TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 1
TD Bank Group Reports Second Quarter 2024 Results
Earnings News Release
Three and six months ended April 30, 2024
This quarterly Earnings News Release should be read in conjunction with the Bank’s unaudited second quarter 2024 Report to Shareholders for the three and six
months ended April 30, 2024, prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB), which is available on our website at http://www.td.com/investor/. This analysis is dated May 22, 2024. Unless otherwise indicated, all amounts are
expressed in Canadian dollars, and have been primarily derived from the Bank’s Annual or Interim Consolidated Financial Statements prepared in accordance with
IFRS. Certain comparative amounts have been revised to conform with the presentation adopted in the current period. Additional information relating to the Bank is
available on the Bank’s website at http://www.td.com, as well as on SEDAR+ at http://www.sedarplus.ca and on the U.S. Securities and Exchange Commission’s
(SEC) website at http://www.sec.gov (EDGAR filers section).
Reported results conform with generally accepted accounting principles (GAAP), in accordance with IFRS. Adjusted results are non-GAAP financial measures.
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Significant Events” and “Non-GAAP and Other Financial Measures” in
the “How We Performed” section of this document.
SECOND QUARTER FINANCIAL HIGHLIGHTS, compared with the second quarter last year:
●
Reported diluted earnings per share were $1.35, compared with $1.69.
●
Adjusted diluted earnings per share were $2.04, compared with $1.91.
●
Reported net income was $2,564 million, compared with $3,306 million.
●
Adjusted net income was $3,789 million, compared with $3,707 million.
YEAR-TO-DATE FINANCIAL HIGHLIGHTS, six months ended April 30, 2024, compared with the corresponding period last year:
●
Reported diluted earnings per share were $2.89, compared with $2.52.
●
Adjusted diluted earnings per share were $4.04, compared with $4.14.
●
Reported net income was $5,388 million, compared with $4,887 million.
●
Adjusted net income was $7,426 million, compared with $7,861 million.
SECOND QUARTER ADJUSTMENTS (ITEMS OF NOTE)
The second quarter reported earnings figures included the following items of note:
●
Amortization of acquired intangibles of $72 million ($62 million after-tax or 4 cents per share), compared with $79 million ($67 million after-tax or
3 cents per share) in the second quarter last year.
●
Acquisition and integration charges related to the Schwab transaction of $21 million ($16 million after-tax or 1 cent per share), compared with
$30 million ($26 million after-tax or 1 cent per share) in the second quarter last year.
●
Restructuring charges of $165 million ($122 million after-tax or 7 cents per share).
●
Acquisition and integration charges related to the Cowen acquisition of $102 million ($80 million after-tax or 4 cents per share), compared with
$73 million ($63 million after-tax or 4 cents per share) in the second quarter last year.
●
Impact from the terminated FHN acquisition-related capital hedging strategy of $64 million ($48 million after-tax or 3 cents per share), compared with
$134 million ($101 million after-tax or 6 cents per share) in the second quarter last year.
●
Civil matter provision/Litigation settlement of $274 million ($205 million after-tax or 11 cents per share), compared with $39 million ($28 million after-
tax or 2 cents per share) in the second quarter last year.
●
FDIC special assessment of $103 million ($77 million after-tax or 4 cents per share).
●
Provision for investigations related to the Bank’s AML program of $615 million ($615 million after-tax or 35 cents per share).
TORONTO
, May 23, 2024 – TD Bank Group (“TD” or the “Bank”) today announced its financial results for the second quarter ended April 30, 2024. Reported
earnings were $2.6 billion, down 22% compared with the second quarter last year, and adjusted earnings were $3.8 billion, up 2%.
“TD delivered strong second quarter results, with earnings of $3.8 billion and solid momentum across our franchise. We delivered significant positive operating
leverage while continuing to invest in our business, including our risk and control infrastructure,” said Bharat Masrani, Group President and Chief Executive Officer,
TD Bank Group.
Canadian Personal and Commercial Banking delivered a strong quarter driven by continued volume growth and positive operating leverage
Canadian Personal and Commercial Banking net income was $1,739 million, an increase of 7% compared to the second quarter last year. The increase reflects
revenue growth, partially offset by higher provisions for credit losses and non-interest expenses. Revenue was $4,839 million, an increase of 10%, driven by
volume growth and margin expansion.
Canadian Personal and Commercial Banking continued to build momentum, delivering another strong quarter for New to Canada account openings. TD increased
its support for international students with an agreement with HDFC, India’s leading private sector bank, to help attract new customers with a simplified banking
experience. The Bank also established a new collaboration with ApplyBoard, a Canadian educational organization that helps international students prepare their
finances to study in Canada. In addition, TD Auto Finance was ranked #1 in Dealer Satisfaction with Non-Prime and Prime Credit Non-Captive Automotive
Financing Lenders, according to the J.D. Power 2024 Canada Dealer Financing Satisfaction Study
1
.
The U.S. Retail Bank delivered operating momentum with sequential earnings and loan growth in a challenging environment
U.S. Retail reported net income was $580 million (US$433 million), a decrease of 59% (58% in U.S. dollars) compared with the second quarter last year. On an
adjusted basis, net income was $1,272 million, a decline of 16% (17% in U.S. dollars). TD Bank’s investment in The Charles Schwab Corporation (“Schwab”)
contributed $183 million in earnings, a decrease of 27% (26% in U.S. dollars) compared with the second quarter last year.
1
which measure Canadian auto dealers’ satisfaction with their auto finance providers. Visit jdpower.com/awards for more details.
TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 2
The U.S. Retail Bank, which excludes the Bank’s investment in Schwab, reported net income of $397 million (US$297 million), a decrease of 66% (65% in U.S.
dollars) from the second quarter last year, primarily reflecting provisions for investigations related to the Bank’s anti-money laundering program and the Federal
Deposit Insurance Corporation (FDIC) Special Assessment, partially offset by acquisition and integration-related charges for the terminated First Horizon
transaction in the second quarter last year. On an adjusted basis net income was $1,089 million (US$803 million), a decrease of 14% (15% in U.S. dollars) from
the second quarter last year, primarily reflecting higher PCL and lower revenue.
The U.S. Retail Bank continued to deliver loan growth while maintaining its through-the-cycle underwriting standards, with total average loan balances up 7%
compared with the second quarter last year and up 1% from last quarter. Excluding sweep deposits, total personal and business deposit average balances were
down 1% year-over-year, reflecting competitive market conditions, while quarter-over-quarter, personal and business deposit average balances were flat. Overall,
the U.S. Retail Bank delivered balance sheet stability in a challenging environment.
During the quarter, TD Bank, America’s Most Convenient Bank® (TD AMCB) launched TD Complete Checking and TD Early Pay, offering customers more flexible
banking options, including earlier access to eligible direct deposits. TD AMCB surpassed five million active mobile customers while continuing to deliver new
features and capabilities that enhance the customer experience. TD AMCB was ranked 9
th
America’s Best Employers for Diversity 2024, leading
its peers as the highest ranked financial institution.
Wealth Management and Insurance results reflect strong business momentum
Wealth Management and Insurance net income was $621 million, an increase of 19% compared with the second quarter last year, as positive top-line momentum
was partially offset by higher insurance service expenses. This quarter’s revenue growth of 11% reflects insurance premium growth, and higher fee-based and
transaction revenue in the Wealth Management business.
Wealth Management and Insurance continued to invest in client-centric innovation this quarter. TD Direct Investing completed its migration of most active traders
to the new TD Active Trader platform and TD Wealth Advice continued to gain market share as it grows its advisor network
2
. TD Asset Management launched
seven new actively managed fixed income ETFs, showcasing the value of its proprietary independent credit research capabilities, and offering investors the
potential to earn a high rate of interest income. In TD Insurance, Small Business Insurance expanded its national reach to new customer segments including
business professionals, healthcare, retail, small manufacturing, and hospitality.
Wholesale Banking delivered record revenue reflecting broad-based growth across the business
Wholesale Banking reported net income for the quarter was $361 million, an increase of $211 million compared with the second quarter last year, reflecting higher
revenues, partially offset by higher non-interest expenses. On an adjusted basis, net income was $441 million, an increase of $228 million, or 107%. Revenue for
the quarter was $1,940 million, an increase of $523 million, or 37%, compared with the second quarter last year, reflecting higher trading-related revenue,
underwriting fees, and lending revenue.
On April 1, TD Securities and TD Cowen achieved an important milestone with the implementation of a unified Investment Banking, Capital Markets and Research
platform, integrating coverage models and streamlining delivery of capabilities for clients.
Enhancements to TD’s anti-money laundering (AML) program
The Bank has been cooperating with U.S. regulators and authorities in good faith for many months and is working diligently to bring these investigations to
resolution so that investors can have more clarity. A comprehensive overhaul of TD's U.S. AML program is well underway, and will strengthen our program
globally.
Capital
TD’s Common Equity Tier 1 Capital ratio was 13.4%.
Conclusion
“Our businesses in Canada, the United States and across the globe are well-positioned to continue to meet the needs of our nearly 28 million customers and
clients. I would like to thank our 95,000 TD bankers for everything they do to deliver for all of our stakeholders,” added Masrani.
The foregoing contains forward-looking statements. Please refer to the “Caution Regarding Forward-Looking Statements” on page 3.
2
TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 3
Caution Regarding Forward-Looking Statements
From time to time, the Bank (as defined in this document) makes written and/or oral forward-looking statements, including in this document, in other filings with Canadian regulators or the
United States (U.S.) Securities and Exchange Commission (SEC), 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 Management’s Discussion and Analysis (“2023 MD&A”) in the Bank’s 2023 Annual Report under the heading “Economic Summary and Outlook”, under the headings
“Key Priorities for 2024” and “Operating Environment and Outlook” for the Canadian Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance, and Wholesale
Banking segments, and under the heading “2023 Accomplishments and Focus for 2024” for the Corporate segment, and in other statements regarding the Bank’s objectives and priorities
for 2024 and beyond and strategies to achieve them, the regulatory environment in which the Bank operates, and the Bank’s anticipated financial performance. Forward-looking statements
can be identified by words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “forecast”, “goal”, “intend”, “may”, “outlook”, “plan”, “possible”, “potential”, “predict”, “project”, “should”,
“target”, “will”, and “would” and similar expressions or variations thereof, or the negative thereof, but these terms are not the exclusive means of identifying such statements.
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,
individually or in the aggregate, such differences include: strategic, credit, market (including equity, commodity, foreign exchange, interest rate, and credit spreads), operational (including
technology, cyber security, and infrastructure), model, insurance, liquidity, capital adequacy, legal, regulatory compliance and conduct, reputational, environmental and social, and other
risks. Examples of such risk factors include general business and economic conditions in the regions in which the Bank operates; geopolitical risk; inflation, rising rates and recession;
regulatory oversight and compliance risk; the ability of the Bank to execute on long-term strategies, shorter-term key strategic priorities, including the successful completion of acquisitions
and dispositions and integration of acquisitions, the ability of the Bank to achieve its financial or strategic objectives with respect to its investments, business retention plans, and other
strategic plans; technology and cyber security risk (including cyber-attacks, data security breaches or technology failures) on the Bank’s technologies, systems and networks, those of the
Bank’s customers (including their own devices), and third parties providing services to the Bank; model risk; fraud activity; insider risk; the failure of third parties to comply with their
obligations to the Bank or its affiliates, including relating to the care and control of information, and other risks arising from the Bank’s use of third parties; the impact of new and changes to,
or application of, current laws, rules and regulations, including without limitation tax laws, capital guidelines and liquidity regulatory guidance; increased competition from incumbents and
new entrants (including Fintechs and big technology competitors); shifts in consumer attitudes and disruptive technology; environmental and social risk (including climate change);
exposure related to significant litigation and regulatory matters; ability of the Bank to attract, develop, and retain key talent; changes to the Bank’s credit ratings; changes in foreign
exchange rates, interest rates, credit spreads and equity prices; the interconnectivity of Financial Institutions including existing and potential international debt crises; increased funding
costs and market volatility due to market illiquidity and competition for funding; Interbank Offered Rate (IBOR) transition risk; critical accounting estimates and changes to accounting
standards, policies, and methods used by the Bank; the economic, financial, and other impacts of pandemics; and the occurrence of natural and unnatural catastrophic events and claims
resulting from such events. The Bank cautions 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 refer to the “Risk Factors and Management” section of the 2023 MD&A, as may be updated in subsequently filed quarterly reports to shareholders and news
releases (as applicable) related to any events or 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, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements, should be considered carefully when making
decisions with respect to the Bank. The Bank cautions 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 2023 MD&A under the heading “Economic Summary and Outlook”,
under the headings “Key Priorities for 2024” and “Operating Environment and Outlook” for the Canadian Personal and Commercial Banking, U.S. Retail, Wealth Management and
Insurance, and Wholesale Banking segments, and under the heading “2023 Accomplishments and Focus for 2024” for the Corporate segment, each as may be 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 law.
This document was reviewed by the Bank’s Audit Committee and was approved by the Bank’s Board of Directors, on the Audit Committee’s recommendation, prior to its release.
TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 4
TABLE 1: FINANCIAL HIGHLIGHTS
(millions of Canadian dollars, except as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2024
2024
2023
2024
2023
Results of operations
Total revenue – reported
1
$
13,819
$
13,714
$
12,397
$
27,533
$
24,598
Total revenue – adjusted
1,2
13,883
13,771
12,570
27,654
25,647
Provision for (recovery of) credit losses
1,071
1,001
599
2,072
1,289
Insurance service expenses (ISE)
1
1,248
1,366
1,118
2,614
2,282
Non-interest expenses – reported
1
8,401
8,030
6,756
16,431
14,868
Non-interest expenses – adjusted
1,2
7,084
7,125
6,462
14,209
12,799
Net income – reported
1
2,564
2,824
3,306
5,388
4,887
Net income – adjusted
1,2
3,789
3,637
3,707
7,426
7,861
Financial position
(billions of Canadian dollars)
Total loans net of allowance for loan losses
$
928.1
$
904.3
$
849.6
$
928.1
$
849.6
Total assets
1,966.7
1,910.9
1,924.8
1,966.7
1,924.8
Total deposits
1,203.8
1,181.3
1,189.4
1,203.8
1,189.4
Total equity
112.0
112.4
116.2
112.0
116.2
Total risk-weighted assets
3
602.8
579.4
549.4
602.8
549.4
Financial ratios
Return on common equity (ROE) – reported
1,4
9.5
%
10.9
%
12.4
%
10.2
%
9.1
%
Return on common equity – adjusted
1,2
14.5
14.1
14.0
14.3
15.0
Return on tangible common equity (ROTCE)
1,2,4
13.0
14.9
16.5
13.9
12.3
Return on tangible common equity – adjusted
1,2
19.2
18.7
18.3
18.9
19.7
Efficiency ratio – reported
1,4
60.8
58.6
54.5
59.7
60.4
Efficiency ratio – adjusted, net of ISE
1,2,4,5
56.1
57.4
56.4
56.7
54.8
Provision for (recovery of) credit losses as a % of net
average loans and acceptances
0.47
0.44
0.28
0.45
0.30
Common share information – reported
(Canadian dollars)
Per share earnings
1
Basic
$
1.35
$
1.55
$
1.69
$
2.90
$
2.52
Diluted
1.35
1.55
1.69
2.89
2.52
Dividends per share
1.02
1.02
0.96
2.04
1.92
Book value per share
4
57.69
57.34
57.08
57.69
57.08
Closing share price
6
81.67
81.67
82.07
81.67
82.07
Shares outstanding (millions)
Average basic
1,762.8
1,776.7
1,828.3
1,769.8
1,824.4
Average diluted
1,764.1
1,778.2
1,830.3
1,771.2
1,826.6
End of period
1,759.3
1,772.1
1,838.5
1,759.3
1,838.5
Market capitalization (billions of Canadian dollars)
$
143.7
$
144.7
$
150.9
$
143.7
$
150.9
Dividend yield
4
5.1
%
4.9
%
4.5
%
5.0
%
4.4
%
Dividend payout ratio
4
75.6
65.7
56.7
70.3
76.2
Price-earnings ratio
1,4
13.8
13.1
10.4
13.8
10.4
Total shareholder return (1 year)
4
4.5
(6.9)
(7.5)
4.5
(7.5)
Common share information – adjusted
(Canadian dollars)
1,2
Per share earnings
1
Basic
$
2.04
$
2.01
$
1.91
$
4.05
$
4.15
Diluted
2.04
2.00
1.91
4.04
4.14
Dividend payout ratio
49.9
%
50.7
%
50.2
%
50.3
%
46.2
%
Price-earnings ratio
1
10.5
10.6
9.8
10.5
9.8
Capital ratios
3
Common Equity Tier 1 Capital ratio
13.4
%
13.9
%
15.3
%
13.4
%
15.3
%
Tier 1 Capital ratio
15.1
15.7
17.3
15.1
17.3
Total Capital ratio
17.1
17.6
19.7
17.1
19.7
Leverage ratio
4.3
4.4
4.6
4.3
4.6
TLAC ratio
30.6
30.8
34.2
30.6
34.2
TLAC Leverage ratio
8.7
8.6
9.0
8.7
9.0
1
For the three and six months ended April 30, 2023, certain amounts have been restated for the adoption of IFRS 17,
Insurance Contracts
quarter 2024 Interim Consolidated Financial Statements for further details.
2
The Toronto-Dominion Bank (“TD” or the “Bank”) prepares its Interim Consolidated Financial Statements in accordance with IFRS, the current GAAP, and refers to results prepared in
accordance with IFRS as the “reported” results. The Bank also utilizes non-GAAP financial measures such as “adjusted” results and non-GAAP ratios to assess each of its businesses
and to measure overall Bank performance. To arrive at adjusted results, the Bank adjusts reported results for “items of note”. Refer to “Significant Events” and “How We Performed”
sections of this document for further explanation, a list of the items of note, and a reconciliation of adjusted to reported results. Non-GAAP financial measures and ratios used in this
document are not defined terms under IFRS and, therefore, may not be comparable to similar terms used by other issuers.
3
These measures have been included in this document in accordance with the Office of the Superintendent of Financial Institutions Canada’s (OSFI’s) Capital Adequacy Requirements,
Leverage Requirements, and Total Loss Absorbing Capacity (TLAC) guidelines. Refer to the “Capital Position” section in the second quarter of 2024 MD&A for further details.
4
5
Q2 2024: $12,635 million, Q1 2024: $12,405 million, Q2 2023: $11, 452 million, 2024 YTD: $25,040 million, 2023 YTD: $23,365 million. Effective the first quarter of 2024, the composition
of this non-GAAP ratio and the comparative amounts have been revised.
6
Toronto Stock Exchange closing market price.
TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 5
SIGNIFICANT EVENTS
a) Provision for Investigations Related to the Bank’s AML Program
In the second quarter of 2024, the Bank recorded an initial provision of $615 million (US$450 million) in connection with discussions with one of its U.S. regulators,
related to previously disclosed regulatory and law enforcement investigations of the Bank’s U.S.
Bank Secrecy Act
For further details, refer to Note 19 of the Bank’s second quarter 2024 Interim Consolidated Financial Statements.
b)
Restructuring Charges
The Bank continued to undertake certain measures in the second quarter of 2024 to reduce its cost base and achieve greater efficiency. In connection with these
measures, the Bank incurred $165 million of restructuring charges which primarily relate to employee severance and other personnel-related costs and real estate
optimization. Next quarter, we expect to incur additional restructuring charges of approximately $50 million, and to conclude our restructuring program.
c) Federal Deposit Insurance Corporation Special Assessment
On November 16, 2023, the FDIC announced a final rule that implements a special assessment to recover the losses to the Deposit Insurance Fund arising from
the protection of uninsured depositors during the U.S. bank failures in the spring of 2023. The special assessment resulted in the recognition of $411 million
(US$300 million) pre-tax in non-interest expenses in the first quarter of the Bank’s fiscal 2024.
On February 23, 2024, the FDIC notified all institutions subject to the special assessment that its estimate of total losses has increased compared to the amount
communicated with the final rule in November 2023. Accordingly, the Bank recognized an additional expense for the special assessment of $103 million
(US$75 million)
in the second quarter of the Bank’s fiscal 2024. The final amount of the Bank’s special assessment may be further updated as the FDIC
determines the actual losses to the Deposit Insurance Fund. The FDIC plans to provide institutions subject to the special assessment with an updated estimate
with its first quarter 2024 special assessment invoice, to be released in June 2024.
TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 6
HOW WE PERFORMED
HOW THE BANK REPORTS
The Bank prepares its Interim Consolidated Financial Statements in accordance with IFRS and refers to results prepared in accordance with IFRS as “reported”
results.
Non-GAAP and Other Financial Measures
In addition to reported results, the Bank also presents certain financial measures, including non-GAAP financial measures that are historical, non-GAAP ratios,
supplementary financial measures and capital management measures, to assess its results. Non-GAAP financial measures, such as “adjusted” results, are utilized
to assess the Bank’s businesses and to measure the Bank’s overall performance. To arrive at adjusted results, the Bank adjusts for “items of note” from reported
results. Items of note are items which management does not believe are indicative of underlying business performance and are disclosed in Table 3. Non-GAAP
ratios include a non-GAAP financial measure as one or more of its components. Examples of non-GAAP ratios include adjusted basic and diluted earnings per
share (EPS), adjusted dividend payout ratio, adjusted efficiency ratio, net of ISE, and adjusted effective income tax rate. The Bank believes that non-GAAP
financial measures and non-GAAP ratios provide the reader with a better understanding of how management views the Bank’s performance. Non-GAAP financial
measures and non-GAAP ratios used in this document are not defined terms under IFRS and, therefore, may not be comparable to similar terms used by other
issuers. Supplementary financial measures depict the Bank’s financial performance and position, and capital management measures depict the Bank’s capital
position, and both are explained in this document where they first appear.
U.S. Strategic Cards
The Bank’s U.S. strategic cards portfolio is comprised of agreements with certain U.S. retailers pursuant to which TD is the U.S. issuer of private label and co-
branded consumer credit cards to their U.S. customers. Under the terms of the individual agreements, the Bank and the retailers share in the profits generated by
the relevant portfolios after credit losses. Under IFRS, TD is required to present the gross amount of revenue and PCL related to these portfolios in the Bank’s
Interim Consolidated Statement of Income. At the segment level, the retailer program partners’ share of revenues and credit losses is presented in the Corporate
segment, with an offsetting amount (representing the partners’ net share) recorded in Non-interest expenses, resulting in no impact to Corporate’s reported net
income (loss). The net income (loss) included in the U.S. Retail segment includes only the portion of revenue and credit losses attributable to TD under the
agreements.
Investment in The Charles Schwab Corporation and IDA Agreement
On October 6, 2020, the Bank acquired an approximately 13.5% stake in The Charles Schwab Corporation (“Schwab”) following the completion of Schwab’s
acquisition of TD Ameritrade Holding Corporation (“TD Ameritrade”) of which the Bank was a major shareholder (the “Schwab transaction”). On August 1, 2022,
the Bank sold 28.4 million non-voting common shares of Schwab, at a price of US$66.53 per share for proceeds of $2.5 billion (US$1.9 billion), which reduced the
Bank’s ownership interest in Schwab to approximately 12.0%.
The Bank accounts for its investment in Schwab using the equity method. The U.S. Retail segment reflects the Bank’s share of net income from its investment
in Schwab. The Corporate segment net income (loss) includes amounts for amortization of acquired intangibles, the acquisition and integration charges related to
the Schwab transaction, and the Bank’s share of restructuring and other charges incurred by Schwab. The Bank’s share of Schwab’s earnings available to
common shareholders is reported with a one-month lag. For further details, refer to Note 7 of the Bank’s second quarter 2024 Interim Consolidated Financial
Statements.
On November 25, 2019, the Bank and Schwab signed an insured deposit account agreement (the “2019 Schwab IDA Agreement”), with an initial expiration
date of July 1, 2031. Under the 2019 Schwab IDA Agreement, starting July 1, 2021, Schwab had the option to reduce the deposits by up to US$10 billion per year
(subject to certain limitations and adjustments), with a floor of US$50 billion. In addition, Schwab requested some further operational flexibility to allow for the
sweep deposit balances to fluctuate over time, under certain conditions and subject to certain limitations.
On May 4, 2023, the Bank and Schwab entered into an amended insured deposit account agreement (the “2023 Schwab IDA Agreement”), which replaced the
2019 Schwab IDA Agreement. Pursuant to the 2023 Schwab IDA Agreement, the Bank continues to make sweep deposit accounts available to clients of Schwab.
Schwab designates a portion of the deposits with the Bank as fixed-rate obligation amounts (FROA). Remaining deposits over FROA are designated as floating-
rate obligations. In comparison to the 2019 Schwab IDA Agreement, the 2023 Schwab IDA Agreement extends the initial expiration date by three years to
July 1, 2034 and provides for lower deposit balances in its first six years, followed by higher balances in the later years. Specifically, until September 2025, the
aggregate FROA will serve as the floor. Thereafter, the floor will be set at US$60 billion. In addition, Schwab has the option to buy down up to $6.8 billion
(US$5 billion) of FROA by paying the Bank certain fees in accordance with the 2023 Schwab IDA Agreement, subject to certain limits. Refer to the “Related Party
Transactions” section in the 2023 MD&A for further details.
During the first quarter of 2024, Schwab exercised its option to buy down the remaining $0.7 billion (US$0.5 billion) of the US$5 billion FROA buydown
allowance and paid $32 million (US$23 million) in termination fees to the Bank in accordance with the 2023 Schwab IDA Agreement. By the end of the first quarter
of 2024, Schwab had completed its buy down of the full US$5 billion FROA buydown allowance and had paid a total of $337 million (US$250 million) in termination
fees to the Bank. The fees were intended to compensate the Bank for losses incurred from discontinuing certain hedging relationships and for lost revenues. The
net impact was recorded in net interest income.
TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 7
The following table provides the operating results on a reported basis for the Bank.
TABLE 2: OPERATING RESULTS – Reported
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2024
2024
2023
2024
2023
Net interest income
$
7,465
$
7,488
$
7,428
$
14,953
$
15,161
Non-interest income
1
6,354
6,226
4,969
12,580
9,437
Total revenue
1
13,819
13,714
12,397
27,533
24,598
Provision for (recovery of) credit losses
1,071
1,001
599
2,072
1,289
Insurance service expenses
1
1,248
1,366
1,118
2,614
2,282
Non-interest expenses
1
8,401
8,030
6,756
16,431
14,868
Income before income taxes and share of net income from
investment in Schwab
1
3,099
3,317
3,924
6,416
6,159
Provision for (recovery of) income taxes
1
729
634
859
1,363
1,798
Share of net income from investment in Schwab
194
141
241
335
526
Net income – reported
1
2,564
2,824
3,306
5,388
4,887
Preferred dividends and distributions on other equity instruments
190
74
210
264
293
Net income available to common shareholders
1
$
2,374
$
2,750
$
3,096
$
5,124
$
4,594
1
Consolidated Financial Statements for further details.
TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 8
The following table provides a reconciliation between the Bank’s adjusted and reported results. For further details refer to the “Significant Events” section.
TABLE 3: NON-GAAP FINANCIAL MEASURES – Reconciliation of Adjusted to Reported Net Income
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2024
2024
2023
2024
2023
Operating results – adjusted
Net interest income
1
$
7,529
$
7,545
$
7,610
$
15,074
$
15,472
Non-interest income
1,2,3
6,354
6,226
4,960
12,580
10,175
Total revenue
2
13,883
13,771
12,570
27,654
25,647
Provision for (recovery of) credit losses
1,071
1,001
599
2,072
1,289
Insurance service expenses
2
1,248
1,366
1,118
2,614
2,282
Non-interest expenses
2,4
7,084
7,125
6,462
14,209
12,799
Income before income taxes and share of net income from
investment in Schwab
4,480
4,279
4,391
8,759
9,277
Provision for income taxes
920
872
967
1,792
2,027
Share of net income from investment in Schwab
5
229
230
283
459
611
Net income – adjusted
2
3,789
3,637
3,707
7,426
7,861
Preferred dividends and distributions on other equity instruments
190
74
210
264
293
Net income available to common shareholders – adjusted
3,599
3,563
3,497
7,162
7,568
Pre-tax adjustments for items of note
Amortization of acquired intangibles
6
(72)
(94)
(79)
(166)
(133)
Acquisition and integration charges related to the Schwab transaction
4,5
(21)
(32)
(30)
(53)
(64)
Share of restructuring and other charges from investment in Schwab
5
–
(49)
–
(49)
–
Restructuring charges
4
(165)
(291)
–
(456)
–
Acquisition and integration-related charges
4
(102)
(117)
(73)
(219)
(94)
Charges related to the terminated First Horizon (FHN) acquisition
4
–
–
(154)
–
(260)
Impact from the terminated FHN acquisition-related
capital hedging strategy
1
(64)
(57)
(134)
(121)
(1,010)
Civil matter provision/Litigation settlement
4
(274)
–
(39)
(274)
(1,642)
FDIC special assessment
4
(103)
(411)
–
(514)
–
Provision for investigations related to the Bank’s AML program
4
(615)
–
–
(615)
–
Less: Impact of income taxes
Amortization of acquired intangibles
(10)
(15)
(12)
(25)
(20)
Acquisition and integration charges related to the Schwab transaction
(5)
(6)
(4)
(11)
(10)
Restructuring charges
(43)
(78)
–
(121)
–
Acquisition and integration-related charges
(22)
(24)
(10)
(46)
(15)
Charges related to the terminated FHN acquisition
–
–
(38)
–
(64)
Impact from the terminated FHN acquisition-related
capital hedging strategy
(16)
(14)
(33)
(30)
(249)
Civil matter provision/Litigation settlement
(69)
–
(11)
(69)
(456)
FDIC special assessment
(26)
(101)
–
(127)
–
Canada Recovery Dividend (CRD) and federal tax rate
increase for fiscal 2022
7
–
–
–
–
585
Total adjustments for items of note
(1,225)
(813)
(401)
(2,038)
(2,974)
Net income available to common shareholders – reported
$
2,374
$
2,750
$
3,096
$
5,124
$
4,594
1
to-market gains (losses) on interest rate swaps recorded in non-interest income – Q2 2023: ($263) million, Q1 2023: ($998) million, ii) basis adjustment amortization related to de-
designated fair value hedge accounting relationships, recorded in net interest income – Q2 2023: $129 million, Q1 2023: $122 million, and iii) interest income (expense) recognized on the
interest rate swaps, reclassified from non-interest income to net interest income with no impact to total adjusted net income – Q2 2023: $311 million, Q1 2023: $251 million. After the
termination of the merger agreement, the residual impact of the strategy is reversed through net interest income – Q2 2024: ($64) million, Q1 2024: ($57) million.
2
Consolidated Financial Statements for further details.
3
i. Stanford litigation settlement – Q2 2023: $39 million. This reflects the foreign exchange loss and is reported in the Corporate segment.
4
i. Amortization of acquired intangibles – Q2 2024: $42 million, Q1 2024: $63 million, Q2 2023: $49 million, Q1 2023: $24 million, reported in the Corporate segment;
ii. The Bank’s own integration and acquisition costs related to the Schwab transaction – Q2 2024: $16 million, Q1 2024: $23 million, Q2 2023: $18 million, Q1 2023: $21 million , reported
in the Corporate segment;
iii. Restructuring charges – Q2 2024: $165 million, Q1 2024: $291 million, reported in the Corporate segment;
iv. Acquisition and integration-related charges – Q2 2024: $102 million, Q1 2024: $117 million, Q2 2023: $73 million, Q1 2023: $21 million, reported in the Wholesale Banking segment;
v. Charges related to the terminated FHN acquisition – Q2 2023: $154 million, Q1 2023: $106 million, reported in the U.S. Retail segment;
vi. Civil matter provision/Litigation settlement – Q2 2024: $274 million in respect of a civil matter, Q1 2023: $1,603 million in respect of the Stanford litigation settlement, reported in the
Corporate segment;
vii. FDIC special assessment – Q2 2024: $103 million, Q1 2024: $411 million, reported in the U.S. Retail segment; and
viii. Provision for investigations related to the Bank’s AML program – Q2 2024: $615 million, reported in the U.S. Retail segment.
5
segment:
i. Amortization of Schwab-related acquired intangibles – Q2 2024: $30 million, Q1 2024: $31 million, Q2 2023: $30 million, Q1 2023: $30 million;
ii. The Bank’s share of acquisition and integration charges associated with Schwab’s acquisition of TD Ameritrade – Q2 2024: $5 million, Q1 2024: $9 million, Q2 2023: $12 million,
Q1 2023: $13 million;
iii. The Bank’s share of restructuring charges incurred by Schwab – Q1 2024: $27 million; and
iv. The Bank’s share of the FDIC special assessment charge incurred by Schwab – Q1 2024: $22 million.
6
Amortization of acquired intangibles relates to intangibles acquired as a result of asset acquisitions and business combinations, including the after-tax amounts for amortization of
acquired intangibles relating to the Share of net income from investment in Schwab, reported in the Corporate segment. Refer to footnotes 4 and 5 for amounts.
7
TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 9
TABLE 4: RECONCILIATION OF REPORTED TO ADJUSTED EARNINGS PER SHARE
1
(Canadian dollars)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2024
2024
2023
2024
2023
Basic earnings per share – reported
2
$
1.35
$
1.55
$
1.69
$
2.90
$
2.52
Adjustments for items of note
0.69
0.45
0.22
1.15
1.63
Basic earnings per share – adjusted
2
$
2.04
$
2.01
$
1.91
$
4.05
$
4.15
Diluted earnings per share – reported
2
$
1.35
$
1.55
$
1.69
$
2.89
$
2.52
Adjustments for items of note
0.69
0.45
0.22
1.15
1.63
Diluted earnings per share – adjusted
2
$
2.04
$
2.00
$
1.91
$
4.04
$
4.14
1
rounding.
2
Consolidated Financial Statements for further details.
Return on Common Equity
The consolidated Bank ROE is calculated as reported net income available to common shareholders as a percentage of average common equity. The
consolidated Bank adjusted ROE is calculated as adjusted net income available to common shareholders as a percentage of average common equity. Adjusted
ROE is a non-GAAP financial ratio and can be utilized in assessing the Bank’s use of equity.
ROE for the business segments is calculated as the segment net income attributable to common shareholders as a percentage of average allocated capital. The
Bank’s methodology for allocating capital to its business segments is largely aligned with the common equity capital requirements under Basel III. Capital allocated
to the business segments was increased to 11.5% Common Equity Tier 1 (CET1) Capital effective the first quarter of 2024, compared with 11% in fiscal 2023.
TABLE 5: RETURN ON COMMON EQUITY
(millions of Canadian dollars, except as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2024
2024
2023
2024
2023
Average common equity
$
101,137
$
100,269
$
102,800
$
100,573
$
101,750
Net income available to common shareholders – reported
1
2,374
2,750
3,096
5,124
4,594
Items of note, net of income taxes
1,225
813
401
2,038
2,974
Net income available to common shareholders – adjusted
1
$
3,599
$
3,563
$
3,497
$
7,162
$
7,568
Return on common equity – reported
1
9.5
%
10.9
%
12.4
%
10.2
%
9.1
%
Return on common equity – adjusted
1
14.5
14.1
14.0
14.3
15.0
1
Consolidated Financial Statements for further details.
Return on Tangible Common Equity
Tangible common equity (TCE) is calculated as common shareholders’ equity less goodwill, imputed goodwill and intangibles on the investments in Schwab and
other acquired intangible assets, net of related deferred tax liabilities. ROTCE is calculated as reported net income available to common shareholders after
adjusting for the after-tax amortization of acquired intangibles, which are treated as an item of note, as a percentage of average TCE. Adjusted ROTCE is
calculated using reported net income available to common shareholders, adjusted for all items of note, as a percentage of average TCE. TCE, ROTCE, and
adjusted ROTCE can be utilized in assessing the Bank’s use of equity. TCE is a non-GAAP financial measure, and ROTCE and adjusted ROTCE are non-GAAP
ratios.
TABLE 6: RETURN ON TANGIBLE COMMON EQUITY
(millions of Canadian dollars, except as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2024
2024
2023
2024
2023
Average common equity
$
101,137
$
100,269
$
102,800
$
100,573
$
101,750
Average goodwill
18,380
18,208
17,835
18,322
17,713
Average imputed goodwill and intangibles on
investments in Schwab
6,051
6,056
6,142
6,062
6,163
Average other acquired intangibles
1
574
615
583
595
525
Average related deferred tax liabilities
(228)
(231)
(210)
(230)
(195)
Average tangible common equity
76,360
75,621
78,450
75,824
77,544
Net income available to common shareholders – reported
2
2,374
2,750
3,096
5,124
4,594
Amortization of acquired intangibles, net of income taxes
62
79
67
141
113
Net income available to common shareholders adjusted for
amortization of acquired intangibles, net of income taxes
2
2,436
2,829
3,163
5,265
4,707
Other items of note, net of income taxes
1,163
734
334
1,897
2,861
Net income available to common shareholders – adjusted
2
$
3,599
$
3,563
$
3,497
$
7,162
$
7,568
Return on tangible common equity
2
13.0
%
14.9
%
16.5
%
13.9
%
12.3
%
Return on tangible common equity – adjusted
2
19.2
18.7
18.3
18.9
19.7
1
2
Consolidated Financial Statements for further details.
TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 10
HOW OUR BUSINESSES PERFORMED
For management reporting purposes, the Bank’s business operations and activities are organized around the following four key business segments: Canadian
Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance, and Wholesale Banking. The Bank’s other activities are grouped into the
Corporate segment.
Results of each business segment reflect revenue, expenses, assets, and liabilities generated by the businesses in that segment. Where applicable, the Bank
measures and evaluates the performance of each segment based on adjusted results and ROE, and for those segments, the Bank indicates that the measure is
adjusted. For further details, refer to the “How We Performed” section of this document, the “Business Focus” section in the Bank’s 2023 MD&A, and Note 28 of
the Bank’s Consolidated Financial Statements for the year ended October 31, 2023. Effective the first quarter of 2024, certain asset management businesses
which were previously reported in the U.S. Retail segment are now reported in the Wealth Management and Insurance segment. Comparative period information
has been adjusted to reflect the new alignment.
PCL related to performing (Stage 1 and Stage 2) and impaired (Stage 3) financial assets, loan commitments, and financial guarantees is recorded within the
respective segment.
Net interest income within Wholesale Banking is calculated on a taxable equivalent basis (TEB), which means that the value of non-taxable or tax-exempt
income, including certain dividends, is adjusted to its equivalent pre-tax value. Using TEB allows the Bank to measure income from all securities and loans
consistently and makes for a more meaningful comparison of net interest income with similar institutions. The TEB increase to net interest income and provision for
income taxes reflected in Wholesale Banking results is reversed in the Corporate segment. The TEB adjustment for the quarter was $4 million, compared with
$29 million in the prior quarter and $40 million in the second quarter last year.
Share of net income from investment in Schwab is reported in the U.S. Retail segment. Amounts for amortization of acquired intangibles, the acquisition and
integration charges related to the Schwab transaction, and the Bank’s share of restructuring and other charges incurred by Schwab are recorded in the Corporate
segment.
TABLE 7: CANADIAN PERSONAL AND COMMERCIAL BANKING
(millions of Canadian dollars, except as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2024
2024
2023
2024
2023
Net interest income
$
3,812
$
3,833
$
3,377
$
7,645
$
6,916
Non-interest income
1,027
1,051
1,027
2,078
2,077
Total revenue
4,839
4,884
4,404
9,723
8,993
Provision for (recovery of) credit losses – impaired
397
364
234
761
454
Provision for (recovery of) credit losses – performing
70
59
13
129
120
Total provision for (recovery of) credit losses
467
423
247
890
574
Non-interest expenses
1,957
1,984
1,903
3,941
3,766
Provision for (recovery of) income taxes
676
692
629
1,368
1,299
Net income
$
1,739
$
1,785
$
1,625
$
3,524
$
3,354
Selected volumes and ratios
Return on common equity
1
32.9
%
34.6
%
37.4
%
33.8
%
38.6
%
Net interest margin (including on securitized assets)
2
2.84
2.84
2.74
2.84
2.77
Efficiency ratio
40.4
40.6
43.2
40.5
41.9
Number of Canadian retail branches
1,062
1,062
1,060
1,062
1,060
Average number of full-time equivalent staff
29,053
29,271
28,797
29,163
28,800
1
2
GAAP financial measure. Refer to “Non-GAAP and Other Financial Measures” in the “How We Performed” section of this document and the Glossary in the Bank’s second quarter 2024
MD&A for additional information about these metrics.
Quarterly comparison – Q2 2024 vs. Q2 2023
Canadian Personal and Commercial Banking net income for the quarter was $1,739 million, an increase of $114 million, or 7%, compared with the second quarter
last year, reflecting higher revenue, partially offset by higher PCL and non-interest expenses. The annualized ROE for the quarter was 32.9%, compared with
37.4% in the second quarter last year.
Revenue for the quarter was $4,839 million, an increase of $435 million, or 10%, compared with the second quarter last year. Net interest income was
$3,812 million, an increase of $435 million, or 13%, compared with the second quarter last year, primarily reflecting volume growth and higher margins. Average
loan volumes increased $37 billion, or 7%, reflecting 7% growth in personal loans and 7% growth in business loans. Average deposit volumes increased
$16 billion, or 4%, reflecting 6% growth in personal deposits, partially offset by 1% decline in business deposits. Net interest margin was 2.84%, an increase of
10 basis points (bps), primarily due to higher margins on deposits, partially offset by lower margins on loans and changes to balance sheet mix. Non-interest
income was $1,027 million, flat compared with the second quarter last year.
PCL for the quarter was $467 million, an increase of $220 million compared with the second quarter last year. PCL – impaired was $397 million, an increase of
$163 million, or 70%, reflecting credit migration in the consumer and commercial lending portfolios. PCL – performing was $70 million, an increase of $57 million.
The performing provisions this quarter largely reflect credit conditions, including credit migration in the commercial and consumer lending portfolios, and volume
growth. Total PCL as an annualized percentage of credit volume was 0.34%, an increase of 15 bps compared with the second quarter last year.
Non-interest expenses for the quarter were $1,957 million, an increase of $54 million, or 3%, compared with the second quarter last year, reflecting higher
spend supporting business growth, including higher employee-related expenses and technology costs, partially offset by higher non-credit provisions in the second
quarter last year.
The efficiency ratio for the quarter was 40.4%, compared with 43.2% in the second quarter last year.
Quarterly comparison – Q2 2024 vs. Q1 2024
Canadian Personal and Commercial Banking net income for the quarter was $1,739 million, a decrease of $46 million, or 3%, compared with the prior quarter,
reflecting lower revenue and higher PCL, partially offset by lower non-interest expenses. The annualized ROE for the quarter was 32.9%, compared with 34.6% in
the prior quarter.
Revenue decreased $45 million, or 1%, compared with the prior quarter. Net interest income decreased $21 million, or 1%, reflecting fewer days in the second
quarter, partially offset by volume growth. Average loan volumes increased $5 billion, or 1%, reflecting 1% growth in personal loans and 2% growth in business
loans. Average deposit volumes were relatively flat compared with the prior quarter, reflecting 1% growth in personal deposits, offset by 1% decline in business
TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 11
deposits. Net interest margin was 2.84%, flat compared with the prior quarter. Non-interest income decreased $24 million, or 2%, compared with the prior quarter,
reflecting lower fee revenue.
PCL for the quarter was $467 million, an increase of $44 million compared with the prior quarter. PCL – impaired was $397 million, an increase of $33 million, or
9%, largely reflecting credit migration in the commercial lending portfolio. PCL – performing was $70 million, an increase of $11 million. The performing provisions
this quarter largely reflect credit conditions, including credit migration in the commercial and consumer lending portfolios, and volume growth. Total PCL as an
annualized percentage of credit volume was 0.34%, an increase of 4 bps compared with the prior quarter.
Non-interest expenses decreased $27 million, or 1% compared with the prior quarter, primarily reflecting lower technology costs and employee-related
expenses
.
The efficiency ratio was 40.4%, compared with 40.6%, in the prior quarter.
Year-to-date comparison – Q2 2024 vs. Q2 2023
Canadian Personal and Commercial Banking net income for the six months ended April 30, 2024, was $3,524 million, an increase of $170 million, or 5%,
compared with the same period last year, reflecting higher revenue, partially offset by higher PCL and non-interest expenses. The annualized ROE for the period
was 33.8%, compared with 38.6%, in the same period last year.
Revenue for the period was $9,723 million, an increase of $730 million, or 8%, compared with the same period last year. Net interest income was
$7,645 million, an increase of $729 million, or 11% compared with the same period last year, reflecting volume growth and higher margins. Average loan volumes
increased $37 billion, or 7%, reflecting 7% growth in personal loans and 8% growth in business loans. Average deposit volumes increased $15 billion, or 3%,
reflecting 6% growth in personal deposits, partially offset by a 2% decline in business deposits. Net interest margin was 2.84%, an increase of 7 bps, primarily due
to higher margins on deposits, partially offset by lower margins on loans and changes to balance sheet mix.
Non-interest income was $2,078 million, relatively flat
compared with the same period last year.
PCL was $890 million, an increase of $316 million compared with the same period last year. PCL – impaired was $761 million, an increase of $307 million, or
68%, reflecting credit migration in the consumer and commercial lending portfolios. PCL – performing was $129 million, an increase of $9 million. The current year
performing provisions largely reflect current credit conditions, including credit migration, and volume growth. Total PCL as an annualized percentage of credit
volume was 0.32%, an increase of 10 bps compared with the same period last year.
Non-interest expenses were $3,941 million, an increase of $175 million, or 5%, compared with the same period last year, reflecting higher spend supporting
business growth, including higher employee-related expenses and technology costs.
The efficiency ratio was 40.5%, compared with 41.9%, for the same period last year.
TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 12
TABLE 8: U.S. RETAIL
(millions of dollars, except as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
Canadian Dollars
2024
2024
2023
2024
2023
Net interest income
$
$
$
$
$
Non-interest income
Total revenue
Provision for (recovery of) credit losses – impaired
Provision for (recovery of) credit losses – performing
(8)
Total provision for (recovery of) credit losses
Non-interest expenses – reported
Non-interest expenses – adjusted
1,2
Provision for (recovery of) income taxes – reported
(5)
Provision for (recovery of) income taxes – adjusted
1
U.S. Retail Bank net income – reported
U.S. Retail Bank net income – adjusted
1
Share of net income from investment in Schwab
3,4
Net income – reported
$
$
$
$
$
Net income – adjusted
1
U.S. Dollars
Net interest income
$
$
$
$
$
Non-interest income
Total revenue
Provision for (recovery of) credit losses – impaired
Provision for (recovery of) credit losses – performing
(6)
Total provision for (recovery of) credit losses
Non-interest expenses – reported
Non-interest expenses – adjusted
1,2
Provision for (recovery of) income taxes – reported
(3)
Provision for (recovery of) income taxes – adjusted
1
U.S. Retail Bank net income – reported
U.S. Retail Bank net income – adjusted
1
Share of net income from investment in Schwab
3,4
Net income – reported
$
$
$
$
$
Net income – adjusted
1
Selected volumes and ratios
Return on common equity – reported
5
%
%
%
%
%
Return on common equity – adjusted
1,5
Net interest margin
1,6
Efficiency ratio – reported
Efficiency ratio – adjusted
1
Assets under administration (billions of U.S. dollars)
7
$
$
$
$
$
Assets under management (billions of U.S. dollars)
7,8
Number of U.S. retail stores
Average number of full-time equivalent staff
1
document.
2
i. Charges related to the terminated First Horizon acquisition – Q2 2023: $154 million or US$113 million ($116 million or US$85 million after-tax), Q1 2023: $106 million or
US$78 million ($80 million or US$59 million after-tax);
ii. FDIC special assessment – Q2 2024: $103 million or US$75 million ($77 million or US$56 million after-tax), Q1 202 4: $411 million or US$300 million ($310 million or US$ 226 million
after-tax); and
iii. Provision for investigations related to the Bank’s AML program – Q2 2024: $615 million or US$450 million (before and after tax).
3
The Bank’s share of Schwab’s earnings is reported with a one-month lag. Refer to Note 7 of the Bank’s second quarter 2024 Interim Consolidated Financial Statements for further details.
4
The after-tax amounts for amortization of acquired intangibles, the Bank’s share of acquisition and integration charges associated with Schwab’s acquisition of TD Ameritrade, the Bank’s
share of Schwab’s restructuring charges, and the Bank’s share of Schwab’s FDIC special assessment charge are recorded in the Corporate segment.
5
Capital allocated to the business segment was increased to 11.5% CET1 Capital effective the first quarter of 2024, compared with 11% in the prior year.
6
Net interest margin is calculated by dividing U.S. Retail segment’s net interest income by average interest -earning assets. For the U.S. Retail segment, this calculation excludes the
impact related to sweep deposits arrangements, intercompany deposits, and cash collateral. The value of tax-exempt interest income is adjusted to its equivalent before-tax value. For
investment securities, the adjustment to fair value is included in the calculation of average interest-earning assets. Management believes this calculation better reflects segment
performance. Net interest income and average interest-earning assets used in the calculation are non-GAAP financial measures.
7
For additional information about this metric, refer to the Glossary in the Bank’s second quarter 2024 MD&A.
8
Refer to “How Our Businesses Performed” section regarding alignment of certain asset management businesses from the U.S. Retail segment to the Wealth Management and Insurance
segment.
TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 13
Quarterly comparison – Q2 2024 vs. Q2 2023
U.S. Retail reported net income for the quarter was $580 million (US$433 million), a decrease of $826 million (US$607 million), or 59% (58% in U.S. dollars),
compared with the second quarter last year. On an adjusted basis, net income for the quarter was $1,272 million (US$939 million), a decrease of $250 million
(US$186 million), or 16% (17% in U.S. dollars). The reported and adjusted annualized ROE for the quarter were 5.4% and 11.7%, respectively, compared with
14.1% and 15.3%, respectively, in the second quarter last year.
U.S. Retail net income includes contributions from the U.S. Retail Bank and the Bank’s investment in Schwab. Reported net income for the quarter from the
Bank’s investment in Schwab was $183 million (US$136 million), a decrease of $67 million (US$49 million), or 27% (26% in U.S. dollars).
U.S. Retail Bank reported net income was $397 million (US$297 million), a decrease of $759 million (US$558 million), or 66% (65% in U.S. dollars), compared
with the second quarter last year, primarily reflecting higher non-interest expenses, higher PCL, and lower net interest income. U.S. Retail Bank adjusted net
income was $1,089 million (US$803 million), a decrease of $183 million (US$137 million), or 14% (15% in U.S. dollars), compared with the second quarter last
year, reflecting higher PCL and lower net interest income.
Revenue for the quarter was US$2,540 million, a decrease of US$88 million, or 3%, compared with the second quarter last year. Net interest income of
US$2,094 million, decreased US$147 million, or 7%, driven by lower deposit margins and volumes, partially offset by higher loan volumes. Net interest margin of
2.99%, decreased 26 bps, due to lower deposit margins reflecting higher deposit costs and lower margins on loans. Non-interest income of US$446 million
increased US$59 million, or 15%, compared with the second quarter last year, primarily reflecting fee income growth from increased customer activity and losses
from the disposition of certain investments in the prior year.
Average loan volumes increased US$13 billion, or 7%, compared with the second quarter last year. Personal loans increased 10%, reflecting strong mortgage
and auto originations and lower prepayments in the higher rate environment. Business loans increased 5%, reflecting good originations from new customer growth
and slower payment rates. Average deposit volumes decreased US$21 billion, or 6%, reflecting an 18% decrease in sweep deposits, a 2% decrease in business
deposits, partially offset by a 1% increase in personal deposit volumes. Excluding sweep deposits, average deposits decreased 1%.
Assets under administration (AUA) were US$40 billion as at April 30, 2024, an increase of US$1 billion, or 3%, compared with the second quarter last year,
reflecting net asset growth. Assets under Management (AUM) were US$7 billion as at April 30, 2024, flat compared with the second quarter last year.
PCL for the quarter was US$280 million, an increase of US$140 million compared with the second quarter last year. PCL – impaired was US$229 million, an
increase of US$92 million, or 67%, reflecting credit migration in the consumer and commercial lending portfolios. PCL – performing was US$51 million, an increase
of US$48 million. The performing provisions this quarter reflect credit conditions and volume growth, and are largely recorded in the auto and commercial lending
portfolios. U.S. Retail PCL including only the Bank’s share of PCL in the U.S. strategic cards portfolio, as an annualized percentage of credit volume was 0.60%,
an increase of 27 bps, compared with the second quarter last year.
Reported non-interest expenses for the quarter were US$1,909 million, an increase of US$416 million, or 28%, compared with the second quarter last year,
reflecting the impact of the provision for investigations related to the Bank’s AML program, and FDIC special assessment, partially offset by acquisition and
integration-related charges for the terminated First Horizon transaction in the second quarter last year. On an adjusted basis, non-interest expenses were relatively
flat, reflecting higher employee-related expenses, partially offset by productivity initiatives.
The reported and adjusted efficiency ratios for the quarter were 75.2% and 54.5%, respectively, compared with 56.8% and 52.5%, respectively, in the second
quarter last year.
Quarterly comparison – Q2 2024 vs. Q1 2024
U.S. Retail reported net income of $580 million (US$433 million), a decrease of $327 million (US$237 million), or 36% (35% in U.S. dollars), compared with the
prior quarter. On an adjusted basis, net income for the quarter was $1,272 million (US$939 million), an increase of $55 million (US$43 million), or 5% (5% in
U.S. dollars). The reported and adjusted annualized ROE for the quarter were 5.4% and 11.7%, respectively, compared with 8.5% and 11.3%, respectively, in the
prior quarter.
The contribution from Schwab of $183 million (US$136 million) decreased $11 million (US$8 million), or 6% (6% in U.S. dollars).
U.S. Retail Bank reported net income was $397 million (US$297 million), a decrease of $316 million (US$229 million), or 44% (44% in U.S. dollars), compared
with the prior quarter, primarily reflecting higher non-interest expenses and lower net interest income. U.S. Retail Bank adjusted net income was $1,089 million
(US$803 million), an increase of $66 million (US$51 million), or 6% (7% in U.S. dollars), primarily reflecting lower non-interest expenses, partially offset by lower
net interest income.
Revenue for the quarter was US$2,540 million, a decrease of US$47 million, or 2%, compared with the prior quarter. Net interest income of US$2,094 million
decreased US$47 million, or 2%, primarily reflecting the effect of fewer days in the quarter, and lower deposit margins and volumes. Net interest margin of 2.99%
decreased 4 bps quarter-over-quarter due to balance sheet mix and higher funding costs. Non-interest income of US$446 million was flat compared to the prior
quarter.
Average loan volumes increased US$2 billion, or 1%, compared with the prior quarter. Personal loans were relatively flat. Business loans increased 1%,
reflecting good originations from new customer growth and slower payment rates. Average deposit volumes decreased US$5 billion, or 1%, compared with the
prior quarter, reflecting a 5% decrease in sweep deposits and a 2% decrease in business deposits, partially offset by a 2% increase in personal deposit volume.
AUA were US$40 billion
as at April 30, 2024, flat compared with the prior quarter. AUM were US$7 billion, flat compared with the prior quarter.
PCL for the quarter was US$280 million, a decrease of US$5 million compared with the prior quarter. PCL – impaired was US$229 million, a decrease of
US$50 million, or 18%, reflecting lower provisions in the commercial lending portfolios, and seasonal trends in credit card and auto portfolios. PCL – performing
was US$51 million, an increase of US$45 million. The performing provisions this quarter reflect credit conditions and volume growth, and are largely recorded in
the auto and commercial lending portfolios. U.S. Retail PCL including only the Bank’s share of PCL in the U.S. strategic cards portfolio, as an annualized
percentage of credit volume was 0.60%, a decrease of 1 basis point, compared with the prior quarter.
Reported non-interest expenses for the quarter were US$1,909 million, an increase of US$130 million, or 7%, compared to the prior quarter, primarily reflecting
the impact of the provision for investigations related to the Bank’s AML program
and additional FDIC special assessment, partially offset by the initial FDIC special
assessment in the prior quarter, and lower operating expenses. On an adjusted basis, non-interest expenses decreased US$95 million, or 6%, due to seasonality
of expenses and the impact of productivity initiatives.
The reported and adjusted efficiency ratios for the quarter were 75.2% and 54.5%, respectively, compared with 68.8% and 57.2%, respectively, in the prior
quarter.
Year-to-date comparison – Q2 2024 vs. Q2 2023
U.S. Retail reported net income for the six months ended April 30, 2024, was $1,487 million (US$1,103 million), a decrease of $1,503 million (US$1,110 million), or
50% (50% in U.S. dollars), compared with the same period last year. On an adjusted basis, net income for the period was $2,489 million (US$1,835 million), a
decrease of $697 million (US$522 million), or 22% (22% in U.S. dollars). The reported and adjusted annualized ROE for the period were 6.9% and 11.5%,
respectively, compared with 14.8% and 15.8%, respectively, in the same period last year.
The contribution from Schwab of $377 million (US$280 million), decreased $174 million (US$127 million), or 32% (31% in U.S. dollars).
TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 14
U.S. Retail Bank reported net income for the period was $1,110 million (US$823 million), a decrease of $1,329 million (US$983 million), or 54% (54% in U.S.
dollars), compared with the same period last year, reflecting higher non-interest expenses, higher PCL, and lower net interest income. U.S. Retail Bank adjusted
net income was $2,112 million (US$1,555 million), a decrease of $523 million (US$395 million), or 20% (20% in U.S. dollars), primarily reflecting higher PCL,
higher non-interest expenses, and lower net interest income.
Revenue for the period was US$5,127 million, a decrease of US$264 million, or 5%, compared with the same period last year. Net interest income of
US$4,235 million decreased US$354 million, or 8%, primarily reflecting lower deposit margins and volumes, partially offset by higher loan volumes. Net interest
margin of 3.01%, decreased 26 bps, due to lower deposit margins reflecting higher deposit costs and lower margins on loans. Non-interest income of
US$892 million increased US$90 million, or 11%, primarily reflecting fee income growth from increased customer activity and higher valuation on certain
investments in the prior year.
Average loan volumes increased US$15 billion, or 8%, compared with the same period last year. Personal loans increased 10%, reflecting good originations
and slower payment rates across portfolios. Business loans increased 6%, reflecting good originations from new customer growth, and slower payment rates.
Average deposit volumes decreased US$27 billion, or 8%, reflecting a 20% decrease in sweep deposits and a 3% decrease in business deposits. Personal
deposit volumes were flat. Excluding sweep deposits, average deposits decreased 1%.
PCL was US$565 million, an increase of US$276 million compared with the same period last year. PCL – impaired was US$508 million, an increase of
US$213 million, or 72%, reflecting credit migration in the consumer and commercial lending portfolios. PCL – performing was a build of US$57 million, compared
with a recovery of US$6 million in the prior year. The current year performing provisions largely reflect current conditions, including credit migration, and volume
growth. U.S. Retail PCL including only the Bank’s share of PCL in the U.S. strategic cards portfolio, as an annualized percentage of credit volume was 0.60%, an
increase of 27 bps, compared with the same period last year.
Reported non-interest expenses for the period were US$3,688 million, an increase of US$683 million, or 23%, compared with the same period last year,
reflecting the impact of the provision for investigations related to the Bank’s AML program, FDIC special assessment, and higher operating expenses, partially
offset by acquisition and integration-related charges for the terminated First Horizon transaction in the same period last year. On an adjusted basis, non-interest
expenses increased US$49 million, or 2%, reflecting higher employee-related expenses.
The reported and adjusted efficiency ratios for the quarter were 71.9% and 55.8%, respectively, compared with 55.7% and 52.2%, respectively, for the same
period last year.
TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 15
TABLE 9: WEALTH MANAGEMENT AND INSURANCE
(millions of Canadian dollars, except as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2024
2024
2023
2024
2023
Net interest income
$
304
$
285
$
258
$
589
$
541
Non-interest income
1
2,810
2,850
2,543
5,660
5,175
Total revenue
3,114
3,135
2,801
6,249
5,716
Provision for (recovery of) credit losses – impaired
–
–
1
–
1
Provision for (recovery of) credit losses – performing
–
–
–
–
–
Total provision for (recovery of) credit losses
–
–
1
–
1
Insurance service expenses
1
1,248
1,366
1,118
2,614
2,282
Non-interest expenses
1
1,027
1,047
963
2,074
1,972
Provision for (recovery of) income taxes
218
167
195
385
383
Net income
$
621
$
555
$
524
$
1,176
$
1,078
Selected volumes and ratios
Return on common equity
1,2
40.8
%
37.5
%
38.0
%
39.2
%
38.6
%
Efficiency ratio
1
33.0
33.4
34.4
33.2
34.5
Efficiency ratio, net of ISE
1,3
55.0
59.2
57.2
57.1
57.4
Assets under administration (billions of Canadian dollars)
4
$
596
$
576
$
549
$
596
$
549
Assets under management (billions of Canadian dollars)
489
479
460
489
460
Average number of full-time equivalent staff
15,163
15,386
16,454
15,276
16,426
-
1
Consolidated Financial Statements for further details.
2
3
Q2 2023: $1,683 million, 2024 YTD: $3,635 million, 2023 YTD: $3,434 million. Total revenue, net of ISE is a non-GAAP financial measure. Refer to “Non-GAAP and Other Financial
Measures” in the “How We Performed” section and the Glossary in the Bank’s second quarter 2024 MD&A for additional information about this metric.
4
Quarterly comparison – Q2 2024 vs. Q2 2023
Wealth Management and Insurance net income for the quarter was $621 million, an increase of $97 million, or 19%, compared with the second quarter last year,
reflecting higher revenue, partially offset by higher insurance service expenses and non-interest expenses. The annualized ROE for the quarter was 40.8%,
compared with 38.0% in the second quarter last year.
Revenue for the quarter was $3,114 million, an increase of $313 million, or 11%, compared with the second quarter last year. Non-interest income was
$2,810 million, an increase of $267 million, or 10%, reflecting higher insurance premiums, fee-based revenue commensurate with market growth and transaction
revenue. Net interest income was $304 million, an increase of $46 million, or 18%, compared with the second quarter last year, reflecting higher deposit margins.
AUA were $596 billion as at April 30, 2024, an increase of $47 billion, or 9%, compared with the second quarter last year, reflecting market appreciation and net
asset growth. AUM were $489 billion as at April 30, 2024, an increase of $29 billion, or 6%, compared with the second quarter last year, primarily reflecting market
appreciation.
Insurance service expenses for the quarter were $1,248 million, an increase of $130 million, or 12%, compared with the second quarter last year, reflecting
business growth, increased claims severity and less favourable prior years’ claims development.
Non-interest expenses for the quarter were $1,027 million, an increase of $64 million, or 7%, compared with the second quarter last year, reflecting higher
variable compensation commensurate with higher revenues, and technology costs.
The efficiency ratio for the quarter was 33.0%, compared with 34.4% in the second quarter last year. The efficiency ratio, net of ISE for the quarter was 55.0%,
compared with 57.2% in the second quarter last year.
Quarterly comparison – Q2 2024 vs. Q1 2024
Wealth Management and Insurance net income for the quarter was $621 million, an increase of $66 million, or 12%, compared with the prior quarter, primarily
reflecting higher earnings in the wealth management business. The annualized ROE for the quarter was 40.8%, compared with 37.5% in the prior quarter.
Revenue decreased $21 million, or 1%, compared with the prior quarter. Non-interest income decreased $40 million, or 1%, reflecting lower revenue in the
insurance business, partially offset by higher fee-based and transaction revenue in the wealth management business. Net interest income increased $19 million, or
7%, reflecting higher deposit margins.
AUA increased $20 billion, or 3%, compared with the prior quarter, reflecting market appreciation and net asset growth. AUM increased $10 billion, or 2%,
compared with prior quarter, primarily reflecting market appreciation.
Insurance service expenses for the quarter decreased $118 million, or 9%, compared with the prior quarter, reflecting seasonally lower claims and more
favourable prior years’ claims development.
Non-interest expenses decreased $20 million, or 2%, compared with the prior quarter, reflecting lower employee-related expenses.
The efficiency ratio for the quarter was 33.0%, compared with 33.4% in the prior quarter. The efficiency ratio, net of ISE for the quarter was 55.0%, compared
with 59.2% in the prior quarter.
Yearto-date comparison – Q2 2024 vs. Q2 2023
Wealth Management and Insurance net income for the six months ended April 30, 2024, was $1,176 million, an increase of $98 million, or 9%, compared with the
same period last year, reflecting higher revenues, partially offset by higher insurance service expenses and non-interest expenses. The annualized ROE for the
period was 39.2%, compared with 38.6%, in the same period last year.
Revenue for the period was $6,249 million, an increase of $533 million, or 9%, compared with same period last year. Non-interest income increased
$485 million, or 9%, reflecting higher insurance premiums, and fee-based revenue commensurate with market growth. Net interest income increased $48 million,
or 9%, reflecting higher investment income in the insurance business, and higher deposit margins, partially offset by lower deposit volumes in the wealth
management business.
Insurance service expenses were $2,614 million, an increase of $332 million, or 15%, compared with the same period last year, reflecting business growth,
increased claims severity and less favourable prior years’ claims development.
Non-interest expenses were $2,074 million, an increase of $102 million, or 5%, compared with the same period last year, reflecting higher variable
compensation commensurate with higher revenues, and technology costs.
The efficiency ratio for the period was 33.2%, compared with 34.5% for the same period last year. The efficiency ratio, net of ISE for the period was 57.1%,
compared with 57.4% in the same period last year.
TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 16
TABLE 10: WHOLESALE BANKING
1
(millions of Canadian dollars, except as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2024
2024
2023
2024
2023
Net interest income (TEB)
$
189
$
198
$
498
$
387
$
1,023
Non-interest income
1,751
1,582
919
3,333
1,739
Total revenue
1,940
1,780
1,417
3,720
2,762
Provision for (recovery of) credit losses – impaired
(1)
5
5
4
6
Provision for (recovery of) credit losses – performing
56
5
7
61
38
Total provision for (recovery of) credit losses
55
10
12
65
44
Non-interest expenses – reported
1,430
1,500
1,189
2,930
2,072
Non-interest expenses – adjusted
2,3
1,328
1,383
1,116
2,711
1,978
Provision for (recovery of) income taxes (TEB) – reported
94
65
66
159
165
Provision for (recovery of) income taxes (TEB) – adjusted
2
116
89
76
205
180
Net income – reported
$
361
$
205
$
150
$
566
$
481
Net income – adjusted
2
441
298
213
739
560
Selected volumes and ratios
Trading-related revenue (TEB)
4
$
693
$
730
$
482
$
1,423
$
1,144
Average gross lending portfolio (billions of Canadian dollars)
5
96.3
96.2
95.2
96.3
96.1
Return on common equity – reported
6
9.2
%
5.3
%
4.5
%
7.3
%
7.0
%
Return on common equity – adjusted
2,6
11.3
7.6
6.4
9.5
8.2
Efficiency ratio – reported
73.7
84.3
83.9
78.8
75.0
Efficiency ratio – adjusted
2
68.5
77.7
78.8
72.9
71.6
Average number of full-time equivalent staff
7,077
7,100
6,510
7,089
5,937
-
1
2
document.
3
$117 million ($93 million after-tax), Q2 2023: $73 million ($63 million after -tax), Q1 2023: $21 million ($16 million after-tax).
4
$784 million, Q2 2023: $197 million, Q1 2023: $401 million). Trading-related revenue (TEB) is a non-GAAP financial measure. Refer to “Non-GAAP and Other Financial Measures” in the
“How We Performed” section and the Glossary in the Bank’s second quarter 2024 MD&A for additional information about this metric.
5
6
Quarterly comparison – Q2 2024 vs. Q2 2023
Wholesale Banking reported net income for the quarter was $361 million, an increase of $211 million, compared with the second quarter last year, primarily
reflecting higher revenues, partially offset by higher non-interest expenses. On an adjusted basis, net income was $441 million, an increase of $228 million.
Revenue for the quarter, including TD Cowen, was $1,940 million, an increase of $523 million, or 37%, compared with the second quarter last year. Higher
revenue primarily reflects higher trading-related revenue, underwriting fees, and lending revenue.
PCL for the quarter was $55 million, an increase of $43 million compared with the second quarter last year. PCL – impaired was a recovery of $1 million. PCL –
performing was $56 million, an increase of $49 million compared to the prior year, reflecting a higher build in the current quarter largely related to credit migration
across various industries.
Reported non-interest expenses for the quarter, including TD Cowen, were $1,430 million, an increase of $241 million, or 20%, compared with the second
quarter last year, primarily reflecting higher variable compensation commensurate with higher revenues, TD Cowen and the associated acquisition and integration-
related costs. On an adjusted basis, non-interest expenses were $1,328 million, an increase of $212 million, or 19%.
Quarterly comparison – Q2 2024 vs. Q1 2024
Wholesale Banking reported net income for the quarter was $361 million, an increase of $156 million, or 76%, compared with the prior quarter, primarily reflecting
higher revenues, and lower non-interest expenses, partially offset by higher PCL. On an adjusted basis, net income was $441 million, an increase of $143 million,
or 48%.
Revenue for the quarter increased $160 million, or 9%, compared with the prior quarter. Higher revenue primarily reflects higher underwriting and advisory fees,
and the net change in fair value of loan underwriting commitments.
PCL for the quarter was $55 million, an increase of $45 million compared with the prior quarter. PCL – impaired was a recovery of $1 million. PCL – performing
was $56 million, an increase of $51 million compared to the prior quarter, reflecting a higher build in the current quarter largely related to credit migration across
various industries.
Reported non-interest expenses for the quarter decreased $70 million, or 5%, compared with the prior quarter, primarily reflecting a provision of $102 million
taken in connection with the U.S. record keeping matter recorded in the prior period, partially offset by higher variable compensation commensurate with higher
revenues. On an adjusted basis, non-interest expenses decreased $55 million or 4%.
Yearto-date comparison – Q2 2024 vs. Q2 2023
Wholesale Banking reported net income for the six months ended April 30, 2024 was $566 million, an increase of $85 million, or 18%, compared with the same
period last year, reflecting higher revenues, partially offset by higher non-interest expenses. On an adjusted basis, net income was $739 million, an increase of
$179 million, or 32%.
Revenue, including TD Cowen, was $3,720 million, an increase of $958 million, or 35%, compared with the same period last year. Higher revenue primarily
reflects higher trading-related revenue, underwriting fees, lending revenue largely from syndicated and leveraged finance, and equity commissions.
PCL was $65 million, an increase of $21 million compared with the same period last year. PCL – impaired was $4 million. PCL – performing was $61 million, an
increase of $23 million compared to the prior year. The current year performing provisions largely reflect credit migration across various industries.
Reported non-interest expenses were $2,930 million, an increase of $858 million, or 41%, compared with the same period last year, reflecting TD Cowen and
the associated acquisition and integration-related costs, higher variable compensation commensurate with higher revenues, as well as a provision taken in
connection with the U.S. record keeping matter. On an adjusted basis, non-interest expenses were $2,711 million, an increase of $733 million or 37%.
TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 17
TABLE 11: CORPORATE
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2024
2024
2023
2024
2023
Net income (loss) – reported
$
(737)
$
(628)
$
(399)
$
(1,365)
$
(3,016)
Adjustments for items of note
Amortization of acquired intangibles
72
94
79
166
133
Acquisition and integration charges related to the Schwab transaction
21
32
30
53
64
Share of restructuring and other charges from investment in Schwab
–
49
–
49
–
Restructuring charges
165
291
–
456
–
Impact from the terminated FHN acquisition-related capital hedging strategy
64
57
134
121
1,010
Civil matter provision/Litigation settlement
274
–
39
274
1,642
Less: impact of income taxes
CRD and federal tax rate increase for fiscal 2022
–
–
–
–
(585)
Other items of note
143
113
60
256
735
Net income (loss) – adjusted
1
$
(284)
$
(218)
$
(177)
$
(502)
$
(317)
Decomposition of items included in net income (loss) – adjusted
Net corporate expenses
2
$
(411)
$
(254)
$
(191)
$
(665)
$
(382)
Other
127
36
14
163
65
Net income (loss) – adjusted
1
$
(284)
$
(218)
$
(177)
$
(502)
$
(317)
Selected volumes
Average number of full-time equivalent staff
23,270
23,437
22,656
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document.
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Quarterly comparison – Q2 2024 vs. Q2 2023
Corporate segment’s reported net loss for the quarter was $737 million, compared with a reported net loss of $399 million in the second quarter last year. The
higher net loss primarily reflects the impacts of a civil matter provision, higher risk and control expenses and restructuring charges, partially offset by higher
revenue from treasury and balance sheet activities in the current quarter. Net corporate expenses increased $220 million compared to the prior year, primarily
reflecting investments in our risk and control infrastructure. The adjusted net loss for the quarter was $284 million, compared with an adjusted net loss of $177
million in the second quarter last year.
Quarterly comparison – Q2 2024 vs. Q1 2024
Corporate segment’s reported net loss for the quarter was $737 million, compared with a reported net loss of $628 million in the prior quarter. The higher net loss
reflects higher risk and control expenses and the impact of a civil matter provision, partially offset by lower restructuring charges and higher revenue from treasury
and balance sheet management activities. Net corporate expenses increased $157 million compared to the prior quarter, primarily reflecting investments in our risk
and control infrastructure. The adjusted net loss for the quarter was $284 million, compared with an adjusted net loss of $218 million in the prior quarter.
Year-to-date comparison – Q2 2024 vs. Q2 2023
Corporate segment’s reported net loss for the six months ended April 30, 2024 was $1,365 million, compared with a reported net loss of $3,016 million in the same
period last year. The lower net loss primarily reflects the prior period impacts of the Stanford litigation settlement, the terminated FHN acquisition-related capital
hedging strategy and provision for income taxes in connection with the CRD and increase in the Canadian federal tax rate for fiscal 2022, partially offset by
restructuring charges and risk and control expenses in the current period. The adjusted net loss for the six months ended April 30, 2024 was $502 million,
compared with an adjusted net loss of $317 million in the same period last year.
TD BANK GROUP • SECOND QUARTER 2024 • EARNINGS NEWS RELEASE
Page 18
SHAREHOLDER AND INVESTOR INFORMATION
Shareholder Services
If you:
And your inquiry relates to:
Are a registered shareholder (your name appears
on your TD share certificate)
Missing dividends, lost share certificates, estate
questions, address changes to the share register,
dividend bank account changes, the dividend
reinvestment plan, eliminating duplicate mailings of
shareholder materials or stopping (or resuming)
receiving annual and quarterly reports
Transfer Agent:
TSX Trust Company
301-100 Adelaide Street West
Toronto, ON M5H 4H1
1-800-387-0825 (Canada and U.S. only)
or 416-682-3860
Facsimile: 1-888-249-6189
shareholderinquiries@tmx.com or www.tsxtrust.com
Hold your TD shares through the
Direct Registration System
in the United States
Missing dividends, lost share certificates, estate
questions, address changes to the share register,
eliminating duplicate mailings of shareholder
materials or stopping (or resuming) receiving annual
and quarterly reports
Co-Transfer Agent and Registrar:
Computershare Trust Company, N.A.
P.O. Box 43006
Providence, RI 02940-3006
or
Computershare Trust Company, N.A.
150 Royall Street
Canton, MA 02021
1-866-233-4836
TDD for hearing impaired: 1-800-231-5469
Shareholders outside of U.S.: 201-680-6578
TDD shareholders outside of U.S.: 201-680-6610
Email inquiries: web.queries@computershare.com
For electronic access to your account visit:
www.computershare.com/investor
Beneficially own TD shares that are held in the
name of an intermediary, such as a bank, a trust
company, a securities broker or other nominee
Your TD shares, including questions regarding the
dividend reinvestment plan and mailings of
shareholder materials
Your intermediary
For all other shareholder inquiries, please contact TD Shareholder Relations at 416-944-6367 or 1-866-756-8936 or email tdshinfo@td.com. Please note that by
leaving us an e-mail or voicemail message, you are providing your consent for us to forward your inquiry to the appropriate party for response.
Access to Quarterly Results Materials
Interested investors, the media and others may view the second quarter earnings news release, results slides, supplementary financial information, and the Report
to Shareholders on the TD Investor Relations website at www.td.com/investor/.
Quarterly Earnings Conference Call
TD Bank Group will host an earnings conference call in Toronto, Ontario on May 23, 2024. The call will be audio webcast live through TD’s website at 8:00 a.m. ET.
The call will feature presentations by TD executives on the Bank’s financial results for second quarter and discussions of related disclosures, followed by a
question-and-answer period with analysts. The presentation material referenced during the call will be available on the TD website at
www.td.com/investor
May 23, 2024, in advance of the call. A listen-only telephone line is available at 416-641-6150 or 1-866-696-5894 (toll free) and the passcode is 2727354#.
The audio webcast and presentations will be archived at
www.td.com/investor
. Replay of the teleconference will be available from 5:00 p.m. ET on May 23, 2024,
until 11:59 p.m. ET on June 7, 2024, by calling 905-694-9451 or 1-800-408-3053 (toll free). The passcode is 7300743#.
About TD Bank Group
The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group (“TD” or the “Bank”). TD is the sixth largest bank in North America by
assets and serves over 27.5 million customers in four key businesses operating in a number of locations in financial centres around the globe: Canadian Personal
and Commercial Banking, including TD Canada Trust and TD Auto Finance Canada; U.S. Retail, including TD Bank, America’s Most Convenient Bank®, TD Auto
Finance U.S., TD Wealth (U.S.), and an investment in The Charles Schwab Corporation; Wealth Management and Insurance, including TD Wealth (Canada),
TD Direct Investing, and TD Insurance; and Wholesale Banking, including TD Securities and TD Cowen. TD also ranks among the world’s leading online financial
services firms, with more than 17 million active online and mobile customers. TD had $1.97 trillion in assets on April 30, 2024. The Toronto-Dominion Bank trades
under the symbol “TD” on the Toronto and New York Stock Exchanges.
For further information contact:
Brooke Hales, Vice President, Investor Relations, 416-307-8647, Brooke.hales@td.com
Elizabeth Goldenshtein, Senior Manager, Corporate Communications, 416-994-4124, Elizabeth.goldenshtein@td.com