Laurentian Bank Financial Group reports 2020 results Toronto Stock Exchange:LB

The financial information reported herein is based on the condensed interim consolidated (unaudited) information for the three-month period ended October 31, 2020, and on the audited consolidated financial statements for the year ended October 31, 2020, and has been prepared in accordance with International Financial Reporting standards (IFRS), as issued by the International Accounting Standards Board (IASB). All amounts are denominated in Canadian dollars. The Laurentian Bank of Canada and its entities are collectively referred to as Laurentian Bank Financial Group (the “Group” or the “Bank”) and provide deposit, investment, loan, securities, trust and other products or services.

The Bank’s 2020 Annual Report (which includes the Audited Consolidated Financial Statements and accompanying Management’s Discussion & Analysis) will be available today on the Laurentian Bank Financial Group’s website at www.lbcfg.ca and on SEDAR at www.sedar.com

“I want to convey my personal thanks and immense appreciation to our employees for their efforts in serving our customers and this organization during what has been a challenging year for Laurentian Bank and for Canadians in general,” said Rania Llewellyn, President and Chief Executive Officer. “While the economic uncertainty caused by the pandemic remains in place, challenges can bring about positive change. We are actively engaging in the process of renewal and growth within our organization. Looking ahead to 2021, we will be resetting our priorities, refocusing our efforts, and renewing the passion and pride of our employees to believe in, and serve as, One Bank to provide long-term sustainable value to our customers, our communities and our shareholders.”  

Highlights of 2020

  • Adjusted net income(1) of $138.2 million for 2020, compared to $193.2 million for 2019.
  • Reported net income of $114.1 million for 2020, compared to $172.7 million for 2019.
  • Provision for credit losses of $116.3 million for 2020, impacted by the COVID-19 pandemic.
  • Adjusted return on common shareholders’ equity(1) of 5.5%, and return on common shareholders’ equity of 4.4%.
  • Adjusted efficiency ratio(1) of 72.3%, and reported efficiency ratio of 75.6%.
  • Net interest margin up 3 basis points year-over-year.
  • Common Equity Tier 1 (CET1) capital ratio at 9.6%.

Highlights of fourth quarter 2020

  • Adjusted net income(1) of $42.3 million, and reported net income of $36.8 million.
  • Adjusted return on common shareholders’ equity(1) of 6.8%, and reported return on common shareholders’ equity of 5.9%.
  • Adjusted efficiency ratio(1) of 69.9%, and reported efficiency ratio of 72.9%.
  • Appointment of Rania Llewellyn as President and Chief Executive Officer.
  For the three months ended   For the year ended
In thousands of Canadian dollars, except when noted (Unaudited) October 31
2020
  October 31
2019
  Variance   October 31
2020
  October 31
2019
  Variance
                       
Reported basis                      
Net income $ 36.8     $ 41.3     (11 ) %   $ 114.1     $ 172.7     (34 ) %
Diluted earnings per share $ 0.79     $ 0.90     (12 ) %   $ 2.37     $ 3.77     (37 ) %
Return on common shareholders’ equity 5.9 %   6.6 %       4.4 %   7.0 %    
Efficiency ratio 72.9 %   74.8 %       75.6 %   75.0 %    
Common Equity Tier 1 capital ratio 9.6 %   9.0 %                
                       
Adjusted basis(1)                      
Adjusted net income $ 42.3     $ 48.0     (12 ) %   $ 138.2     $ 193.2     (28 ) %
Adjusted diluted earnings per share $ 0.91     $ 1.05     (13 ) %   $ 2.93     $ 4.26     (31 ) %
Adjusted return on common shareholders’ equity 6.8 %   7.8 %       5.5 %   7.9 %    
Adjusted efficiency ratio 69.9 %   71.2 %       72.3 %   72.3 %    
(1) Certain measures presented throughout this document exclude amounts designated as adjusting items and are Non-GAAP measures. Refer to the Non-GAAP measures section for further details

MONTREAL, Dec. 04, 2020 (GLOBE NEWSWIRE) — Laurentian Bank Financial Group reported net income of $114.1 million or $2.37 diluted per share for the year ended October 31, 2020, compared with $172.7 million or $3.77 diluted per share for the year ended October 31, 2019. Return on common shareholders’ equity was 4.4% for the year ended October 31, 2020, compared with 7.0% for the year ended October 31, 2019. On an adjusted basis, net income totaled $138.2 million or $2.93 diluted per share for the year ended October 31, 2020, down from $193.2 million or $4.26 diluted per share for the year ended October 31, 2019. Adjusted return on common shareholders’ equity was 5.5% for the year ended October 31, 2020, compared with 7.9% a year ago.

For the fourth quarter of 2020, net income was $36.8 million and diluted earnings per share were $0.79, compared with $41.3 million and $0.90 for the fourth quarter of 2019. Return on common shareholders’ equity was 5.9% for the fourth quarter of 2020, compared with 6.6% for the fourth quarter of 2019. On an adjusted basis, net income was $42.3 million and diluted earnings per share were $0.91 for the fourth quarter of 2020, down from $48.0 million and $1.05 for the fourth quarter of 2019. Adjusted return on common shareholders’ equity was 6.8% for the fourth quarter of 2020, compared with 7.8% a year ago. Reported results include adjusting items, as detailed in the Non-GAAP and Key Performance Measures section.

Organizational changes

We are making several important changes to our executive team and organization. Stéphane Therrien’s has announced his decision to retire from the Bank at the end of December. Stéphane has been a valued leader at Laurentian Bank for more than nine years. We thank him for his significant contributions to the Bank and wish him well for the future. With Stephane’s departure, we will also be implementing a re-organization of Commercial and Personal Banking into two distinct operating units.

We are pleased to announce that Eric Provost, Senior Vice President, Commercial Banking, and President of LBC Capital, has been appointed as Executive Vice President of Commercial Banking, effective January 1, 2021. This promotion is a testament to Eric’s many successes during his more than eight years at Laurentian Bank, during which time he played a pivotal role in several recent acquisitions, including the Canadian operations of CIT and Northpoint Commercial Finance.

Personal Banking will include the Québec branch network, Digital Banking and B2B Bank under a “One Retail” operating unit. We will be formally launching a search for a new Head of Personal Banking, who will be based in Québec.

Impacts of the COVID-19 pandemic

In early 2020, COVID-19 had spread worldwide and was declared a global pandemic by the World Health Organization. The unprecedented nature of COVID-19 has adversely impacted the global economy throughout 2020 and the second wave, that began in the Fall, is raising concerns as we enter 2021. In this context, our response to the pandemic to date has enabled us to keep our employees and our customers safe. Furthermore, the measures we put in place have also provided the foundation to support our operations in this period of heightened uncertainty. Our liquidity and capital position continues to offer the required flexibility to allow us to support our customers through this difficult period. COVID-19 has had an impact on financial performance since March 2020, and, as a result, improvements in certain of our businesses were overshadowed by a significant increase in provision for credit losses. Nonetheless, we remain cautiously optimistic about the future as the economy has shown resilience to date in progressively adapting to this new reality.

Highlights

  For the three months ended   For the year ended
In thousands of Canadian dollars, except when noted (Unaudited) October 31
2020
  July 31
2020
  Variance   October 31
2019
  Variance   October 31
2020
  October 31
2019
  Variance
                               
Operating results                              
Total revenue $ 243,539       $ 248,609     (2 ) %   $ 241,638       1   %   $ 971,009       $ 968,510         %
Net income $ 36,811       $ 36,217     2   %   $ 41,343       (11 ) %   $ 114,085       $ 172,710       (34 ) %
Adjusted net income(1) $ 42,311       $ 47,083     (10 ) %   $ 47,966       (12 ) %   $ 138,206       $ 193,227       (28 ) %
                               
Operating performance                              
Diluted earnings per share $ 0.79       $ 0.77     3   %   $ 0.90       (12 ) %   $ 2.37       $ 3.77       (37 ) %
Adjusted diluted earnings per share(1) $ 0.91       $ 1.02     (11 ) %   $ 1.05       (13 ) %   $ 2.93       $ 4.26       (31 ) %
Return on common shareholders’ equity 5.9   %   5.8 %       6.6   %       4.4   %   7.0   %    
Adjusted return on common shareholders’ equity(1) 6.8   %   7.7 %       7.8   %       5.5   %   7.9   %    
Net interest margin 1.82   %   1.86 %       1.84   %       1.84   %   1.81   %    
Efficiency ratio 72.9   %   73.9 %       74.8   %       75.6   %   75.0   %    
Adjusted efficiency ratio(1) 69.9   %   68.1 %       71.2   %       72.3   %   72.3   %    
Operating leverage 1.3   %   3.4 %       (2.9 ) %       (0.7 ) %   (8.5 ) %    
Adjusted operating leverage(1) (2.7 ) %   9.3 %       (0.9 ) %         %   (7.8 ) %    
                               
Financial position ($ millions)                            
Loans and acceptances $ 33,193       $ 32,807     1   %   $ 33,667       (1 ) %            
Total assets $ 44,168       $ 44,295       %   $ 44,353         %            
Deposits $ 23,920       $ 24,570     (3 ) %   $ 25,653       (7 ) %            
Common shareholders’ equity $ 2,324       $ 2,292      1   %   $ 2,303         %            
                               
Key growth drivers ($ millions)                          
Loans to Business customers $ 12,730       $ 12,704      —    %   $ 12,966       (2 ) %            
Loans to Personal customers(2) $ 20,463       $ 20,103      2   %   $ 20,700       (1 ) %            
Deposits from clients(3) $ 21,436       $ 22,045      (3 ) %   $ 22,518       (5 ) %            
                               
Basel III regulatory capital ratios                          
Common Equity Tier 1 (CET1) capital ratio(4) 9.6   %   9.4 %       9.0   %                
CET1 risk-weighted assets ($ millions) $ 19,669       $ 19,927         $ 20,407                    
                               
Credit quality                              
Gross impaired loans as a % of loans and acceptances 0.82   %   0.84 %       0.52   %                
Net impaired loans as a % of loans and acceptances 0.59   %   0.62 %       0.40   %                
Provision for credit losses as a % of average loans and acceptances 0.29   %   0.27 %       0.15   %       0.35   %   0.13   %    
                               
Common share information                              
Closing share price(5) $ 26.21       $ 26.55     (1 ) %   $ 45.30       (42 ) %   $ 26.21       $ 45.30       (42 ) %
Price / earnings ratio (trailing four quarters) 11.1   x   10.7 x       12.0   x       11.1   x   12.0   x    
Book value per share $ 53.74       $ 53.15     1   %   $ 54.02       (1 ) %   $ 53.74       $ 54.02       (1 ) %
Dividends declared per share $ 0.40       $ 0.40       %   $ 0.66       (39 ) %   $ 2.14       $ 2.62       (18 ) %
Dividend yield 6.1   %   6.0 %       5.8   %       8.2   %   5.8   %    
Dividend payout ratio 50.8   %   52.0 %       73.5   %       90.2   %   69.3   %    
Adjusted dividend payout ratio(1) 43.7   %   39.1 %       62.6   %       72.9   %   61.4   %    
(1) Refer to the Non-GAAP Measures section.
(2) Including personal loans and residential mortgage loans.
(3) Including personal deposits from the Quebec Retail Network, the Advisors and Brokers channel, the Digital Direct to Customers offering and from Business customers.
(4) Using the Standardized Approach in determining credit risk and operational risk.
(5) Toronto Stock Exchange (TSX) closing market price.

Medium-Term Performance Targets Retrospective

The following table shows the medium-term performance targets that were set a year ago and the Bank’s performance for 2020. These targets will be reviewed as further detailed below. These medium-term performance targets depend on a number of assumptions, as detailed in our 2019 Annual Report under the heading “Outlook”.

In billions of Canadian dollars, except per share and percentage amounts (Unaudited) Three-year
2022 Mid-term Targets(1)
  2020   2019   Variance 2020/2019
               
Adjusted financial performance(2)              
Adjusted return on common shareholders’ equity Narrow gap
to 250 bps(3)
  5.5 %   7.9   %   Current gap at
630 bps
Adjusted efficiency ratio <63%   72.3 %   72.3   %     %
Adjusted diluted earnings per share Grow by
5% to 10% annually
  $ 2.93     $ 4.26       (31 ) %
Adjusted operating leverage Positive   %   (7.8 ) %   n.m.
               
Key growth drivers              
Loans to Business customers Grow to $17.5 B   $ 12.7     $ 13.0       (2 ) %
Loans to Personal customers(4) Grow to $22.5 B   $ 20.5     $ 20.7       (1 ) %
Deposits from clients(5) Grow to $26.0 B   $ 21.4     $ 22.5       (5 ) %
(1) Mid-term targets, as set out in the 2019 Annual Report.
(2) The 2022 financial objectives are based on non-GAAP measures that exclude adjusting items related to restructuring plans and to business combinations. Refer to the Non-GAAP and Key Performance Measures section.
(3) Compared to the major Canadian banks, based on the Bank using the AIRB approach in determining credit risk and the Standardized approach in determining operational risk. The current gap is based on the average of major Canadian banks for the nine months ended July 31, 2020.
(4) Including personal loans and residential mortgage loans.
(5) Including personal deposits from the Quebec Retail Network, the Advisors and Brokers channel, the Digital Direct to Customers offering and from Business customers.

2020 performance summary

The financial impact of COVID-19, as of the second quarter of 2020, hampered our ability to deliver on most of our performance targets. Higher expected credit losses, primarily driven by the severe economic conditions, and lower interest income as a result of a decrease in certain targeted loan portfolios, contributed to lower performance, despite improved results from market driven activities in the second half of 2020 and the stabilization of expenses. Deposits from clients also decreased, as a result of lower loan levels and funding optimization measures. However, personal demand deposits increased by 27% over the last twelve months. Adjusted return on common shareholders’ equity was 5.5% in 2020 compared with 7.9% in fiscal 2019, and the ROE gap relative to the major Canadian banks was 630 bps. Adjusted diluted earnings per share of $2.93 for 2020 were down 31% year-over-year. The adjusted efficiency ratio of 72.3% for 2020 remained unchanged as compared to the 2019 level as both revenues and expenses finished the year at similar levels.

Reshaping the Bank for tomorrow

On October 30, 2020, Rania Llewellyn was appointed as President and Chief Executive Officer, and as a director of the Bank. Ms. Llewellyn brings more than 25 years of experience in the banking sector and is looking forward to pursuing opportunities to reshape the Bank for tomorrow.

In the coming months the management team will establish a renewed strategic direction for Laurentian Bank. As part of this review and in consideration of the impact of the COVID-19 pandemic, the Bank’s 2022 mid-term objectives will be revised or replaced.

Update on Key Initiatives

Over the past few years, we launched major initiatives with the objective of building a stronger foundation and modernizing the Bank in order to improve financial performance. The following section provides an update on these key projects.

Digital offering

In the first quarter of 2020, we launched LBC Digital, a direct-to-customer channel, expanding our customer reach from coast to coast. The initial digital offering includes chequing accounts, high-interest savings accounts and guaranteed investment certificates. This pan-Canadian launch provided us with the opportunity to welcome thousands of new customers. Over time, our goal is to broaden and deepen customer relationships and use this platform to build out a high-value and complete product suite. As at October 31, 2020, LBC Digital related demand deposits stood at $0.6 billion.

Core-banking system replacement program

In 2019, we completed Phase 1 of the core banking system replacement program resulting in the migration of all B2B Bank products and most of our loans to business customers to this new system. Given the impacts of COVID-19 on our business and following the recent change in management, we are currently reassessing the next phase of this project. Our latest estimate had set the project costs at approximately $250 million and, as at October 31, 2020, we had invested about 80% of that amount.

Evolution of 100% Advice model

In 2020, we completed the conversion of our traditional branch network to a 100% Advice model. Based on the evolving needs of our customers, this new operating model provides the right balance to serve the daily needs of our customers through electronic and phone solutions, as well as to focus on professional financial advice for more complex banking and investment needs. We will continue to right-size our branch network and gradually modify its design to be aligned with our 100% Advice model. All branch employees will now be 100% focused on advising customers on improving their financial health.

Advanced internal ratings-based approach to credit risk

As part of our plan to improve the Bank’s foundation, we pursued our initiative to adopt, subject to regulatory approval, the AIRB approach to credit risk throughout 2020. Given the impacts of COVID-19 on our business and following the recent change in management, we are currently reassessing this initiative and its timeline. Based on our latest assessment, we are not expecting to complete the process prior to the end of 2023.

Update on Efficiency Measures

Since 2019, we have been identifying opportunities to improve our efficiency. The conversion of our traditional branches to a 100% Advice model and the optimization of certain back-office functions in 2019 resulted in significant savings. As we entered 2020, we maintained our focus on improving efficiency. We merged 20 retail branches during the year (six in the fourth quarter). These measures are also attributed to recent changes in the economic landscape and the ongoing reduction in the number of customer branch visits. Customers will continue to be served by our Quebec Retail Network with locations that are reasonably proximate to converted branch locations. In May 2020, we also reduced headcount by approximately 100 people through attrition, retirement and targeted job reductions in order to realign our workforce with our operational needs, and provide leverage to improve efficiency. These measures resulted in restructuring charges of $18.3 million in 2020, which included severance charges and charges related to lease contracts.

Consolidated Results

Non-GAAP measures

Management uses both generally accepted accounting principles (GAAP) and non-GAAP measures to assess the Bank’s performance. Results prepared in accordance with GAAP are referred to as “reported” results. Non-GAAP measures presented throughout this document are referred to as “adjusted” measures and exclude amounts designated as adjusting items. Adjusting items relate to restructuring plans and to business combinations and have been designated as such as management does not believe they are indicative of underlying business performance. Non-GAAP measures are considered useful to readers in obtaining a better understanding of how management analyzes the Bank’s results and in assessing underlying business performance and related trends. Non-GAAP measures do not have any standardized meaning prescribed by GAAP and are unlikely to be comparable to any similar measures presented by other issuers.

The following table shows adjusting items and their impact on reported results.

  For the three months ended   For the year ended
In thousands of Canadian dollars, except per share amounts (Unaudited) October 31
2020
  July 31
2020
  October 31
2019
  October 31
2020
  October 31
2019
                   
Impact on income before income taxes                  
Reported income before income taxes $ 41,647     $ 42,405     $ 47,926     $ 120,284     $ 196,165  
                   
Adjusting items, before income taxes                  
Restructuring charges(1)                  
Severance charges 2,253     7,047     1,735     12,321     6,474  
Other restructuring charges 1,909     4,020     3,696     5,968     6,205  
  4,162     11,067     5,431     18,289     12,679  
Items related to business combinations                  
Amortization of net premium on purchased financial instruments(2) 100     127     284     638     1,452  
Amortization of acquisition-related intangible assets(3) 3,180     3,520     3,416     13,641     13,711  
  3,280     3,647     3,700     14,279     15,163  
  7,442     14,714     9,131     32,568     27,842  
Adjusted income before income taxes $ 49,089     $ 57,119     $ 57,057     $ 152,852     $ 224,007  
                   
Impact on net income                  
Reported net income $ 36,811     $ 36,217     $ 41,343     $ 114,085     $ 172,710  
                   
Adjusting items, net of income taxes                  
Restructuring charges(1)                  
Severance charges 1,659     5,178     1,274     9,057     4,752  
Other restructuring charges 1,402     2,955     2,712     4,386     4,554  
  3,061     8,133     3,986     13,443     9,306  
Items related to business combinations                  
Amortization of net premium on purchased financial instruments(2) 77     93     209     472     1,067  
Amortization of acquisition-related intangible assets(3) 2,362     2,640     2,428     10,206     10,144  
  2,439     2,733     2,637     10,678     11,211  
  5,500     10,866     6,623     24,121     20,517  
Adjusted net income $ 42,311     $ 47,083     $ 47,966     $ 138,206     $ 193,227  
                   
Impact on diluted earnings per share                  
Reported diluted earnings per share $ 0.79     $ 0.77     $ 0.90     $ 2.37     $ 3.77  
                   
Adjusting items                  
Restructuring charges(1) 0.07     0.19     0.09     0.31     0.22  
Items related to business combinations 0.06     0.06     0.06     0.25     0.27  
  0.13     0.25     0.15     0.56     0.49  
Adjusted diluted earnings per share(4) $ 0.91     $ 1.02     $ 1.05     $ 2.93     $ 4.26  
(1) Restructuring and charges mainly result from the optimization of our Quebec Retail Network operations and the related streamlining of certain back-office and corporate functions. Restructuring charges also result from the reorganization of retail brokerage activities and other measures aimed at improving efficiency. Restructuring charges include severance charges, salaries, provisions, communication expenses and professional fees and charges related to lease contracts. Restructuring charges are included in Non-interest expenses. 
(2) Amortization of net premium on purchased financial instruments results from a one-time gain on a business acquisition in 2012 and is included in the Amortization of net premium on purchased financial instruments line item. 
(3) Amortization of acquisition-related intangible assets results from business acquisitions and is included in the Non-interest expenses line item.
(4) The impact of adjusting items on a per share basis may not add due to rounding.

Three months ended October 31, 2020 compared with three months ended October 31,2019

Net income was $36.8 million and diluted earnings per share were $0.79 for the fourth quarter of 2020, compared with $41.3 million and $0.90 for the fourth quarter of 2019. Adjusted net income was $42.3 million for the fourth quarter of 2020, down 12% from $48.0 million for the fourth quarter of 2019, while adjusted diluted earnings per share were $0.91, down 13% compared with $1.05 for the fourth quarter of 2019.

Total revenue

Total revenue was $243.5 million for the fourth quarter of 2020, up 1% compared with $241.6 million for the fourth quarter of 2019.

Net interest income decreased by $3.9 million to $169.3 million for the fourth quarter of 2020, compared with $173.2 million for the fourth quarter of 2019. The decrease was mainly due to a year-over-year decrease in higher margin loan volumes, mainly as a result of the impact of the COVID-19 pandemic on inventory financing activities, partly offset by improved funding costs. For the fourth quarter of 2020, the adoption of IFRS 16, Leases as of November 1, 2019 added $1.2 million to interest expenses related to the new lease liabilities and impacted net interest margin negatively by 1 basis point. Net interest margin was 1.82% for the fourth quarter of 2020, a decrease of 2 basis points compared with the fourth quarter of 2019, essentially for the same reasons.

Other income increased by $5.8 million or 8% to $74.2 million for the fourth quarter of 2020, compared with $68.4 million for the fourth quarter of 2019. The increase was mainly due to the strong contribution from capital market activities, which improved by $10.3 million compared with the fourth quarter of 2019. Other income for the fourth quarter of 2020 also included a net gain of $1.1 million on a securitization of a mortgage loan portfolio. This was partly offset by a decrease in service charges due to the ongoing changes to the retail banking environment and the related customers’ banking behaviour, as well as by a decrease in VISA card service revenues stemming from lower transaction volumes as a result of the COVID-19 pandemic.

Amortization of net premium on purchased financial instruments

For the fourth quarter of 2020, amortization of net premium on purchased financial instruments amounted to $0.1 million, compared with $0.3 million for the fourth quarter of 2019. Refer to the 2020 Annual Consolidated Financial Statements for additional information.

Provision for credit losses

The provision for credit losses amounted to $24.2 million for the fourth quarter of 2020 compared with $12.6 million for the fourth quarter of 2019, an increase of $11.6 million. The increase is mainly resulting from our revised assessment of the economic conditions, including the effect of the COVID-19 pandemic, as detailed below.

Collective allowances are sensitive to model inputs, including macroeconomic variables in the forward-looking scenarios and their respective probability weighting, among other factors. The COVID-19 pandemic led to significant changes to this forward-looking information during 2020, resulting in an increase in expected credit losses. As the full extent of the COVID-19 impact on the Canadian and U.S. economies, including government and/or regulatory responses to the pandemic, remains highly uncertain, it is difficult to predict at this time how the increase in expected credit losses will translate into write-offs and whether we will be required to recognize additional increases in expected credit losses in subsequent periods.

Refer to the “Risk Appetite and Risk Management Framework” section of our Management Discussion and Analysis for additional information for the COVID-19 impact on credit risk and measurement uncertainty of expected credit loss estimates and Note 7, Loans and allowances for credit losses, to the Consolidated Financial Statements for more information on provision for credit losses and continuity of the allowance for credit losses.

Non-interest expenses

Non-interest expenses amounted to $177.6 million for the fourth quarter of 2020, a decrease of $3.2 million or 2% compared with the fourth quarter of 2019. Adjusted non-interest expenses amounted to $170.3 million for the fourth quarter of 2020, a decrease of $1.7 million or 1% compared with the fourth quarter of 2019.

Salaries and employee benefits amounted to $88.8 million for the fourth quarter of 2020, an increase of $4.1 million, compared with the fourth quarter of 2019. This increase is mainly due to higher performance-based compensation related to strong capital market activities and higher employee benefits, partly offset by a decrease in salaries reflecting the headcount reduction implemented in May 2020.

Premises and technology costs were $49.9 million for the fourth quarter of 2020, an increase of $0.9 million compared with the fourth quarter of 2019, essentially as a result of higher technology costs to support operations. Rent decreased by $4.9 million as a result of the introduction, as of November 1, 2019, of IFRS 16, Leases, as well as from a reduction in the square-footage utilization given the right-sizing of our Quebec Retail Network. This decrease was mostly offset by a $3.9 million increase in amortization on the newly created right-of-use assets. Including the impact of the interest charge on the new lease liabilities of $1.2 million, as noted above, overall rental costs remained relatively stable.

Other non-interest expenses were $34.7 million for the fourth quarter of 2020, a decrease of $7.0 million compared with the fourth quarter of 2019. The improvement mainly resulted from lower regulatory costs, as well as lower advertising, business development and travel expenses, ensuing from efficiency measures and current economic conditions.

Restructuring charges were $4.2 million for the fourth quarter of 2020 and mainly resulted from measures aimed at improving efficiency as detailed in the “Update on efficiency measures” section. Restructuring charges include severance charges, as well as charges and provisions related to the termination of lease contracts.

Efficiency ratio

The adjusted efficiency ratio was 69.9% for the fourth quarter of 2020, compared with 71.2% for the fourth quarter of 2019, as a result of lower adjusted expenses and an increase in other income. Adjusted operating leverage was positive year-over-year. The efficiency ratio on a reported basis was 72.9% for the fourth quarter of 2020, compared with 74.8% for the fourth quarter of 2019, as a result of lower expenses and an increase in other income.

Income taxes

For the quarter ended October 31, 2020, the income tax expense was $4.8 million, and the effective tax rate was 11.6%. The lower tax rate, compared to the statutory rate, is attributed to a lower taxation level of revenue from foreign operations, as well as from the favourable effect of holding investments in Canadian securities that generate non-taxable dividend income. For the quarter ended October 31, 2019, income tax expense was $6.6 million, and the effective tax rate was 13.7%. Year-over-year, the income tax rate decreased slightly.

Three months ended October 31, 2020 compared with three months ended July 31, 2020

Net income was $36.8 million and diluted earnings per share were $0.79 for the fourth quarter of 2020, compared with $36.2 million and $0.77 for the third quarter of 2020. Adjusted net income was $42.3 million and adjusted diluted earnings per share were $0.91 for the fourth quarter of 2020, compared with $47.1 million and $1.02 for the third quarter of 2020.

Total revenue decreased by $5.1 million to $243.5 million for the fourth quarter of 2020, compared with $248.6 million for the previous quarter.

Net interest income decreased by $4.2 million sequentially to $169.3 million. The decrease reflects the impact of lower inventory financing volumes due to higher repayments resulting from the increased demand for boats and other recreational vehicles, as well as of the inability of dealers to replenish their inventory as a result of the manufacturers’ production disruption. Net interest margin was 1.82% for the fourth quarter of 2020, a decrease of 4 basis points compared with 1.86% for the third quarter of 2020, mainly as a result of the lower proportion of higher-yielding loans to business customers.

Other income slightly decreased by $0.9 million to $74.2 million for the fourth quarter of 2020, compared with $75.1 million for the previous quarter. The decrease was mainly due to the lower contribution from capital markets in fourth quarter of 2020, compared with their historic high contribution in the third quarter of 2020, partly offset by higher lending fees and a net gain of $1.1 million on a securitization of a mortgage loan portfolio.

The line item “Amortization of net premium on purchased financial instruments” amounted to $0.1 million for the fourth quarter of 2020, essentially unchanged from the third quarter of 2020. Refer to the 2020 Annual Consolidated Financial Statements for additional information.

Provision for credit losses totaled $24.2 million for the fourth quarter of 2020, a $1.9 million increase compared with $22.3 million for the third quarter of 2020. The provision for credit losses for the fourth quarter of 2020 remains high and considers our revised assumptions, as noted above.

Non-interest expenses decreased by $6.2 million to $177.6 million for the fourth quarter of 2020 from $183.8 million in the third quarter of 2020. Adjusted non-interest expenses increased by $1.1 million and amounted to $170.3 million in the fourth quarter of 2020, compared with $169.2 million in the third quarter of 2020. The increase in adjusted non-interest expenses mainly results from a higher level of activity, as the economy began to reopen, as well as to sales tax adjustments and other year-end accruals. These increases were partially offset by a decrease in salaries and employee benefits, mostly as the third quarter results included a $2.7 million compensation charge related to the Bank’s former President and Chief Executive Officer retirement. Restructuring charges for the fourth quarter of 2020 decreased by $6.9 million compared with the third quarter of 2020 and mainly resulted from measures aimed at improving efficiency. Restructuring charges include severance charges, as well as charges related to the termination of lease contracts.

Financial Condition

As at October 31, 2020, total assets amounted to $44.2 billion, relatively unchanged compared with $44.4 billion as at October 31, 2019, as the higher level of liquid assets mostly offset the decrease in loan portfolios.

Liquid assets

Liquid assets consist of cash, deposits with banks, securities and securities purchased under reverse repurchase agreements. As at October 31, 2020, these assets totaled $9.6 billion, an increase of $0.4 billion compared with $9.3 billion as at October 31, 2019.

We continue to prudently manage our level of liquid assets. The Bank’s funding sources remain well diversified and sufficient to meet all obligations. Liquid assets represented 22% of total assets as at October 31, 2020, compared with 21% as at October 31, 2019.

Loans

Loans and bankers’ acceptances, net of allowances, stood at $33.0 billion as at October 31, 2020, a decrease of $0.5 billion or 2% compared with $33.6 billion as at October 31, 2019. During the year 2020, the negative impacts of COVID-19 hindered the Bank’s ability to maintain its growth momentum in commercial loan portfolios.

Personal loans amounted to $4.1 billion as at October 31, 2020, a decrease of $0.5 billion or 12% since October 31, 2019, mainly as a result of the continued reduction in the investment loan portfolio, reflecting the continued reduction in the use of leverage by consumers, as well as, to a lesser extent, the decrease in other retail exposures.

Residential mortgage loans amounted to $16.3 billion as at October 31, 2020, an increase of $0.3 billion or 2% since October 31, 2019. The acquisition of mortgage loans from third parties, as part of our program to optimize the usage of the National Housing Act mortgage-backed securities allocations, has contributed to mitigating the impact of maturities.

Commercial loans and acceptances amounted to $12.7 billion as at October 31, 2020, a decrease of 2% since October 31, 2019. This decrease was mainly due to inventory financing volumes which were negatively impacted by the COVID-19 pandemic as a result of higher repayments due to the increased demand for boats and other recreational vehicles in Canada and the U.S. The inability of dealers to replenish their inventory as a result of the manufacturers’ production disruption also affected inventory levels. This was partly offset by the increase in real estate lending, which showed resilience during the COVID-19 pandemic amidst the lower interest rate environment.

Other assets

Other assets stood at $1.5 billion as at October 31, 2020, essentially unchanged compared with October 31, 2019.

Liabilities

Deposits decreased by $1.7 billion or 7% to $23.9 billion as at October 31, 2020 compared with $25.7 billion as at October 31, 2019, in part to adapt to the reduction in loans and optimization of other funding sources. Personal deposits stood at $18.8 billion as at October 31, 2020, down $1.0 billion compared with October 31, 2019. The decrease resulted mainly from the lower term deposits sourced through intermediaries managed down to meet our funding needs, partly offset by higher volumes of demand deposits generated through the various direct to customer distribution channels of the Bank. In the first quarter of 2020, we launched our LBC Digital deposit offering. These deposits, amounting to $0.6 billion as at October 31, 2020, contribute to our well-diversified funding and provide the opportunity to develop new client relationships and cross-selling activities. In 2020, personal demand deposits sourced through our Quebec Retail Network increased by $0.3 billion, while other demand deposits from intermediaries increased by $0.4 billion. Business and other deposits decreased by $0.8 billion over the same period to $5.1 billion, mostly due to a decrease in institutional funding as we optimized our funding sources given lower asset levels.

Personal deposits represented 79% of total deposits as at October 31, 2020, compared with 77% as at October 31, 2019, and contributed to our good liquidity position.

Obligations related to securities sold short stood at $3.0 billion as at October 31, 2020, an increase of $0.4 billion compared to October 31, 2019.

Debt related to securitization activities increased by $1.3 billion compared with October 31, 2019 and stood at $10.2 billion as at October 31, 2020. Since the beginning of the year, mortgage loan securitization through both the CMHC programs and a third-party program, as well as securitization of investment loans more than offset maturities of liabilities related to the Canada Mortgage Bond program, as well as normal repayments.

Shareholders’ equity and regulatory capital

Shareholders’ equity amounted to $2,611.2 million as at October 31, 2020, compared with $2,567.7 million as at October 31, 2019.

Compared to a year ago, retained earnings decreased by $8.7 million, mainly as the net income contribution of $114.1 million was offset by dividends amounting to $104.1 million, as well as by other charges related to employee benefit plans and equity securities designated at fair value through other comprehensive income (FVOCI) of $11.4 million.

As mentioned in the “Basis of Presentation” section of our MD&A, the adoption of IFRS 16 at the outset of the year also contributed to reduce retained earnings by $7.3 million as at November 1, 2019. Increases in accumulated other comprehensive income (AOCI) of $31.3 million and common share issuance of $20.3 million as part of the Bank’s Shareholder Dividend Reinvestment and Share Purchase Plan, contributed positively to shareholders’ equity. For additional information, please refer to the Consolidated Statement of Changes in Shareholders’ Equity in the Annual Consolidated Financial Statements.

The Bank’s book value per common share was $53.74 as at October 31, 2020 compared to $54.02 as at October 31, 2019.

There were 43,238,083 common shares outstanding as at November 27, 2020.

The Common Equity Tier 1 capital ratio stood at 9.6% as at October 31, 2020, compared with 9.0% as at October 31, 2019. The increase compared with October 31, 2019 mainly results from the lower level of assets resulting from the current COVID-19 situation. This level of capital provides the Bank with the necessary operational flexibility to resume growth and to pursue key initiatives, prudently considering the economic conditions.

Condensed Interim Consolidated Financial Statements (unaudited)

Consolidated Balance Sheet

In thousands of Canadian dollars (Unaudited) As at October 31
2020
  As at October 31
2019
       
Assets      
Cash and non-interest bearing deposits with banks $ 69,661     $ 90,658  
Interest bearing deposits with banks 603,181     322,897  
Securities      
At amortized cost 3,109,698     2,744,929  
At fair value through profit or loss (FVTPL) 2,414,939     3,242,146  
At fair value through other comprehensive income (FVOCI) 274,579     312,861  
  5,799,216     6,299,936  
Securities purchased under reverse repurchase agreements 3,140,228     2,538,285  
Loans      
Personal 4,120,875     4,660,524  
Residential mortgage 16,341,890     16,039,680  
Commercial 12,730,360     12,646,332  
Customers’ liabilities under acceptances     319,992  
  33,193,125     33,666,528  
Allowances for loan losses (173,522 )   (100,457 )
  33,019,603     33,566,071  
Other      
Derivatives 295,122     143,816  
Premises and equipment 199,869     77,802  
Software and other intangible assets 380,259     391,162  
Goodwill 117,286     116,649  
Deferred tax assets 62,216     37,045  
Other assets 481,019     768,806  
  1,535,771     1,535,280  
  $ 44,167,660     $ 44,353,127  
       
Liabilities and shareholders’ equity      
Deposits      
Personal $ 18,796,150     $ 19,747,260  
Business, banks and other 5,124,053     5,905,344  
  23,920,203     25,652,604  
Other      
Obligations related to securities sold short 3,020,709     2,618,147  
Obligations related to securities sold under repurchase agreements 2,411,649     2,558,883  
Acceptances     319,992  
Derivatives 127,412     112,737  
Deferred tax liabilities 55,333     53,102  
Other liabilities 1,487,174     1,207,567  
  7,102,277     6,870,428  
Debt related to securitization activities 10,184,497     8,913,333  
Subordinated debt 349,442     349,101  
Shareholders’ equity      
Preferred shares 244,038     244,038  
Common shares 1,159,488     1,139,193  
Retained earnings 1,152,973     1,161,668  
Accumulated other comprehensive income 52,215     20,947  
Share-based compensation reserve 2,527     1,815  
  2,611,241     2,567,661  
  $ 44,167,660     $ 44,353,127  

Consolidated Statement of Income

  For the three months ended   For the year ended
In thousands of Canadian dollars, except per share amounts (Unaudited) October 31
2020 
July 31
2020
October 31
2019
  October 31
2020
October 31
2019
                   
Interest and dividend income                  
Loans $ 290,794   $ 307,888   $ 360,367     $ 1,288,850   $ 1,440,102  
Securities 10,662   13,230   18,318     57,798   76,562  
Deposits with banks 281   152   2,120     4,294   8,356  
Other, including derivatives 28,839   26,604   6,551     71,311   31,362  
  330,576   347,874   387,356     1,422,253   1,556,382  
                   
Interest expense                  
Deposits 112,874   124,809   157,984     532,062   638,389  
Debt related to securitization activities 42,531   43,911   44,961     179,930   172,419  
Subordinated debt 3,824   3,825   3,835     15,222   15,214  
Other, including derivatives 2,001   1,783   7,371     12,615   43,949  
  161,230   174,328   214,151     739,829   869,971  
                   
Net interest income 169,346   173,546   173,205     682,424   686,411  
                   
Other income                  
Lending fees 16,893   15,607   16,630     62,595   61,459  
Fees and securities brokerage commissions 12,570   12,634   11,919     48,030   43,892  
Commissions from sales of mutual funds 11,183   10,666   10,706     42,985   42,892  
Service charges 7,981   7,947   10,109     33,733   42,033  
Income from financial instruments 9,082   12,905   (584 )   33,728   12,460  
Card service revenues 6,700   6,464   7,855     28,438   33,238  
Fees on investment accounts 4,196   3,310   4,593     16,350   18,231  
Insurance income, net 2,817   3,182   3,334     11,148   13,941  
Other 2,771   2,348   3,871     11,578   13,953  
  74,193   75,063   68,433     288,585   282,099  
                   
Total revenue 243,539   248,609   241,638     971,009   968,510  
                   
Amortization of net premium on purchased financial instruments 100   127   284     638   1,452  
                   
Provision for credit losses 24,200   22,300   12,600     116,300   44,400  
                   
Non-interest expenses                  
Salaries and employee benefits 88,811   92,483   84,755     370,535   357,396  
Premises and technology 49,949   50,091   49,017     200,529   197,351  
Other 34,670   30,136   41,625     144,434   159,067  
Restructuring charges 4,162   11,067   5,431     18,289   12,679  
  177,592   183,777   180,828     733,787   726,493  
                   
Income before income taxes 41,647   42,405   47,926     120,284   196,165  
Income taxes 4,836   6,188   6,583     6,199   23,455  
Net income $ 36,811   $ 36,217   $ 41,343     $ 114,085   $ 172,710  
                   
Preferred share dividends, including applicable taxes 2,874   3,198   3,196     12,466   12,966  
                   
Net income available to common shareholders $ 33,937   $ 33,019   $ 38,147     $ 101,619   $ 159,744  
                   
Weighted-average number of common shares outstanding (in thousands)                  
Basic 43,161   43,001   42,518     42,910   42,310  
Diluted 43,161   43,001   42,583     42,929   42,356  
                   
Earnings per share                  
Basic $ 0.79   $ 0.77   $ 0.90     $ 2.37   $ 3.78  
Diluted $ 0.79   $ 0.77   $ 0.90     $ 2.37   $ 3.77  
                   
Dividends declared per share                  
Common share $ 0.40   $ 0.40   $ 0.66     $ 2.14   $ 2.62  
Preferred share – Series 13 $ 0.26   $ 0.26   $ 0.26     $ 1.03   $ 1.06  
Preferred share – Series 15 $ 0.37   $ 0.37   $ 0.37     $ 1.46   $ 1.46  

Consolidated Statement of Comprehensive Income

  For the three months ended   For the year ended
In thousands of Canadian dollars (Unaudited) October 31
2020
  July 31
2020
  October 31
2019
  October 31
2020
  October 31
2019
Net income $ 36,811     $ 36,217     $ 41,343     $ 114,085     $ 172,710  
                   
Other comprehensive income (loss), net of income taxes                  
Items that may subsequently be reclassified to the Statement of Income                  
Net change in debt securities at FVOCI                  
Unrealized net gains (losses) on debt securities at FVOCI (26 )   683     (114 )   1,559     2,327  
Reclassification of net (gains) losses on debt securities at FVOCI to net income (53 )   (57 )   115     (103 )   (378 )
  (79 )   626     1     1,456     1,949  
Net change in value of derivatives designated as cash flow hedges (3,109 )   (8,345 )   (1,764 )   22,544     33,293  
Net foreign currency translation adjustments                  
Net unrealized foreign currency translation gains (losses) on investments in foreign operations (2,155 )   (19,119 )   (432 )   5,005     445  
Net gains (losses) on hedges of investments in foreign operations 1,201     6,413     (242 )   2,263     (5,158 )
  (954 )   (12,706 )   (674 )   7,268     (4,713 )
  (4,142 )   (20,425 )   (2,437 )   31,268     30,529  
                   
Items that may not subsequently be reclassified to the Statement of Income                  
Remeasurement gains (losses) on employee benefit plans 6,959     (801 )   (3,938 )   (5,420 )   (7,311 )
Net gains (losses) on equity securities designated at FVOCI 4,315     9,344     (3,338 )   (6,008 )   (18,411 )
  11,274     8,543     (7,276 )   (11,428 )   (25,722 )
Total other comprehensive income (loss), net of income taxes 7,132     (11,882 )   (9,713 )   19,840     4,807  
                   
Comprehensive income $ 43,943     $ 24,335     $ 31,630     $ 133,925     $ 177,517  

Income Taxes — Other Comprehensive Income

The following table shows income tax expense (recovery) for each component of other comprehensive income.

  For the three months ended   For the year ended
In thousands of Canadian dollars (Unaudited) October 31
2020
  July 31
2020
  October 31
2019
  October 31
2020
  October 31
2019
                   
Net change in debt securities at FVOCI                  
Unrealized net gains (losses) on debt securities at FVOCI $ (29 )   $ 247     $ 140     $ 543     $ 846  
Reclassification of net (gains) losses on debt securities at FVOCI to net income (19 )   (21 )   (137 )   (37 )   (137 )
  (48 )   226     3     506     709  
                   
Net change in value of derivatives designated as cash flow hedges (1,157 )   (3,010 )   (639 )   8,094     12,034  
Net foreign currency translation adjustments                  
Net gains (losses) on hedges of investments in foreign operations (422 )       142     (320 )    
Remeasurement gains (losses) on employee benefit plans 2,459     (289 )   (1,443 )   (2,005 )   (2,666 )
Net gains (losses) on equity securities designated at FVOCI 1,556     3,371     (1,181 )   (2,169 )   (6,648 )
  $ 2,388     $ 298     $ (3,118 )   $ 4,106     $ 3,429  

Consolidated Statement of Changes in Shareholders’ Equity

  For the year ended October 31, 2020
        Accumulated Other Comprehensive Income Share-based
compensation
reserve
 
In thousands of Canadian dollars (Unaudited) Preferred
shares
Common
shares
Retained
earnings
Debt
securities
at FVOCI
Cash
flow
hedges
Translation
of foreign
operations
Total Total
shareholders’
equity
                   
Balance as at October 31, 2019 $ 244,038   $ 1,139,193   $ 1,161,668   $ 328   $ 21,049   $ (430 ) $ 20,947   $ 1,815   $ 2,567,661  
Impact of adoption of IFRS 16, Leases     (7,256 )           (7,256 )
Balance as at November 1, 2019 244,038   1,139,193   1,154,412   328   21,049   (430 ) 20,947   1,815   2,560,405  
Net income     114,085             114,085  
Other comprehensive income, net of income taxes                  
Unrealized net gains on debt securities at FVOCI       1,559       1,559     1,559  
Reclassification of net gains on debt securities at FVOCI to net income       (103 )     (103 )   (103 )
Net change in value of derivatives designated as cash flow hedges         22,544     22,544     22,544  
Net unrealized foreign currency translation gains on investments in foreign operations           5,005   5,005     5,005  
Net gains on hedges of investments in foreign operations           2,263   2,263     2,263  
Remeasurement losses on employee benefit plans     (5,420 )           (5,420 )
Net losses on equity securities designated at FVOCI     (6,008 )           (6,008 )
Comprehensive income     102,657   1,456   22,544   7,268   31,268     133,925  
Issuance of share capital   20,295               20,295  
Share-based compensation               712   712  
Dividends                  
Preferred shares, including applicable taxes     (12,466 )           (12,466 )
Common shares     (91,630 )           (91,630 )
Balance as at October 31, 2020 $ 244,038   $ 1,159,488   $ 1,152,973   $ 1,784   $ 43,593   $ 6,838   $ 52,215   $ 2,527   $ 2,611,241  
  For the year ended October 31, 2019
        Accumulated Other Comprehensive Income Share-based
compensation
reserve
 
In thousands of Canadian dollars (Unaudited) Preferred
shares
Common
shares
Retained
earnings
Debt
securities
at FVOCI
Cash
flow
hedges
Translation
of foreign
operations
Total Total
shareholders’
equity
                   
Balance as at November 1, 2018 $ 244,038   $ 1,115,416   $ 1,138,383   $ (1,621 ) $ (12,244 ) $ 4,283   $ (9,582 ) $ 268   $ 2,488,523  
Net income     172,710             172,710  
Other comprehensive income, net of income taxes                  
Unrealized net gains on debt securities at FVOCI       2,327       2,327     2,327  
Reclassification of net gains on debt securities at FVOCI to net income       (378 )     (378 )   (378 )
Net change in value of derivatives designated as cash flow hedges         33,293     33,293     33,293  
Net unrealized foreign currency translation gains on investments in foreign operations           445   445     445  
Net losses on hedges of investments in foreign operations           (5,158 ) (5,158 )   (5,158 )
Remeasurement losses on employee benefit plans     (7,311 )           (7,311 )
Net losses on equity securities designated at FVOCI     (18,411 )           (18,411 )
Comprehensive income     146,988   1,949   33,293   (4,713 ) 30,529     177,517  
Issuance of share capital   23,777               23,777  
Share-based compensation               1,547   1,547  
Dividends                  
Preferred shares, including applicable taxes     (12,966 )           (12,966 )
Common shares     (110,737 )           (110,737 )
Balance as at October 31, 2019 $ 244,038   $ 1,139,193   $ 1,161,668   $ 328   $ 21,049   $ (430 ) $ 20,947   $ 1,815   $ 2,567,661  

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 regulatory authorities or in other written or oral communications. Forward-looking statements include, but are not limited to, statements regarding our business plans and strategies, priorities and financial objectives, the regulatory environment in which we operate, the anticipated impact of the coronavirus (“COVID-19”) pandemic on the Bank’s operations, earnings results and financial performance and statements under the headings “Outlook”, “COVID-19 Pandemic” and “Risk Appetite and Risk Management Framework” contained in our 2020 Annual Report, including the Management’s Discussion and Analysis for the fiscal year ended October 31, 2020 and other statements that are not historical facts. Forward-looking statements typically are identified with words or phrases such as “believe”, “assume”, “estimate”, “forecast”, “outlook”, “project”, “vision”, “expect”, “foresee”, “anticipate”, “plan”, “goal”, “aim”, “target”, “may”, “should”, “could”, “would”, “will”, “intend” or the negative of these terms, variations thereof or similar terminology. 

By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, both general and specific in nature. Material economic assumptions underlying the forward-looking statements contained in this document are set out in the 2020 Annual Report under the heading “Outlook”. There is significant risk that the predictions, forecasts, projections or conclusions will prove to be inaccurate, that our assumptions may not be correct, and that actual results may differ materially from such predictions, forecasts, projections or conclusions.

We caution readers against placing undue reliance on forward-looking statements, as a number of factors, many of which are beyond our control and the effects of which can be difficult to predict, could influence, individually or collectively, the accuracy of the forward-looking statements and cause actual future results to differ significantly from the targets, expectations, estimates or intentions expressed in the forward-looking statements. These factors include, but are not limited to risks relating to: the impacts of the COVID-19 pandemic on the Bank, our business, financial condition and prospects; technology, information systems and cybersecurity; technological disruption, competition and our ability to execute on our strategic objectives; the economic climate in the U.S. and Canada; accounting policies, estimates and developments; legal and regulatory compliance; fraud and criminal activity; human capital; insurance; business continuity; business infrastructure; environmental and social risk and climate change; and our ability to manage operational, regulatory, legal, strategic, reputational and model risks, all of which are described in more detail in the section titled “Risk Appetite and Risk Management Framework” beginning on page 43 of the 2020 Annual Report including the Management’s Discussion and Analysis for the fiscal year ended October 31, 2020.

We further caution that the foregoing list of factors is not exhaustive. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also have a material adverse effect on our financial position, financial performance, cash flows, business or reputation. Any forward-looking statements contained in this document represent the views of Management only as at the date hereof, are presented for the purposes of assisting investors and others in understanding certain key elements of the Bank’s current objectives, strategic priorities, expectations and plans, and in obtaining a better understanding of the Bank’s business and anticipated operating environment and may not be appropriate for other purposes. We do not undertake to update any forward-looking statements , whether oral or written, made by us or on our behalf whether as a result of new information, future events or otherwise, except to the extent required by securities regulations. Additional information relating to the Bank can be located on the SEDAR website at www.sedar.com.

Access to Quarterly Results Materials

This press release can be found on our website at www.lbcfg.ca, under the Press Room tab, and our Report to Shareholders, Investor Presentation and Supplementary Financial Information under the Investor Centre tab, Financial Results.

Conference Call

Laurentian Bank Financial Group invites media representatives and the public to listen to the conference call to be held at 9:00 a.m. Eastern Time on December 4, 2020. The live, listen-only, toll-free, call-in number is 1-800-263-0877, code 9823383. A live webcast will also be available on the Group’s website under the Investor Centre tab, Financial Results.

The conference call playback will be available on a delayed basis at any time from 12:00 p.m. on December 4, 2020 until 12:00 p.m. on January 3, 2021, on our website under the Investor Centre tab, Financial Results.

The presentation material referenced during the call will be available on our website under the Investor Centre tab, Financial Results.

Contact Information  
   
Investor Relations  Media
Susan Cohen Fabrice Tremblay
Director, Investor Relations Advisor, Communications
Mobile: 514 970-0564 Office: 514 284-4500, ext. 40020
susan.cohen@lbcfg.ca Mobile: 438 989-6070
  fabrice.tremblay@lbcfg.ca

About Laurentian Bank Financial Group

Founded in 1846, Laurentian Bank Financial Group is a diversified financial services provider whose mission is to help its customers improve their financial health. The Laurentian Bank of Canada and its entities are collectively referred to as Laurentian Bank Financial Group (the “Group” or the “Bank”).

With more than 2,900 employees guided by the values of proximity, simplicity and honesty, the Group provides a broad range of advice-based solutions and services to its personal, business and institutional customers. With pan-Canadian activities and a presence in the U.S., the Group is an important player in numerous market segments.

The Group has $44.2 billion in balance sheet assets and $27.8 billion in assets under administration. 

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