs for credit due to market illiquidity and competition for funding; and the
occurrence of natural and unnatural catastrophic events and claims resulting from such events. We caution that the preceding list is not
exhaustive of all possible risk factors and other factors could also adversely affect the Bank��s results. For more detailed information, please
see the ��Risk Factors and Management�� section of the 2013 MD&A, as may be updated in subsequently filed quarterly reports to
shareholders and news releases (as applicable) related to any transactions discussed under the heading ��Significant Events�� in the
relevant MD&A, which applicable releases may be found on www.td.com. All such factors should be considered carefully, as well as other
uncertainties and potential events, and the inherent uncertainty of forward-looking statements, when making decisions with respect to the
Bank and we caution readers not to place undue reliance on the Bank��s forward-looking statements.
Material economic assumptions underlying the forward-looking statements contained in this document are set out in the 2013 MD&A under
the headings ��Economic Summary and Outlook��, and for each business segment, ��Business Outlook and Focus for 2014��, each as
updated in subsequently filed quarterly reports to shareholders.
Any forward-looking statements contained in this document represent the views of management only as of the date hereof and are
presented for the purpose of assisting the Bank��s shareholders and analysts in understanding the Bank��s financial position, objectives and
priorities and anticipated financial performance as at and for the periods ended on the dates presented, and may not be appropriate for
other purposes. The Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from
time to time by or on its behalf, except as required under applicable securities legislation.
2
TD Bank Group – Key Messages
Top 10 Retail Focused North American Bank
1
Proven Performance
Strong Balance Sheet and Capital Position
Focused on Growth Opportunities
4
2
3
5th
largest bank
by Total Assets1
6th
largest bank
by Market Cap1
Targeting 7-10%
adjusted EPS
growth over the
medium term2
Highly rated by all
major credit rating
agencies
Delivering
top tier long
term shareholder
returns
1. See slide 6.
2. See slide 4, footnote 3, for definition of adjusted results.
3
TD Bank Group
Our Businesses
Canadian Personal & Commercial
Wholesale
U.S. Personal & Commercial
Wealth & Insurance
∎
Direct investing
∎
Advice-based wealth business
∎
Asset management
∎
Insurance
2,496
Business Locations1
Q4 20132 (C$)
CAD
P&C
U.S.
P&C
Total Deposits3
$228B
$198B
Total Loans4
$314B
$109B
Rpt. Earnings5
$3.7B
$1.5B
Adj. Earnings5
$3.8B
$1.6B
Customers
14MM
8MM
Employees6
28,418
24,797
Lower-risk retail focused North American bank
1. Number of North American retail outlets at the end of Q4/13.
2. Q4/13 is the period from August 1, 2013 to October 31, 2013.
3. Total Deposits based on total of average personal and business deposits during Q4/13. U.S. deposits include TD Ameritrade Insured Deposit Accounts (IDAs).
4. Total Loans based on total of average personal and business loans during Q4/13.
5. For trailing four quarters ended Q4/13 (i.e., full fiscal 2013). See slide 4, footnote 3 for definition of adjusted results.
6. Average number of full-time equivalent staff in these segments during Q4/13.
∎
Personal banking, credit cards and auto finance
∎
Small business and commercial banking
∎
Personal banking, credit cards and auto finance
∎
Small business and commercial banking
∎
Corporate and specialty banking
∎
Research
∎
Investment banking
∎
Capital markets
∎
Global transaction banking
4
Simple Strategy, Consistent Focus
Building the Better Bank
Franchise Businesses
Retail Earnings Focus
Risk Discipline
North America
∎
Top 10 Bank in North America1
∎
One of only a few banks globally to be rated Aa1 by Moody��s2
∎
Leverage platform and brand for growth
∎
Strong employment brand
∎
Leader in customer service and convenience
∎
Over 80% of adjusted earnings from retail3,4
∎
Repeatable and growing earnings stream
∎
Focus on customer-driven products
∎
Only take risks we understand
∎
Systematically eliminate tail risk
∎
Strong organic growth engine
∎
Better return for risk undertaken5
∎
Operating a franchise dealer of the future
∎
Consistently reinvest in our competitive advantages
∎
Robust capital and liquidity management
∎
Culture and policies aligned with risk philosophy
Superior execution
1. See slide 6.
2. For long term debt (deposits) of The Toronto-Dominion Bank, as at October 31, 2013. Credit ratings are not recommendations to purchase, sell, or hold a financial obligation
inasmuch as they do not comment on market price or suitability for a particular investor. Ratings are subject to revision or withdrawal at any time by the rating organization.
3. Based on Q4/13 adjusted earnings. Effective November 1, 2011, the Bank prepares its consolidated financial statements in accordance with International Financial Reporting
Standards (IFRS), the current generally accepted accounting principles (GAAP), and refers to results prepared in accordance with IFRS as the ��reported�� results. The Bank
also utilizes non-GAAP financial measures to arrive at "adjusted" results (i.e. reported results excluding ��items of note��, net of income taxes) to assess each of its businesses
and measure overall Bank performance. Please see "How the Bank Reports" starting on page 5 of the 4th Quarter 2013 Earnings News Release for further explanation and a reconciliation of the Bank��s non-GAAP measures to reported basis results.
4. Retail includes Canadian Personal & Commercial Banking, Wealth & Insurance, and U.S. Personal & Commercial Banking segments. See slide 7 for more detail.
5. Based on Q4/13 return on risk-weighted assets (RWA), calculated as adjusted net income available to common shareholders divided by average RWA. See slide 20 for details. See footnote 3 above for definition of adjusted results.
5
Competing in Attractive Markets
∎
10th largest economy
∎
Nominal GDP of C$1.7 trillion
∎
Population of 35 million
TD��s Canadian P&C3 Business
Canadian Banking System
Country Statistics
∎
World��s largest economy
∎
Nominal GDP of US$15.1 trillion
∎
Population of 314 million
TD��s U.S. P&C3 Business
U.S. Banking System
Country Statistics
Significant growth opportunities within TD��s footprint
1. World Economic Forum,
Global Competitiveness Reports 2008-2013.
2. Includes securitizations. As per Canada Mortgage and Housing Corporation (CMHC).
3. ��P&C�� refers to Personal & Commercial Banking.
4. Based on SNL Bank and Thrifts as of 06/30/2011.
5. New mortgage origination volume in 2011 from Moody��s.
∎
Soundest banking system in the world1
∎
Market leadership position held by the ��Big 5��
Canadian Banks
∎
Canadian chartered banks account for more than
75% of the residential mortgage market2
∎
Mortgage lenders have recourse to both borrower
and property in most provinces
∎
Network of 1,179 branches and 2,845 ATMs
∎
1 in 3 Canadians have an account with TD
∎
Composite market share of 21%
∎
Ranked #1 or #2 in market share for most
retail products
∎
Top tier dual credit card issuer
∎
Over 9,000+ banks with market leadership
position held by a few large banks
∎
The 5 largest banks have assets > 50% of the
U.S. economy
∎
Mortgage lenders have limited recourse in most
jurisdictions
∎
Network of 1,317 stores and 1,889 ATMs
∎
Operations in 5 of the top 10 metropolitan
statistical areas and 7 of the 10 wealthiest states
❑
> US$1.6T deposits market4
❑
US$200B in mortgage originations5
∎
Access to nearly 55 million customers within five
miles of TD stores
6
TD Bank Group in North America
TD is a Top 10 Bank in North America
1. See slide 4, footnote 3, for definition of adjusted results.
2. Effective Q1/13, amounts are calculated in accordance with the Basel III regulatory framework, and are presented based on the ��all-in��
methodology. Prior to Q1/13, amounts were calculated in accordance with the Basel II regulatory framework. See slide 19 for more detail.
3. See slide 4, footnote 2.
4. Canadian Peers – includes other 4 big banks (RY, BMO, BNS and CM) adjusted on a comparable basis to exclude identified non-underlying items. Based on Q4/13 results ended October 31, 2013.
5. North American Peers – includes Canadian Peers and U.S. Peers. U.S. Peers – includes Money Center Banks (C, BAC, JPM) and Top 2 Super-Regional Banks (WFC, USB). Adjusted on a comparable basis to exclude identified non-underlying
items. For U.S. Peers, based on Q3/13 results ended September 30, 2013.
Q4 2013
(C$)
Compared to:
Canadian
Peers4
North
American
Peers5
Total Assets
$863B
1st
5th
Total Deposits
$544B
2nd
6th
Market Cap (as of October 31, 2013)
$88B
2nd
6th
Adjusted Net Income1 (Trailing 4 Quarters)
$7.2B
2nd
6th
Reported Net Income (Trailing 4 Quarters)
$6.7B
n/a
n/a
Tier 1 Capital Ratio2
11.0%
5th
10th
Avg. # of Full-Time Equivalent Staff
78,896
2nd
6th
Moody��s Rating3
Aa1
n/a
n/a
7
Composition of Earnings
Retail-focused earnings mix
2013 Adjusted Retail Earnings2,5 = 91%
$2,158
$7,158
2001
2013
58%
42%
91%
13%
∎
TD is a top 10 bank in North America1
∎
Increasing retail focus
∎
Strength of retail franchise
∎
Reliable and steady earnings mix
Adjusted Retail Earnings2,5
Wholesale Earnings
Highlights
9%
1. See slide 6.
2. See slide 4, footnote 3, for definition of adjusted results.
3. TD had a reported investment in TD Ameritrade of 42.22% as at October 31, 2013.
4. For financial reporting purposes, the ��Wealth & Insurance�� business segment is comprised of ��Wealth & Insurance�� and ��TD Ameritrade��, but have been separated here for illustrative purposes.
5. For the purpose of calculating contribution by each business segment, adjusted earnings from the Corporate segment are excluded. For a definition of retail earnings, see slide 4, footnote 4.
4
3,4
4
8
Evolution of TD
Building Franchise Businesses
Wound down
structured
products
business
Exited
non-franchise
proprietary
trading
Recorded media/
telecom/energy
loan losses
Did not acquire
large-scale
investment
dealer
Exited
non-franchise
credit
products
>>> Increasing Retail focus >>>
Traditional Dealer >>>
>>> Franchise Dealer
Strategic evolution to a lower-risk retail focused bank with a franchise dealer
• •
•
• •
•
•
•
•
•
• • •
Late
��90s
2000
2001 2002-
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
TD Bank
and Canada
Trust merge
Acquired
51% of
Banknorth
Privatized
TD
Banknorth
Acquired
Commerce
Bank
Acquired
Newcrest
Capital
TD
Waterhouse
USA/
Ameritrade
transaction
Commerce
Bank
integration
Acquired
Riverside
& TSFG
Acquired
Chrysler
Financial
and MBNA
credit card
portfolio
Acquired
Target credit
card portfolio
& Epoch and
announced
agreement
with Aimia
9
Our Risk Appetite
∎ Integrated risk monitoring and reporting
❑ To senior management and Board of Directors
∎ Regular review, evaluation and approval of risk framework
❑ Structured Risk Appetite governance, from the Business to the Board
❑ Executive Committees and Risk Committee of the Board
Risk Management Framework
∎
Fit our business strategy and can be understood and managed
∎
Do not expose the enterprise to any significant single loss events; we
don��t ��bet the bank�� on any single acquisition, business or product
∎
Do not risk harming the TD brand
We take risks required to build our business, but only if those risks:
Proactive and disciplined risk management practices
10
TD Bank Group – Key Messages
Top 10 Retail Focused North American Bank1
1
Proven Performance
Strong Balance Sheet and Capital Position
Focused on Growth Opportunities
4
2
3
1. See slide 6.
11
Solid Growth and Returns Across Businesses
$3,813
$4,716
$5,228
$6,432
$7,075
$7,158
2008
2009
2010
2011
2012
2013
Adjusted Retail
Earnings as % of
Adjusted Earnings
98%
78%
83%
87%
88%
Wholesale Banking
U.S. P&C
Wealth & Insurance2
Canadian P&C2
1. The Bank transitioned from Canadian Generally Accepted Accounting Principles (GAAP) to International Reporting Standards (IFRS) effective November 1, 2011. As a result of this transition, balances presented in the graph above are based on
Canadian GAAP for 2008 to 2010 and based on IFRS for 2011 to 2013. For details on the Bank��s transition from Canadian GAAP to IFRS please see Note 40 of the 2012 Financial Statements and Notes. See slide 4 footnote 3 for definition of adjusted
results. See also pages 186-191 of the 2012 Annual Report for a reconciliation for 10 years ending FY12. For the purpose of calculating contribution by each business segment, adjusted earnings from the Corporate segment are excluded. For
additional information, also see the Canadian P&C, Wealth & Insurance, U.S. P&C and Wholesale segment discussions in the Business Segment Analysis section of the 2007-2012 Annual Reports.
2. Effective July 4, 2011, executive responsibilities for TD Insurance were moved from Group Head Canadian P&C Segment to Group Head Wealth Segment. Results are updated for segment reporting purposes effective Q1 2012. These changes were
applied retroactively to 2011 for comparative purposes.
3. As a result of the Bank��s transition to IFRS as described above, the calculation of the Compounded Annual Growth Rate (CAGR) includes balances based on Canadian GAAP from 2008 to 2010 and balances based on IFRS from 2011 to 2013.
Targeting 7-10% adjusted EPS growth over the medium term
Adjusted Earnings1,2
(C$MM)
91%
12
22.3%
13.1%
15.2%
11.9%
23.8%
11.7%
15.9%
10.7%
27.5%
12.5%
6.9%
5.0%
Strong Total Shareholder Returns
1 Year
3 Years
5 Years
10 Years
NA Peers3
CDN
Peers2
Delivering top tier long-term shareholder returns
1. Compounded Annual Growth Rates (CAGRs) for all periods ended October 31, 2013. Source: Bloomberg.
2. Canadian Peers – includes other 4 big banks (RY, BMO, BNS and CM).
3. North American Peers – includes Canadian Peers and U.S. Peers. U.S. Peers – includes Money Center Banks (C, BAC, JPM) and Top 3 Super-Regional Banks (WFC, PNC, USB). All figures are in local currency.
Total Shareholder Return
(CAGR1)
13
Strong, Consistent Dividend History
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$3.24
$0.38
Q3/12: Increased
Target Payout
Range to
40%-50%3
Q4/13:
Announced
Stock Dividend with
2:1 Split Effect1
Dividend
Yield:
3.5%2
Dividend has grown over time
1. Stock dividend of one common share per each issued and outstanding common share, which has the same effect as a two-for-one split of the common shares. For shareholders of record as at the close of business on January 23, 2014.
2. Dividend yield based on dividend per share for Q4/13 divided by average of high and low common share prices for the period.
3. In Q3/12, the Bank��s target payout range was changed to 40-50% of adjusted earnings (see slide 4, footnote 3 for the definition of adjusted results).
Dividends Per Share
(C$)
14
Q4 2013 Highlights
1. See slide 4, footnote 3 for definition of adjusted results.
2. See slide 4, footnote 4 for definition of retail earnings. Reported retail results were $1,688 million, up 18% and 19% versus Q3/13 and Q4/12 respectively.
Key Themes
Net Income $MM
(Adjusted, where applicable)
∎ Adjusted1 EPS growth of 4% YoY
∎ Retail earnings up 19%
❑ Strong loan and deposit volume growth
in Canada and the U.S.
∎ Wholesale earnings down 61%
❑ Lower security gains and elevated
expenses
∎ Strong capital ratio of 9.0%
∎ Announced stock dividend with
2-for-1 stock split effect in
January 2014
Great quarter on
strong Retail and good
Wholesale results
Strong Retail results.
Good fundamentals
Q4/13
QoQ
YoY
Retail2
$
1,752
21%
19%
Wholesale
122
-17%
-61%
Corporate
(53)
n/a
-83%
Adjusted Net Income
$
1,821
15%
4%
Reported Net Income
1,622
6%
2%
Adjusted EPS (diluted)
$
1.90
15%
4%
Reported EPS (diluted)
1.68
6%
1%
Basel III CET1 Ratio
9.0%
$0.77
$0.77
$0.81
$0.81
$0.85
+$0.04
+$0.04
+$0.01
Q4/12
Q1/13
Q2/13
Q3/13
Q4/13
Dividend per Common Share
= Announced dividend increase
15
Q4 2013 Operating Highlights
Canadian
P&C
∎ Adjusted earnings1 up 14% YoY
∎ Lending volumes strong in business banking, solid but slowing
in personal
∎ Adjusted expenses flat YoY
∎ Strong credit performance: personal PCL down 23% YoY
Good volume growth,
expense control and
strong credit
performance
Wealth &
Insurance
∎ Record Wealth earnings up 26% YoY due to higher fee-based
revenue, improved trading volumes and the addition of Epoch.
∎ Improved Insurance earnings with good premium growth YoY
∎ Contribution from TD Ameritrade was $77MM (up 51% YoY)
Strong results for
Wealth; improved
quarter for Insurance
U.S.
P&C
∎ Adjusted earnings1 up 13% YoY
∎ Strong loan growth and deposit growth
∎ Credit quality improved: improved commercial asset quality
∎ Adjusted expenses up 29% YoY primarily due to Target and
investments in growth initiatives
A strong quarter in a
challenging
environment
Wholesale
∎ Earnings down 61% YoY
∎ Revenue impacted by lower security gains in investment
portfolio and higher non-interest expenses
∎ Return on common equity of 12.0%
∎ Maintained top-three dealer status in Canada2
Strong fundamentals
Key Themes by Segment
Delivering solid results in a challenging environment
1. Adjusted results are defined on slide 4, footnote 3. Reported earnings in Q4 2013 for Canadian P&C was C$914MM and for US P&C was US$355MM.
2. See slide 30 footnote 3.
16
Q4 2013 Credit Highlights
1. PCL Ratio – Provision for Credit Losses on a quarterly annualized basis/Average Net Loans & Acceptances; Total PCL excludes the impact of acquired credit-impaired loans, debt securities classified as loans and items of note
2. GIL Ratio – Gross Impaired Loans/Gross Loans & Acceptances (both are spot). Excludes the impact of acquired credit impaired loans and debt securities classified as loans.
Highlights
GIL Ratio (bps)2
PCL Ratio (bps)1
Great quarter on
strong Retail and good
Wholesale results
Credit fundamentals
remain strong
∎ Strong credit performance
❑ Loss rates for Canadian P&C remain
historically low
❑ Continued improvement in the U.S.
Personal and Commercial portfolios
∎ Performance expected to
continue through 2014
∎ Release of $40MM of Alberta
flood related reserves
17
TD Bank Group – Key Messages
Top 10 Retail Focused North American Bank1
1
Proven Performance
Strong Balance Sheet and Capital Position
Focused on Growth Opportunities
4
2
3
1. See slide 6.
18
Attractive Balance Sheet Composition1
Funding Mix2
Wholesale Term Debt
1. As of October 31, 2013
2. Excludes certain liabilities which do not create funding which are: acceptances, trading derivatives, other liabilities, wholesale mortgage aggregation business, non-controlling interest and certain equity capital: common equity and other capital
instruments.
3. Bank, Business & Government Deposits less covered bonds and senior MTN notes.
4. Obligations related to securities sold short and sold under repurchase agreements.
5. Based on first par redemption date. Any assumption on the timing of a redemption is subject to management��s view at the time of redemption as well as applicable regulatory and corporate governance approvals.
P&C Deposits
71%
Senior Unsecured
MTN
26%
Covered Bonds
15%
Residential Mortgages
58%
Senior Unsecured
MTN
32%
Covered Bonds
14%
Residential Mortgages
52%
Term Asset Backed
Securities
2%
Assets Securitized
54%
Sub-Debt5
1%
Personal Non-
Term Deposits
37%
Other Deposits3
26%
Personal
Term Deposits
8%
Short Term Liabilities4
11%
Wholesale Term
Debt
10%
Trading
Deposits
7%
Personal and commercial deposits are primary sources of funds
19
Strong Capital Position
Basel III Common Equity Tier 11
Highlights
246
274
282
284
286
Q4/12
Q1/13
Q2/13
Q3/13
Q4/13
Risk-Weighted Assets1
(C$B)
∎ Basel III Common Equity Tier 1
ratio 9.0% as of October 31, 2013
∎ Announced stock dividend with
2-for-1 stock split effect in January
∎ During fiscal 2013 we repurchased
9 million shares under buyback
program
∎ Dividends paid up 12% in 2013
1. Effective Q1 2013, amounts are calculated in accordance with the Basel III regulatory framework, excluding Credit Valuation Adjustment Capital (CVAc) in accordance with OSFI guidance and are presented based on the ��all-in�� methodology. Basel
III Common Equity Tier 1 ratios reported in 2012 are pro-forma estimates reported in the Q4 2012, Q3 2012, and Q2 2012 MD&A (available at td.com).
Remain well-positioned
for evolving regulatory
and capital environment
20
Strong Focus on Risk-Adjusted Return
1. As a result of the transition to IFRS as described on slide 11, footnote 1, the calculation of risk-weighted assets is based on IFRS. Return on Risk-Weighted Assets (RWA) is adjusted net income available to common shareholders divided by
average RWA. Adjusted results are defined on slide 4, footnote 3. Effective Q1/13, amounts are calculated in accordance with the Basel III regulatory framework, and are presented based on the ��all-in�� methodology.
2. TD based on Q4/13 adjusted results as defined on slide 4, footnote 3.
3. Canadian Peers – includes other big 4 banks (RY, BMO, BNS, and CM). Based on Q4/13 results ended October 31, 2013.
4. U.S. Peers – includes Money Center Banks (C, BAC, JPM) and Top 2 Super-Regional Banks (WFC, USB). Based on Q3/13 results ending September 30, 2013.
5. Ratings on long term debt (deposits) of The Toronto-Dominion Bank, as at October 31, 2013. Credit ratings are not recommendations to purchase, sell, or hold a financial obligation inasmuch as they do not comment on market price or suitability
for a particular investor. Ratings are subject to revision or withdrawal at any time by the rating organization.
Highly rated franchise
Citations
∎
Global Finance magazine ranked
TD as the Safest Bank in North
America and one of the World��s
50 Safest Banks in 2013
∎
Bloomberg Markets magazine
ranked TD as one of the world��s
strongest banks in 2013
∎
Euromoney magazine named TD
Best Bank in Canada in 2013
Adjusted Return on
Risk-Weighted Assets1
1.57%
2.33%
2.43%
TD
Canadian Peers
U.S. Peers
2
Moody's
S&P
Fitch
DBRS
Aa1
AA-
AA-
AA
Ratings5
3
4
21
Gross Lending Portfolio
Canadian portfolio – strong credit quality
U.S. portfolio – continued positive trends
Highlights
C$B (unless otherwise noted)
Q4/13
Canadian Personal & Commercial Portfolio
$ 314.6
Personal
$ 267.6
Residential Mortgages
164.7
Home Equity Lines of Credit (HELOC)
61.3
Indirect Auto
14.7
Unsecured Lines of Credit
8.4
Credit Cards
15.3
Other Personal
3.2
Commercial Banking (including Small Business Banking)
$ 47.0
U.S. Personal & Commercial Portfolio (all amounts in US$)
US$ 103.4
Personal
US$ 53.0
Residential Mortgages
20.0
Home Equity Lines of Credit (HELOC)1
10.2
Indirect Auto
15.7
Credit Cards
6.6
Other Personal
0.5
Commercial Banking
US$ 50.4
Non-residential Real Estate
11.5
Residential Real Estate
3.3
Commercial & Industrial (C&I)
35.6
FX on U.S. Personal & Commercial Portfolio
$ 4.3
U.S. Personal & Commercial Portfolio (C$)
$ 107.7
Acquired Credit-Impaired Loans2
$ 2.5
Wholesale Portfolio3
$ 21.3
Other4
$ 4.3
Total
$ 450.4
∎
Real estate secured lending volume up 4% YoY
❑ $226 billion portfolio (66% insured)
❑ Average current LTV of 47%
∎
Auto lending volume increased 3% YoY
∎
All other personal lending volumes up 1% YoY
∎
Business loans and acceptances up 12% YoY
∎
Average personal loans5 increased 14% YoY
∎
Average business loans increased 8% YoY
Balances
Credit quality remains strong
1. U.S. HELOC includes Home Equity Lines of Credit and Home Equity Loans
2. Acquired Credit-Impaired Loans include the acquired credit-impaired loans from The South Financial Group, Chrysler Financial, MBNA, Target, and acquired loans from the FDIC-assisted acquisition
3. Wholesale portfolio includes corporate lending and other Wholesale gross loans and acceptances
4. Other includes Wealth Management and Corporate Segment
5. Excluding the impact of the Target U.S. credit card portfolio acquisition.
Note: Some amounts may not total due to rounding. Excludes Debt securities classified as loans.
22
TD Bank Group – Key Messages
Top 10 Retail Focused North American Bank1
1
Proven Performance
Strong Balance Sheet and Capital Position
Focused on Growth Opportunities
4
2
3
1. See slide 6.
23
Adjusted Net Income1
(C$MM)
Canadian Personal & Commercial Banking
$2,424
$2,472
$3,095
$3,051
$3,408
$3,766
2008
2009
2010
2011
2012
2013
Q4 2013 Highlights
Total Deposits2
C$228B
Customers
14MM
Total Loans2
C$314B
Branches
1,179
Adjusted Earnings3
C$3.8B
ATMs
2,845
Employees4
28,418
∎ Continue to win in retail banking
∎ Higher growth opportunities
❑
Business banking
❑
Credit cards
❑
Auto lending
∎ Service and convenience model
∎ Grow revenue faster than expenses
∎ Leverage TD partners to cross-sell
Where we compete
How we win
Robust retail banking foundation in Canada with proven performance
1. See slide 4, footnotes 3 for definition of adjusted results. See slide 11, footnotes 1 and 2 for explanation of net income presented under Canadian GAAP and IFRS, and information on segment transfers. Reported earnings for 2012 was C$3.3B and
for 2013 was C$3.7B.
2. Total Deposits based on total of average personal and business deposits during Q4/13. Total Loans based on total of average personal and business loans during Q4/13.
3. For trailing four quarters ending Q4/13 (i.e., full fiscal 2013). Reported earnings for the same period was C$3.7B.
4. Average number of full-time equivalent staff during Q4/13.
Consistent Strategy
24
Canadian Personal & Commercial Banking
Leaders in customer service and convenience
∎
TD has opened approximately 1 out of every 3 new branches1
∎
On average 45% longer branch hours than peers2
∎
Sunday banking in more than 425 branches
Integrated product offerings
∎
#1 or #2 market share in most retail products3
∎
Client referrals and product offerings from across TD family
∎
Primary issuer for Aeroplan Visa credit cards beginning in January 2014
Relentless focus on operational excellence
∎
Best-in-class operational efficiency
∎
Customer experience embedded in process and technology
∎
Disciplined approach, grow revenues faster than expenses
Consistently reinvesting for the long-term
∎
Optimize footprint by balancing branch openings and closings
∎
Focus on productivity gains through disciplined expense management
∎
Continue to build on our momentum of higher growth businesses:
❑ Business banking – Only bank to increase market share from 2008 to 2011
❑ Credit cards – Leading market share in Canada and untapped U.S. potential
❑ Indirect auto lending – North American scale
❑ Under-represented regions – Quebec
8th
JD Power
Award win in a row4
9th
IPSOS Best
Banking win in a row5
Target 7-10% earnings growth over the medium term
1. Branches opened by TD vs. Canadian peers from Q1/08 to Q4/13. Canadian Peers – other 4 big banks (RY, BNS, BMO and CM).
2. As at October 31, 2013. Canadian Peers – other 4 big banks (RY, BNS, BMO and CM).
3. Source: Canadian Bankers Association, as at May 2013.
4. TD Canada Trust received the highest numerical score among the big 5 retail banks in the proprietary J.D. Power and Associates 2006-2013 Canadian Retail Banking Customer Satisfaction StudiesSM. 2013 study based on more than 21,000 total
responses. Proprietary study results are based on experiences and perceptions of consumers surveyed between May 7 and May 24, 2013. Your experiences may vary. Visit jdpower.com
5. Rated #1 among Canada��s five major banks for ��Overall quality of customer service�� by independent market research firm Ipsos (formerly Synovate) from 2005 – 2013.
25
Wealth & Insurance
Q4 2013 Highlights
Wealth Assets Under Administration
C$293B
Wealth Assets Under Management
C$257B
Insurance Gross Originated Premiums2
C$3.8B
Earnings2
C$1.2B
Employees3
11,451
Consistent Strategy
Wealth
∎
Mass affluent and high net worth TD clients in
Canada and U.S.
∎
Self-directed investors in selected markets
∎
Institutional asset management in Canada
Insurance
∎
TD customers and affinity markets
∎
Simple personal lines products (Home & Auto,
Life & Health, Creditor and Travel)
∎
Legendary TD client experience
∎
Leverage TD brand and client base
∎
Direct distribution
∎
Conservative risk appetite
Net Income1
(C$MM)
Where we compete
How we win
$480
$345
$447
$566
$601
$691
$289
$252
$194
$207
$209
$246
$541
$557
$216
$769
$597
$641
$1,314
$1,367
$1,153
2008
2009
2010
2011
2012
2013
Wealth
TD Ameritrade
Insurance
1. See slide 11, footnotes 1 and 2 for explanation of net income presented under Canadian GAAP and IFRS and information on segment transfers.
2. For trailing four quarters ending Q4/13 (i.e., full fiscal 2013).
3. Average number of full-time equivalent staff during Q4/13.
Strong franchise – poised for growth
26
Wealth & Insurance
Leading market positions
∎
#1 Online brokerage in Canada for assets and trades1
∎
#2 Execution-only brokerage in the U.K.2
∎
#1 Institutional Asset Management3
∎
#1 Direct writer of home & auto insurance in Canada4
∎
#1 Affinity home and auto insurance4
Leverage TD brand and client base
∎
Strong referral model with leading retail bank
∎
Competing on client experience, TD brand and direct distribution
∎
Focusing on unique client segments to service their specific
financial needs
∎
Closed on acquisition of Epoch Investment Partners in March 2013,
which expands overall product capabilities for Wealth
Strategic relationship with TD Ameritrade
∎
#1 in online trades per day in the U.S.5
∎
Best options and mobile trading platform6
∎
Strong momentum with asset gathering strategy
∎
Opportunities for mutually beneficial customer referrals and growth
1. Market share is based on Investor Economics, as of December 2012.
2. Source: Compeer based on daily average retail trades as at December 2012.
3. Source: Benefits Canada ��2013 Top 40 Money Managers Report�� released November 2013.
4. Source: TD Insurance Market Watch Report.
5. Internally estimated daily average revenue client trades (DARTS) based on last twelve months publicly available reports for E*Trade Financial and Charles Schwab.
6. Source: Investor��s Business Daily survey released January 25, 2013.
Expect to achieve good earnings growth over the medium term
27
U.S. Personal & Commercial Banking
$806
$909
$1,042
$1,270
$1,422
$1,627
2008
2009
2010
2011
2012
2013
Consistent Strategy
1. Metropolitan Statistical Area
2. See slide 4, footnote 3 for definition of adjusted results. Also see slide 11, footnotes 1 and 2 for explanation of net income presented under Canadian GAAP and IFRS. Reported earnings in 2007 was C$320MM, 2008 was C$722MM, 2009 was
C$633MM, 2010 was C$973MM, 2011 was C$1,188MM, 2012 was C$1,128MM and 2013 was C$1,527MM.
3. Total Deposits based on total of average personal deposits, business deposits and TD Ameritrade Insured Deposit Accounts (IDAs) during Q4/13. Total Loans based on total of average personal and business loans during Q4/13.
4. For trailing four quarters ending Q4/13 (i.e., full fiscal 2013). See slide 4, footnote 3, for definition of adjusted results. Reported earnings for the same period was C$1,527MM.
5. Average number of full-time equivalent staff during Q4/13.
Adjusted Net Income2
($MM)
∎ Retail and commercial banking along the
Eastern Seaboard
∎ Operate in 5 of the top 10 MSAs1 and 7 of
the 10 wealthiest states
∎ Focused on higher growth markets and
products
∎ Unique value proposition
∎ Regional banking model
∎ De novo growth
∎ Accelerate cross-sell
∎ Drive efficiencies
US$
C$
Where we compete
How we win
$794
$1,008
$781
$1,289
$1,416
Significant scale and enviable footprint
Q4 2013 Highlights
Total Deposits3
C$198B
Customers
8MM
Total Loans3
C$109B
Stores
1,317
Adjusted Earnings4
C$1.6B
ATMs
1,889
Employees5
24,797
$1,595
28
U.S. Personal & Commercial Banking
Lead in customer service and convenience
∎
Committed to providing legendary service and unparalleled convenience
∎
Open longer than the competition, including Sunday banking in most markets
∎
24/7/365 live customer contact center support
Significant scale and enviable footprint
∎
Operating retail stores in 15 states and the District of Columbia
∎
Top 10 U.S. bank with 8MM+ customers
∎
Closed acquisition of Target U.S. Credit Card portfolio
in March 2013
Disciplined credit culture
∎
In-footprint lending
∎
Conservative product suite
∎
Distribution through proprietary channels, not brokers
Continued organic growth and de novo expansion
∎
Targeting top 5 market share in our major markets, including #3 deposit share in New York
∎
Opened 24 new stores in fiscal 2013 with a focus on higher growth markets (e.g., New York
City, South Florida and Boston)
∎
Opened 100th store in New York City in 2013, with 108 stores operating at year-end
∎
Cross-sell initiatives progressing as franchise matures
Expect modest earnings growth given interest rate challenges
From MONEY® Magazine, October 2012 © 2012 Time Inc. MONEY is a registered trademark of Time Inc. and is used under license. MONEY and Time Inc. are not affiliated with, and do not endorse products or services of TD Bank, N.A.
Named ��Best Big Bank��
in
Money®��s
��Best Banks 2013�� Issue
Ranked Highest in
J.D. Power Customer
Satisfaction Study
▪Small Business Customer
Satisfaction in the Northeast
(Oct 2013)
▪Customer Satisfaction in
Florida (Apr 2013)
29
Wholesale Banking
$65
$1,137
$987
$815
$880
$648
2008
2009
2010
2011
2012
2013
1. See slide 4, footnote 3 for definition of adjusted results. Also see slide 11, footnotes 1 and 2 for definition of adjusted results and explanation of net income presented under Canadian GAAP and IFRS. Reported earnings in 2010 was C$866MM.
2. Effective Q1/13, amounts are calculated in accordance with the Basel III regulatory framework, and are presented based on the ��all-in�� methodology. Prior to Q1/13, amounts were calculated in accordance with the Basel II regulatory framework.
3. For trailing four quarters ending Q4/13 (i.e., full fiscal 2013).
4. Average number of full-time equivalent staff during Q4/13.
Consistent Strategy
A client-centric wholesale franchise
Where we compete
How we win
Q4 2013 Highlights
Risk-Weighted Assets2
C$47B
Earnings3
C$648MM
Employees4
3,535
Adjusted Net Income1
(C$MM)
Canada
∎ Be the top-ranked integrated investment
dealer
∎ Fully aligned with TD Bank Group partners
U.S.
∎ Extend the goals of the Canadian franchise
into the U.S.
∎ Build U.S. franchise in partnership with
TD Bank, America��s Most Convenient Bank
Outside North America
∎ Be a niche player in franchise/client-driven
businesses (energy and mining, super-
sovereign agencies, fixed income, foreign
exchange)
∎ Franchise businesses
∎ Alignment to TD
∎ Disciplined risk approach
30
Wholesale Banking
Focus on client-driven franchise businesses
∎
Diversified business mix with a North American focus
∎
Presence in key global financial centres
∎
Evolved the business model by strategically repositioning
the dealer to concentrate on core-client driven activities
(e.g.: exited global structured products before the financial crisis)
A North American dealer aligned with our TD partners
∎
Focus on integrating the strength of TD brand and partnering
with our retail franchises
Solid returns without going out the risk curve
∎
Disciplined and proactive risk management
∎
Delivered strong business results while repositioning the dealer
Well positioned for growth
∎
Build on position as top 3 dealer in Canada3
∎
Grow U.S. fixed income, foreign exchange and
commodities & precious metal businesses
∎
Extend competitive advantages outside North America
1. For Corporate Debt U/W deals in Canada from January 1, 2013 through September 30, 2013. Source: Bloomberg
2. Source: IRESS; Canadian equity block trades by value on all Canadian exchanges.
3. Ranked # 1 Equity Block Trading (Source: IRESS), #1 Corporate Debt Underwriting (Source: Bloomberg), #3 Government Debt Underwriting, #3 in Canadian Syndicated Loans (Source: Bloomberg), #3 Completed M&A (Source: Thomson
Financial 2013) and #3 Equity Underwriting (Source: Thomson Financial 2013).
Targeting 15-20% ROE with acceptable risk
#1 Canadian
Corporate
Underwriting1
Twelve years as
Top Equity
Block Trader
in Canada2
31
TD Model Has Proven Its Resilience
Targeting 7-10% adjusted EPS growth over the medium term
∎ Slowing loan growth in
Canada
∎ Low interest rate
environment
∎ Demanding regulatory
environment
Headwinds
Continue to invest while driving efficiencies
Leverage TD brand across all segments
Lead with service and convenience
Focus on organic growth
Simple Strategy
Consistent Focus
Superior Execution
32
Commitment to Corporate & Social Responsibility
For further information about Corporate Responsibility, please visit http://www.td.com/corporateresponsibility/.
1. According to AON Hewitt��s ��50 Best Employers in Canada�� for 2008 - 2013.
Supporting customers and employees
Corporate Leadership
Extraordinary Workplace that Embraces Diversity
Corporate Responsibility
∎ One of Canada��s ��Most Responsible
Companies�� (Macleans magazine and
Sustainalytics, 2011, 2012, 2013)
∎ One of the ��Best 50 Corporate Citizens in
Canada�� (Corporate Knights, 2011, 2012, 2013)
∎ Best Bank in North America by Euromoney
three years running
∎ Greenwich Excellence Awards: National Award
in Middle Market Banking for Financial Stability,
Northeast Regional Award in Treasury
Management for Overall Satisfaction
∎ TD Bank ranked #1 by Brand Finance Canada
as Canada��s most valuable brand (2012)
∎ Recognized by sustainability indices
❑ Dow Jones Sustainability Index North America
❑ Ethibel Sustainability Index Global
❑ Jantzi Social Index
❑ FTSE4Good Index
❑ Nasdaq OMX CRD Global Sustainability Index
∎ Transparency and disclosure in reporting
demonstrated by a B+ level GRI rating
∎ One of the 50 Best Employers in Canada1
∎ Named one of The Best Places to Work for LGBT
Equality in the U.S. by Human Rights Campaign for
the third consecutive year
∎ Recognized as one of the Top 125 training
organizations in the world by
Training Magazine for
the fourth consecutive year
∎ Corporate Knights�� Diversity in the Boardroom Report
ranked TD #7 in its Top 10 for Female Representation
on Canadian Boards (2012)
∎ Diversity Leadership Council led by senior executives
embeds diversity into business plans
33
Environmental Leadership & Community Engagement
For further information about Corporate Responsibility, please visit http://www.td.com/corporateresponsibility/.
Taking responsibility to be The Better Bank
Environmental Leader
Community Involvement
∎ One of the world��s top 500 corporate environmental leaders
(Newsweek 2012)
∎ Only Canadian bank recognized in the 2013 Global
Performance Leadership Index (annual ranking by CDP)
∎ One of Canada��s top 5 organizations in terms of our approach
to greenhouse gas emissions and disclosure (2013 CDP
Canada 200 Leaders Index)
∎ First North American-based bank to become carbon neutral
(as of Feb.18th, 2010)
∎ One of Canada��s Greenest Employers (Mediacorp Canada
Inc., 2010, 2011, 2012, 2013)
∎ A leader in renewables financing
∎ TD Bank Named EPA Green Partner of the Year in 2010 for
use of green energy and received a Green Power Leadership
Award (2012)
∎ TD Bank��s Net Zero store received:
❑ The International Council of Shopping Center��s US Design
and Development Award for Sustainable Design
❑ The Community Appearance Award for Outstanding
Achievement in Urban Design (City of Ft. Lauderdale) in 2012
for its LEED design
❑ The Chain Store Age Retail Store of the Year Award for
Sustainable Design
∎ TD Friends of the Environment Foundation celebrates 23 years
❑ Over 147,000 trees have been planted through TD Tree Days,
TD��s flagship volunteer program, in Canada, the US, the UK
and Luxembourg.
❑ Expect to plant another 50,000 trees to the Canadian
landscape in 2014.
❑ Working towards launching TD Green Streets in the UK
∎ Framework of environmental/sustainability policies:
❑ TD Asset Management is a signatory to United Nations
Principles for Responsible Investment
❑ Sustainable Investment Policy applicable to all asset
management instruments
❑ Launched TD Forests in 2012, which works to grow and
protect forest areas and includes a goal to reduce TD's paper
usage by 20% by 2015 (vs. 2010)
❑ Responsible lending through Environmental and Social Risk
Policy and Equator Principles
∎
Donated more than C$74 million in 2013 to not-for-profit groups in
Canada, the U.S., and the U.K.
∎
Awarded Outstanding Community Reinvestment Act rating by
Office of the Comptroller (OCC) in June 2012
∎
TD Bank WOW!Zone (U.S.) has taught more than one million
students (kids and their parents) about budgeting, saving and
good financial habits
∎
In 2013, more than 1.4 million kids benefitted from a children��s
literacy program supported by TD
34
Investor Relations Contacts
Phone:
416-308-9030
or 1-866-486-4826
Email:
tdir@td.com
Website:
www.td.com/investor
Grand Prix for Best Overall
Investor Relations: Large Cap
Best Investor Relations by
Sector: Financial Services
Best Investor Relations
by a CEO: Large Cap
Best Investor Relations
by a CFO: Large Cap
Best Investment
Community Meetings
Best Financial Reporting
Best Corporate Governance
Best Use of Technology
TD Bank Group
Investor Presentation
Q4 2013