Toronto-Dominion Bank to Acquire First Horizon Corp - Conference Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Congratulations on the deal. Can you give me a time line for synergies, firstly, like how much of those synergies do you expect in 2023, by, say, the 2024 and 2025 completion date?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Yes, the 2023 though, I'm just asking about that. Is there anything -- are there any synergies in 2023?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Okay. Now more broadly, and I actually want to talk about the historical acquisition there or a merger of equals between First Horizon and IBERIABANK. And from what little I know of that situation, it sounds like integration costs ramped up faster than expected. And I'm wondering maybe why that was the case. And then the bank also to offset that, they tripled the amount of branches they had to close, generate more cost savings, I guess, from 25 to 75, something like that. And I'm just trying to contrast that to a message we're getting today that you're not going to be closing any branches in this situation.

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Okay. Did you take into consideration some of the additional costs, like given the experience they had, you kind of have to reflect some of that additional conservatism in your integration cost forecast?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : I know how you operate, and it's sometimes hard to get an answer, though. That's my own...

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Just last one...

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Maybe I'll start with Kelvin. Kelvin, just on that Slide 17, you've also included an estimate for First Horizon in 2023. Does that include the costs associated with the prefs that you -- that they're issuing to?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Which line would that be in?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Okay. And then I'm going to have to challenge you again on the cost savings. Everything I've seen with those types of cost reductions in the U.S. banking -- the regional banking space is typically almost unilaterally involved kind of branch overlap and reductions of those types of overlap as a cost synergy kind of driver. So you're going to have to detail out a bit more where this 33% is coming from, please?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Kelvin, can you comment on how much you've spent on digital, maybe last year versus how much First Horizon has?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Okay. So maybe 1 last question, Bharat, for you. I think it's coming through very loud and clear that this was an acquisition for scale. It doesn't sound like you're picking up any new capabilities, for example, or maybe adjacent markets to your existing Southeast, I suppose, footprint. So is it fair to say that aside from adding scale to your U.S. operations, it doesn't -- it's strategically neutral to the bank?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : But Bharat, not to be [a pain] about it. But if we look at 3, 4 years from now, hopefully, this has been a successful integration as advertised, you're still primarily a deposit-taking loan-making bank. You haven't enhanced the wealth franchise, you haven't enhanced the fee-generating franchise of the bank. Is that an unfair statement?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Congratulations on getting it done. We'll have to follow on this Leo afterwards. Leovigildo Salom - The Toronto-Dominion Bank - Group Head U.S. Retail and President & CEO of TD Bank, America's Most Convenient Bank Thank you, Sohrab.