TD Bank

TD Bank
2035 Limestone Road
Wilmington, DE 19808

Concentration: All Other Specialization > 1 Billion
Established: 1852-01-01
FDIC Insurance: 1961-07-01
FDIC Cert: #18409
Holden By: Toronto-Dominion Bank
# of Branches: 1247
Website: www.td.com/us/en/personal-banking
Total Assets: $305,418,987,000
Total Deposits: $258,573,086,000
Total Equity Capital: $40,536,130,000
Total Domestic Deposits: $258,573,086,000
Net Income: $1,367,650,000
Quarterly Net Income: $715,713,000
Return on Assets: 1%
Quarterly Return on Assets: 1%
Return on Equity: 7%
Quarterly Return on Equity: 7%
Charter Class: Commercial bank, national (federal) charter and Fed member, Oversee by the Office of the Comptroller of the Currency (OCC)

Financial Highlights in 2019

3rd Quarter 2019

Charges associated with the acquisition of Greystone, as explained in footnote 7 – third quarter 2019 – $26 million, second-quarter 2019 – $30 million, first quarter 2019 – $31 million; this quantity was reportable within the Canadian Retail phase.

Charges associated with Scottrade transaction, as explained in footnote 8 – second quarter 2018 – $16 million and first quarter 2018 – $5 million; these amounts were reported in the U.S. Retail segment.

The Bank’s share of charges associated with TD Ameritrade’s acquisition of Scottrade Financial Services Inc., as explained in footnote 8 – third quarter 2018 – $18 million, second-quarter 2018 – $61 million, and first quarter 2018 – $68 million.

Million; this quantity was reportable within the Canadian Retail phase.

Million; this quantity was reportable within the Canadian Retail phase.

In the 1st quarter of 2018, the depletion of the U.S. federal corporate tax rate enacted by the Tax Cuts and Jobs Act resulted in a net charge to earnings of $453 million.

In connection with the Transaction, the Bank paid $622 million-plus applicable sales tax to Air Canada, of which $547 million was recognized in Non-interest expenses – Other in the Canadian Retail segment during the first quarter of 2019, and $75 million was recognized as an intangible asset which will be amortized over the Loyalty Agreement term.

Acquisition of Greystone On November 1, 2018, the Bank acquired 100% of the outstanding equity of Greystone for consideration of $821 million, of which $479 million was paid in cash and $342 million was paid in the Bank’s common shares.

As of November 1, 2018, the acquisition contributed $165 million of assets and $46 million of liabilities.

The excess of accounting consideration over the fair value of the identifiable net assets has been allocated to customer relationship intangibles of $140 million, deferred tax liability of $37 million, and goodwill of $432 million.

The TEB adjustment for the quarter was $37 million, compared with $33 million in the prior quarter and $26 million in the third quarter last year.

Quarterly comparison – Q3 2019 vs. Q3 2018 Canadian Retail reported net income for the quarter was $1,890 million, an increase of $38 million, or 2%, compared with the third quarter last year, reflecting higher revenue, partially offset by higher non-interest expenses including charges related to the acquisition of Greystone, as well as higher insurance claims, and PCL. On an adjusted basis, net income for the quarter was $1,916 million, an increase of $64 million, or 3%. The reported and adjusted annualized ROE for the quarter was 41.7% and 42.2%, respectively, compared with 48.6% in the third quarter last year.

Revenue for the quarter was $6,146 million, an increase of $347 million, or 6%, compared with the third quarter last year.

Net interest income was $3,122 million, an increase of $174 million, or 6%, reflecting volume growth and higher margins.

PCL – impaired for the quarter was $282 million, an increase of $56 million, or 25%, reflecting low prior period provisions in business banking, higher insolvencies in the current quarter in alternative personal disposition and credit card portfolios, and volume growth.

PCL – performing was $34 million, an increase of $14 million, reflecting parameter updates in the consumer lending portfolios.

Reported non-interest expenses for the quarter were $2,533 million, an increase of $133 million, or 6%, compared with the third quarter last year, reflecting higher costs supporting business growth, including additional employees and higher cost per employee, and charges related to the acquisition of Greystone, partially offset by lower marketing and promotion costs.

On an adjusted basis, non-interest expenses were $2,507 million, an increase of $107 million, or 4%. The reported and adjusted efficiency ratio for the quarter was 41.2% and 40.8%, respectively, compared with 41.4% in the third quarter last year.

Quarterly comparison – Q3 2019 vs. Q2 2019 Canadian Retail reported net income for the quarter increased $41 million, or 2%, compared with the prior quarter, reflecting higher revenue, partially offset by higher non-interest expenses, insurance claims, and PCL. On an adjusted basis, net income increased $39 million, or 2%. The reported and adjusted annualized ROE for the quarter was 41.7% and 42.2%, respectively, compared with 43.2% and 43.9%, respectively, in the prior quarter.

Year-to-date comparison – Q3 2019 vs. Q3 2018 Canadian Retail reported net income for the nine months ended July 31, 2019, was $5,118 million, a decrease of $324 million, or 6%, compared with the same period last year.

On an adjusted basis, net income for the period was $5,648 million, an increase of $206 million, or 4%. The reported and adjusted annualized ROE for the period was 38.8% and 42.9%, respectively, compared with 48.8%, in the same period last year.

Quarterly comparison – Q3 2019 vs. Q3 2018 U.S. Retail reported net income for the quarter was $1,287 million, an increase of $144 million, or 13%, compared with the third quarter last year.

TD Bank: On an adjusted basis, net income for the quarter was $1,287 million, an increase of $126 million, or 11%. The reported and adjusted annualized ROE for the quarter was 12.9%, compared with 13.1% and 13.3%, respectively, in the third quarter last year.

Net income for the quarter from the U.S. Retail Bank and the Bank’s investment in TD Ameritrade were $993 million and $294 million, respectively.

The contribution from TD Bank Ameritrade of US$220 million increased US$46 million, or 26%, compared with the third quarter last year, primarily due to higher asset-based revenue, a gain on disposition of assets in the Trust business, and charges associated with the Scottrade transaction in the same quarter last year, partially offset by increased operating expenses.

Adjusted contribution from TD Ameritrade increased US$32 million, or 17%. TD BANK GROUP THIRD QUARTER 2019 EARNINGS NEWS RELEASE Page 10 U.S.

Revenue for the quarter was US$2,247 million, an increase of US$91 million, or 4%, compared with the third quarter last year.

PCL for the quarter was US$191 million, an increase of US$21 million, or 12%, compared with the third quarter last year.

TD Bank: PCL – impaired was US$138 million, a decrease of US$4 million, or 3%. PCL – performing was US$53 million, an increase of US$25 million, or 89%, primarily reflecting parameter updates in the consumer lending portfolios, partially offset by lower provisions in the commercial portfolio.

Non-interest expenses for the quarter were US$1,208 million, an increase of US$36 million, or 3%, compared with the third quarter last year, reflecting higher employee-related costs, business and volume growth, and higher investments in business initiatives, partially offset by productivity and elimination of the Federal Deposit Insurance Corporation deposit insurance surcharge.

TD Bank: Quarterly comparison – Q3 2019 vs. Q2 2019 U.S. Retail net income of $1,287 million increased $24 million, or 2%, compared with the prior quarter.

The contribution from TD Ameritrade was US$220 million, an increase of US$25 million, or 13%, compared with the prior quarter, primarily due to a gain on disposition of assets in the Trust business.

U.S. Retail Bank’s net income for the quarter was US$747 million, a decrease of US$6 million, or 1% compared with the prior quarter.

Adjusted contribution from TD Ameritrade increased US$171 million, or 36%. U.S. Retail Bank reported net income for the period was US$2,200 million, an increase of US$165 million, or 8%, compared with the same period last year, primarily due to higher revenue.  Retail Bank adjusted net income increased US$152 million, or 7%. Revenue for the period was US$6,646 million, an increase of US$338 million, or 5%, compared with the same period last year.

Quarterly comparison – Q3 2019 vs. Q2 2019 Wholesale Banking net income for the quarter was $244 million, an increase of $23 million, or 10%, compared with the prior quarter, reflecting higher revenue and lower non-interest expenses, partially offset by higher PCL. Revenue for the quarter increased $27 million, or 3%, compared with the prior quarter, reflecting higher trading-related revenue, partially offset by lower advisory and underwriting fees.

Year-to-date comparison – Q3 2019 vs. Q3 2018 Wholesale Banking net income for the nine months ended July 31, 2019, was $448 million, a decrease of $320 million, compared with net income of $768 million for the same period last year, reflecting lower revenue, higher non-interest expenses, and higher PCL. Revenue was $2,383 million, a decrease of $203 million, or 8%, compared with the same period last year reflecting challenging market conditions in the first quarter of this year.

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