- Total Revenue (2024): $1.02 billion, down 1% year-over-year.
- Net Loss (Reported): $5.5 million.
- Diluted EPS (Reported): -$0.47.
- Net Income (Adjusted): $168.7 million.
- Adjusted EPS: $3.57 per share.
- Q4 Total Revenue: $236.8 million, down 4% year-over-year and 8% sequentially.
- Q4 Diluted EPS: $0.89, down 11% year-over-year, up 1% quarter-over-quarter.
- Q4 Net Income: $40.9 million, down 8% year-over-year and 5% quarter-over-quarter.
- Efficiency Ratio: Increased by 300 basis points year-over-year and 170 basis points sequentially.
- Return on Equity (ROE) for Q4: 6.2%.
- Net Interest Income (Q4): Down $9 million or 5% year-over-year.
- Net Interest Margin: 1.77%, up 1 basis point year-over-year, down 2 basis points sequentially.
- Other Income (Q4): $62.9 million, down 3% year-over-year and 17% sequentially.
- Adjusted Net Interest Expenses (Q4): $177.7 million, stable year-over-year, down 6% sequentially.
- CET1 Ratio: 10.9%.
- Commercial Loan Portfolio: Down $1.2 billion or 7% year-over-year, up $100 million or 1% sequentially.
- Residential Mortgage Loans: Down 1% year-over-year, up 1% sequentially.
- Allowances for Credit Losses: $204 million, down $20.4 million sequentially.
- Provision for Credit Losses (PCL): $10.4 million, down $6.3 million year-over-year, down $5.8 million sequentially.
- Gross Impaired Loans: Increased by $150.8 million year-over-year, stable sequentially.
Release Date: December 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Laurentian Bank of Canada (LRCDF, Financial) introduced a strategic plan focusing on areas where they have scale, leading to successful divestitures in their securities retail activities.
- The bank has enhanced processes to maximize efficiency and ensure sustained value delivery to customers.
- Laurentian Bank of Canada (LRCDF) has a strong balance sheet with solid liquidity and capital levels, positioning it well for future asset growth.
- The bank's inventory financing business expanded by onboarding over 350 new dealers, a 6% increase year-over-year.
- The merger of equipment finance and inventory finance businesses under Northpoint Commercial Finance positions it as a leading specialty financing platform in North America.
Negative Points
- Total revenue for the year was down 1% compared to last year, with a reported net loss of $5.5 million.
- Loan growth has slowed due to an uncertain economic environment, particularly affecting commercial real estate projects.
- The bank's efficiency ratio increased by 300 basis points year-over-year, reflecting ongoing investments and lower loan volumes.
- Net interest income decreased by 5% year-over-year due to lower commercial loan volumes.
- The provision for credit losses was $10.4 million, with gross impaired loans increasing by $150.8 million year-over-year.
Q & A Highlights
Q: Can you clarify the efficiency ratio guidance for 2025?
A: Yvan Deschamps, CFO, explained that the efficiency ratio is expected to remain stable throughout 2025, as the bank continues to invest in strategic priorities and rebuilds its loan book, with commercial loan growth anticipated in the latter part of the year.
Q: What are the expectations for loan growth in 2025?
A: Yvan Deschamps, CFO, stated that overall loan growth is expected to be relatively stable for the year, with an uptick in commercial loans anticipated in Q4. Inventory financing is expected to gradually normalize towards the latter part of the year.
Q: Is Laurentian Bank considering M&A for capital deployment?
A: Yvan Deschamps, CFO, clarified that the focus is on sustaining loan growth rather than M&A. The bank is confident in its capital levels to support expected growth in its commercial loan book.
Q: How will the rebound in loan utilization be funded?
A: Yvan Deschamps, CFO, noted that the rebound in inventory financing will be funded through the bank's existing Canadian operations, with no anticipated changes to the funding model. Eric Provost, CEO, added that partnerships are being explored to maximize growth opportunities.
Q: What is the strategy behind the Northpoint partnership and expansion?
A: Eric Provost, CEO, explained that the strategy involves exploring partnerships to enhance growth opportunities, potentially through originate-to-distribute models and expanding into new industries. The focus is on leveraging Northpoint's operational capabilities to accelerate growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
