TD Bank 2001 Annual Report Download - page 53

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51
FINANCIAL RESULTS
Allowance for credit losses
(millions of dollars) 2001 2000
Specific General Specific General
allowance allowance Total allowance allowance Total
Balance at beginning of year $ 312 $ 836 $ 1,148 $ 254 $ 712 $ 966
Acquisition of CT Financial Services Inc. –
balance at date of acquisition –––83 101 184
Provision for credit losses charged to
the consolidated statement of income 620 300 920 458 22 480
Write-offs (844) – (844) (564) – (564)
Recoveries 90 – 90 67 – 67
Other, including foreign exchange rate changes 15614 1 15
Allowance for loan losses at end of year $ 179 $ 1,141 $ 1,320 $ 312 $ 836 $ 1,148
(millions of dollars) 2001 2000
Residential mortgages
Conventional $ 3,253 $ 5,776
Mortgage-backed securities 5,144 5,724
Personal loans 9,859 9,873
Other loans 200 200
$ 18,456 $ 21,573
(millions of dollars) 2001 2000
Accumulated Net book Net book
Cost depreciation value value
Land $ 305 $ – $ 305 $ 403
Buildings 642 183 459 1,457
Computer equipment and software 911 539 372 348
Furniture, fixtures and other equipment 617 261 356 258
Leasehold improvements 521 181 340 325
$ 2,996 $ 1,164 $ 1,832 $ 2,791
Accumulated depreciation at the end of 2000 was $1,216 million.
During the year, the Bank securitized government guaranteed
residential mortgage loans through the creation of mortgage-
backed securities and received net cash proceeds of $999 mil-
lion. The Bank retained the rights to future excess interest on the
residential mortgages valued at $47 million. A gain on sale, net
of transaction fees and expenses, of $38 million was recognized
in income. The Bank retained the responsibility for servicing the
mortgages. The key assumptions used to value the sold
and retained interests included a prepayment rate of 7.0%,
an excess spread of 1.4% and a discount rate of 4.5%.
There are no expected credit losses as the mortgages are
government guaranteed.
The following table presents the total outstanding principal
amount of loans securitized and sold at October 31.
NOTE 4 Loan securitizations
NOTE 5 Land, buildings and equipment