6-K
TORONTO DOMINION BANK (TD)
FORM
6-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
______________________________
______________________________
REPORT OF FOREIGN PRIVATE
ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of February,
2025
Commission File Number:
001-14446
______________________________
The Toronto-Dominion Bank
(Translation of registrant's name into English)
______________________________
c/o General Counsel’s Office
P.O. Box 1
,
Toronto Dominion Centre
,
Toronto
,
Ontario
,
M5K 1A2
(Address of principal executive offices)
Indicate by check mark whether the registrant
files or will file annual reports under cover
of Form 20-F or Form 40-F:
Form 20-F
☐
Form 40-F
☑
This Form 6-K, excluding Exhibit 99.4, Exhibit
99.5 and Exhibit 99.6 hereto, is incorporated by
reference into all outstanding Registration Statements
of The Toronto-
Dominion Bank filed with the U.S. Securities
and Exchange Commission.
EXHIBIT INDEX
Exhibit
Description
99.1
Quarter 2025 Report to Shareholders
99.2
99.3
Return on Assets, Dividend Payouts, and Equity to Assets Ratios
99.4
99.5
99.6
101
Interactive Data File (formatted as Inline
XBRL)
104
Cover Page Interactive Data File (formatted
as Inline XBRL and contained in Exhibit
101)
FORM 6-K
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant
has duly caused this report to be signed on
its behalf by the undersigned, thereunto
duly
authorized.
THE TORONTO-DOMINION BANK
DATE:
February 27, 2025
By:
/s/ Caroline Cook
Name:
Caroline Cook
Title:
Associate Vice President, Legal Treasury and
Corporate Securities
ex991
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 1
TD Bank Group Reports First Quarter 2025 Results
Report to Shareholders
•
Three months ended January 31, 2025
The financial information in this document is reported
in Canadian dollars and is based on
the Bank’s unaudited Interim Consolidated
Financial Statements and
related Notes prepared in accordance
with International Financial Reporting Standards
(IFRS) as issued by the International
Accounting Standards Board (IASB),
unless otherwise noted. Certain comparative
amounts have been revised to conform
with the presentation adopted in the current period.
Reported results conform with generally accepted
accounting principles (GAAP), in accordance
with IFRS. Adjusted measures are non-GAAP
financial
measures. For additional information about
the Bank’s use of non-GAAP financial measures,
refer to “Significant and Subsequent Events”
and “Non-GAAP and
Other Financial Measures” in the “How
We Performed” section of this document.
FIRST QUARTER FINANCIAL HIGHLIGHTS,
compared with the first quarter last year:
●
Reported diluted earnings per share were
$1.55, compared with $1.55.
●
Adjusted diluted earnings per share were
$2.02, compared with $2.00.
●
Reported net income was $2,793 million,
compared with $2,824 million.
●
Adjusted net income was $3,623 million,
compared with $3,637 million.
FIRST QUARTER ADJUSTMENTS (ITEMS
OF NOTE)
The first quarter reported earnings figures
included the following items of note:
●
Amortization of acquired intangibles
of $61 million ($52 million after tax or 3
cents per share), compared with $94 million
($79 million after tax or
4 cents per share) in the first quarter last
year.
●
Acquisition and integration charges related
to the Cowen acquisition of $52 million
($41 million after tax or 2 cents per share),
compared with
$117 million ($93 million after tax or 5 cents per share)
in the first quarter last year.
●
Impact from the terminated First Horizon
Corporation (FHN) acquisition-related
capital hedging strategy of $54 million ($41
million after tax or
2 cents per share), compared with $57 million
($43 million after tax or 2 cents per
share) in the first quarter last year.
●
U.S. balance sheet restructuring of $927
million ($696
million after tax or 40 cents per share).
TORONTO
, February 27, 2025 – TD Bank Group (“TD” or
the “Bank”) today announced its financial results
for the first quarter ended January 31, 2025. Reported
and
adjusted earnings were $2.8 billion and $3.6 billion,
respectively, relatively flat
compared with the first quarter last year.
“TD started the year with strong momentum and record revenue
across many of our businesses. While expenses
remain somewhat elevated, we delivered solid earnings,
which positions us well as we begin the new fiscal year,”
said Raymond Chun, Group President and Chief Executive
Officer, TD Bank Group.
“U.S. AML remediation remains
our top priority and we continue to make consistent progress
to strengthen the Bank. The strategic review is
advancing as planned, and we have taken early
action, such as
our divestiture of Schwab, as we develop our strategy
and roadmap for the future.”
Canadian Personal and Commercial Banking delivered
record revenue supported by continued volume growth
Canadian Personal and Commercial Banking net income was
$1,831 million, an increase of 3% compared to the first
quarter last year. This increase
reflects higher revenue,
partially offset by higher non-interest expenses and provisions
for credit losses (PCL). Revenue was a record $5,149
million, an increase of 5%, primarily reflecting loan
and
deposit volume growth.
This quarter, the Canadian Personal Bank
continued to build momentum, including deepening
customer relationships by launching Real Estate Secured
Lending and
Investing specialists in its highest opportunity branches.
In addition, the TD Aeroplan Visa Infinite Card
was recognized by Rewards Canada as Canada
’s top airline credit
card for the fourth year in a row
1
. In Business Banking, TD Auto Finance achieved record retail
originations this quarter and a significant expansion
of new dealer floor plan
relationships.
The U.S. Retail Bank delivered continued momentum
while making progress on balance sheet restructuring
U.S. Retail reported net income for the quarter was $342
million (US$247 million), down 61% (62% in U.S. dollars),
compared with the first quarter last year.
On an adjusted
basis, net income was $1,038 million (US$736 million),
down 12% (15% in U.S. dollars). Reported net income
for the quarter from the Bank’s investment in
The Charles
Schwab Corporation (“Schwab”) was $199 million (US$142 million),
up 3% (down 1% in U.S. dollars), compared with
the first quarter last year.
The U.S. Retail Bank, which excludes the Bank’s investment
in Schwab, reported net income was $143 million (US$10
5
million), down 79% (79% in U.S. dollars), compared
with the first quarter last year, primarily
reflecting the impact of balance sheet restructuring activities,
governance and control investments including the
Bank’s U.S. BSA/AML
remediation program, and higher PCL, partially offset
by the impact of the FDIC special assessment charge in the
first quarter last year. On
an adjusted basis, net income was
$839 million (US$594 million), down 15% (18% in U.S.
dollars) compared with the first quarter last year,
reflecting higher non-interest expenses and higher PCL,
partially
offset by higher revenue.
This quarter, the U.S. Retail Bank continued
to deliver operating momentum, with its fifth consecutive
quarter of personal deposit growth and double-digit
growth in
U.S. Wealth assets year-over-year.
The business also made significant progress in its
balance sheet restructuring strategy to ensure it can continue
to support its customers’
needs under the asset limitation.
Wealth Management and Insurance delivered record
Wealth revenue, earnings and assets, and
strong Insurance premium growth
Wealth Management and Insurance net income
was $680 million, an increase of 23% compared with
the first quarter last year, driven
by record revenue, earnings and assets
in Wealth Management and strong insurance premiums
growth. This quarter’s 15% revenue increase reflected insurance
premiums growth and higher fee-based revenue
driven by market and asset growth, as well as higher interest
income from deposits and increased transaction
revenue.
This quarter, Wealth Management
and Insurance continued to deliver investment excellence
and innovative solutions.
TD Direct Investing was ranked #1 Digital Brokerage in
Canada by The Globe and Mail for the third consecutive
year. TD Asset Management received
24 Fundata FundGrade A+® Awards and was
recognized in six categories at
1
Awarded by AwardsCanada.ca on January 3, 2025: https://rewardscanada.ca/TopTravelCreditCard/
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 2
the 2024 Canada LSEG Lipper Fund Awards. In addition,
TD Insurance, with TD Securities as joint bookrunner,
diversified its reinsurance capacity by becoming
the first
Canadian insurer to sponsor a catastrophe bond solely focused
on catastrophe perils in Canada.
Wholesale Banking delivered record revenue driven by
its Global Markets business
Wholesale Banking reported net income for the quarter was
$299 million, an increase of 46% compared with the first
quarter last year, primarily reflecting
higher revenue,
partially offset by higher PCL and non-interest expenses.
On an adjusted basis, net income was $339 million,
an increase of 14% compared with the first quarter last
year.
Revenue for the quarter was a record $2 billion,
an increase of 12% compared with the first quarter last
year, primarily reflecting higher
trading-related revenue and
underwriting fees.
Wholesale Banking continued to drive growth from the enhanced
capabilities of the franchise. TD Cowen won the
2024 IFR U.S. Mid-Market Equity House Award,
which
recognizes the leading underwriter of U.S. equity offerings
between US$50-US$500 million. Following the quarter
end, TD Cowen also acted as a lead bookrunner on the
marquee US$15 billion secondary offering of Schwab
shares by TD, an important milestone.
Capital
TD’s Common Equity Tier 1 Capital
ratio was 13.1%.
Conclusion
“TD’s strength and stability,
combined with our unrelenting focus on meeting the
needs of our customers and clients, will serve the Bank well
in this period
of geopolitical
and
macroeconomic uncertainty,
”
added Chun. “I want to thank our colleagues across
the globe for their tremendous efforts and commitment.
”
The foregoing contains forward-looking statements. Please refer to the “Caution Regarding Forward-Looking Statements”
on page 4.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 3
ENHANCED DISCLOSURE TASK FORCE
The Enhanced Disclosure Task Force (EDTF) was established by the Financial
Stability Board in 2012 to identify fundamental
disclosure principles,
recommendations and leading practices to enhance
risk disclosures of banks. The index
below includes the recommendations (as
published by the EDTF) and
lists the location of the related EDTF disclosures
presented in the first quarter 2025
Report to Shareholders (RTS), Supplemental
Financial Information (SFI), or
Supplemental Regulatory Disclosures (SRD).
Information on TD’s website, SFI, and SRD is not
and should not be considered incorporated
herein by reference
into the first quarter 2025
RTS, Management’s Discussion and Analysis, or the
Interim Consolidated Financial Statements.
Certain disclosure references have
been made to the Bank’s 2024
Annual Report.
Type of
Risk
Topic
EDTF Disclosure
Page
RTS
First
Quarter
2025
SFI
First
Quarter
2025
SRD
First
Quarter
2025
Annual Report
2024
General
1
Present all related risk information together in any particular report.
Refer to below for location of disclosures
2
The bank’s risk terminology and risk measures and present key parameter
values used.
94-101, 105,
110, 112-114,
125-127
3
Describe and discuss top and emerging risks.
84-93
4
Outline plans to meet each new key regulatory ratio once applicable rules
are finalized.
30-31, 44
80, 122
Risk
Governance
and Risk
Management
and
Business
Model
5
Summarize the bank’s risk management organization, processes, and key
functions.
95-99
6
Description of the bank’s risk culture and procedures applied to support the
culture.
94-95
7
Description of key risks that arise from the bank’s business models and
activities.
79, 94, 100-128
8
Description of stress testing within the bank’s risk governance and capital
frameworks.
78, 99-100, 108,
125
Capital
Adequacy
and Risk
Weighted
Assets
9
Pillar 1 capital requirements and the impact for global systemically important
banks.
28-30, 75
1-3, 6
75-77, 80-81,
235
10
Composition of capital and reconciliation of accounting balance sheet to the
regulatory balance sheet.
1-3, 5
75
11
Flow statement of the movements in regulatory capital.
4
12
Discussion of capital planning within a more general discussion of
management’s strategic planning.
76-78, 125
13
Analysis of how risk-weighted asset (RWA) relate to business activities
and
related risks.
9-13
78-79
14
Analysis of capital requirements for each method used for calculating RWA.
13
101-103, 105,
107-108
15
Tabulate credit risk in the banking book
for Basel asset classes and major
portfolios.
36-53, 59-65
16
Flow statement reconciling the movements of RWA by risk type.
18-19
17
Discussion of Basel III back-testing requirements.
80
104, 108,
112-113
Liquidity
18
The bank’s management of liquidity needs and liquidity reserves.
37-41
114-116,
118-119
Funding
19
Encumbered and unencumbered assets in a table by balance sheet
category.
39
117, 229
20
Tabulate consolidated total assets, liabilities
and off-balance sheet
commitments by remaining contractual maturity at the balance sheet date.
44-46
122-124
21
Discussion of the bank’s funding sources and the bank’s funding strategy.
40-44
119-122
Market Risk
22
Linkage of market risk measures for trading and non-trading portfolio and
balance sheet.
34
106
23
Breakdown of significant trading and non-trading market risk factors.
34, 36
106, 109-110
24
Significant market risk measurement model limitations and validation
procedures.
35
107-110,
112-113
25
Primary risk management techniques beyond reported risk measures and
parameters.
35
107-110
Credit Risk
26
Provide information that facilitates users’ understanding of the bank’s credit
risk profile, including any significant credit risk concentrations.
25-28, 61-67
21-36
1-5, 13, 18,
20-70, 72-80
62-74, 101-105,
185-192, 201,
203-204,
233-234
27
Description of the bank’s policies for identifying impaired loans.
66
71, 162-163,
169-170, 191
28
Reconciliation of the opening and closing balances of impaired loans in the
period and the allowance for loan losses.
26, 63-65
25, 29
69, 188-190
29
Analysis of the bank’s counterparty credit risks that arise from derivative
transactions.
54-55, 66-70
103, 173-174,
195-197, 201,
203-204
30
Discussion of credit risk mitigation, including collateral held for all sources of
credit risk.
104, 166,
173-174
Other Risks
31
Description of ‘other risk’ types based on management’s classifications and
discuss how each one is identified, governed, measured, and managed.
110-113,
125-128
32
Discuss publicly known risk events related to other risks.
73-74
91-93, 227-228
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 4
TABLE OF CONTENTS
MANAGEMENT’S DISCUSSION AND ANALYSIS
4
Caution Regarding Forward-Looking Statements
47
Securitization and Off-Balance Sheet Arrangements
5
Financial Highlights
47
Accounting Policies and Estimates
6
Significant and Subsequent Events
47
Changes in Internal Control over Financial
Reporting
6
Update on U.S. BSA/AML Program Remediation
and
48
Glossary
Enterprise AML Program Improvement Activities
8
How We Performed
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
12
Financial Results Overview
51
Interim Consolidated Balance Sheet
15
How Our Businesses Performed
52
Interim Consolidated Statement of Income
23
Quarterly Results
53
Interim Consolidated Statement of Comprehensive
Income
24
Balance Sheet Review
54
Interim Consolidated Statement of Changes
in Equity
25
Credit Portfolio Quality
55
Interim Consolidated Statement of Cash
Flows
28
Capital Position
56
Notes to Interim Consolidated Financial Statements
32
Risk Factors and Management
32
Managing Risk
76
SHAREHOLDER AND INVESTOR INFORMATION
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF OPERATING
PERFORMANCE
This MD&A is presented to enable readers
to assess material changes in the financial
condition and operating results of TD Bank
Group (“TD” or the “Bank”) for
the three months ended January 31, 2025,
compared with the corresponding periods
shown. This MD&A should be read in conjunction
with the Bank’s unaudited
Interim Consolidated Financial Statements
and related Notes included in this Report
to Shareholders and with the 2024 Consolidated
Financial Statements and
related Notes and 2024 MD&A. This MD&A
is dated February 26, 2025. Unless otherwise
indicated, all amounts are expressed
in Canadian dollars and have been
primarily derived from the Bank’s 2024 Consolidated
Financial Statements and related Notes or Interim
Consolidated Financial Statements and
related Notes,
prepared in accordance with IFRS as issued
by the IASB. Note that certain comparative
amounts have been revised to conform
with the presentation adopted in
the current period.
Additional information relating to the Bank,
including the Bank’s 2024 Annual Information
Form, 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 SEC’s website at http://www.sec.gov (EDGAR
filers section).
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 (“2024 MD&A”) in the Bank’s 2024 Annual Report under the heading
“Economic
Summary and Outlook”, under the headings “Key Priorities for 2025” 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 “2024 Accomplishments and Focus for
2025” for the Corporate segment, and in other statements regarding the Bank’s objectives and priorities for
2025 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 are typically identified by words such as “will”, “would”, “should”, “believe”,
“expect”, “anticipate”, “intend”, “estimate”, “forecast”, “outlook”, “plan”, “goal”, “target”, “possible”,
“potential”, “predict”,
“project”, “may”, and “could” 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, process, systems, data, third-party, fraud, infrastructure, insider and conduct), model, insurance, liquidity, capital adequacy, legal and regulatory compliance (including financial crime),
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 (including the economic, financial, and other impacts of pandemics); geopolitical
risk (including the
potential impact of new or elevated tariffs); inflation, interest rates and recession uncertainty; regulatory oversight
and compliance risk; risks associated with the Bank’s ability to satisfy the terms of the global resolution
of
the investigations into the Bank’s U.S.
Bank Secrecy Act
(BSA)/anti-money laundering (AML) program; the impact of the global resolution of the
investigations into the Bank’s U.S. BSA/AML program on the Bank’s
businesses, operations, financial condition, and reputation; 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; data risk; model risk; fraud activity; insider risk; conduct 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 consumer protection laws and regulations, 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-related risk); exposure related to litigation and
regulatory matters; ability of the Bank to attract, develop, and retain key talent; changes in
foreign exchange rates, interest
rates, credit spreads and equity prices; downgrade, suspension or withdrawal of ratings assigned
by any rating agency, the value and market price of the Bank’s common shares and other securities may be impacted by
market conditions and other factors; 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; critical accounting estimates and changes to accounting standards, policies, and methods
used by the Bank; 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 2024 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 headings
“Significant Events”, “Significant and Subsequent Events” or “Update on U.S. Bank Secrecy
Act (BSA)/Anti-Money Laundering (AML) Program Remediation and Enterprise AML Program Improvement
Activities“ 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 2024 MD&A under the headings “Economic Summary and Outlook” and “Significant Events”,
under
the headings “Key Priorities for 2025” 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 “2024 Accomplishments and Focus for 2025” for the Corporate segment,
each as may be updated in subsequently filed quarterly reports to shareholders and news releases (as
applicable).
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 securities legislation.
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 • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 5
TABLE 1: FINANCIAL HIGHLIGHTS
(millions of Canadian dollars, except
as noted)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Results of operations
Total revenue – reported
$
14,049
$
15,514
$
13,714
Total revenue – adjusted
1
15,030
14,897
13,771
Provision for (recovery of) credit losses
1,212
1,109
1,001
Insurance service expenses (ISE)
1,507
2,364
1,366
Non-interest expenses – reported
8,070
8,050
8,030
Non-interest expenses – adjusted
1
7,983
7,731
7,125
Net income (loss) – reported
2,793
3,635
2,824
Net income – adjusted
1
3,623
3,205
3,637
Financial position
(billions of Canadian dollars)
Total loans net of allowance for loan losses
$
965.3
$
949.5
$
904.3
Total assets
2,093.6
2,061.8
1,910.9
Total deposits
1,290.5
1,268.7
1,181.3
Total equity
119.0
115.2
112.4
Total risk-weighted assets
2
649.0
630.9
579.4
Financial ratios
Return on common equity (ROE) – reported
3
10.1
%
13.4
%
10.9
%
Return on common equity – adjusted
1
13.2
11.7
14.1
Return on tangible common equity (ROTCE)
1,3
13.4
17.8
14.9
Return on tangible common equity – adjusted
1
17.2
15.4
18.7
Efficiency ratio – reported
3
57.4
51.9
58.6
Efficiency ratio – adjusted, net of ISE
1,3,4
59.0
61.7
57.4
Provision for (recovery of) credit losses
as a % of net
average loans and acceptances
0.50
0.47
0.44
Common share information – reported
(Canadian dollars)
Per share earnings (loss)
Basic
$
1.55
$
1.97
$
1.55
Diluted
1.55
1.97
1.55
Dividends per share
1.05
1.02
1.02
Book value per share
3
61.61
59.59
57.34
Closing share price
5
82.91
76.97
81.67
Shares outstanding (millions)
Average basic
1,749.9
1,748.2
1,776.7
Average diluted
1,750.7
1,749.3
1,778.2
End of period
1,751.7
1,750.1
1,772.1
Market capitalization (billions of Canadian dollars)
$
145.2
$
134.7
$
144.7
Dividend yield
3
5.4
%
5.0
%
4.9
%
Dividend payout ratio
3
67.8
51.8
65.7
Price-earnings ratio
3
17.5
16.3
13.1
Total shareholder return (1 year)
3
6.9
4.5
(6.9)
Common share information – adjusted
(Canadian dollars)
Per share earnings
Basic
$
2.02
$
1.72
$
2.01
Diluted
2.02
1.72
2.00
Dividend payout ratio
51.9
%
59.2
%
50.7
%
Price-earnings ratio
10.6
9.9
10.6
Capital ratios
3
Common Equity Tier 1 Capital ratio
13.1
%
13.1
%
13.9
%
Tier 1 Capital ratio
14.7
14.8
15.7
Total Capital ratio
17.0
16.8
17.6
Leverage ratio
4.2
4.2
4.4
TLAC ratio
29.5
28.7
30.8
TLAC Leverage ratio
8.5
8.1
8.6
1
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
and Subsequent 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.
2
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
(CAR), Leverage Requirements (LR), and Total
Loss Absorbing Capacity (TLAC) guidelines.
Refer to the “Capital Position” section of this document for further details.
3
For additional information about this metric, refer to the Glossary of this document.
4
Efficiency ratio – adjusted, net of ISE is calculated by dividing adjusted non-interest expenses by adjusted
total revenue, net of ISE. Adjusted total revenue, net of ISE –
Q1 2025: $13,523 million, Q4 2024: $12,533 million, Q1 2024: $12,405 million.
5
Toronto Stock Exchange closing market
price.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 6
SIGNIFICANT AND SUBSEQUENT EVENTS
Sale of Schwab Common Shares
On February 12, 2025, the Bank sold its entire
remaining equity investment in Schwab
through a registered offering and share repurchase
by Schwab.
Immediately prior to the sale, TD held 184.7
million shares of Schwab’s common stock, representing
10.1% economic ownership. The sale of
the shares resulted
in proceeds of approximately $21.0 billion
(US$14.6 billion). In the second quarter
of fiscal 2025, the Bank is expected
to recognize a net gain on sale of its
investment in Schwab of approximately $8.6
billion (US$5.8 billion). This gain is net of
the release of related cumulative foreign currency
translation from AOCI, the
release of AOCI on designated net investment
hedging items, direct transaction costs, and
taxes. The Bank will also recognize $0.2
billion of underwriting fees in
its Wholesale segment as a result of TD
Securities acting as a lead bookrunner on
the transaction.
The transaction is expected to increase
Common Equity Tier 1 (CET1) capital by approximately
238 bps, based on the Bank’s CET1 capital
as at
January 31, 2025. Additionally, assuming the $8.0 billion planned
share repurchases
pursuant to the Bank’s proposed normal course issuer
bid were completed as
of January 31, 2025, the Bank’s pro forma CET1
capital as at January 31, 2025 would be
approximately 14.2%. The Bank
continues to have a business
relationship with Schwab through the IDA Agreement.
The Bank will discontinue recording
its share of earnings available to common
shareholders from its
investment in Schwab in the second quarter
of fiscal 2025.
UPDATE ON U.S. BANK
SECRECY ACT (BSA)/ANTI-MONEY LAUNDERING (AML
)
PROGRAM REMEDIATION
AND
ENTERPRISE AML PROGRAM IMPROVEMENT ACTIVITIES
As previously disclosed in the Bank’s 2024
MD&A, on October 10, 2024, the Bank announced
that, following active cooperation and engagement
with authorities
and regulators, it reached a resolution of previously
disclosed investigations related to its
U.S. BSA/AML compliance programs (the “Global
Resolution”). The Bank
and certain of its U.S. subsidiaries consented
to orders with the Office of the Comptroller
of the Currency (OCC), the Federal Reserve
Board, and the Financial
Crimes Enforcement Network (FinCEN) and
entered into plea agreements with the
Department of Justice (DOJ), Criminal
Division, Money Laundering and Asset
Recovery Section and the United States
Attorney’s Office for the District of New Jersey. The Bank is focused
on meeting the terms of the consent orders and
plea
agreements, including meeting its requirements
to remediate the Bank’s U.S. BSA/AML programs.
In addition, the Bank is also undertaking several
improvements
to the Bank’s enterprise-wide AML/Anti-Terrorist Financing and Sanctions Programs
(“Enterprise AML Program”).
For additional information on the Global
Resolution, the Bank’s U.S. BSA/AML program
remediation activities, the Bank’s Enterprise
AML Program improvement
activities, and the risks associated with the
foregoing, see the “Significant Events – Global
Resolution of the Investigations into the Bankְ’s U.S. BSA/AML
Program”
and “Risk Factors That May Affect Future Results
– Global Resolution of the Investigations into
the Bank’s U.S. BSA/AML Program” sections of
the Bank’s
2024 MD&A.
Remediation of the U.S. BSA/AML Program
The Bank remains focused on remediating
its U.S. BSA/AML program to meet the requirements
of the Global Resolution. The Bank continues
to expect to have
the majority of its management remediation
actions implemented in calendar 2025 and
continues to expect U.S. BSA/AML remediation
and related governance
and control investments of approximately
US$500 million pre-tax in fiscal 2025
2
. Remaining management implementations are
planned for calendar 2026 and into
calendar 2027. Sustainability and testing activities
are planned for calendar 2026 and
calendar 2027 following management implementations,
and the Bank is
targeting to have the Suspicious Activity
Report lookback to be completed in calendar
2027 per the OCC consent order. As noted in the Bank’s 2024
MD&A, all
management remediation actions will be
subject to validation by the Bank’s internal audit function,
followed by the review and acceptance by
the appointed
monitor, demonstrated sustainability, and, ultimately, the review and approval of the Bank’s U.S. banking
regulators and the DOJ. The following
graph illustrates
the Bank’s expected remediation plan and progress
on a calendar year basis,
based on its work to date:
As noted in the Bank’s 2024 MD&A including in
the “Risk Factors That May Affect Future
Results – Global Resolution of the Investigations
into the Bank’s U.S.
BSA/AML Program” section thereof, the Bank’s
remediation timeline is based on the Bank’s
current plans, as well as assumptions
related to the duration of
planning activities, including the completion
of external benchmarking and lookback
reviews. As an example, as the Bank
undertakes the lookback reviews, the
Bank may be required to further expand
the scope of the review, either in terms of the subjects being
addressed and/or the time period reviewed.
The Bank’s
ability to meet its planned remediation milestones
assumes that the Bank will be able
to successfully execute against its
U.S. BSA/AML remediation program plan,
which is subject to inherent risks and uncertainties
including the Bank’s ability to attract and
retain key employees, the ability of third
parties to deliver on their
contractual obligations, and the successful
development and implementation of required
technology solutions. Furthermore, the execution
of the U.S. BSA/AML
remediation plan, including these planned
milestones, will not be entirely within the Bank’s
control because of various factors such as (i)
the requirement to obtain
regulatory approval or non-objection before
proceeding with various steps, and (ii) the
requirement for the various deliverables
to be acceptable to the regulators
and/or the monitor.
While substantial work remains, the
Bank has made progress on its U.S. BSA/AML
program remediation activities over the
first fiscal quarter of 2025, including:
2
The total amount expected to be spent on remediation and governance and control investments is subject to inherent uncertainties
and may vary based on the scope of work in the U.S.
BSA/AML remediation plan which could change as a result of additional findings that are identified as work progresses
as well as the Bank’s ability to successfully execute against the
U.S. BSA/AML remediation program in accordance with the U.S. Retail segment’s fiscal 2025 plan.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 7
1)
the Bank submitted a list of candidates for
the monitorship to both the DOJ and
FinCEN, and they both approved the use of
the same Independent
Compliance Monitor on a go-forward basis;
2)
the implementation of enhanced investigation
practices including the implementation
of technology which centralizes all new investigative
cases in a
single system to provide unified data sets
to help manage financial crime risk
with a single view of the customer;
3)
the continued hiring of investigative analysts,
with the U.S. investigative analyst team
up 4% in size in the first fiscal quarter of
2025;
4)
the completion of the design of machine learning
tools that help analyze customer data to
more effectively and rapidly detect potential activity
of
interest;
5)
the introduction of new reporting on workloads
that has improved the Bank’s ability to forecast resource
needs; and
6)
completed development of a detailed plan
to improve employee accountability
mechanisms to ensure that there are clear
consequences that are
understood throughout the organization.
For the second and third fiscal quarters of
2025, the Bank’s focus will be on the following remediation
activities:
1)
hiring of additional investigative analysts
to help manage case volumes which are
expected to be higher as additional monitoring
capabilities continue
to be implemented;
2)
the implementation of incremental enhancements
for transaction monitoring and client
onboarding, including the implementation of
a further round of
scenarios into the Bank’s transaction monitoring
system;
3)
the introduction of updated investigative procedures
that contain additional guidance on analyzing
customer activity; and
4)
the implementation of machine learning analysis
capabilities beginning in the third fiscal quarter
of 2025.
As noted in the Bank’s 2024 MD&A,
to help ensure that the Bank can continue
to support its customers’ financial needs
in the U.S. while not exceeding the
limitation on the combined total assets of
the U.S. Bank, the Bank is focused on executing
multiple U.S. balance sheet restructuring actions
in fiscal 2025. Refer to
the “Update on U.S. Balance Sheet Restructuring”
section of the U.S. Retail segment section
for additional information on these actions.
For additional information
about expenses associated with the Bank’s
U.S. BSA/AML program remediation activities,
refer to the U.S. Retail segment
section.
Assessment and Strengthening of the
Bank’s Enterprise AML Program
The Bank is continuing to implement improvements
to the Enterprise AML Program and
continues to target implementation of
the majority of its Enterprise AML
Program remediation and enhancement actions
by the end of calendar 2025. As noted in
the Bank’s 2024 MD&A, once implemented,
those remediation and
enhancement actions will then be subject to internal
review, challenge and validation of the activities. Following
the end of the first fiscal quarter, the Financial
Transactions and Reports Analysis Centre of Canada
(“FINTRAC”) commenced a review of
certain remediation steps that the Bank has
taken to date to address
the FINTRAC violations. This review is ongoing,
and subject to the outcome, may result
in additional regulatory actions.
As noted in the “Risk Factors That May
Affect Future Results – Global Resolution of
the Investigations into the Bank’s U.S. BSA/AML
Program” section of the
Bank’s 2024 MD&A, the remediation and enhancement
of the Enterprise AML program is exposed
to similar risks as noted in respect
of the remediation of the
Bank’s U.S. BSA/AML program. In particular, as the Bank makes
remediation and enhancements to the
Enterprise AML Program, it expects an
increase in
identification of reportable transactions and/or
events, which will add to the operational
backlog in the Bank’s Financial Crime
Risk Management (FCRM)
investigations processing that the Bank currently
faces, but is working towards remediating,
across the enterprise. In addition, as the
Bank continues its
remediation and improvement activities of
the Enterprise AML Program, it continues
to assess (i) whether issues that have
been, and continue to be, identified in
the U.S. BSA/AML program exist in the Enterprise
AML Program in Canada, Europe or
Asia, and (ii) the impact of such issues. The results
of these assessments
may also broaden the scope of the remediation
and improvements required for the
Enterprise AML Program. Furthermore, the
Bank’s regulators or law
enforcement agencies may identify other issues
with the Bank’s Enterprise AML Program,
which may result in additional regulatory
actions.
While substantial work remains, the
Bank has made progress on the improvements
to the Enterprise AML Program over the
first fiscal quarter of 2025, including:
1) the consolidation of the Enterprise and
the U.S. AML mandates under the leadership
of the Global Head of FCRM, in order to better
enable strong
and consistent engagement, and delivery of improvements
across both the U.S. and Enterprise
AML programs;
2) additional improvements in the Bank’s process
and procedural guidance, including
additional targeted training across FCRM
and individual business
lines; and
3)
hiring of additional investigative analysts,
to help improve management of case volumes,
with further expansion planned in future fiscal
quarters.
For the second and third fiscal quarters of
2025, the Bank’s focus will be on the following improvements
to the Enterprise AML Program:
1) the implementation of a new centralized
case management tool that is already in production
in the U.S. through the rest of the Bank,
with the goal of
strengthening oversight and investigations of identified
FCRM risks;
2) the implementation of technology initiatives
to consolidate electronic document and data
availability to help improve timeliness of
monitoring and
oversight of escalated AML issues; and
3) the continued rollout of an enhanced risk
assessment methodology and tools to
strengthen identification and measurement
of FCRM risks across
clients, products, and transactions, supported
by improved data capabilities.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 8
HOW WE PERFORMED
CORPORATE OVERVIEW
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 more than 27.9 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., and TD Wealth (U.S.);
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
$2.09 trillion in assets on January 31, 2025.
The Toronto-Dominion Bank trades under the symbol “TD” on the Toronto
Stock Exchange and New York Stock Exchange.
HOW THE BANK REPORTS
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 “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
As at January 31, 2025, the Bank accounted
for its investment in Schwab using the equity
method. The U.S. Retail segment reflected
the Bank’s share of net
income from its investment in Schwab.
The Corporate segment net income (loss)
included
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
was reported with a one-month lag. For further
details, refer to Note 12 of the Bank’s 2024
Annual Consolidated
Financial Statements.
On August 21, 2024, the Bank sold 40.5
million shares of common stock of Schwab for
proceeds of approximately $3.4 billion (US$2.5
billion). The share sale
reduced the Bank’s ownership interest in Schwab
from 12.3% to 10.1%. The Bank recognized
approximately $1.0 billion (US$0.7 billion) as
other income (net of
$0.5 billion (US$0.4 billion) loss from AOCI
reclassified to earnings), in the fourth quarter
of fiscal 2024.
On February 12, 2025, the Bank sold its entire
remaining equity investment in Schwab
through a registered offering and share repurchase
by Schwab. For
further details, refer to “Significant and Subsequent
Events” section of this document.
The Bank will discontinue recording its share
of earnings available to
common shareholders from its investment
in Schwab in the second quarter of fiscal
2025.
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”
or the “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
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 had 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.
During the first quarter of fiscal 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 fiscal 2024, Schwab had completed its buydown
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.
Subsequent to the sale of the Bank’s entire remaining
equity investment in Schwab, the Bank
continues to have a business relationship
with Schwab through
the IDA Agreement.
Refer to Note 27 of the Bank’s 2024 Annual
Consolidated Financial Statements for further details
on the Schwab IDA Agreement.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 9
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
January 31
October 31
January 31
2025
2024
2024
Net interest income
$
7,866
$
7,940
$
7,488
Non-interest income
6,183
7,574
6,226
Total revenue
14,049
15,514
13,714
Provision for (recovery of) credit losses
1,212
1,109
1,001
Insurance service expenses
1,507
2,364
1,366
Non-interest expenses
8,070
8,050
8,030
Income before income taxes and share
of net income from
investment in Schwab
3,260
3,991
3,317
Provision for (recovery of) income taxes
698
534
634
Share of net income from investment in
Schwab
231
178
141
Net income (loss) – reported
2,793
3,635
2,824
Preferred dividends and distributions on other
equity instruments
86
193
74
Net income (loss) attributable to common
shareholders
$
2,707
$
3,442
$
2,750
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 10
The following table provides a reconciliation between
the Bank’s adjusted and reported results.
For further details refer to the “Significant
and Subsequent Events”
or “How We Performed”
sections.
TABLE 3: NON-GAAP FINANCIAL MEASURES – Reconciliation
of Adjusted to Reported Net Income
(millions of Canadian dollars)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Operating results – adjusted
Net interest income
1,2
$
7,920
$
8,034
$
7,545
Non-interest income
3
7,110
6,863
6,226
Total revenue
15,030
14,897
13,771
Provision for (recovery of) credit losses
1,212
1,109
1,001
Insurance service expenses
1,507
2,364
1,366
Non-interest expenses
4
7,983
7,731
7,125
Income before income taxes and share of net income from
investment in Schwab
4,328
3,693
4,279
Provision for (recovery of) income taxes
962
695
872
Share of net income from investment in Schwab
5
257
207
230
Net income – adjusted
3,623
3,205
3,637
Preferred dividends and distributions on other equity instruments
86
193
74
Net income available to common shareholders –
adjusted
3,537
3,012
3,563
Pre-tax adjustments for items of note
Amortization of acquired intangibles
6
(61)
(60)
(94)
Acquisition and integration charges related to the Schwab
transaction
4,5
–
(35)
(32)
Share of restructuring and other charges from investment
in Schwab
5
–
–
(49)
Restructuring charges
4
–
–
(291)
Acquisition and integration-related charges
4
(52)
(82)
(117)
Impact from the terminated FHN acquisition-related capital
hedging strategy
1
(54)
(59)
(57)
Gain on sale of Schwab shares
3
–
1,022
–
U.S. balance sheet restructuring
3
(927)
(311)
–
Indirect tax matters
2,4
–
(226)
–
FDIC special assessment
4
–
72
(411)
Global resolution of the investigations into the Bank’s
U.S. BSA/AML program
4
–
(52)
–
Less: Impact of income taxes
Amortization of acquired intangibles
(9)
(8)
(15)
Acquisition and integration charges related to the Schwab
transaction
–
(9)
(6)
Restructuring charges
–
–
(78)
Acquisition and integration-related charges
(11)
(18)
(24)
Impact from the terminated FHN acquisition-related capital
hedging strategy
(13)
(14)
(14)
U.S. balance sheet restructuring
(231)
(77)
–
Indirect tax matters
–
(53)
–
FDIC special assessment
–
18
(101)
Total adjustments for items
of note
(830)
430
(813)
Net income (loss) available to common shareholders
– reported
$
2,707
$
3,442
$
2,750
1
After the termination of the merger agreement between the Bank and FHN on May 4, 2023, the residual
impact of the strategy is reversed through net interest income – Q1 2025: ($54) million,
Q4 2024: ($59) million,
Q1 2024: ($57) million, reported in the Corporate segment.
2
Adjusted net interest income excludes the following item of note:
i.
Indirect tax matters – Q4 2024: $35 million, reported in the Corporate segment.
3
Adjusted non-interest income excludes the following items of note:
i.
The Bank sold 40.5 million shares of common stock of Schwab and recognized a gain on the sale
– Q4 2024: $1,022 million, reported in the Corporate segment; and
ii.
U.S. balance sheet restructuring – Q1 2025: $927 million, Q4 2024: $311 million, reported in the U.S. Retail segment.
4
Adjusted non-interest expenses exclude the following items of note:
i.
Amortization of acquired intangibles – Q1 2025: $35 million, Q4 2024: $33 million, Q1 2024: $63 million, reported
in the Corporate segment;
ii.
The Bank’s own acquisition and integration charges related to the Schwab transaction – Q4 2024: $33
million, Q1 2024: $23 million, reported in the Corporate segment;
iii.
Restructuring charges – Q1 2024: $291 million, reported in the Corporate segment;
iv.
Acquisition and integration-related charges – Q1 2025: $52 million, Q4 2024: $82 million, Q1 2024:
$117 million, reported in the Wholesale Banking segment;
v.
Indirect tax matters – Q4 2024: $191 million, reported in the Corporate segment;
vi.
FDIC special assessment – Q4 2024: ($72) million, Q1 2024: $411 million, reported in the U.S. Retail segment; and
vii.
Charges for the global resolution of the investigations into the Bank’s U.S. BSA/AML program – Q4 2024:
$52 million, reported in the U.S. Retail segment.
5
Adjusted Share of net income from investment in Schwab excludes the following items of note
on an after-tax basis. The earnings impact of these items is reported in the Corporate
segment:
i.
Amortization of Schwab-related acquired intangibles – Q1 2025: $26 million, Q4 2024: $27 million,
Q1 2024: $31 million;
ii.
The Bank’s share of acquisition and integration charges associated with Schwab’s acquisition of TD Ameritrade – Q4 2024: $2
million, Q1 2024: $9 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.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 11
TABLE 4: RECONCILIATION OF REPORTED TO ADJUSTED EARNINGS PER SHARE
1
(Canadian dollars)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Basic earnings (loss) per share – reported
$
1.55
$
1.97
$
1.55
Adjustments for items of note
0.47
(0.25)
0.45
Basic earnings per share – adjusted
$
2.02
$
1.72
$
2.01
Diluted earnings (loss) per share – reported
$
1.55
$
1.97
$
1.55
Adjustments for items of note
0.47
(0.25)
0.45
Diluted earnings per share – adjusted
$
2.02
$
1.72
$
2.00
1
EPS is computed by dividing net income available to common shareholders by the weighted-average number of
shares outstanding during the period. Numbers may not add due to
rounding.
TABLE 5: AMORTIZATION OF INTANGIBLES, NET OF INCOME TAXES
(millions of Canadian dollars)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Schwab
1
$
26
$
27
$
31
Wholesale Banking related intangibles
21
19
42
Other
5
6
6
Included as items of note
52
52
79
Software and asset servicing rights
119
117
96
Amortization of intangibles, net of income
taxes
$
171
$
169
$
175
1
Included in Share of net income from investment in Schwab.
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 11.5% Common Equity Tier 1 (CET1) Capital
effective fiscal 2024.
TABLE 6: RETURN ON COMMON EQUITY
(millions of Canadian dollars, except
as noted)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Average common equity
$
106,133
$
102,051
$
100,269
Net income (loss) attributable to common
shareholders – reported
2,707
3,442
2,750
Items of note, net of income taxes
830
(430)
813
Net income available to common shareholders
– adjusted
$
3,537
$
3,012
$
3,563
Return on common equity – reported
10.1
%
13.4
%
10.9
%
Return on common equity – adjusted
13.2
11.7
14.1
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 7: RETURN ON TANGIBLE COMMON EQUITY
(millions of Canadian dollars, except
as noted)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Average common equity
$
106,133
$
102,051
$
100,269
Average goodwill
19,205
18,568
18,208
Average imputed goodwill and intangibles on investments
in Schwab
5,116
5,328
6,056
Average other acquired intangibles
1
482
508
615
Average related deferred tax liabilities
(237)
(230)
(231)
Average tangible common equity
81,567
77,877
75,621
Net income (loss) attributable to common
shareholders – reported
2,707
3,442
2,750
Amortization of acquired intangibles, net of income
taxes
52
52
79
Net income (loss) attributable to common
shareholders adjusted for
amortization of acquired intangibles,
net of income taxes
2,759
3,494
2,829
Other items of note, net of income taxes
778
(482)
734
Net income available to common shareholders
– adjusted
$
3,537
$
3,012
$
3,563
Return on tangible common equity
13.4
%
17.8
%
14.9
%
Return on tangible common equity – adjusted
17.2
15.4
18.7
1
Excludes intangibles relating to software and asset servicing rights.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 12
IMPACT OF FOREIGN EXCHANGE RATE ON U.S. RETAIL SEGMENT TRANSLATED EARNINGS
The following table reflects the estimated impact
of foreign currency translation on key
U.S. Retail segment income statement items.
The impact is calculated as
the difference in translated earnings using the average
U.S. to Canadian dollars exchange rates in the
periods noted.
TABLE 8: IMPACT OF FOREIGN EXCHANGE RATE ON U.S. RETAIL SEGMENT TRANSLATED EARNINGS
(millions of Canadian dollars, except
as noted)
For the three months ended
January 31, 2025 vs.
January 31, 2024
Increase (Decrease)
U.S. Retail Bank
Total revenue – reported
$
133
Total revenue – adjusted
1
178
Non-interest expenses – reported
114
Non-interest expenses – adjusted
1
114
Net income (loss) – reported, after tax
7
Net income – adjusted, after tax
1
40
Share of net income from investment in
Schwab
2
6
U.S. Retail segment net income (loss) –
reported, after tax
13
U.S. Retail segment net income – adjusted,
after tax
1
46
Earnings (loss) per share
(Canadian dollars)
Basic – reported
$
0.01
Basic – adjusted
1
0.03
Diluted – reported
0.01
Diluted – adjusted
1
0.03
Average foreign exchange rate (equivalent of CAD $1.00)
For the three months ended
January 31
January 31
2025
2024
U.S. dollar
$
0.704
$
0.739
1
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP
and Other Financial Measures” in the “How We Performed” section of this
document.
2
Share of net income from investment in Schwab and the foreign exchange impact are reported with a one-month
lag.
FINANCIAL RESULTS
OVERVIEW
Performance Summary
Outlined below is an overview of the Bank’s performance
for the first quarter of 2025. Shareholder
performance indicators help guide and benchmark
the Bank’s
accomplishments. For the purposes
of this analysis, the Bank utilizes adjusted earnings,
which excludes items of note from the reported
results that are prepared
in accordance with IFRS. Reported and adjusted
results and items of note are explained in “Non-GAAP
and Other Financial Measures” in the “How
We Performed”
section of this document.
●
Adjusted diluted EPS for the three months
ended January 31, 2025, increased 1%
from the same period last year.
●
Adjusted ROTCE for the three months ended
January 31, 2025, was 17.2%.
●
For the twelve months ended January 31, 2025,
the total shareholder return was 6.9% compared
to the Canadian peer
3
average of 35.8%.
Net Income
Quarterly comparison – Q1 2025 vs. Q1 2024
Reported net income for the quarter was $2,793
million, a decrease of $31 million, or 1%,
compared with the first quarter last year, primarily reflecting
the impact of
balance sheet restructuring activities in the
current quarter in U.S. Retail, higher non-interest
expenses, including higher governance and
control investments,
including costs for U.S. BSA/AML remediation,
and higher PCL, partially offset by higher revenues,
and the impact of the FDIC special assessment
charge
i
n U.S.
Retail and restructuring charges in the
first quarter last year. On an adjusted basis, net income for
the quarter was $3,623 million, relatively flat
compared with the
first quarter last year.
By segment, the decrease in reported net income
reflects a decrease in U.S. Retail of $528
million, partially offset by increases in the Corporate
segment of
$232 million, in Wealth Management and Insurance
of $125 million, in Wholesale Banking
of $94 million, and in Canadian Personal
and Commercial Banking of
$46 million.
Quarterly comparison – Q1 2025 vs. Q4 2024
Reported net income for the quarter decreased
$842 million, or 23%, compared with
the prior quarter, primarily reflecting the prior quarter gain on
sale of Schwab
shares in the Corporate segment, the impact
of balance sheet restructuring activities in
the current quarter in U.S. Retail, and higher
non-interest expenses,
partially offset by lower insurance service expenses,
and the prior quarter provision for indirect
tax matters in the Corporate segment.
Adjusted net income for the
quarter increased $418 million, or 13%.
By segment, the decrease in reported net income
reflects decreases in the Corporate segment
of $885 million and in U.S. Retail of $360
million, partially offset
by increases in Wealth Management and Insurance
of $331 million, in Wholesale Banking
of $64 million, and in Canadian Personal
and Commercial Banking of
$8 million.
Net Interest Income
Quarterly comparison – Q1 2025 vs. Q1 2024
Reported net interest income for the quarter
was $7,866 million, an increase of $378
million, or 5%, compared with the first quarter
last year, primarily reflecting
volume growth in Canadian Personal and Commercial
Banking, the impact of foreign exchange
translation, higher deposit margins and
the impact of balance
sheet restructuring activities in U.S. Retail,
and higher revenue from treasury and balance
sheet activities, partially offset by lower net interest
income in Wholesale
Banking. On an adjusted basis, net interest
income was $7,920 million, an increase of
$375 million, or 5%.
3
Canadian peers include Bank of Montreal, Canadian Imperial Bank of Commerce, Royal Bank of Canada, and
The Bank of Nova Scotia.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 13
By segment, the increase in reported net interest
income reflects increases in Canadian
Personal and Commercial Banking of $302
million, in U.S. Retail of
$165 million, in the Corporate segment
of $132 million, and in Wealth Management
and Insurance of $84 million, partially offset
by a decrease in Wholesale
Banking of $305 million.
Quarterly comparison – Q1 2025 vs. Q4 2024
Reported net interest income for the quarter
decreased $74 million, or 1%, compared
with the prior quarter, primarily reflecting
lower net interest income in
Wholesale Banking, partially offset by the impact
of foreign exchange translation, volume growth
and higher margins in Canadian Personal
and Commercial
Banking, and the impact of balance sheet restructuring
activities in U.S. Retail. On an adjusted
basis, net interest income decreased $114
million, or 1%.
By segment, the decrease in reported net interest
income reflects decreases in Wholesale
Banking of $328 million and in the Corporate
segment of $11 million,
partially offset by increases in U.S. Retail of
$140 million, in Canadian Personal and
Commercial Banking of $77 million, and
in Wealth Management and
Insurance of $48 million.
Non-Interest Income
Quarterly comparison – Q1 2025 vs. Q1 2024
Reported non-interest income for the quarter
was $6,183 million, a decrease of $43
million, or 1%, compared with the first quarter
last year, primarily reflecting the
impact of balance sheet restructuring activities
in U.S. Retail, partially offset by higher trading-related
revenue and underwriting fees in Wholesale
Banking, and
higher insurance premiums, fee-based revenue,
and transaction revenue in Wealth Management
and Insurance. On an adjusted basis,
non-interest income was
$7,110 million, an increase of $884 million,
or 14%.
By segment, the decrease in reported non-interest
income reflects decreases in U.S. Retail of
$886 million, in Canadian Personal and
Commercial Banking of
$37 million, and in the Corporate segment of $24
million, partially offset by increases in Wholesale
Banking of $525 million and in Wealth Management
and
Insurance of $379 million.
Quarterly comparison – Q1 2025 vs. Q4 2024
Non-interest income for the quarter decreased
$1,391 million, or 18%, compared with the prior
quarter, primarily reflecting the impact of
the prior quarter gain on
sale of Schwab shares in the Corporate segment,
reinsurance recoveries for catastrophe
claims in the prior quarter in Wealth Management
and Insurance, and the
impact of balance sheet restructuring activities
in the current quarter in U.S. Retail, partially
offset by higher trading-related revenue in
Wholesale Banking, and
higher fee-based revenue, transaction revenue
and insurance premiums in Wealth Management
and Insurance. On an adjusted basis,
non-interest income
increased $247 million, or 4%.
By segment, the decrease in non-interest income
reflects decreases in the Corporate segment
of $1,000 million, in U.S. Retail of $569
million, and in Wealth
Management and Insurance of $387 million, partially
offset by increases in Wholesale Banking
of $557 million and in Canadian Personal and
Commercial Banking
of $8 million.
Provision for Credit Losses
Quarterly comparison – Q1 2025 vs. Q1 2024
PCL for the quarter was $1,212 million, an increase
of $211 million compared with the first quarter last year. PCL – impaired
was $1,216 million, an increase of
$282 million, or 30%, reflecting credit migration
in the Business and Government and
Canadian consumer lending portfolios and
the adoption impact of a model
update in the U.S. Cards portfolio.
PCL – performing was a recovery of $4
million, compared with a build of $67 million
in the prior year. The performing recovery
this quarter reflects
the adoption impact of a model update in
the U.S. Cards portfolio, and an update to
the economic forecast, largely offset by a build in
the
Business and Government lending portfolios
related to policy and trade uncertainty that
could impact the economic trajectory and credit
performance. Total PCL
for the quarter as an annualized percentage
of credit volume was 0.50%.
By segment, PCL was higher by $98
million in Canadian Personal and Commercial
Banking, by $66 million in U.S. Retail, by
$62 million in Wholesale Banking,
and lower by $15 million in the Corporate
segment.
Quarterly comparison – Q1 2025 vs. Q4 2024
PCL for the quarter was $1,212 million, an increase
of $103 million compared with the prior
quarter. PCL – impaired was $1,216 million, an increase
of $63 million,
or 5%, largely recorded in the U.S. Cards portfolio
reflecting the adoption impact of a
model update and seasonal trends, partially offset by
lower provisions in the
Wholesale and Canadian commercial lending
portfolios.
PCL – performing was a recovery of $4
million, compared with a recovery of $44
million in the prior
quarter. The performing recovery this quarter reflects
the adoption impact of a model update in
the U.S. Cards portfolio, and an update
to the economic forecast,
largely offset by a build in the Business and Government
lending portfolios related to policy and
trade uncertainty that could impact the economic
trajectory and
credit performance.
Total PCL for the quarter as an annualized percentage of credit volume was 0.50%.
By segment, PCL was higher by $91
million in Canadian Personal and Commercial
Banking, by $62 million in U.S. Retail, by
$12 million in the Corporate
segment, and lower by $62 million in
Wholesale Banking.
While results may vary by quarter, there are
many potential scenarios that may impact
the economic trajectory and credit performance,
some of which could
drive PCL results beyond the high
end of the Bank’s previously disclosed
estimated PCL range of 45 to 55
basis points
for fiscal 2025
4
.
4
The Bank’s estimated PCL range is based on forward-looking assumptions that have inherent risks and
uncertainties. Results may vary depending on actual economic or credit conditions
and performance, such as the level of unemployment, interest rates, economic growth or contraction, and borrower
or industry specific credit factors and conditions, inclusive of policy
and trade uncertainty.
The Bank’s PCL estimate is subject to risks and uncertainties including those set out in the
“Risk Factors That May Affect Future Results” section of this document.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 14
TABLE 9: PROVISION FOR CREDIT LOSSES
1
(millions of Canadian dollars)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Provision for (recovery of) credit losses
– Stage 3 (impaired)
Canadian Personal and Commercial
Banking
$
459
$
456
$
364
U.S. Retail
529
418
377
Wealth Management and Insurance
–
–
–
Wholesale Banking
33
134
5
Corporate
2
195
145
188
Total provision for (recovery of) credit losses – Stage 3
1,216
1,153
934
Provision for (recovery of) credit losses
– Stage 1 and Stage 2 (performing)
Canadian Personal and Commercial
Banking
62
(26)
59
U.S. Retail
(78)
(29)
8
Wealth Management and Insurance
–
–
–
Wholesale Banking
39
–
5
Corporate
2
(27)
11
(5)
Total provision for (recovery of) credit losses – Stage 1 and
Stage 2
(4)
(44)
67
Total provision for (recovery of) credit losses
$
1,212
$
1,109
$
1,001
1
Includes PCL for off-balance sheet instruments.
2
Includes PCL on the retailer program partners’ share of the U.S. strategic cards portfolio.
Insurance Service Expenses
Quarterly comparison – Q1 2025 vs. Q1 2024
Insurance service expenses for the quarter
were $1,507 million, an increase of $141
million, or 10%, compared with the first quarter
last year, primarily reflecting
increased claims severity.
Quarterly comparison – Q1 2025 vs. Q4 2024
Insurance service expenses for the quarter
decreased $857 million, or 36%, compared
with the prior quarter, primarily the result of estimated losses
from
catastrophe claims of $1,020 million in
the prior quarter
,
partially offset by increased claims severity.
Non-Interest Expenses and Efficiency
Ratio
Quarterly comparison – Q1 2025 vs. Q1 2024
Reported non-interest expenses were $8,070
million, relatively flat compared with
the first quarter last year, primarily reflecting higher governance
and control
investments in the U.S. Retail and Corporate
segments, including costs for U.S. BSA/AML
remediation, higher employee-related
expenses, including higher
variable compensation commensurate
with higher revenues and the impact of the
compensation initiative whereby the Bank’s eligible
non-executive employees
received share compensation (the “TD Share
Compensation Initiative”), the impact of
foreign exchange translation, and higher
technology investment supporting
business growth, offset by the impact of the FDIC
special assessment charge in U.S. Retail
and restructuring charges in the first quarter
last year. On an adjusted
basis, non-interest expenses were $7,983
million, an increase of $858 million, or 12%.
As previously noted in the Bank’s 2024 MD&A,
as a result of the Bank’s
investments in governance and control and investments
supporting business growth, including employee-related
expenses, net of expected productivity
and
restructuring run-rate savings, the Bank expects
that adjusted expense growth for the 2025 fiscal
year will be in the range of 5-7%
5
. However, given the ramp up in
our governance and control investments over
the course of fiscal 2024, we expect elevated
expense growth in the second quarter
of fiscal year 2025 on a year-
over-year basis
5
.
By segment, reported non-interest expenses
reflect increases in Wealth Management and
Insurance of $126 million, in Canadian Personal
and Commercial
Banking of $102 million, and in Wholesale
Banking of $35 million, partially offset by decreases
in the Corporate segment of $144
million and in U.S. Retail of
$79 million.
The Bank’s reported efficiency ratio was 57.4%, compared
to 58.6% in the first quarter last year. The Bank’s adjusted efficiency ratio,
net of ISE was 59.0%,
compared with 57.4% in the first quarter last
year.
Quarterly comparison – Q1 2025 vs. Q4 2024
Reported non-interest expenses were relatively
flat, compared with the prior quarter, primarily reflecting higher
employee-related expenses, including higher
variable compensation commensurate
with higher revenues and the impact of the
TD Share Compensation Initiative, offset by the prior
quarter provision for
indirect tax matters in the Corporate Segment,
and lower spend on legal and regulatory
fees, marketing, occupancy, and technology. Adjusted non-interest
expenses increased $252 million, or 3%.
By segment, reported non-interest expenses
reflect increases in Wholesale Banking
of $199 million, in Wealth Management and
Insurance of $66 million, and
in U.S. Retail of $56 million, partially offset by
decreases in the Corporate segment of $285
million and in Canadian Personal and Commercial
Banking of
$16 million.
The Bank’s reported efficiency ratio was 57.4%, compared
with 51.9% in the prior quarter. The Bank’s adjusted efficiency ratio, net
of ISE was 59.0%,
compared with 61.7% in the prior quarter.
5
The Bank’s expectations regarding expense growth are based on the Bank’s assumptions
regarding certain factors, including risk
and control investments, employee-related expenses,
foreign exchange impact, gross-up of the retailer program partners’ share of PCL for the Bank’s U.S. strategic
card portfolio (“SCP Impact”), and productivity and restructuring savings. In
particular, in estimating its expense growth expectations, the Bank has assumed
that the following three factors on the Bank’s fiscal 2025 adjusted expenses will be the same
as the
Bank’s fiscal 2024 adjusted expenses: (i) variable compensation commensurate with higher revenue,
(ii) foreign exchange translation, and (iii) SCP Impact. For reference, in the first
quarter of 2025, variable compensation commensurate with higher revenue and foreign exchange translation, in
the aggregate, accounted for approximately one-third of the year-over-
year 12% increase in adjusted non-interest expenses, while the SCP Impact was not a significant driver of the increase.
The Bank’s assumptions are subject to inherent uncertainties and
may vary based on factors both within and outside the Bank’s control, including the accuracy of the Bank’s
employee compensation and benefit expense forecasts, impact of business
performance on variable compensation, inflation, the pace of productivity initiatives across the organization, and
unexpected expenses such as legal matters. Refer to the “Risk Factors
That May Affect Future Results” section of this document for additional information about risks and uncertainties
that may impact the Bank’s estimates.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 15
Income Taxes
The Bank’s effective income tax rate on a reported
basis was 21.4% for the current quarter, compared with 19.1%
in the first quarter last year and 13.4%
in the
prior quarter. The year-over-year increase primarily reflects
the impact of lower tax-exempt dividend income,
taxes associated with Pillar Two legislation and
earnings mix. The quarter-over-quarter increase
primarily reflects the non-taxable gain from
the sale of Schwab shares in the prior quarter.
To allow for an after-tax calculation of adjusted income, the adjusted provision
for income taxes is calculated by adjusting
the taxes for each item of note using
the statutory income tax rate of the applicable
legal entity. The adjusted effective income tax rate is calculated
as the adjusted provision for income taxes as
a
percentage of adjusted net income before
taxes. The Bank’s adjusted effective income tax rate
was 22.2% for the current quarter, compared with 20.4% in
the first
quarter last year and 18.8% in the prior quarter. The year-over-year
increase primarily reflects the impact of lower
tax-exempt dividend income, taxes associated
with Pillar Two legislation and earnings mix. The quarter-over-quarter
increase primarily reflects taxes associated
with Pillar Two Legislation, the impact of higher
adjusted pre-tax income and earnings mix.
TABLE 10: INCOME TAXES – Reconciliation of Reported to Adjusted Provision for
Income Taxes
(millions of Canadian dollars, except
as noted)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Income taxes at Canadian statutory income
tax rate
$
906
27.8
%
$
1,110
27.8
%
$
920
27.7
%
Increase (decrease) resulting from:
Dividends received
(3)
(0.1)
(3)
(0.1)
(19)
(0.6)
Rate differentials on international operations
1
(199)
(6.1)
(573)
(14.3)
(271)
(8.2)
Other
(6)
(0.2)
–
–
4
0.2
Provision for income taxes and effective
income tax rate – reported
$
698
21.4
%
$
534
13.4
%
$
634
19.1
%
Total adjustments for items of note
264
161
238
Provision for income taxes and effective
income tax rate – adjusted
$
962
22.2
%
$
695
18.8
%
$
872
20.4
%
1
These amounts reflect tax credits as well as international earnings mix.
International Tax Reform – Pillar Two Global Minimum Tax
On December 20, 2021, the Organisation
for Economic Co-operation and Development
(OECD) published Pillar Two model rules as part of its
efforts toward
international tax reform. The Pillar Two model rules provide
for the implementation of a 15% global
minimum tax for large multinational enterprises,
which is to be
applied on a jurisdiction-by-jurisdiction
basis. Pillar Two legislation was enacted in Canada on
June 20, 2024 under Bill C-69, which includes
the
Global Minimum
Tax Act
addressing the Pillar Two model rules. Similar legislation
has passed in other jurisdictions in
which the Bank operates and will result in additional
taxes
being paid in these countries. The rules
were effective and implemented by the Bank on
November 1, 2024. The IASB previously issued
amendments to IAS 12
Income Taxes
for a temporary mandatory exception from
the recognition and disclosure of deferred
taxes related to the implementation of Pillar
Two model rules,
which the Bank has applied. For the three
months ended January 31, 2025, the Bank’s
effective tax rate increased by approximately 0.5%
due to Pillar Two taxes.
ECONOMIC SUMMARY AND OUTLOOK
The evolution of geopolitical and trade-related
risks maintains a high degree of uncertainty
on both the economic outlook and the inflation
trajectory. However,
absent a significant materialization of negative
risks, the global economy remains on
track for a solid growth performance
in calendar 2025. A moderate slowdown
in the U.S. expansion over the past year and
still-soft conditions in Canada, the E.U. and
the U.K., has helped to cool inflation and
enabled central banks to lower
interest rates. TD Economics expects future
interest rate reductions to be gradual,
as central banks assess how growth and inflation
respond.
The U.S. economy grew at a healthy 2.8%
average annual pace in calendar 2024
supported by resilient consumer spending and
strength in business
investment. Lower mortgage rates in the
spring and summer of 2024 delivered a late-year
boost to residential investment, although
a more recent backup in bond
yields is likely to slow the sector’s
momentum in the near term. With U.S.
domestic demand outpacing that of many
of its advanced economy peers, import
growth
continued to run ahead of exports, leading
to little growth support from international
trade.
Based on January 2025 data, the U.S. job
market has stabilized recently, with the unemployment rate at 4.0%,
up modestly from a year ago. This can be
characterized as a normalization following
tight conditions that persisted for longer than
expected after the pandemic. The U.S. economy
carries the markings of a
“soft landing” that has been allowing inflation
pressures to gradually drift lower. Accordingly, the U.S. central bank trimmed
its policy rate by a full percentage point
from September to December 2024, before
pausing in January 2025.
At its January 2025 meeting, the Federal Reserve
indicated that further interest rate reductions
would require additional progress towards
achieving its inflation
mandate. TD Economics expects this condition
to be met by the summer of 2025,
opening the door for the federal funds rate
to be lowered to 3.75-4.00% by the
end of calendar 2025 – a level still on the restrictive
side. The potential for higher federal government
deficits and increased import tariffs represent
upside risks to
both inflation and interest rates, while a strong
U.S. dollar poses a downside risk.
After Canada’s economy slowed notably in calendar
2023, strong population gains and lower
interest rates lifted economic growth
in calendar 2024 to an
estimated 1.9% in real terms on a fourth quarter-over-fourth
quarter basis. Population increases have
also contributed to labour force growth outpacing
job
creation, taking the unemployment rate higher
and cooling labour market conditions. The
unemployment rate was 6.6% in January 2025,
above its pre-pandemic
level, but still below its long-run average. Looking
ahead, TD Economics expects population
growth to slow sharply over the next few
years as the federal
government’s immigration policy changes restrict
immigration. The negative impact of
weaker population inflows on consumer spending
and housing activity is
likely to be more than offset by the boost to activity
from lower interest rates.
The risk of U.S. import tariffs on Canadian goods
has emerged as a major downside
risk to the Canadian economic outlook. Even
if tariffs are not as severe as
proposed, the uncertainty is likely to dampen
business investment in Canada.
No other major central bank has reduced interest
rates as aggressively as the Bank
of Canada in recent years. The Canadian
central bank lowered its overnight
rate further to 3.00% in January 2025,
two percentage points below its peak in
calendar 2024. TD Economics expects the
Bank of Canada to continue trimming
interest rates, reaching 2.25% by the
middle of calendar 2025. Historically-wide interest
rate differentials between Canada and the
U.S. – alongside concerns
around U.S. import tariffs – have weakened the
Canadian dollar. TD Economics expects the Canadian dollar
will trade in the 68 to 70 U.S. cent range over
the
next few quarters assuming major U.S. tariffs are
avoided.
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
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 16
adjusted. For further details, refer to the “How
We Performed”
section of this document, the “Business
Focus”
section in the Bank’s 2024 MD&A, and Note
28 of
the Bank’s Consolidated Financial Statements
for the year ended October 31, 2024. Effective
the first quarter of 2025, certain U.S. governance
and control
investments, including costs for U.S. BSA/AML
remediation, previously reported
in the Corporate segment are now reported
in the U.S. Retail segment.
Comparative amounts have been reclassified
to conform with the presentation adopted
in the current period.
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 $15
million, compared with
$19 million in the prior quarter and $29 million
in the first 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 11: CANADIAN PERSONAL AND COMMERCIAL BANKING
(millions of Canadian dollars, except
as noted)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Net interest income
$
4,135
$
4,058
$
3,833
Non-interest income
1,014
1,006
1,051
Total revenue
5,149
5,064
4,884
Provision for (recovery of) credit losses –
impaired
459
456
364
Provision for (recovery of) credit losses –
performing
62
(26)
59
Total provision for (recovery of) credit losses
521
430
423
Non-interest expenses
2,086
2,102
1,984
Provision for (recovery of) income taxes
711
709
692
Net income
$
1,831
$
1,823
$
1,785
Selected volumes and ratios
Return on common equity
1
31.4
%
32.0
%
34.6
%
Net interest margin (including on securitized
assets)
2
2.81
2.80
2.84
Efficiency ratio
40.5
41.5
40.6
Number of Canadian retail branches
1,063
1,060
1,062
Average number of full-time equivalent staff
27,422
27,930
29,271
1
Capital allocated to the business segment was 11.5% CET1 Capital.
2
Net interest margin is calculated by dividing net interest income by average interest-earning assets. Average
interest-earning assets used in the calculation of net interest margin is a non-
GAAP financial measure. Refer to “Non-GAAP and Other Financial Measures” in the “How We Performed”
section and the Glossary of this document for additional information about
these metrics.
Quarterly comparison – Q1 2025 vs. Q1 2024
Canadian Personal and Commercial
Banking net income for the quarter was
$1,831 million, an increase of $46
million, or 3%, compared with the first quarter
last
year, reflecting higher revenue, partially offset by higher non-interest
expenses and PCL. The annualized
ROE for the quarter was 31.4%, compared
with 34.6% in
the first quarter last year.
Revenue for the quarter was $5,149 million, an
increase of $265 million, or 5%,
compared with the first quarter last year. Net interest income
was
$4,135 million, an increase of $302 million, or
8%, primarily reflecting volume growth.
Average loan volumes increased $24 billion,
or 4%, reflecting 4% growth in
personal loans and 6% growth in business
loans. Average deposit volumes increased $25
billion, or 5%, reflecting 4% growth in personal
deposits and 7% growth
in business deposits. Net interest margin
was 2.81%, a decrease of 3 basis points
(bps), primarily due to changes to balance
sheet mix reflecting the transition of
Bankers’ Acceptances (BAs) to Canadian Overnight
Repo Rate Average (CORRA)-based loans.
Non-interest income was $1,014 million, a decrease
of
$37 million, or 4%, compared with the
first quarter last year, primarily reflecting lower fees due
to the transition of BAs to CORRA-based loans in
the prior year, the
impact of which is offset in net interest income.
PCL for the quarter was $521 million, an increase
of $98 million compared with the first quarter
last year. PCL – impaired was $459 million, an increase of
$95 million, or 26%, reflecting credit
migration in the consumer and commercial
lending portfolios. PCL – performing was
$62 million, an increase of $3 million
compared to the prior year. The performing provisions this quarter
were largely recorded in the commercial lending
portfolio reflecting policy and trade uncertainty
that could impact the economic trajectory and
credit performance, partially offset by an update
to the economic forecast. Total PCL as an annualized percentage of
credit volume was 0.35%, an increase of
5 bps compared with the first quarter last
year.
Non-interest expenses for the quarter were $2,086
million, an increase of $102 million, or
5%, compared with the first quarter
last year, reflecting higher
technology spend, the impact of TD Share
Compensation Initiative,
and various other operating expenses.
The efficiency ratio for the quarter was 40.5%,
compared with 40.6% in the first quarter
last year.
Quarterly comparison – Q1 2025 vs. Q4 2024
Canadian Personal and Commercial
Banking net income for the quarter was
$1,831 million, an increase of $8 million, relatively
flat compared with the prior
quarter, primarily reflecting higher revenue and lower non-interest
expenses, partially offset by higher PCL. The annualized
ROE for the quarter was 31.4%,
compared with 32.0% in the prior quarter.
Revenue increased $85 million, or 2%, compared
with the prior quarter. Net interest income increased $77
million, or 2%, reflecting volume growth and higher
margins. Average loan volumes increased $6 billion,
or 1%, reflecting 1% growth in personal
loans and 2% growth in business loans.
Average deposit volumes
increased $8 billion, or 2%, reflecting 1%
growth in personal deposits and 3% growth
in business deposits. Net interest margin
was 2.81%, an increase of 1 basis
point, primarily driven by changes to balance
sheet mix. As we look forward to Q2, while
many factors can impact margins, including
the impact of any further Bank
of Canada rate cuts, competitive market dynamics,
and deposit reinvestment rates and
maturity profiles, we expect NIM to be relatively
stable
6
. Non-interest
income increased $8 million, or 1% compared
with the prior quarter.
6
The Bank’s Q2 2025 net interest margin expectations for the segment are based on the Bank’s
assumptions regarding factors such as Bank of Canada rate cuts, competitive market
dynamics, and deposit reinvestment rates and maturity profiles, and are subject to inherent risks and uncertainties,
including those set out in the “Risk Factors That May Affect Future
Results” section of the Bank’s 2024 MD&A and the first quarter 2025 MD&A.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 17
PCL for the quarter was $521 million, an increase
of $91 million compared with the prior
quarter. PCL – impaired was $459 million, an increase of
$3 million, or
1%, reflecting credit migration in the consumer
lending portfolios largely offset by lower
provisions in the commercial lending portfolio.
PCL – performing was a
build of $62 million, compared with a recovery
of $26 million in the prior quarter. The performing provisions
this quarter were largely recorded in the commercial
lending portfolio reflecting policy and trade
uncertainty that could impact the economic
trajectory and credit performance, partially offset by
an update to the
economic forecast. Total PCL as an annualized percentage of credit volume
was 0.35%, an increase of 5 bps compared
with the prior quarter.
Non-interest expenses decreased $16 million,
or 1% compared with the prior quarter.
The efficiency ratio was 40.5%, compared with 41.5%
in the prior quarter.
U.S. Retail
Update on U.S. Balance Sheet Restructuring
Activities
The Bank continued to focus on executing
the balance sheet restructuring activities
disclosed in the 2024 MD&A to help ensure
we can continue to support
customers’ financial needs in the U.S. while
not exceeding the limitation on the
combined total assets of TD Bank, N.A. and
TD Bank USA, N.A. (the “U.S. Bank”).
As previously disclosed, the Bank expects
to reposition its U.S. investment portfolio by
selling up to US$50 billion of lower yielding investment
securities and
reinvesting the proceeds into a similar composition
of assets but yielding higher rates.
During the first quarter, the Bank sold approximately US$13.1
billion of
bonds. In the aggregate, since the announcement
of the U.S. balance sheet restructuring
activities on October 10, 2024, through
January 31, 2025, the Bank has
sold approximately US$15.9 billion of bonds
from its U.S. investment portfolio for an
aggregate loss of US$875 million pre-tax
and US$657 million after-tax.
Between February 1, 2025, through February
26, 2025, the Bank sold an additional
US$3.1 billion of bonds, resulting in a loss of
US$197 million pre-tax and
US$148 million after-tax. The Bank expects
to complete its investment portfolio repositioning
no later than the first half of calendar 2025
and expects the net
interest income benefit from these sales
to be at the upper end of the previously disclosed
range of US$300 million to US$500 million pre-tax
in fiscal 2025
7
.
In addition, the Bank continues to target reducing
the U.S. Bank’s assets by approximately 10%
from the asset level as of September 30, 2024,
largely by selling
or winding down certain non-scalable or non-core
U.S. loan portfolios that do not align
with the U.S. Retail segment’s focused strategy
or have lower returns on
investment such as the correspondent lending,
residential jumbo mortgage, export
and import lending, and commercial
auto dealer portfolios. This reduction in
assets combined with natural balance sheet
run-off, is expected to be largely complete by
the end of fiscal 2025 and reduce net interest
income in the U.S. Retail
segment by approximately US$200 million
to US$225 million pre-tax in fiscal 2025
8
.
This quarter, the Bank used proceeds from investment maturities,
plus cash on hand, to pay down US$25
billion of short-term borrowings.
In addition, loans were
reduced by US$2 billion, reflecting loan run-off and
some loan sales in certain non-scalable and
non-core U.S. loan portfolios. Accordingly, as of January 31, 2025,
the combined total assets of the U.S. Bank
were US$402 billion. In the aggregate, total
losses associated with the Bank’s U.S. balance
sheet restructuring
activities from October 10, 2024 through
January 31, 2025 are US$878 million pre-tax
and US$659 million after-tax. In total, the
Bank’s collective balance sheet
restructuring actions are expected to result
in a loss up to US$1.5 billion after-tax, and impact
capital as executed
7
,8
.
Subsequent to quarter end, the Bank reached
an agreement to sell approximately US$9
billion of certain U.S. residential mortgage loans
(correspondent lending
loans), which is expected to result in
a recognition of a pre-tax loss of approximately
US$600 million in the second quarter of
2025
8
.
7
The amount of bonds that the Bank sells and the timing of such sales, are subject to market conditions and other
factors. Accordingly, the expected loss incurred as well as the expected
amount of net interest income benefit, are subject to risk and uncertainties and are based on assumptions regarding
the timing of when such bonds are sold, the interest rates at the time
of sale as well as other market factors and conditions which are not entirely within the Bank’s control.
8
The Bank’s estimates regarding net interest income impacts are based on assumptions regarding the timing of
when such assets are sold or wound down. The Bank’s ability to
successfully dispose of the assets is subject to inherent risks and uncertainty and there is no guarantee that the
Bank will be able to sell the assets in the timeline outlined or achieve the
purchase price which it currently expects. The ability to sell the assets will depend on market factors and conditions and any
sale will likely be subject to customary closing terms and
conditions which could involve regulatory approvals which are not entirely within the Bank’s control.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 18
TABLE 12: U.S. RETAIL
(millions of dollars, except as noted)
For the three months ended
January 31
October 31
January 31
Canadian Dollars
2025
2024
2024
Net interest income
$
3,064
$
2,924
$
2,899
Non-interest income (loss) – reported
(282)
287
604
Non-interest income – adjusted
1,2
645
598
604
Total revenue – reported
2,782
3,211
3,503
Total revenue – adjusted
1,2
3,709
3,522
3,503
Provision for (recovery of) credit losses –
impaired
529
418
377
Provision for (recovery of) credit losses –
performing
(78)
(29)
8
Total provision for (recovery of) credit losses
451
389
385
Non-interest expenses – reported
2,380
2,324
2,459
Non-interest expenses – adjusted
1,3
2,380
2,344
2,048
Provision for (recovery of) income taxes – reported
(192)
(50)
(17)
Provision for (recovery of) income taxes – adjusted
1
39
9
84
U.S. Retail Bank net income – reported
143
548
676
U.S. Retail Bank net income – adjusted
1
839
780
986
Share of net income from investment in
Schwab
4,5
199
154
194
Net income – reported
$
342
$
702
$
870
Net income – adjusted
1
1,038
934
1,180
U.S. Dollars
Net interest income
$
2,160
$
2,141
$
2,141
Non-interest income (loss) – reported
(198)
212
446
Non-interest income – adjusted
1,2
454
438
446
Total revenue – reported
1,962
2,353
2,587
Total revenue – adjusted
1,2
2,614
2,579
2,587
Provision for (recovery of) credit losses –
impaired
371
306
279
Provision for (recovery of) credit losses –
performing
(53)
(21)
6
Total provision for (recovery of) credit losses
318
285
285
Non-interest expenses – reported
1,675
1,703
1,815
Non-interest expenses – adjusted
1,3
1,675
1,717
1,515
Provision for (recovery of) income taxes – reported
(136)
(37)
(12)
Provision for (recovery of) income taxes – adjusted
1
27
6
62
U.S. Retail Bank net income – reported
105
402
499
U.S. Retail Bank net income – adjusted
1
594
571
725
Share of net income from investment in
Schwab
4,5
142
114
144
Net income – reported
$
247
$
516
$
643
Net income – adjusted
1
736
685
869
Selected volumes and ratios
Return on common equity – reported
6
2.9
%
6.2
%
8.1
%
Return on common equity – adjusted
1,6
8.6
8.2
11.0
Net interest margin
1,7
2.86
2.77
3.03
Efficiency ratio – reported
85.4
72.4
70.2
Efficiency ratio – adjusted
1
64.1
66.6
58.6
Assets under administration (billions of U.S.
dollars)
8
$
43
$
43
$
40
Assets under management (billions of U.S.
dollars)
8
9
8
7
Number of U.S. retail stores
1,134
1,132
1,176
Average number of full-time equivalent staff
28,276
27,802
27,985
1
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP
and Other Financial Measures” in the “How We Performed” section of this
document.
2
Adjusted non-interest income excludes the following item of note:
i.
U.S. balance sheet restructuring – Q1 2025: $927 million or US$652 million ($696 million or US$489 million after
tax), Q4 2024:
$311 million or US$226 million ($234 million or
US$170 million after tax).
3
Adjusted non-interest expenses exclude the following items of note:
i.
FDIC special assessment – Q4 2024: ($72) million or US($52) million (($54) million or US($39) million after tax), Q1
2024: $411 million or US$300 million ($310 million
or
US$226 million after tax); and
ii.
Charges for the global resolution of the investigations into the Bank’s U.S. BSA/AML program –
Q4 2024: $52 million or US$38 million (before and after tax).
4
The Bank’s share of Schwab’s earnings is reported with a one-month lag. Refer to
Note 7 of the Bank’s first quarter 2025 Interim Consolidated Financial Statements for
further details.
5
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.
6
Capital allocated to the business segment was 11.5% CET1
Capital.
7
Net interest margin is calculated by dividing U.S. Retail segment’s net interest income
by average interest-earning assets excluding the impact related to sweep deposits arrangements
and the impact of intercompany deposits and cash collateral, which management believes better reflects segment
performance.
In addition, 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. Net interest income and
average interest-earning assets used in the calculation are non-GAAP financial measures.
Management believes this calculation better reflects segment performance.
8
For additional information about this metric, refer to the Glossary of this document.
Quarterly comparison – Q1 2025 vs. Q1 2024
U.S. Retail reported net income for the quarter
was $342 million (US$247 million), a decrease
of $528 million (US$396 million), or 61%
(62% in U.S. dollars),
compared with the first quarter last year. On an adjusted
basis, net income for the quarter was
$1,038 million (US$736 million), a decrease
of $142 million
(US$133 million), or 12% (15% in U.S. dollars).
The reported and adjusted annualized ROE
for the quarter were 2.9% and 8.6%, respectively, compared
with 8.1%
and 11.0%, respectively, in the first 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 $199 million (US$142
million), an increase of $5 million (a decrease
of US$2 million), or 3% (a decrease of 1%
in U.S. dollars),
compared with the first quarter last year.
U.S. Retail Bank reported net income
was $143 million (US$105 million), a decrease
of $533 million (US$394 million), or 79%
(79% in U.S. dollars), compared
with the first quarter last year, primarily reflecting the impact
of U.S. balance sheet restructuring activities,
higher governance and control investments,
including
costs for U.S. BSA/AML remediation,
and higher PCL, partially offset by the impact of
the FDIC special assessment charge in
the first quarter last year. U.S. Retail
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 19
Bank adjusted net income was $839 million
(US$594 million), a decrease of $147
million (US$131 million), or 15% (18% in
U.S. dollars), compared with the first
quarter last year, reflecting higher governance and control
investments, including costs for U.S. BSA/AML
remediation and higher PCL, partially offset by higher
revenue.
Reported revenue for the quarter was US$1,962
million, a decrease of US$625 million, or 24%,
compared with the first quarter last year. On an adjusted basis,
revenue for the quarter was US$2,614
million, an increase of US$27 million, or 1%.
Net interest income of US$2,160 million, increased
US$19 million, or 1%,
driven by higher deposit margins and
the impact of U.S. balance sheet restructuring activities.
Net interest margin of 2.86% decreased
17 bps due to maintaining
elevated liquidity levels (which negatively
impacted net interest margin by 19 bps),
partially offset by the impact of U.S. balance sheet
restructuring activities, and
higher deposit margins. Reported non-interest
income (loss) was US($198) million, a
decrease of US$644 million, compared
with the first quarter last year,
reflecting the impact of U.S. balance
sheet restructuring activities, partially offset by higher
fee revenue. On an adjusted basis, non-interest
income of
US$454 million increased US$8 million, or
2%, compared with the first quarter last
year, reflecting higher fee revenue.
Average loan volumes increased US$2 billion,
or 1%, compared with the first quarter last
year. Personal loans increased 3%, reflecting solid mortgage
and auto
originations, and business loans decreased
1%. Excluding the impact of the loan portfolios
identified for sale or run-off under our U.S. balance
sheet restructuring
program, average loan volumes increased
US$5 billion, or 3%
9,10
. Average deposit volumes decreased US$10 billion,
or 3%, reflecting a 11% decrease in sweep
deposits and a 4% decrease in business deposits,
partially offset by a 3% increase in personal
deposit volumes. Excluding sweep deposits,
average deposits were
flat.
Assets under administration (AUA) were
US$43 billion as of January 31, 2025, an increase
of US$3 billion, or 8%, compared with the first
quarter last year,
reflecting net asset growth. Assets under
management (AUM) were US$9 billion
as of January 31, 2025, an increase of
US$2 billion, or 29%, compared with the
first quarter last year.
PCL for the quarter was US$318 million,
an increase of US$33 million compared
with the first quarter last year. PCL – impaired was US$371 million,
an
increase of US$92 million, or 33%, largely
reflecting credit migration in the commercial
lending portfolio, and the adoption impact
of a model update in the U.S.
Cards portfolio. PCL – performing was a recovery
of US$53 million, compared with a build
of US$6 million in the prior year. The performing recovery
this quarter
was largely recorded in the consumer lending
portfolios, reflecting the adoption impact
of a model update in the U.S. Cards portfolio,
partially offset by a build in
the commercial lending portfolio related
to policy and trade uncertainty that could
impact the economic trajectory and
credit performance. 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 0.67%, an increase
of 6 bps, compared with
the first quarter last year.
Effective the first quarter of 2025, U.S. Retail segment
non-interest expenses include certain U.S.
governance and control investments, including
costs for U.S.
BSA/AML remediation which were previously
reported in the Corporate segment.
Comparative amounts have been reclassified
to conform with the presentation
adopted in the current period.
Reported non-interest expenses for the quarter
were US$1,675 million, a decrease of
US$140 million, or 8%, compared to the
first
quarter last year, reflecting the impact of the FDIC special assessment
charge in the first quarter last year, partially offset by higher governance
and control
investments including costs of US$86
million for U.S. BSA/AML remediation, and
higher operating expenses. Our governance
and control investments in this
quarter were higher compared to the first
quarter last year as remediation efforts progressed
over this period and we expect this year-over-year
trend to continue
into the second quarter of 2025
11
. On an adjusted basis, non-interest expenses
increased US$160 million, or 11%, reflecting higher governance
and control
investments including costs for U.S.
BSA/AML remediation, and higher operating
expenses.
The reported and adjusted efficiency ratios for
the quarter were 85.4% and 64.1%, respectively, compared with 70.2%
and 58.6%, respectively, in the first
quarter last year.
Quarterly comparison – Q1 2025 vs. Q4 2024
U.S. Retail reported net income was $342
million (US$247 million), a decrease of $360
million (US$269 million), or 51% (52% in U.S. dollars),
compared with the
prior quarter. On an adjusted basis, net income for the
quarter was $1,038 million (US$736 million),
an increase of $104 million (US$51 million), or
11% (7% in
U.S. dollars). The reported and adjusted annualized
ROE for the quarter were 2.9% and 8.6%,
respectively, compared with 6.2% and 8.2%, respectively, in the
prior quarter.
The contribution from Schwab of $199
million (US$142 million) increased $45
million (US$28 million), or 29% (25%
in U.S. dollars), compared with the prior
quarter.
U.S. Retail Bank reported net income
was $143 million (US$105 million), a decrease
of $405 million (US$297 million), or 74%
(74% in U.S. dollars) compared
with the prior quarter, primarily reflecting the impact of
U.S. balance sheet restructuring activities, higher
PCL, and the expense recovery of the FDIC
special
assessment charge in the prior quarter, partially offset by the impact
of the charges for the global resolution of
the investigations into the Bank’s U.S. BSA/AML
program in the prior quarter. U.S. Retail Bank adjusted net
income was $839 million (US$594
million), an increase of $59 million (US$23 million),
or 8% (4% in
U.S. dollars), compared to the prior quarter, primarily reflecting
higher revenue, partially offset by higher non-interest
expenses (lower in U.S. dollars) and higher
PCL.
Reported revenue was US$1,962 million,
a decrease US$391 million, or 17%,
compared with the prior quarter. Net interest income of US$2,160
million
increased US$19 million, or 1%, reflecting the
impact of U.S. balance sheet restructuring activities,
partially offset by lower deposit margins. Net
interest margin of
2.86% increased 9 bps, compared with the
prior quarter, due to impact of U.S. balance sheet restructuring
activities and normalization of liquidity levels
(which
positively impacted net interest margin by
5 bps), partially offset by lower deposit margins.
Net Interest Margin in the second quarter
is expected to deliver
substantial expansion,
reflecting ongoing U.S. balance sheet
restructuring activities and further normalization
of our elevated liquidity levels
12
. Reported non-
interest income (loss) was US($198)
million, compared with reported non-interest income
of US$212 million in the prior quarter, reflecting the impact
of U.S.
balance sheet restructuring activities. On
an adjusted basis, non-interest income of
US$454 million increased US$16 million,
or 4%, compared with the prior
quarter, reflecting higher fee revenue.
Average loan volumes were relatively flat, compared
with the prior quarter, reflecting a 1% decrease in business
loans, offset by a 1% increase in personal
loans. Excluding the impact of the loan portfolios
identified for sale or run-off under our U.S. balance
sheet restructuring program, average loan
volumes were
9
Loan portfolios identified for sale or run-off include correspondent lending, residential jumbo mortgage,
export and import lending, commercial auto dealer portfolio, and other non-core
portfolios. Q1 2025 average loan volumes: US$192 billion (Q4 2024: US$193 billion; Q1 2024: US$191 billion).
Q1 2025 average loan volumes of loan portfolios identified for sale or run-
off: US$22 billion (Q4 2024: US$23 billion; Q1 2024: US$25 billion). Q1 2025 average loan volumes
excluding loan portfolios identified for sale or run-off: US$170 billion (Q4 2024:
US$170 billion; Q1 2024: US$166 billion).
10
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP and Other Financial Measures”
in the “How We Performed” section of this
document.
11
Expense estimates are subject to inherent risks and uncertainties and may vary based on the Bank’s ability to successfully
execute against its projects or programs in accordance with its
plans, including its ability to successfully execute against the U.S. BSA/AML remediation program. As well, expense estimates may vary if the scope of work in the U.S.
BSA/AML
remediation plan changes as a result of additional findings that are identified as work progresses.
12
The Bank’s Q2 2025 net interest margin expectations for the segment are based on the Bank’s assumptions regarding
interest rates, deposit reinvestment rates, average asset levels,
execution of planned restructuring opportunities, and other variables, and are subject to inherent risks and uncertainties,
including those set out in the “Risk Factors That May Affect
Future Results” section of this document.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 20
flat
9
,10
. Average deposit volumes increased US$3
billion, or 1%, compared with the prior
quarter, reflecting a 1% increase in personal deposits and
a 3% increase
in sweep deposits, partially offset by a 1% decrease
in business deposits.
AUA were US$43 billion as of January 31,
2025, flat compared with the prior quarter. AUM were US$9
billion, an increase of $1 billion, or 13%,
compared with
the prior quarter.
PCL for the quarter was US$318 million,
an increase of US$33 million compared
with the prior quarter. PCL – impaired was US$371 million, an increase
of
US$65 million, or 21%, largely reflected
in the U.S. Cards portfolio, related
to the adoption impact of a model update, and
typical seasonal trends. PCL –
performing was a recovery of US$53
million, compared with a recovery of US$21
million in the prior quarter. The performing recovery this quarter
was largely
recorded in the consumer lending portfolios, reflecting
the adoption impact of a model update in
the U.S. Cards portfolio, partially offset by a build
in the
commercial lending portfolio related to policy
and trade uncertainty that could impact the
economic trajectory and credit performance.
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 0.67%, an increase
of 7 bps, compared with
the prior quarter.
Reported non-interest expenses for the quarter
were US$1,675 million, a decrease of US$28
million, or 2%, compared with the prior quarter, largely reflecting
lower legal and regulatory expenses, partially
offset by higher operating expenses. On an adjusted
basis, non-interest expenses decreased
US$42 million, or 2%.
The reported and adjusted efficiency ratios for
the quarter were 85.4% and 64.1%, respectively, compared with 72.4%
and 66.6%, respectively, in the prior
quarter.
THE CHARLES SCHWAB CORPORATION
Refer to Note 7, Investment in Associates
and Joint Ventures of the Bank’s first quarter 2025
Interim Consolidated Financial Statements
for further information on
Schwab.
TABLE 13: WEALTH MANAGEMENT AND INSURANCE
(millions of Canadian dollars, except
as noted)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Net interest income
$
369
$
321
$
285
Non-interest income
1
3,229
3,616
2,850
Total revenue
3,598
3,937
3,135
Provision for (recovery of) credit losses –
impaired
–
–
–
Provision for (recovery of) credit losses –
performing
–
–
–
Total provision for (recovery of) credit losses
–
–
–
Insurance service expenses
2
1,507
2,364
1,366
Non-interest expenses
1,173
1,107
1,047
Provision for (recovery of) income taxes
238
117
167
Net income
$
680
$
349
$
555
Selected volumes and ratios
Return on common equity
42.7
%
22.5
%
37.5
%
Return on common equity – Wealth Management
3
61.9
56.6
44.5
Return on common equity – Insurance
21.9
(13.1)
29.3
Efficiency ratio
32.6
28.1
33.4
Efficiency ratio, net of ISE
4
56.1
70.4
59.2
Assets under administration (billions of Canadian
dollars)
5
$
687
$
651
$
576
Assets under management (billions of Canadian
dollars)
556
530
479
Average number of full-time equivalent staff
15,059
14,939
15,386
1
Includes recoveries from reinsurers for catastrophe claims – Q1 2025: nil, Q4 2024: $718 million, Q1 2024: nil.
2
Includes estimated losses related to catastrophe claims – Q1 2025: nil, Q4 2024: $1,020 million, Q1 2024: $10
million.
3
Capital allocated to the business was 11.5% CET1 Capital.
4
Efficiency ratio, net of ISE is calculated by dividing non-interest expenses by total revenue, net of ISE.
Total revenue, net of ISE
– Q1 2025: $2,091
million, Q4 2024: $1,573 million,
Q1 2024: $1,769 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 of this document for additional information about this metric.
5
Includes
AUA administered by TD Investment Services Inc. which is part of the Canadian Personal and Commercial
Banking segment.
Quarterly comparison – Q1 2025 vs. Q1 2024
Wealth Management and Insurance net income
for the quarter was $680 million, an increase
of $125 million, or 23%,
compared with the first quarter last year,
reflecting Wealth Management net income of
$512 million, an increase of $157 million, or
44%, compared with the first quarter last
year, and Insurance net income
of $168 million, a decrease of $32 million, or 16%,
compared with the first quarter last year. The annualized
ROE for the quarter was 42.7%, compared
with 37.5%
in the first quarter last year. Wealth Management annualized ROE
for the quarter was 61.9%, compared
with 44.5% in the first quarter last year, and Insurance
annualized ROE for the quarter was 21.9%
compared with 29.3% in the first quarter
last year.
Revenue for the quarter was $3,598
million, an increase of $463
million, or 15%, compared with the first quarter
last year. Non-interest income was
$3,229 million, an increase of $379 million, or
13%, reflecting higher insurance
premiums, fee-based revenue, and transaction
revenue. Net interest income was
$369 million, an increase of $84 million, or 29%,
compared with the first quarter last year, reflecting higher
deposit margins and volume growth.
AUA were $687 billion as at January 31, 2025,
an increase of $111 billion, or 19%, and AUM were $556 billion as at January 31, 2025, an
increase of
$77 billion, or 16%, compared with the
first quarter last year, both reflecting market appreciation
and net asset growth.
Insurance service expenses for the quarter
were $1,507 million, an increase of $141
million, or 10%, compared with the first quarter
last year, primarily reflecting
increased claims severity.
Non-interest expenses for the quarter were $1,173
million, an increase of $126 million, or
12%, compared with the first quarter last year, reflecting
higher
variable compensation,
higher spend supporting business growth initiatives
from technology costs and employee-related
expenses including the impact of TD
Share Compensation Initiative.
The efficiency ratio for the quarter was 32.6%,
compared with 33.4% in the first quarter
last year. The efficiency ratio, net of ISE for the quarter was
56.1%,
compared with 59.2% in the first quarter last
year.
Quarterly comparison – Q1 2025 vs. Q4 2024
Wealth Management and Insurance net income
for the quarter was $680 million, an increase
of $331 million, or 95%, compared
with the prior quarter, reflecting
Wealth Management net income of $512 million,
an increase of $64 million, or 14%, compared
with the prior quarter, and Insurance net income of $168
million, an
increase of $267 million, compared with a loss
of $99 million in the prior quarter. The annualized ROE
for the quarter was 42.7%, compared with
22.5% in the prior
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 21
quarter. Wealth Management annualized ROE for the quarter was
61.9%, compared with 56.6% in the prior
quarter, and Insurance annualized ROE for the quarter
was 21.9% compared with -13.1% in the
prior quarter.
Revenue decreased $339
million, or 9%, compared with the prior quarter, primarily as
a result of reinsurance recoveries for
catastrophe claims in the prior
quarter of $718 million. Non-interest income
decreased $387
million, or 11%, reflecting lower reinsurance recoveries for
catastrophe claims, partially offset by
lower costs of reinsurance reinstatement
premiums, higher fee-based revenue,
transaction
revenue and insurance premiums. Net
interest income increased
$48 million, or 15%, reflecting higher deposit
volumes and margins.
AUA increased $36 billion, or 6%, and AUM
increased $26
billion, or 5%, compared with the prior
quarter, both reflecting market appreciation and net asset
growth.
Insurance service expenses for the quarter
decreased $857 million, or 36%, compared
with the prior quarter, primarily the result of estimated losses
from
catastrophe claims of $1,020 million in
the prior quarter, partially offset by increased claims severity.
Non-interest expenses increased $66 million,
or 6%, compared with the prior quarter, primarily reflecting
higher employee-related expenses including
the impact
of TD Share Compensation Initiative
and higher variable compensation.
The efficiency ratio for the quarter was 32.6%,
compared with 28.1% in the prior quarter. The efficiency ratio,
net of ISE for the quarter was 56.1%, compared
with 70.4% in the prior quarter.
TABLE 14: WHOLESALE BANKING
1
(millions of Canadian dollars, except
as noted)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Net interest income (loss) (TEB)
$
(107)
$
221
$
198
Non-interest income
2,107
1,550
1,582
Total revenue
2,000
1,771
1,780
Provision for (recovery of) credit losses –
impaired
33
134
5
Provision for (recovery of) credit losses –
performing
39
–
5
Total provision for (recovery of) credit losses
72
134
10
Non-interest expenses – reported
1,535
1,336
1,500
Non-interest expenses – adjusted
1,2
1,483
1,254
1,383
Provision for (recovery of) income taxes
(TEB) – reported
94
66
65
Provision for (recovery of) income taxes
(TEB) – adjusted
1
105
84
89
Net income – reported
$
299
$
235
$
205
Net income – adjusted
1
340
299
298
Selected volumes and ratios
Trading-related revenue (TEB)
3
$
904
$
633
$
730
Average gross lending portfolio (billions of Canadian
dollars)
4
100.9
97.0
96.2
Return on common equity – reported
5
7.3
%
5.9
%
5.3
%
Return on common equity – adjusted
1,5
8.3
7.5
7.6
Efficiency ratio – reported
76.8
75.4
84.3
Efficiency ratio – adjusted
1
74.2
70.8
77.7
Average number of full-time equivalent staff
6,919
6,975
7,100
1
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP
and Other Financial Measures” in the “How We Performed” section of this
document.
2
Adjusted non-interest expenses exclude the acquisition and integration-related charges for the Cowen acquisition
– Q1 2025: $52 million ($41 million after tax), Q4 2024: $82 million
($64 million after tax), Q1 2024: $117 million ($93 million after
tax).
3
Includes net interest income (loss) TEB of ($404) million, Q4 2024: ($149) million, Q1 2024: ($54) million, and trading
income (loss) of $1,308 million,
Q4 2024: $782 million, Q1 2024:
$784 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
of this document for additional information about this metric.
4
Includes gross loans and bankers’ acceptances relating to Wholesale Banking, excluding letters of credit, cash
collateral, credit default swaps, and allowance for credit losses.
5
Capital allocated to the business segment was 11.5% CET1 Capital.
Quarterly comparison – Q1 2025 vs. Q1 2024
Wholesale Banking reported net income for
the quarter was $299 million, an increase
of $94 million, or 46%, compared with the
first quarter last year, primarily
reflecting higher revenues, partially offset by higher
PCL and non-interest expenses. On an
adjusted basis, net income was $340
million, an increase of
$42 million, or 14%, compared with the
first quarter last year.
Revenue for the quarter was $2,000 million, an
increase of $220 million, or 12%,
compared with the first quarter last year. Higher revenue
primarily reflects
higher trading-related revenue and underwriting
fees.
PCL for the quarter was $72 million, an increase
of $62 million compared with the first quarter
last year. PCL – impaired was $33 million, an increase of
$28 million compared with the prior year, primarily reflecting
a few new impairments. PCL – performing
was $39
million, an increase of $34 million compared
to the
prior year. The performing build this quarter reflects policy and
trade uncertainty that could impact the economic
trajectory and credit performance.
Reported non-interest expenses for the quarter
were $1,535 million, an increase of $35
million, or 2%, compared with the first quarter
last year, primarily
reflecting higher variable compensation
commensurate with higher revenues, higher
front office and technology costs.
The higher non-interest expenses are
partially offset by the impact of a provision related
to the U.S. record keeping and trading regulatory
matters recorded in the same quarter last year
and lower
acquisition and integration-related costs. On
an adjusted basis, non-interest expenses
were $1,483 million, an increase of $100 million,
or 7%.
Quarterly comparison – Q1 2025 vs. Q4 2024
Wholesale Banking reported net income for
the quarter was $299 million, an increase
of $64 million, or 27%, compared with the prior
quarter, primarily reflecting
higher revenues and lower PCL, partially offset
by higher non-interest expenses. On an adjusted
basis, net income was $340 million, an increase
of $41 million, or
14%.
Revenue for the quarter increased $229 million,
or 13%, compared with the prior quarter. Higher revenue
primarily reflects higher trading-related
revenue.
PCL for the quarter was $72 million, a decrease
of $62 million compared with the prior quarter. PCL – impaired
was $33 million, a decrease of $101 million, due
to higher impairments in the prior period.
PCL – performing was $39 million,
an increase of $39 million. The performing
build this quarter reflects policy and trade
uncertainty that could impact the economic
trajectory and credit performance.
Reported non-interest expenses for the quarter
increased $199 million, or 15%, compared
with the prior quarter, primarily reflecting higher variable
compensation commensurate with higher
revenues, partially offset by lower acquisition
and integration-related costs. On an adjusted
basis, non-interest expenses
increased $229 million, or 18%.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 22
TABLE 15: CORPORATE
(millions of Canadian dollars)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Net income (loss) – reported
$
(359)
$
526
$
(591)
Adjustments for items of note
Amortization of acquired intangibles
61
60
94
Acquisition and integration charges related
to the Schwab transaction
–
35
32
Share of restructuring and other charges
from investment in Schwab
–
–
49
Restructuring charges
–
–
291
Impact from the terminated FHN acquisition-related
capital hedging strategy
54
59
57
Gain on sale of Schwab shares
–
(1,022)
–
Indirect tax matters
–
226
–
Less: impact of income taxes
22
84
113
Net income (loss) – adjusted
1
$
(266)
$
(200)
$
(181)
Decomposition of items included in net
income (loss) – adjusted
Net corporate expenses
2
$
(370)
$
(389)
$
(217)
Other
104
189
36
Net income (loss) – adjusted
1
$
(266)
$
(200)
$
(181)
Selected volumes
Average number of full-time equivalent staff
22,748
22,826
23,437
1
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP
and Other Financial Measures” in the “How We Performed” section of this
document.
2
For additional information about this metric, refer to the Glossary of this document.
Quarterly comparison – Q1 2025 vs. Q1 2024
Corporate segment’s reported net loss for the quarter
was $359 million, compared with a reported
net loss of $591 million in the first quarter
last year. The lower
net loss primarily reflects the impacts of
prior year restructuring charges,
share of restructuring charges from investment
in Schwab and higher revenue from
treasury and balance sheet activities in the
current quarter. Net corporate expenses increased $153
million compared to the prior year, primarily reflecting higher
governance and control costs, pension and
benefit related costs. The adjusted net
loss for the quarter was $266 million,
compared with an adjusted net loss of
$181 million in the first quarter last year.
Quarterly comparison – Q1 2025 vs. Q4 2024
Corporate segment’s reported net loss for the quarter
was $359 million, compared with a reported
net income of $526 million in the prior quarter. The quarter-over-
quarter decrease primarily reflects the impacts
of prior quarter gain on sale of Schwab
shares, partially offset by the provision for indirect
tax matters. Net
corporate expenses decreased $19 million
compared to the prior quarter. The adjusted net loss
for the quarter was $266 million, compared with an
adjusted net
loss of $200 million in the prior quarter.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 23
QUARTERLY
RESULTS
The following table provides summary information
related to the Bank’s eight most recently
completed quarters.
TABLE 16: QUARTERLY RESULTS
(millions of Canadian dollars, except as noted)
For the three months ended
2025
2024
2023
Jan. 31
Oct. 31
Jul. 31
Apr. 30
Jan. 31
Oct. 31
Jul. 31
Apr. 30
Net interest income
$
7,866
$
7,940
$
7,579
$
7,465
$
7,488
$
7,494
$
7,289
$
7,428
Non-interest income
6,183
7,574
6,597
6,354
6,226
5,684
5,625
4,969
Total revenue
14,049
15,514
14,176
13,819
13,714
13,178
12,914
12,397
Provision for (recovery of) credit losses
1,212
1,109
1,072
1,071
1,001
878
766
599
Insurance service expenses
1,507
2,364
1,669
1,248
1,366
1,346
1,386
1,118
Non-interest expenses
8,070
8,050
11,012
8,401
8,030
7,628
7,359
6,756
Provision for (recovery of) income taxes
698
534
794
729
634
616
704
859
Share of net income from investment in Schwab
231
178
190
194
141
156
182
241
Net income (loss) – reported
2,793
3,635
(181)
2,564
2,824
2,866
2,881
3,306
Pre-tax adjustments for items of note
1
Amortization of acquired intangibles
61
60
64
72
94
92
88
79
Acquisition and integration charges related to the
Schwab transaction
–
35
21
21
32
31
54
30
Share of restructuring and other charges from
investment in Schwab
–
–
–
–
49
35
–
–
Restructuring charges
–
–
110
165
291
363
–
–
Acquisition and integration-related charges
52
82
78
102
117
197
143
73
Charges related to the terminated FHN acquisition
2
–
–
–
–
–
–
84
154
Payment related to the termination of the
FHN transaction
2
–
–
–
–
–
–
306
–
Impact from the terminated FHN acquisition-related
capital hedging strategy
54
59
62
64
57
64
177
134
Impact of retroactive tax legislation on payment card
clearing services
3
–
–
–
–
–
–
57
–
Gain on sale of Schwab shares
–
(1,022)
–
–
–
–
–
–
U.S. balance sheet restructuring
927
311
–
–
–
–
–
–
Indirect tax matters
–
226
–
–
–
–
–
–
Civil matter provision/Litigation settlement
2,3
–
–
–
274
–
–
–
39
FDIC special assessment
–
(72)
–
103
411
–
–
–
Global resolution of the investigations into the
Bank’s U.S. BSA/AML program
–
52
3,566
615
–
–
–
–
Total pre-tax adjustments
for items of note
1
1,094
(269)
3,901
1,416
1,051
782
909
509
Less: Impact of income taxes
264
161
74
191
238
163
141
108
Net income – adjusted
1
3,623
3,205
3,646
3,789
3,637
3,485
3,649
3,707
Preferred dividends and distributions on other
equity instruments
86
193
69
190
74
196
74
210
Net income available to common
shareholders – adjusted
1
$
3,537
$
3,012
$
3,577
$
3,599
$
3,563
$
3,289
$
3,575
$
3,497
(Canadian dollars, except as noted)
Basic earnings (loss) per share
Reported
$
1.55
$
1.97
$
(0.14)
$
1.35
$
1.55
$
1.48
$
1.53
$
1.69
Adjusted
1
2.02
1.72
2.05
2.04
2.01
1.82
1.95
1.91
Diluted earnings (loss) per share
Reported
1.55
1.97
(0.14)
1.35
1.55
1.48
1.53
1.69
Adjusted
1
2.02
1.72
2.05
2.04
2.00
1.82
1.95
1.91
Return on common equity – reported
10.1
%
13.4
%
(1.0)
%
9.5
%
10.9
%
10.5
%
10.8
%
12.4
%
Return on common equity – adjusted
1
13.2
11.7
14.1
14.5
14.1
12.9
13.8
14.0
(billions of Canadian dollars, except as noted)
Average total assets
$
2,063
$
2,035
$
1,968
$
1,938
$
1,934
$
1,910
$
1,898
$
1,944
Average interest-earning assets
4
1,883
1,835
1,778
1,754
1,729
1,715
1,716
1,728
Net interest margin – reported
1.66
%
1.72
%
1.70
%
1.73
%
1.72
%
1.73
%
1.69
%
1.76
%
Net interest margin – adjusted
1
1.67
1.74
1.71
1.75
1.74
1.75
1.70
1.81
1
For explanations of items of note, refer to the “Significant and Subsequent Events”
and “Non-GAAP Financial Measures – Reconciliation of Adjusted to Reported Net Income” table in the
“How We Performed” section of this document.
2
Adjusted non-interest expenses exclude the following items of note:
i.
Charges related to the terminated FHN acquisition, reported in the U.S. Retail segment;
ii.
Payment related to the termination of the FHN transaction, reported in the Corporate segment; and
iii.
Civil matter provision/Litigation settlement in respect of a civil matter, reported
in the Corporate segment.
3
Adjusted non-interest income excludes the following items of note:
i.
Impact of retroactive tax legislation on payment card clearing services, reported in the Corporate segment; and
ii.
Stanford litigation settlement reflects the foreign exchange loss, reported in the Corporate segment.
4
Average interest-earning assets used in the calculation of net interest margin is a non-GAAP financial
measure. Refer to “Non-GAAP and Other Financial Measures” in the “How We
Performed” section and the Glossary of this document for additional information about these metrics.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 24
BALANCE SHEET REVIEW
TABLE 17: SELECTED INTERIM CONSOLIDATED BALANCE SHEET ITEMS
(millions of Canadian dollars)
As at
January 31, 2025
October 31, 2024
Assets
Cash and Interest-bearing deposits
with banks
$
142,992
$
176,367
Trading loans, securities, and other
198,855
175,770
Non-trading financial assets at fair value through
profit or loss
6,810
5,869
Derivatives
83,885
78,061
Financial assets designated at fair value through
profit or loss
6,299
6,417
Financial assets at fair value through other
comprehensive income
108,691
93,897
Debt securities at amortized cost, net of allowance
for credit losses
255,743
271,615
Securities purchased under reverse repurchase
agreements
222,119
208,217
Loans, net of allowance for loan losses
965,312
949,549
Investment in Schwab
9,242
9,024
Other
93,606
86,965
Total assets
$
2,093,554
$
2,061,751
Liabilities
Trading deposits
$
27,198
$
30,412
Derivatives
75,017
68,368
Financial liabilities designated at fair value
through profit or loss
210,700
207,914
Deposits
1,290,486
1,268,680
Obligations related to securities sold
under repurchase agreements
193,856
201,900
Subordinated notes and debentures
13,671
11,473
Other
163,622
157,844
Total liabilities
1,974,550
1,946,591
Total equity
119,004
115,160
Total liabilities and equity
$
2,093,554
$
2,061,751
Total assets
were $2,094 billion as at January 31, 2025,
an increase of $32 billion from October
31, 2024. The impact of foreign exchange
translation from the
depreciation in the Canadian dollar increased
total assets by $43 billion.
The increase in total assets reflects an increase
in trading loans, securities, and other of
$23 billion, loans, net of allowances for loan losses
of $16 billion, financial
assets at fair value through other comprehensive
income of $15 billion, securities purchased
under reverse repurchase agreements of
$14 billion, other assets of
$6 billion, derivative assets of $6 billion, and
non-trading financial assets at fair
value through profit or loss of $1 billion.
The increase was partially offset by a
decrease in cash and interest-bearing deposits
with banks of $33 billion and debt securities at
amortized cost of $16 billion.
Cash and interest-bearing deposits with
banks
decreased $33 billion primarily reflecting
cash management activities, partially offset by
the impact of foreign
exchange translation.
Trading loans, securities, and other
increased $23 billion primarily in commodities
held for trading, equity securities, government
securities held for trading, and
the impact of foreign exchange translation.
Non-trading financial assets at fair
value through profit or loss
increased $1 billion reflecting new investments.
Derivative
assets
increased $6 billion primarily reflecting changes
in mark-to-market values of foreign exchange
and interest rate contracts.
Financial assets at fair value through other
comprehensive income
increased $15 billion reflecting new investments
primarily in government securities and
the impact of foreign exchange translation,
partially offset by maturities.
Debt securities at amortized cost, net
of allowance for credit losses
decreased $16 billion primarily reflecting
sales and maturities as a result of the U.S.
balance sheet restructuring activities, partially
offset by new investments and the impact of
foreign exchange translation.
Securities purchased under reverse repurchase
agreements
increased $14 billion
primarily
reflecting an increase in volume and the
impact of foreign
exchange translation.
Loans, net of allowance for loan losses
increased $16 billion primarily reflecting the
impact of foreign exchange translation and
volume growth in residential real
estate secured lending.
Investment in Schwab
remains relatively flat as the impact of
the Bank’s share of Schwab’s other comprehensive income
and net income is offset by the impact
of foreign exchange translation.
Other
assets increased $6 billion primarily reflecting
increase in amounts receivable from brokers,
dealers and clients due to higher volumes
of pending trades,
and the impact of foreign exchange translation.
Total liabilities
were $1,975 billion as at January 31, 2025,
an increase of $28 billion from October
31, 2024. The impact of foreign exchange
translation from the
depreciation in the Canadian dollar increased
total liabilities by $43 billion.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 25
The increase in total liabilities reflects an
increase in deposits of $22 billion, derivative
liabilities of $7 billion, other liabilities of $5
billion, financial liabilities
designated at fair value through profit or loss
of $3 billion, and subordinated notes and debentures
of $2 billion. The increase was partially
offset by a decrease in
obligations related to securities sold under repurchase
agreements of $8 billion and trading deposits
of $3 billion.
Trading deposits
decreased $3 billion primarily reflecting
maturities, partially offset by the impact of foreign
exchange translation.
Derivative
liabilities
increased $7 billion primarily reflecting
changes in mark-to-market values of foreign
exchange and interest rate contracts.
Financial liabilities designated at fair value
through profit or loss
increased $3 billion reflecting the impact
of foreign exchange translation and new
issuances,
partially offset by maturities.
Deposits
increased $22 billion primarily reflecting
the impact of foreign exchange translation
and a volume increase in personal deposits,
partially offset by volume
decrease in bank deposits.
Obligations related to securities sold
under repurchase agreements
decreased $8 billion primarily reflecting
a decrease in volume, partially offset by the
impact of foreign exchange translation.
Subordinated notes and debentures
increased $2 billion reflecting a new
issuance.
Other
liabilities increased $5 billion primarily
reflecting volume increase in obligations
related to securities sold short and the impact
of foreign exchange
translation, partially offset by a decrease in provision
for investigations related to the Bank’s U.S.
BSA/AML program due to payments.
Equity
was $119 billion as at January 31, 2025, and increase of $4 billion
from October 31, 2024. The increase reflects
gains in accumulated other comprehensive
income and retained earnings. The increase
in accumulated other comprehensive
income is primarily driven by the impact of
foreign currency translation.
CREDIT PORTFOLIO QUALITY
Quarterly comparison – Q1 2025 vs. Q1 2024
Gross impaired loans were $5,453 million
as at January 31, 2025, an increase of $1,744
million, or 47%, compared with the first quarter
last year. Canadian
Personal and Commercial Banking gross
impaired loans increased $387 million, or
24%, compared with the first quarter
last year, reflecting formations outpacing
resolutions in the consumer and commercial
lending portfolios. U.S. Retail gross
impaired loans increased $982 million, or
48%, compared with the first quarter
last year, reflecting formations outpacing resolutions in the
commercial and consumer lending portfolios,
and the impact of foreign exchange. Wholesale
gross
impaired loans increased $375 million, compared
with the first quarter last year, reflecting formations outpacing
resolutions. Net impaired loans were $3,635
million
as at January 31, 2025, an increase of $1,109
million, or 44%, compared with the first quarter
last year.
The allowance for credit losses of $9,598
million as at January 31, 2025 was comprised
of Stage 3 allowance for impaired loans of $1,824
million, Stage 2
allowance of $4,774 million and Stage 1 allowance
of $2,996 million, and the allowance for debt
securities of $4 million. The Stage 1 and 2
allowances are for
performing loans and off-balance sheet instruments.
The Stage 3 allowance for loan losses increased
$637 million, or 54%, reflective of
credit migration in the Business and Government
and consumer lending
portfolios, the impact of foreign exchange, and
the adoption impact of a model update in
the U.S. Cards portfolio. The Stage 1 and
Stage 2 allowance for loan
losses increased $692 million, or 10%, reflecting
credit migration, reserve build related
to elevated uncertainty associated with policy
and trade, the impact of
foreign exchange, and volume growth, partially
offset by the adoption impact of a model update
in the U.S. Cards portfolios. The allowance
change included an
increase of $100 million attributable to
the retailer program partners’ share of the
U.S. strategic cards portfolio.
Forward-looking information, including
macroeconomic variables deemed to be
predictive of expected credit losses (ECLs)
based on the Bank’s experience, is
used to determine ECL scenarios and associated
probability weights to determine the probability-weighted
ECLs. Each quarter, all base forecast macroeconomic
variables are refreshed, resulting in new upside
and downside macroeconomic scenarios.
The probability weightings assigned
to each ECL scenario are also
reviewed each quarter and updated as required,
as part of the Bank’s ECL governance process.
As a result of periodic reviews and quarterly updates,
the
allowance for credit losses may be revised
to reflect updates in loss estimates based on
the Bank’s recent loss experience and its forward-looking
views. The Bank
periodically reviews the methodology and
has performed certain additional quantitative
and qualitative portfolio and loan level
assessments of significant increase
in credit risk. Refer to Note 3 of the Bank’s first quarter
2025 Interim Consolidated Financial Statements
for further details on forward-looking information.
The probability-weighted allowance for
credit losses reflects the Bank’s forward-looking
views.
To
the extent that certain anticipated effects cannot
be fully
incorporated into quantitative models, management
continues to exercise expert credit judgment
in determining the amount of ECLs, including
for risks related to
elevated uncertainty associated with policy and
trade, and such adjustments will be updated
as appropriate in future quarters as additional
information becomes
available. Refer to Note 4 of the Bank’s first quarter
2025 Interim Consolidated Financial
Statements for additional details.
The Bank calculates allowances for ECLs
on debt securities measured at amortized
cost and fair value through other comprehensive
income (FVOCI). The Bank
has $360 billion in such debt securities,
all of which are performing (Stage 1 and
2) and none are impaired (Stage 3).
The allowance for credit losses was
$3 million for debt securities at amortized
cost (DSAC) and $1 million for debt securities
at FVOCI, for a total of $4 million, an increase
of $1 million, compared with
the first quarter last year.
Quarterly comparison – Q1 2025 vs. Q4 2024
Gross impaired loans increased $504 million,
or 10%, compared with the prior quarter, largely related
to new formations outpacing resolutions in
the Business &
Government and consumer lending portfolios,
and the impact of foreign exchange. Impaired
loans net of allowance increased $228
million, or 7%, compared with
the prior quarter.
The allowance for credit losses of $9,598
million as at January 31, 2025 was comprised
of Stage 3 allowance for impaired loans
of $1,824 million, Stage 2
allowance of $4,774 million and Stage 1 allowance
of $2,996 million, and the allowance for debt
securities of $4 million. The Stage 1 and 2 allowances
are for
performing loans and off-balance sheet instruments.
The Stage 3 allowance for loan losses increased
$271 million, or 17%, compared
with the prior quarter,
largely driven by credit migration in the Business
& Government lending portfolios, the
impact of foreign exchange, and the adoption
impact of a model update in
the U.S. Cards portfolio. The Stage 1 and
Stage 2 allowance for loan losses increased
$186 million, or 2%, compared with the prior
quarter, reflecting reserve build
in the Business & Government lending portfolios
related to policy and trade uncertainty, and the impact of foreign
exchange, partially offset by an update to the
economic forecast and the adoption impact
of a model update in the U.S. Cards portfolio.
The allowance for debt securities was $4 million,
consistent with the prior quarter.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 26
For further details on loans, impaired loans,
allowance for credit losses,
and on the Bank’s use of forward-looking information
and macroeconomic variables in
determining its allowance for credit losses,
refer to Note 6 of the Bank’s first quarter 2025
Interim Consolidated Financial Statements.
TABLE 18: CHANGES IN GROSS IMPAIRED LOANS AND ACCEPTANCES
1,2
(millions of Canadian dollars)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Personal, Business, and Government
Loans
Impaired loans as at beginning of period
$
4,949
$
4,170
$
3,299
Classified as impaired during the period
2,432
2,657
2,005
Transferred to performing during the period
(327)
(254)
(315)
Net repayments
(532)
(487)
(308)
Disposals of loans
(47)
(148)
(10)
Amounts written off
(1,144)
(1,008)
(917)
Exchange and other movements
122
19
(45)
Impaired loans as at end of period
$
5,453
$
4,949
$
3,709
1
Includes customers’ liability under acceptances.
2
Includes loans that are measured at FVOCI.
TABLE 19: ALLOWANCE FOR CREDIT LOSSES
(millions of Canadian dollars, except
as noted)
As at
January 31
October 31
January 31
2025
2024
2024
Allowance for loan losses for on-balance sheet
loans
Stage 1 allowance for loan losses
$
2,598
$
2,470
$
2,396
Stage 2 allowance for loan losses
4,239
4,082
3,686
Stage 3 allowance for loan losses
1,818
1,542
1,183
Total allowance for loan losses for on-balance sheet loans
1
8,655
8,094
7,265
Allowance for off-balance sheet instruments
Stage 1 allowance for loan losses
398
439
424
Stage 2 allowance for loan losses
535
593
572
Stage 3 allowance for loan losses
6
11
4
Total allowance for off-balance sheet instruments
939
1,043
1,000
Allowance for loan losses
9,594
9,137
8,265
Allowance for debt securities
4
4
3
Allowance for credit losses
$
9,598
$
9,141
$
8,268
Impaired loans, net of allowance
2
$
3,635
$
3,407
$
2,526
Net impaired loans as a percentage of net loans
2
0.38
%
0.36
%
0.28
%
Total allowance for credit losses as a percentage of gross loans and acceptances
0.99
0.95
0.89
Provision for (recovery of) credit losses
as a percentage of net average loans and
acceptances
0.50
0.47
0.44
1
Includes allowance for loan losses related to loans that are measured at FVOCI of $1 million as at January 31 202
5
(October 31, 2024 – nil, January 31, 2024
– nil).
2
Credit cards are considered impaired when they are 90 days past due and written off at 180 days past
due.
Real Estate Secured Lending
Retail real estate secured lending includes
mortgages and lines of credit to North American
consumers to satisfy financing needs including
home purchases and
refinancing. While the Bank retains first lien
on the majority of properties held as security, there is a small
portion of loans with second liens, but
most of these are
behind a TD mortgage that is in first
position. In Canada, credit policies are designed
so that the combined exposure of all uninsured
facilities on one property does
not exceed 80% of the collateral value at origination.
Lending at a higher loan-to-value ratio
is permitted by legislation but requires
default insurance. This
insurance is contractual coverage for the life
of eligible facilities and protects the
Bank’s real estate secured lending portfolio against
potential losses caused by
borrowers’ default. The Bank may also purchase
default insurance on lower loan-to-value
ratio loans. The insurance is provided
by either government-backed
entities or approved private mortgage insurers.
In the U.S., for residential mortgage originations,
mortgage insurance is usually obtained from either
government-
backed entities or approved private mortgage
insurers when the loan-to-value exceeds
80% of the collateral value at origination.
The Bank regularly performs stress tests
on its real estate lending portfolio as part
of its overall stress testing program. This is
done with a view to determine the
extent to which the portfolio would be vulnerable
to a severe downturn in economic conditions.
The effect of severe changes in house prices,
interest rates, and
unemployment levels are among the factors
considered when assessing the impact
on credit losses and the Bank’s overall profitability. A variety of portfolio
segments, including dwelling type and geographical
regions, are examined during the exercise
to determine whether specific vulnerabilities exist.
TABLE 20: CANADIAN REAL ESTATE SECURED LENDING
1,2
(millions of Canadian dollars)
As at
Amortizing
Non-amortizing
Total
Residential
Home equity
Total amortizing real
Home equity
mortgages
lines of credit
estate secured lending
lines of credit
January 31, 2025
Total
$
272,838
$
90,010
$
362,848
$
34,198
$
397,046
October 31, 2024
Total
$
273,069
$
89,369
$
362,438
$
33,667
$
396,105
1
Excludes loans classified as trading as the Bank intends to sell the loans immediately or in the near term, and loans
designated at fair value through profit or loss (FVTPL)
for which no
allowance is recorded.
2
Amortizing includes loans where the fixed contractual payments are no longer sufficient to cover the interest
based on the rates in effect at January 31, 2025
and October 31, 2024.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 27
TABLE 21: REAL ESTATE
SECURED LENDING
1,2
(millions of Canadian dollars, except as noted)
As at
Residential mortgages
Home equity lines of credit
Total
Insured
3
Uninsured
Insured
3
Uninsured
Insured
3
Uninsured
January 31, 2025
Canada
Atlantic provinces
$
2,415
0.9
%
$
4,813
1.8
%
$
151
0.1
%
$
2,281
1.8
%
$
2,566
0.6
%
$
7,094
1.8
%
British Columbia
4
8,186
3.0
48,226
17.7
774
0.6
23,169
18.7
8,960
2.3
71,395
18.0
Ontario
4
21,775
8.0
126,693
46.3
2,624
2.1
68,287
55.0
24,399
6.1
194,980
49.1
Prairies
4
17,472
6.4
22,344
8.2
1,436
1.2
12,591
10.1
18,908
4.8
34,935
8.8
Québec
6,465
2.4
14,449
5.3
483
0.4
12,412
10.0
6,948
1.7
26,861
6.8
Total Canada
56,313
20.7
%
216,525
79.3
%
5,468
4.4
%
118,740
95.6
%
61,781
15.5
%
335,265
84.5
%
United States
1,588
59,677
–
12,212
1,588
71,889
Total
$
57,901
$
276,202
$
5,468
$
130,952
$
63,369
$
407,154
October 31, 2024
Canada
Atlantic provinces
$
2,445
0.9
%
$
4,753
1.7
%
$
158
0.1
%
$
2,207
1.8
%
$
2,603
0.7
%
$
6,960
1.8
%
British Columbia
4
8,311
3.0
48,362
17.7
804
0.7
22,840
18.6
9,115
2.3
71,202
18.0
Ontario
4
21,943
8.1
126,294
46.3
2,734
2.2
67,567
54.9
24,677
6.2
193,861
48.9
Prairies
4
17,685
6.5
22,120
8.1
1,499
1.2
12,459
10.1
19,184
4.8
34,579
8.7
Québec
6,616
2.4
14,540
5.3
509
0.4
12,259
10.0
7,125
1.8
26,799
6.8
Total Canada
57,000
20.9
%
216,069
79.1
%
5,704
4.6
%
117,332
95.4
%
62,704
15.8
%
333,401
84.2
%
United States
1,517
57,063
–
11,525
1,517
68,588
Total
$
58,517
$
273,132
$
5,704
$
128,857
$
64,221
$
401,989
1
Geographic location is based on the address of the property mortgaged.
2
Excludes loans classified as trading as the Bank intends to sell the loans immediately or in the near term, and loans
designated at FVTPL for which no allowance is recorded.
3
Default insurance is contractual coverage for the life of eligible facilities whereby the Bank’s exposure
to real estate secured lending, all or in part, is protected against potential losses
caused by borrower default. It is provided by either government-backed entities or other approved private mortgage
insurers.
4
The territories are included as follows: Yukon is included in British Columbia; Nunavut
is included in Ontario; and the Northwest Territories
is included in the Prairies region.
The following table provides a summary
of the period over which the Bank’s residential
mortgages would be fully repaid based on
the amount of the most recent
payment received. All figures are calculated
based on current customer payment amounts,
including voluntary payments larger than
the original contractual
amounts and/or other voluntary prepayments.
The most recent customer payment amount
may exceed the original contractual amount
due.
Balances with a remaining amortization longer
than 30 years primarily reflect Canadian
variable rate mortgages where prior interest
rate increases relative to
current customer payment levels have resulted
in a longer current amortization period.
At renewal, the amortization period for
Canadian mortgages reverts to the
remaining contractual amortization, which
may require increased payments.
TABLE 22: RESIDENTIAL MORTGAGES BY REMAINING
AMORTIZATION
1,2,3
As at
<=5
>5 – 10
>10 – 15
>15 – 20
>20 – 25
>25 – 30
>30 – 35
>35
years
years
years
years
years
years
years
years
Total
January 31, 2025
Canada
0.8
%
2.8
%
7.1
%
18.9
%
32.9
%
29.4
%
1.2
%
6.9
%
100.0
%
United States
2.2
1.4
3.4
7.6
15.7
68.7
0.5
0.5
100.0
Total
1.0
%
2.6
%
6.4
%
16.8
%
29.7
%
36.8
%
1.0
%
5.7
%
100.0
%
October 31, 2024
Canada
0.8
%
2.7
%
6.4
%
16.8
%
33.3
%
28.9
%
2.4
%
8.7
%
100.0
%
United States
2.3
1.3
3.4
7.6
14.2
70.2
0.5
0.5
100.0
Total
1.0
%
2.5
%
5.9
%
15.1
%
29.9
%
36.2
%
2.1
%
7.3
%
100.0
%
1
Excludes loans classified as trading as the Bank intends to sell the loans immediately or in the near term, and loans
designated at FVTPL for which no allowance is recorded.
2
Percentage based on outstanding balance.
3
$6.9 billion or 3% of the mortgage portfolio in Canada (October 31, 2024: $15.6 billion or 6%) relates to mortgages
in which the fixed contractual payments are no longer sufficient to
cover the interest based on the rates in effect at January 31,
2025 and October 31, 2024, respectively.
TABLE 23: UNINSURED AVERAGE LOAN-TO-VALUE – Newly Originated and Newly Acquired
1,2,3
For the three months ended
Residential
Home equity
Residential
Home equity
mortgages
lines of credit
4,5
Total
mortgages
lines of credit
4,5
Total
January 31, 2025
October 31, 2024
Canada
Atlantic provinces
69
%
68
%
68
%
69
%
67
%
68
%
British Columbia
6
66
63
64
66
62
65
Ontario
6
67
64
65
67
63
65
Prairies
6
72
70
71
73
69
71
Québec
69
69
69
69
69
69
Total Canada
68
65
66
68
64
66
United States
71
60
67
73
61
68
Total
68
%
65
%
66
%
69
%
64
%
66
%
1
Geographic location is based on the address of the property mortgaged.
2
Excludes loans classified as trading as the Bank intends to sell the loans immediately or in the near term, and loans
designated at FVTPL for which no allowance is recorded.
3
Based on house price at origination.
4
Home equity lines of credit (HELOCs) loan-to-value includes first position collateral mortgage if applicable.
5
HELOC fixed rate advantage option is included in loan-to-value calculation.
6
The territories are included as follows: Yukon is included in British Columbia; Nunavut
is included in Ontario; and the Northwest Territories
is included in the Prairies region.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 28
Sovereign Risk
The table below provides a summary of
the Bank’s direct credit exposures
outside of Canada and the U.S. (Europe excludes
United Kingdom).
TABLE 24: Total Net Exposure by Region and Counterparty
(millions of Canadian dollars)
As at
Loans and commitments
1
Derivatives, repos, and securities lending
2
Trading and investment portfolio
3
Total
Corporate
Sovereign
Financial
Total
Corporate
Sovereign
Financial
Total
Corporate
Sovereign
Financial
Total
Exposure
4
January 31, 2025
Region
Europe
$
8,467
$
8
$
5,554
$
14,029
$
5,085
$
1,912
$
9,688
$
16,685
$
967
$
24,411
$
2,389
$
27,767
$
58,481
United Kingdom
8,818
2,518
2,714
14,050
3,803
1,234
15,484
20,521
599
931
527
2,057
36,628
Asia
235
26
2,473
2,734
376
598
2,689
3,663
253
9,545
785
10,583
16,980
Other
5
218
–
747
965
329
466
2,785
3,580
83
1,147
2,511
3,741
8,286
Total
$
17,738
$
2,552
$
11,488
$
31,778
$
9,593
$
4,210
$
30,646
$
44,449
$
1,902
$
36,034
$
6,212
$
44,148
$
120,375
October 31, 2024
Region
Europe
$
8,490
$
8
$
5,050
$
13,548
$
4,847
$
2,117
$
8,145
$
15,109
$
1,157
$
24,124
$
2,660
$
27,941
$
56,598
United Kingdom
8,462
3,124
2,661
14,247
3,490
1,172
13,536
18,198
866
1,691
1,104
3,661
36,106
Asia
241
30
2,412
2,683
519
533
2,739
3,791
290
10,486
893
11,669
18,143
Other
5
209
–
598
807
370
416
2,481
3,267
218
1,012
3,187
4,417
8,491
Total
$
17,402
$
3,162
$
10,721
$
31,285
$
9,226
$
4,238
$
26,901
$
40,365
$
2,531
$
37,313
$
7,844
$
47,688
$
119,338
1
Exposures, including interest-bearing deposits with banks, are presented net of impairment charges where applicable.
2
Exposures are calculated on a fair value basis and presented net of collateral. Derivatives are presented as net
exposures where there is an International Swaps and Derivatives
Association master netting agreement.
3
Trading exposures are net of eligible short positions.
4
In addition to the exposures identified above, the Bank also has $35.3 billion (October 31, 2024 – $35.5 billion)
of exposure to supranational entities.
5
Other regional exposure largely attributable to Australia.
CAPITAL POSITION
REGULATORY CAPITAL
Capital requirements established by the Basel
Committee on Banking Supervision (BCBS)
are commonly referred to as Basel
III. Under Basel III,
Total Capital consists of three components, namely CET1, Additional Tier 1, and Tier 2 Capital.
Risk sensitive regulatory capital ratios are
calculated by dividing
CET1, Tier 1, and Total Capital by risk-weighted assets (RWA), inclusive of any minimum requirements
outlined under the regulatory floor. Basel III also
introduced a non-risk sensitive leverage
ratio to act as a supplementary measure
to the risk-sensitive capital requirements.
The leverage ratio is calculated by
dividing Tier 1 Capital by leverage exposure which is
primarily comprised of on-balance sheet
assets with adjustments made to derivative
and securities financing
transaction exposures, and credit equivalent amounts
of off-balance sheet exposures. TD manages its
regulatory capital in accordance with
OSFI’s
implementation of the Basel III Capital
Framework.
OSFI’s Capital Requirements under Basel III
OSFI’s CAR and LR guidelines detail how
the Basel III capital rules apply to Canadian
banks.
The Domestic Stability Buffer (DSB) level increased
from 3% to 3.5% as of November 1,
- The 50 bps increase reflects OSFI’s
view of appropriate actions to
enhance the resilience of Canada’s largest banks.
Currently, the DSB can range from 0 to 4%, with the effective level
adjusted
by OSFI in response to
developments in Canada’s financial system and
the broader economy.
On February 1, 2023, OSFI implemented revised
capital rules that incorporate the Basel III reforms
with adjustments to make them suitable
for domestic
implementation. These revised rules
include changes to the calculation of credit
risk and operational risk requirements,
and amendments to the LR Guideline to
include a requirement for domestic systemically
important banks (D-SIBs) to hold a
leverage ratio buffer of 0.50% in addition
to the regulatory minimum
requirement of 3.0%. The LR buffer requirement
also applies to the TLAC leverage ratio.
On November 1, 2023, OSFI implemented
the second and final phase of
the Basel III reforms relating to the calculation
of credit valuation adjustment (CVA) and market risk RWA requirements. In addition,
effective November 1, 2023,
the regulatory capital floor transitioned
to 67.5% of RWA for fiscal 2024 from 65% of RWA in fiscal 2023.
On November 1, 2023, the Bank implemented
OSFI’s Parental Stand-Alone (Solo) Total Loss Absorbing Capacity (TLAC) Framework
for D-SIBs, which
establishes a risk-based measure intended
to ensure that a non-viable D-SIB has sufficient
loss absorbing capacity on a stand-alone,
legal entity basis to support
its resolution. The Bank is compliant with
the requirements set out in this framework.
The table below summarizes OSFI’s published regulatory
minimum capital targets for the Bank as at
January 31, 2025.
REGULATORY
CAPITAL AND TLAC
TARGET RATIOS
Capital
Pillar 1
Pillar 1 & 2
Conservation
D-SIB / G-SIB
Regulatory
Regulatory
Minimum
Buffer
Surcharge
1
Target
2
DSB
Target
CET1
4.5
%
2.5
%
1.0
%
8.0
%
3.5
%
11.5
%
Tier 1
6.0
2.5
1.0
9.5
3.5
13.0
Total Capital
8.0
2.5
1.0
11.5
3.5
15.0
Leverage
3.0
n/a
3
0.5
3.5
n/a
3.5
TLAC
18.0
2.5
1.0
21.5
3.5
25.0
TLAC Leverage
6.75
n/a
0.50
7.25
n/a
7.25
1
The higher of the D-SIB and Global Systemically Important Bank (G-SIB) surcharge applies to risk weighted
capital. The D-SIB surcharge is currently equivalent to the Bank’s 1% G-SIB
additional common equity requirement for risk weighted capital. The G-SIB surcharge may increase above
1% if the Bank’s G-SIB score increases above certain thresholds to a maximum
of 4.5%. OSFI’s Leverage Requirements Guideline includes a requirement for D-SIBs to hold a leverage
ratio buffer set at 50% of a D-SIB’s higher loss absorbency risk
-weighted
requirements, effectively 0.50%. This buffer also applies to the TLAC Leverage ratio.
2
The Bank’s countercyclical buffer requirement is 0% as of January 31,
2025.
3
Not applicable.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 29
Global Systemically Important Banks
Disclosures
The Financial Stability Board (FSB), in
consultation with the BCBS and national authorities,
identifies G-SIBs. The G-SIB assessment
methodology is based on the
submissions of the largest global banks. Thirteen
indicators are used in the G-SIB assessment
methodology to determine systemic importance.
The score for a
particular indicator is calculated by dividing
the individual bank value by the aggregate
amount for the indicator summed across all
banks included in the
assessment. Accordingly, an individual bank’s ranking is reliant on the
results and submissions of other global
banks.
The Bank is required to publish the thirteen
indicators used in the G-SIB indicator-based
assessment framework. Public disclosure
of financial year-end data is
required annually, no later than the date of a bank’s first quarter public
disclosure of shareholder financial data
in the following year.
Public communications on G-SIB status are
issued annually each November. On November 22, 2019,
the Bank was designated as a G-SIB by
the FSB. The
Bank continued to maintain its G-SIB status
when the FSB published the 2024 list of
G-SIBs on November 26, 2024. As a result
of this designation, the Bank is
subject to an additional loss absorbency
requirement (CET1 as a percentage
of RWA) of 1% under applicable FSB member authority requirements.
The Bank’s
G-SIB designation has no additional impact
on the Bank’s minimum CET1 regulatory requirements,
as the G-SIB surcharge is consistent
with the D-SIB
requirement set out by OSFI. The G-SIB
surcharge may increase above 1% if the
Bank’s G-SIB score increases above certain thresholds
to a maximum of 4.5%.
As a result of the Bank’s G-SIB designation, the
U.S. Federal Reserve requires TD Group
US Holding LLC (TDGUS), as TD’s U.S. Intermediate
Holding
Company (IHC), to maintain a minimum amount
of TLAC and long-term debt.
The indicator-based measurement approach,
currently in effect, divides the thirteen indicators
into five categories, with each category
yielding a 20% weight to a
bank’s total score on the G-SIB scale.
The following table provides the results of
the thirteen indicators for the Bank.
Increases in Cross-jurisdictional
Activity were primarily driven by increases
in
cash, loans and securities booked in CAD
and USD, and increases in deposits payable
and debt securities booked in CAD, USD,
and Euros. The increase in
Trading Volume was mainly driven by higher North
American fixed income trading. The
increase in Over-the-Counter Derivatives was due
to an increase in interest
rate swaps. Other notable changes in the indicators
from the prior year primarily reflect normal
business activities of the Bank.
TABLE 25: G-SIB INDICATORS
1
(millions of Canadian dollars)
As at
October 31, 2024
October 31, 2023
Category (and weighting)
Individual Indicator
Cross-jurisdictional activity (20%)
Cross-jurisdictional claims
$
1,100,768
$
1,003,230
Cross-jurisdictional liabilities
1,042,951
964,092
Size (20%)
Total exposures as defined for use in the Basel III leverage ratio
2,228,986
2,112,677
Interconnectedness (20%)
Intra-financial system assets
107,793
109,833
Intra-financial system liabilities
36,477
55,247
Securities outstanding
487,199
470,767
Substitutability/financial institution
Assets under custody
689,698
563,783
infrastructure (20%)
Payments activity
41,073,559
39,499,576
Underwritten transactions in debt and equity
markets
211,859
186,110
Trading Volume (includes the two sub indicators)
– Trading volume fixed income sub indicator
12,900,561
9,239,393
– Trading volume equities and other securities sub indicator
2,855,130
2,958,869
Complexity (20%)
Notional amount of OTC derivatives
23,945,530
21,198,657
Trading and other securities
2
72,514
64,944
Level 3 assets
4,663
3,548
1
The G-SIB indicators are prepared based on the methodology prescribed in BCBS guidelines published and
disclosed in accordance with OSFI’s Advisory on G-SIBs – Public Disclosure
Requirements. Given the Bank was designated as a G-SIB by the FSB on November 22, 2019, additional public
disclosures on these indicators are required. Refer to the Bank’s
Regulatory Capital Disclosures at www.td.com/investor-relations/ir-homepage/regulatory-disclosures/g-sib/disclosures.jsp
for these additional disclosures on the 2024 G-SIB indicators.
The Bank is required to submit its G-SIB indicators to OSFI and BCBS for review following the date of this report.
In the event that one or both regulators provide comments to the Bank
regarding its submission that would result in changes to the G-SIB indicators listed in the table above, the Bank
will publish such revised G-SIB indicators on its website.
2
Includes trading securities, securities designated at FVTPL,
and securities at FVOCI.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 30
The following table provides details of the
Bank’s regulatory capital position.
TABLE 26: CAPITAL STRUCTURE AND RATIOS – Basel III
(millions of Canadian dollars, except
as noted)
As at
January 31
October 31
January 31
2025
2024
2024
Common Equity Tier 1 Capital
Common shares plus related contributed
surplus
$
25,679
$
25,543
$
25,428
Retained earnings
71,718
70,826
72,347
Accumulated other comprehensive income
10,520
7,904
3,830
Common Equity Tier 1 Capital before regulatory
adjustments
107,917
104,273
101,605
Common Equity Tier 1 Capital regulatory adjustments
Goodwill (net of related tax liability)
(19,359)
(18,645)
(17,922)
Intangibles (net of related tax liability)
(3,041)
(2,921)
(2,654)
Deferred tax assets excluding those arising
from temporary differences
(284)
(212)
(198)
Cash flow hedge reserve
2,859
3,015
3,559
Shortfall of provisions to expected losses
–
–
–
Gains and losses due to changes in own
credit risk on fair valued liabilities
(191)
(193)
(148)
Defined benefit pension fund net assets (net
of related tax liability)
(733)
(731)
(773)
Investment in own shares
(57)
(21)
(20)
Non-significant investments in the capital of
banking, financial, and insurance entities,
net of eligible
short positions (amount above 10% threshold)
(1,890)
(1,835)
(2,724)
Significant investments in the common
stock of banking, financial, and insurance entities
that are outside the scope of regulatory
consolidation, net of eligible short positions
(amount above 10% threshold)
–
–
–
Equity investments in funds subject to
the fall-back approach
(35)
(32)
(56)
Other deductions or regulatory adjustments
to CET1 as determined by OSFI
18
16
10
Total regulatory adjustments to Common Equity Tier 1 Capital
(22,713)
(21,559)
(20,926)
Common Equity Tier 1 Capital
85,204
82,714
80,679
Additional Tier 1 Capital instruments
Directly issued qualifying Additional Tier 1 instruments
plus stock surplus
11,087
10,887
10,830
Additional Tier 1 Capital instruments before
regulatory adjustments
11,087
10,887
10,830
Additional Tier 1 Capital instruments regulatory
adjustments
Non-significant investments in the capital of
banking, financial, and insurance entities,
net of eligible
short positions (amount above 10% threshold)
(2)
(3)
(5)
Significant investments in the capital of banking,
financial, and insurance entities that are
outside
the scope of regulatory consolidation, net of
eligible short positions
(700)
(350)
(350)
Total regulatory adjustments to Additional Tier 1 Capital
(702)
(353)
(355)
Additional Tier 1 Capital
10,385
10,534
10,475
Tier 1 Capital
95,589
93,248
91,154
Tier 2 Capital instruments and provisions
Directly issued qualifying Tier 2 instruments plus related
stock surplus
13,471
11,273
9,357
Collective allowances
1,424
1,512
1,781
Tier 2 Capital before regulatory adjustments
14,895
12,785
11,138
Tier 2 regulatory adjustments
Investments in own Tier 2 instruments
–
–
–
Non-significant investments in the capital of
banking, financial, and insurance entities,
net of eligible
short positions (amount above 10% threshold)
1
(226)
(224)
(228)
Non-significant investments in the other
TLAC-eligible instruments issued by
G-SIBs and Canadian
D-SIBs, where the institution does not own
more than 10% of the issued common
share capital
of the entity: amount previously designated
for the 5% threshold but that no longer
meets the
conditions
(20)
(64)
(115)
Significant investments in the capital of banking,
financial, and insurance entities that are
outside
the scope of regulatory consolidation, net of
eligible short positions
–
–
(160)
Total regulatory adjustments to Tier 2 Capital
(246)
(288)
(503)
Tier 2 Capital
14,649
12,497
10,635
Total Capital
$
110,238
$
105,745
$
101,789
Risk-weighted assets
$
649,043
$
630,900
$
579,424
Capital Ratios and Multiples
Common Equity Tier 1 Capital (as percentage of risk-weighted
assets)
13.1
%
13.1
%
13.9
%
Tier 1 Capital (as percentage of risk-weighted assets)
14.7
14.8
15.7
Total Capital (as percentage of risk-weighted assets)
17.0
16.8
17.6
Leverage ratio
2
4.2
4.2
4.4
1
Includes other TLAC-eligible instruments issued by G-SIBs and Canadian D-SIBs that are outside the scope of
regulatory consolidation, where the institution does not own more than
10% of the issued common share capital of the entity.
2
The Leverage ratio is calculated as Tier 1 Capital divided by leverage exposure,
as defined in the “Regulatory Capital” section of this document.
As at January 31, 2025, the Bank’s CET1, Tier 1, and Total Capital ratios were 13.1%, 14.7%, and
17.0%, respectively. The Bank’s CET1 Capital ratio remained
relatively flat from 13.1% as at October 31,
2024, primarily attributable to internal
capital generation,
offset by RWA growth across various segments and the
impact of U.S. balance sheet restructuring.
As at January 31, 2025, the Bank’s leverage ratio
was 4.2%. The Bank’s leverage ratio remained relatively
flat from 4.2% as at October 31, 2024,
primarily
attributable to internal capital generation, offset by
exposure increases across various segments
and the impact of U.S. balance sheet restructuring.
Future Regulatory Capital Developments
Future regulatory capital developments, in
addition to those described in the “Future
Regulatory Capital Developments” section
of the Bank’s 2024
MD&A, are
noted below.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 31
On February 12, 2025, OSFI deferred increases
to the Basel III standardized capital floor level
until further notice. The capital floor subjects
banks using internal
model-based approaches to a floor, where the floor is calculated
as a percentage of RWA under the standardized approach.
OSFI will notify the Bank at least two
years prior to resuming an increase in
the capital floor level.
TABLE 27: EQUITY AND OTHER SECURITIES
1
(millions of shares/units and millions of Canadian
dollars, except as noted)
As at
January 31, 2025
October 31, 2024
Number of
Number of
shares/units
Amount
shares/units
Amount
Common shares
Common shares outstanding
1,752.2
$
25,528
1,750.3
$
25,373
Treasury – common shares
(0.5)
(38)
(0.2)
(17)
Total common shares
1,751.7
$
25,490
1,750.1
$
25,356
Stock options
Vested
7.0
5.4
Non-vested
9.3
9.3
Preferred shares – Class A
Series 1
20.0
$
500
20.0
$
500
Series 5
2
–
–
20.0
500
Series 7
14.0
350
14.0
350
Series 9
8.0
200
8.0
200
Series 16
14.0
350
14.0
350
Series 18
14.0
350
14.0
350
Series 27
0.8
850
0.8
850
Series 28
0.8
800
0.8
800
71.6
$
3,400
91.6
$
3,900
Other equity instruments
3,4
Limited Recourse Capital Notes – Series 1
1.8
1,750
1.8
1,750
Limited Recourse Capital Notes – Series 2
1.5
1,500
1.5
1,500
Limited Recourse Capital Notes – Series 3
5
1.7
2,403
1.7
2,403
Limited Recourse Capital Notes – Series 4
5
0.7
1,023
0.7
1,023
Limited Recourse Capital Notes – Series 5
6
0.7
750
–
–
Perpetual Subordinated Capital Notes – Series
2023-9
7
0.1
312
0.1
312
78.1
$
11,138
97.4
$
10,888
Treasury – preferred shares and other equity instruments
(0.5)
(51)
(0.2)
(18)
Total preferred shares and other equity instruments
77.6
$
11,087
97.2
$
10,870
1
For further details, including the conversion and exchange features, and distributions, refer to Note 20 of the Bank’s
2024 Consolidated Financial Statements.
2
On January 31, 2025, the Bank redeemed all of its 20 million outstanding Non-Cumulative 5-Year
Rate Reset Class A First Preferred Shares Non-Viability Contingent Capital
(NVCC),
Series 5 (“Series 5 Preferred Shares”), at a redemption price of $25.00 per Series 5 Preferred Share,
for a total redemption cost of approximately $500 million.
3
For other equity instruments, the number of shares/units represents the number of notes issued.
4
Refer to the “Preferred Shares and Other Equity Instruments – Significant Terms
and Conditions” table in Note 20 of the Bank’s 2024 Consolidated Financial Statements
for further
details.
5
For Limited Recourse Capital Notes (LRCNs) – Series 3 and Series 4, the amount represents the Canadian
dollar equivalent of the U.S. dollar notional amount.
6
On December 18, 2024, the Bank issued CA$750 million 5.909% Fixed Rate Reset Limited Recourse Capital Notes,
Series 5 NVCC (the “LRCNs”). The LRCNs will bear an interest rate
of 5.909 per cent annually, payable quarterly,
for the initial period ending on, but excluding, January 1, 2030. Thereafter, the
interest rate on the LRCNs will reset every five years at a
rate equal to the prevailing Government of Canada Yield plus 3.10 per cent. The LRCNs
will mature on January 1, 2085. Concurrently with the issuance of the LRCNs, the Bank issued
750,000 Non-Cumulative 5.909% Fixed Rate Reset Preferred Shares, Series 32 NVCC (“Preferred Shares
Series 32”). The Preferred Shares Series 32 are eliminated on the Bank’s
Consolidated Financial Statements.
7
For Perpetual Subordinated Capital Notes (AT1), the amount
represents the Canadian dollar equivalent of the Singapore dollar notional amount.
DIVIDENDS
On February 26, 2025, the Board approved
a dividend in an amount of one dollar and
five cents ($1.05)
per fully paid common share in the capital stock
of the
Bank for the quarter ending April 30, 2025, payable
on and after April 30, 2025, to shareholders
of record at the close of business on April
10, 2025.
DIVIDEND REINVESTMENT PLAN
The Bank offers a dividend reinvestment plan
for its common shareholders. Participation in
the plan is optional and under the terms of the
plan, cash dividends on
common shares are used to purchase additional
common shares. At the option of the Bank,
the common shares may be issued from treasury
at an average
market price based on the last five trading
days before the date of the dividend payment,
with a discount of between 0% to 5% at the Bank’s
discretion or
purchased from the open market at market
price.
During the three months ended January 31,
2025, the Bank issued 1.6 million (three
months ended January 31, 2024 – 2.0 million)
common shares from
treasury with no discount.
NORMAL COURSE ISSUER BID
On August 28, 2023,
the Bank announced that the Toronto Stock Exchange and OSFI approved
a normal course issuer bid (NCIB) to
repurchase for cancellation
up to 90 million of its common shares. The
NCIB commenced on August 31, 2023
and continued until August 31, 2024. From
the commencement of the NCIB to
August 31, 2024, the Bank repurchased 71.4
million shares under the program. The NCIB
terminated on August 31, 2024 and therefore,
there was no repurchase
of common shares by the Bank under the
NCIB during the three months ended
January 31, 2025. During the three months
ended January 31, 2024,
the Bank
repurchased 20.9 million common shares,
at an average price of $82.39 per share
for a total amount of $1.7 billion.
Subsequent to the quarter end, on February
24, 2025, the Bank announced that the
Toronto Stock Exchange and OSFI had
approved the Bank’s previously
announced NCIB to purchase for cancellation
up to 100 million of its common shares.
The NCIB will commence on March 3, 2025 and
end on February 28, 2026,
or such earlier date as the Bank may determine.
NON-VIABILITY CONTINGENT CAPITAL PROVISION
If an NVCC trigger event were to occur, for all series of Class
A First Preferred Shares excluding the preferred
shares issued with respect to LRCNs,
the
maximum number of common shares that
could be issued, assuming there are no declared
and unpaid dividends on the respective series
of preferred shares at
the time of conversion, would be 0.7 billion in
aggregate.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 32
The LRCNs, by virtue of the recourse to the
preferred shares held in the Limited Recourse
Trust, include NVCC provisions. For LRCNs, if an NVCC
trigger were
to occur, the maximum number of common shares that could
be issued, assuming there are no declared
and unpaid dividends on the preferred
shares series
issued in connection with such LRCNs,
would be 1.5 billion in aggregate.
For all other NVCC subordinated notes and
debentures including Additional Tier 1 Perpetual
Notes, if an NVCC trigger event were to occur, the maximum
number of common shares that could be issued,
assuming there is no accrued and unpaid
interest on the respective subordinated notes
and debentures, would be
4.0 billion in aggregate.
RISK FACTORS AND
MANAGEMENT
Risk Factors That May Affect Future Results
In addition to the risks described in the “Managing
Risk” section of the Bank’s 2024 MD&A
and this Report, there are numerous other
risk factors, many of which
are beyond the Bank’s control and the effects of
which can be difficult to predict, that could
cause the Bank’s results to differ significantly from the
Bank’s plans,
objectives, and estimates or could impact
the Bank’s reputation or the sustainability of its
business model. All forward-looking statements,
including those in this
MD&A, are, by their very nature, subject
to inherent risks and uncertainties, general
and specific, which may cause the Bank’s actual
results to differ materially
from the plan, objectives, estimates or expectations
expressed in the forward-looking statements.
Some of these factors are discussed
in the “Risk Factors and
Management” section of the 2024 MD&A and
in the “Managing Risk” section of this
document, and others are noted in the “Caution
Regarding Forward-Looking
Statements” section of this document.
The Bank has updated the following Risk
Factor reflecting developments in the external
environment.
Geopolitical Risk
Government policy, international trade and political relations across
the globe may impact overall market and
economic stability, including in the regions where the
Bank operates, or where its customers operate.
While the nature and extent of risks may
vary, they have the potential to disrupt global economic growth, create
volatility in financial markets that may affect
the Bank’s trading and non-trading activities, market
liquidity, funding costs, interest rates, foreign exchange,
commodity prices, credit spreads, fiscal policy, and directly and indirectly
influence general business and economic conditions
in ways that may have an adverse
impact on the Bank and its customers.
Current geopolitical risks include ongoing global
tensions resulting in sanctions and
countersanctions and related
operational complexities, supply chain disruptions,
being subjected to heightened regulatory
focus on climate change and transition
to a low-carbon economy,
increased likelihood of cyber-attacks on critical
public and private infrastructure and networks,
the Russia-Ukraine war and the resulting tensions
between Russia
and other nations, social unrest and volatility in
the Middle East that have escalated due
to the ongoing conflict between Israel and
Hamas and Hezbollah,
political
and economic turmoil, threats of terrorism and
ongoing protectionism measures due
to a decline in global alignment and elections
in geopolitically significant
markets that have potential to generate regulatory
and policy uncertainty.
The application or potential application of
new or elevated tariffs to goods imported into
the United States, and the application or potential
application of retaliatory tariffs have amplified
these risks and economic uncertainty. Renegotiation of the U.S.-
Mexico-Canada Agreement (USMCA) or
tariffs imposed on Canada before its renewal
could result in negative impacts for some industries
or customers that the
Bank services.
MANAGING RISK
EXECUTIVE SUMMARY
Growing profitability in financial results based
on balanced revenue, expense and capital
growth services involves selectively
taking and managing risks within the
Bank’s risk appetite. The Bank’s goal is to earn
a stable and sustainable rate of return for
every dollar of risk it takes, while putting
significant emphasis on
investing in its businesses to meet its future
strategic objectives.
The Bank’s businesses and operations are exposed
to a broad number of risks that have been
identified and defined in the Enterprise
Risk Framework. The
Bank’s tolerance to those risks is defined
in the Enterprise Risk Appetite which has
been developed within a comprehensive
framework that takes into
consideration current conditions in which
the Bank operates and the impact that emerging
risks will have on TD’s strategy and risk profile. The
Bank’s risk appetite
states that it takes risks required to build its
business, but only if those risks: (1)
fit the business strategy and can be understood
and managed; (2) do not expose
the enterprise to any significant single loss
events; TD does not ‘bet the bank’
on any single acquisition, business, product
or decision; and (3) do not risk harming
the TD brand. Each business is responsible
for setting and aligning its individual risk
appetites with that of the enterprise
based on a thorough examination of
the
specific risks to which it is exposed.
The Bank considers it critical to regularly
assess its operating environment
and highlight top and emerging risks. These
are risks with a potential to have a
material effect on the Bank and where the attention
of senior leaders is focused due to the potential
magnitude or immediacy of their impact.
Risks are identified, discussed, and actioned
by senior leaders and reported quarterly
to the Risk Committee. Specific plans
to mitigate top and emerging risks
are prepared, monitored, and adjusted as required.
The Bank’s risk governance structure and risk
management approach have not substantially
changed from that described in the Bank’s 2024
MD&A. Additional
information on risk factors can be found in
this document and the 2024 MD&A under
the heading “Risk Factors and Management”.
For a complete discussion of
the risk governance structure and the risk
management approach, refer to the “Managing
Risk” section in the Bank’s 2024 MD&A.
The shaded sections of this MD&A represent
a discussion relating to market and liquidity
risks and form an integral part of the Interim
Consolidated Financial
Statements for the period ended January 31,
2025.
CREDIT RISK
Gross credit risk exposure, also referred
to as exposure at default (EAD), is the
total amount the Bank is exposed to at the time
of default of a loan and is
measured before counterparty-specific
provisions or write-offs. Gross credit risk exposure
does not reflect the effects of credit risk
mitigation (CRM) and includes
both on-balance sheet and off-balance sheet exposures.
On-balance sheet exposures consist primarily
of outstanding loans, non-trading securities,
derivatives,
and certain other repo-style transactions.
Off-balance sheet exposures consist primarily
of undrawn commitments, guarantees,
and certain other repo-style
transactions.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 33
Gross credit risk exposures for the two approaches
the Bank uses to measure credit risk
are included in the following table.
TABLE 28: GROSS CREDIT RISK EXPOSURE – Standardized
and Internal Ratings-Based (IRB) Approaches
1
(millions of Canadian dollars)
As at
January 31, 2025
October 31, 2024
Standardized
IRB
Total
Standardized
IRB
Total
Retail
Residential secured
$
4,383
$
543,043
$
547,426
$
4,163
$
537,075
$
541,238
Qualifying revolving retail
947
176,182
177,129
866
172,203
173,069
Other retail
3,576
107,149
110,725
3,391
104,253
107,644
Total retail
8,906
826,374
835,280
8,420
813,531
821,951
Non-retail
Corporate
2,795
738,573
741,368
2,346
721,156
723,502
Sovereign
165
560,730
560,895
205
588,498
588,703
Bank
3,560
175,598
179,158
4,541
171,250
175,791
Total non-retail
6,520
1,474,901
1,481,421
7,092
1,480,904
1,487,996
Gross credit risk exposures
$
15,426
$
2,301,275
$
2,316,701
$
15,512
$
2,294,435
$
2,309,947
1
Gross credit risk exposures represent EAD and are before the effects of CRM. This table excludes securitization,
equity, and certain other credit RWA.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 34
MARKET RISK
Market risk capital is calculated using the Standardized
Approach.
The Bank continues to use Value-at-Risk (VaR) as an internal management metric to
monitor
and control market risk.
Market Risk Linkage to the Balance Sheet
The following table provides a breakdown of
the Bank’s balance sheet assets and liabilities
exposed to trading and non-trading market
risks. Market risk of assets
and liabilities included in the calculation of VaR and metrics used
for regulatory market risk capital purposes
is classified as trading market risk.
TABLE 29: MARKET RISK LINKAGE TO THE BALANCE SHEET
(millions of Canadian dollars)
As at
January 31, 2025
October 31, 2024
Non-trading market
Balance
Trading
Non-trading
Balance
Trading
Non-trading
risk – primary risk
sheet
market risk
market risk
Other
sheet
market risk
market risk
Other
sensitivity
Assets subject to market risk
Interest-bearing deposits with banks
$
136,440
$
1,004
$
135,436
$
–
$
169,930
$
1,601
$
168,329
$
–
Interest rate
Trading loans, securities, and other
198,855
197,301
1,554
–
175,770
174,232
1,538
–
Interest rate
Non-trading financial assets at
fair value through profit or loss
6,810
–
6,810
–
5,869
–
5,869
–
Equity,
foreign exchange,
interest rate
Derivatives
83,885
74,526
9,359
–
78,061
70,636
7,425
–
Equity,
foreign exchange,
interest rate
Financial assets designated at
fair value through profit or loss
6,299
–
6,299
–
6,417
–
6,417
–
Interest rate
Financial assets at fair value through
other comprehensive income
108,691
–
108,691
–
93,897
–
93,897
–
Equity,
foreign exchange,
interest rate
Debt securities at amortized cost,
net of allowance for credit losses
255,743
–
255,743
–
271,615
–
271,615
–
Foreign exchange,
interest rate
Securities purchased under
reverse repurchase agreements
222,119
8,800
213,319
–
208,217
10,488
197,729
–
Interest rate
Loans, net of allowance for
loan losses
965,312
–
965,312
–
949,549
–
949,549
–
Interest rate
Investment in Schwab
9,242
–
9,242
–
9,024
–
9,024
–
Equity
Other assets
1
2,166
–
2,166
–
2,230
–
2,230
–
Interest rate
Assets not exposed to
market risk
97,992
–
–
97,992
91,172
–
–
91,172
Total Assets
$
2,093,554
$
281,631
$
1,713,931
$
97,992
$
2,061,751
$
256,957
$
1,713,622
$
91,172
Liabilities subject to market risk
Trading deposits
$
27,198
$
23,702
$
3,496
$
–
$
30,412
$
26,827
$
3,585
$
–
Equity, interest rate
Derivatives
75,017
73,155
1,862
–
68,368
66,976
1,392
–
Equity,
foreign exchange,
interest rate
Securitization liabilities at fair value
21,181
21,181
–
–
20,319
20,319
–
–
Interest rate
Financial liabilities designated at
fair value through profit or loss
210,700
3
210,697
–
207,914
2
207,912
–
Interest rate
Deposits
1,290,486
–
1,290,486
–
1,268,680
–
1,268,680
–
Interest rate,
foreign exchange
Obligations related to securities
sold short
46,086
44,413
1,673
–
39,515
37,812
1,703
–
Interest rate
Obligations related to securities sold
under repurchase agreements
193,856
12,236
181,620
–
201,900
13,540
188,360
–
Interest rate
Securitization liabilities at amortized
cost
12,652
–
12,652
–
12,365
–
12,365
–
Interest rate
Subordinated notes and debentures
13,671
–
13,671
–
11,473
–
11,473
–
Interest rate
Other liabilities
1
34,022
–
34,022
–
34,066
–
34,066
–
Equity, interest rate
Liabilities and Equity not
exposed to market risk
168,685
–
–
168,685
166,739
–
–
166,739
Total Liabilities and Equity
$
2,093,554
$
174,690
$
1,750,179
$
168,685
$
2,061,751
$
165,476
$
1,729,536
$
166,739
1
Relates to retirement benefits, insurance, and structured entity liabilities.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 35
-70
-60
-50
-40
-30
-20
-10
0
10
20
30
40
11/1/2024
11/8/2024
11/15/2024
11/22/2024
11/29/2024
12/6/2024
12/13/2024
12/20/2024
12/30/2024
1/7/2025
1/14/2025
1/21/2025
1/28/2025
TOTAL VALUE-AT-RISK
AND TRADING NET REVENUE
(millions of Canadian dollars)
Trading net revenue
Value-at-Risk
Calculating VaR
The Bank computes total VaR on a daily basis by combining the General
Market Risk (GMR) and Idiosyncratic Debt
Specific Risk (IDSR) associated with the
Bank’s trading positions.
GMR is determined by creating a distribution
of potential changes in the market value of
the current portfolio using historical simulation.
The Bank values the
current portfolio using the market price and rate
changes of the most recent
259
trading days for equity, interest rate, foreign exchange, credit, and
commodity
products. GMR is computed as the threshold
level that portfolio losses are not expected
to exceed more than
one
out of every
100
trading days. A
one-day
holding
period is used for GMR calculation.
IDSR measures idiosyncratic (single-name) credit
spread risk for credit exposures in the trading
portfolio using Monte Carlo simulation.
The IDSR model is
based on the historical behaviour of five-year idiosyncratic
credit spreads. Similar to GMR, IDSR is
computed as the threshold level that portfolio
losses are not
expected to exceed more than
one
out of every
100
trading days. IDSR is measured for a
ten-day
holding period.
The following graph discloses daily one-day
VaR usage and trading net revenue, reported on a TEB,
within Wholesale Banking. Trading net revenue includes
trading income and net interest income related
to positions within the Bank’s market risk capital
trading books. For the first quarter ending January
31, 2025,
there were
4 days
of trading losses and trading net revenue
was positive for
94
% of the trading days, reflecting normal
trading activity. Losses in the quarter did
not exceed VaR on any trading day.
VaR is a valuable risk measure but it should be used in the
context of its limitations, for example:
●
VaR uses historical data to estimate future events, which limits
its forecasting abilities;
●
it does not provide information on losses beyond
the selected confidence level; and
●
it assumes that all positions can be liquidated
during the holding period used for VaR calculation.
The Bank continuously improves its VaR methodologies and incorporates
new risk measures in line with market
conventions, industry best practices, and
regulatory requirements.
To mitigate some of the shortcomings of VaR, the Bank uses additional metrics designed for risk
management purposes.
This includes Stress Testing as well
as sensitivities to various market risk factors.
The following table presents the end of quarter, average, high,
and low usage of TD’s VaR metric.
TABLE 30: PORTFOLIO MARKET RISK MEASURES
(millions of Canadian dollars)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
As at
Average
High
Low
Average
Average
Interest rate risk
$
18.4
$
12.4
$
19.3
$
5.3
$
11.6
$
17.8
Credit spread risk
19.6
19.8
27.4
16.3
33.8
29.4
Equity risk
8.5
8.3
10.2
6.6
7.3
7.2
Foreign exchange risk
4.9
4.1
6.1
2.4
2.8
2.4
Commodity risk
15.0
6.0
15.0
3.8
5.6
3.7
Idiosyncratic debt specific risk
22.1
19.6
22.9
15.4
20.0
20.9
Diversification effect
1
(59.0)
(41.8)
n/m
2
n/m
(46.0)
(51.2)
Total Value-at-Risk (one-day)
29.5
28.4
35.9
20.9
35.1
30.2
1
The aggregate VaR is less than the sum of the VaR
of the different risk types due to risk offsets resulting from portfolio diversification.
2
Not meaningful. It is not meaningful to compute a diversification effect because the high and low may
occur on different days for different risk types.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 36
Average VaR decreased quarter-over-quarter due to changes in fixed income
positions,
coupled with narrowing credit spreads.
Validation of VaR Model
The Bank uses a back-testing process
to compare actual profits and losses to VaR to review their consistency
with the statistical results of the VaR model.
Structural (Non-Trading) Interest Rate
Risk
The Bank’s
structural interest rate risk arises from traditional
personal and commercial banking activity
and is generally the result of mismatches between
the
maturities and repricing dates of the Bank’s assets
and liabilities. The measurement of interest
rate risk in the banking book does not
include exposures from TD’s
Wholesale Banking or Insurance businesses.
The primary measures for managing and
controlling this risk are Economic Value of Shareholders’
Equity (EVE) Sensitivity and Net Interest
Income Sensitivity
(NIIS).
The EVE Sensitivity measures the change in
the net present value of the Bank’s banking
book assets, liabilities, and certain off-balance
sheet items given a
specific interest rate shock. It reflects a measurement
of the potential present value impact on
shareholders’ equity without an assumed
term profile for the
management of the Bank’s own equity and excludes
product margins.
The NIIS measures the net interest income (NII)
change over a twelve-month horizon for
a specified change in interest rates for banking
book assets, liabilities,
and certain off-balance sheet items assuming a
constant balance sheet over the period.
The Bank’s Market Risk policy sets overall limits
on the structural interest rate risk measures.
These limits are periodically reviewed and
approved by the Risk
Committee. In addition to the Board policy limits,
book-level risk limits are set for the
Bank’s management of non-trading interest rate
risk by Risk Management.
Exposures against these limits are routinely
monitored and reported, and breaches of the
Board limits, if any, are escalated to both the Asset Liability and
Capital
Committee (ALCO) and the Risk Committee.
The following table shows the potential before-tax
impact of an immediate and sustained
100 bps increase or decrease in interest rates
on the EVE and NIIS
measures.
TABLE 31: STRUCTURAL INTEREST RATE SENSITIVITY MEASURES
(millions of Canadian dollars)
As at
January 31, 2025
October 31, 2024
January 31, 2024
EVE
NII
EVE
NII
EVE
NII
Sensitivity
Sensitivity
1
Sensitivity
Sensitivity
1
Sensitivity
Sensitivity
1
Canada
U.S.
Total
Canada
U.S.
Total
Total
Total
Total
Total
Before-tax impact of
100 bps increase in rates
$
(639)
$
(1,934)
$
(2,573)
$
134
$
463
$
597
$
(2,489)
$
720
$
(2,136)
$
969
100 bps decrease in rates
503
1,553
2,056
(178)
(611)
(789)
1,914
(983)
1,722
(1,152)
1
Represents the twelve-month NII exposure to an immediate and sustained shock in rates.
As at January 31, 2025, an immediate and
sustained 100 bps increase in interest rates
would have had a negative impact to the
Bank’s EVE of $
2,573
million, an
increase of $
84
million from last quarter, and a positive impact to the Bank’s
NII of $
597
million, a decrease of $
123
million from last quarter. An immediate and
sustained 100 bps decrease in interest rates
would have had a positive impact to the Bank’s EVE
of $
2,056
million, an increase of $
142
million from last quarter,
and a negative impact to the Bank’s NII of $
789
million, a decrease of $
194
million from last quarter. The quarter-over-quarter increase
in EVE Sensitivity is
attributed in part to FX translation combined
with a marginal increase in net fixed rate
assets held. The quarter-over-quarter decrease
in NII Sensitivity is primarily
due to additional hedging within the quarter.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 37
Liquidity Risk
The risk of having insufficient cash or collateral
to meet financial obligations and an inability
to, in a timely manner, raise funding or monetize assets at
a non-
distressed price. Financial obligations can arise
from deposit withdrawals, debt maturities,
commitments to provide credit or liquidity
support or the need to pledge
additional collateral.
TD’S LIQUIDITY RISK APPETITE
The Bank follows a disciplined liquidity management
program that is subject to risk governance
and oversight, and designed to maintain
sufficient liquidity to permit
the Bank to operate through a significant
liquidity event without relying on extraordinary
central bank assistance. The Bank seeks
to maintain a stable and
diversified funding profile that emphasizes
funding assets and contingencies to the appropriate
term.
The Bank manages liquidity risk using a
combination of quantitative and qualitative
measures with the objective of ensuring it has
sufficient liquidity to satisfy its
operational needs and client commitments
in both normal and stress conditions. The
Bank maintains buffers over regulatory minimums
prescribed by OSFI’s
Liquidity Adequacy Requirements (LAR) Guideline.
The Bank targets a 90-day survival horizon
under a combined bank-specific and
market-wide stress scenario,
and minimum surpluses over prescribed regulatory
requirements. The Bank’s funding program emphasizes
maximizing deposits as a core source
of funding and
having ready access to wholesale funding
markets across diversified terms, funding types,
and currencies. This approach helps lower
exposure to a sudden
contraction of wholesale funding capacity and
minimizes structural liquidity gaps. The Bank
also maintains a Contingency Funding
Plan (CFP) to enhance
preparedness for addressing potential liquidity
stress events. The Bank’s strategies, plans and
governance practices underpin an integrated
liquidity risk
management program that is designed to reduce
exposure to liquidity risk and maintain
compliance with regulatory requirements.
LIQUIDITY RISK MANAGEMENT RESPONSIBILITY
The Bank’s ALCO is responsible for establishing
effective management structures and practices
to ensure appropriate measurement,
management, and
governance of liquidity risk. The Global Liquidity
& Funding (GLF) Committee, a subcommittee
of the ALCO comprised of senior management
from Treasury,
Wholesale Banking and Risk Management,
identifies and monitors the Bank’s liquidity risks.
The management of liquidity risk is the responsibility
of the Senior
Executive Team member responsible for Treasury, while oversight and challenge are provided by the ALCO
and independently by Risk Management.
The Risk
Committee regularly reviews the Bank’s liquidity
position and approves the Bank’s Liquidity Risk
Management Framework biennially and the related
policies
annually.
The Bank’s liquidity risk appetite and liquidity risk
management approach have not substantially
changed from that described in the Bank’s 2024
MD&A. For a
complete discussion of liquidity risk,
refer to the “Liquidity Risk” section in the
Bank’s 2024 MD&A.
Liquid assets
The Bank’s unencumbered liquid assets may be
used to help address potential liquidity requirements
arising from stress events. Liquid asset eligibility
considers
estimated in-stress market values and trading
market depths, as well as operational, legal,
or other impediments to sale, rehypothecation
or pledging.
Assets held by the Bank to meet liquidity
requirements are summarized in the following
tables. The tables do not include assets held
within the Bank’s insurance
businesses as these are used to support insurance-specific
liabilities and capital requirements.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 38
TABLE 32: SUMMARY OF LIQUID ASSETS BY TYPE AND CURRENCY
(millions of Canadian dollars, except as noted)
As at
Securities
received as
collateral from
securities
financing and
Bank-owned
derivative
Total
Encumbered
Unencumbered
liquid assets
transactions
liquid assets
liquid assets
liquid assets
1
January 31, 2025
Cash and central bank reserves
$
34,810
$
–
$
34,810
$
1,054
$
33,756
Canadian government obligations
22,513
84,494
107,007
51,305
55,702
National Housing Act Mortgage-Backed
Securities (NHA MBS)
40,826
95
40,921
2,345
38,576
Obligations of provincial governments, public sector entities
and multilateral development banks
43,209
25,346
68,555
34,365
34,190
Corporate issuer obligations
5,567
6,710
12,277
7,318
4,959
Equities
15,734
6,726
22,460
18,793
3,667
Total Canadian dollar-denominated
162,659
123,371
286,030
115,180
170,850
Cash and central bank reserves
98,210
–
98,210
254
97,956
U.S. government obligations
82,345
72,642
154,987
64,916
90,071
U.S. federal agency obligations, including U.S.
federal agency mortgage-backed obligations
76,218
14,871
91,089
29,407
61,682
Obligations of other sovereigns, public sector entities
and multilateral development banks
65,813
47,473
113,286
50,672
62,614
Corporate issuer obligations
71,884
16,673
88,557
28,188
60,369
Equities
58,195
40,775
98,970
60,943
38,027
Total non-Canadian dollar-denominated
452,665
192,434
645,099
234,380
410,719
Total
$
615,324
$
315,805
$
931,129
$
349,560
$
581,569
October 31, 2024
Total Canadian dollar
-denominated
$
163,269
$
117,083
$
280,352
$
110,064
$
170,288
Total non-Canadian
dollar-denominated
470,820
172,185
643,005
238,336
404,669
Total
$
634,089
$
289,268
$
923,357
$
348,400
$
574,957
1
Unencumbered liquid assets include on-balance sheet assets, assets borrowed or purchased under resale agreements,
and other off-balance sheet collateral received less encumbered
liquid assets.
Total unencumbered liquid assets increased modestly by $
7
billion since October 31, 2024 largely as
a result of wholesale funding proceeds and
product related
activity.
Unencumbered liquid assets held in The
Toronto-Dominion Bank and multiple domestic and foreign subsidiaries (excluding
insurance subsidiaries) and branches
are summarized in the following table.
TABLE 33: SUMMARY OF UNENCUMBERED LIQUID ASSETS BY
BANK, SUBSIDIARIES, AND BRANCHES
(millions of Canadian dollars)
As at
January 31
October 31
2025
2024
The Toronto-Dominion Bank (Parent)
$
230,536
$
227,435
Bank subsidiaries
322,798
314,306
Foreign branches
28,235
33,216
Total
$
581,569
$
574,957
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 39
The Bank’s
monthly average liquid assets (excluding those
held in insurance subsidiaries) for the quarters
ended January
31, 2025 and October 31,
2024, are
summarized in the following table.
TABLE 34: SUMMARY OF AVERAGE LIQUID ASSETS BY TYPE AND CURRENCY
(millions of Canadian dollars, except as noted)
Average for the three months ended
Securities
received as
collateral from
securities
financing and
Total
Bank-owned
derivative
liquid
Encumbered
Unencumbered
liquid assets
transactions
assets
liquid assets
liquid assets
1
January 31, 2025
Cash and central bank reserves
$
39,022
$
–
$
39,022
$
1,020
$
38,002
Canadian government obligations
21,579
84,200
105,779
51,850
53,929
NHA MBS
40,733
96
40,829
2,181
38,648
Obligations of provincial governments, public sector
entities and multilateral development banks
42,277
26,714
68,991
36,677
32,314
Corporate issuer obligations
4,530
6,991
11,521
7,509
4,012
Equities
14,549
5,311
19,860
16,194
3,666
Total Canadian dollar-denominated
162,690
123,312
286,002
115,431
170,571
Cash and central bank reserves
100,443
–
100,443
243
100,200
U.S. government obligations
84,116
71,330
155,446
70,499
84,947
U.S. federal agency obligations, including U.S.
federal agency mortgage-backed obligations
77,191
14,793
91,984
29,573
62,411
Obligations of other sovereigns, public sector entities and
multilateral development banks
66,954
45,230
112,184
47,979
64,205
Corporate issuer obligations
71,359
17,348
88,707
30,763
57,944
Equities
61,987
39,901
101,888
58,747
43,141
Total non-Canadian dollar-denominated
462,050
188,602
650,652
237,804
412,848
Total
$
624,740
$
311,914
$
936,654
$
353,235
$
583,419
October 31, 2024
Total Canadian dollar-denominated
$
159,673
$
116,945
$
276,618
$
108,093
$
168,525
Total non-Canadian dollar-denominated
461,866
173,757
635,623
240,453
395,170
Total
$
621,539
$
290,702
$
912,241
$
348,546
$
563,695
1
Unencumbered liquid assets include on-balance sheet assets, assets borrowed or purchased under resale agreements,
and other off-balance sheet collateral received less encumbered
liquid assets.
Average unencumbered liquid assets held in
The Toronto-Dominion Bank and multiple domestic and foreign subsidiaries (excluding
insurance subsidiaries) and
branches are summarized in the following
table.
TABLE 35: SUMMARY OF AVERAGE UNENCUMBERED LIQUID ASSETS BY BANK, SUBSIDIARIES,
AND BRANCHES
(millions of Canadian dollars)
Average for the three months ended
January 31
October 31
2025
2024
The Toronto-Dominion
Bank (Parent)
$
231,628
$
223,581
Bank subsidiaries
322,355
310,596
Foreign branches
29,436
29,518
Total
$
583,419
$
563,695
ASSET ENCUMBRANCE
In the course of the Bank’s daily operations, assets
are pledged to obtain funding, support
trading and brokerage businesses, and participate
in clearing and/or
settlement systems.
A summary of on-
and off-balance sheet encumbered and unencumbered
assets (excluding assets held in insurance
subsidiaries) is
presented as follows.
TABLE 36: ENCUMBERED AND UNENCUMBERED ASSETS
(millions of Canadian dollars)
As at
Total Assets
Encumbered
Unencumbered
Total
Pledged as
Available as
Assets
Collateral
1
Other
2
Collateral
3
Other
4
January 31, 2025
Cash and due from banks
$
6,552
$
–
$
–
$
–
$
6,552
Interest-bearing deposits with banks
136,440
6,145
–
125,772
4,523
Securities, trading loans, and other
969,472
425,367
21,630
490,393
32,082
Derivatives
83,885
–
–
–
83,885
Loans, net of allowance for loan losses
946,056
88,942
104,665
41,043
711,406
Other assets
5
102,848
292
–
–
102,556
Total assets
$
2,245,253
$
520,746
$
126,295
$
657,208
$
941,004
October 31, 2024
Total assets
$
2,202,763
$
509,319
$
113,528
$
635,491
$
944,425
1
Pledged collateral refers to the portion of assets that are pledged through encumbering activities, such as repurchase agreements, securities lending, derivative contracts, and requirements associated
with participation in clearing houses and payment systems.
2
Includes assets supporting TD’s long-term funding activities such as asset securitization and issuance of covered bonds.
3
Represents assets that are readily available for use as collateral to generate funding or support collateral requirements. This category includes unencumbered loans backed by real-estate that qualify as
eligible collateral at FHLB.
4
Other unencumbered assets are not subject to any restrictions on their use to secure funding or as collateral but would not be considered immediately available.
5
Other assets include investment in Schwab, goodwill, other intangibles, land, buildings, equipment, other depreciable assets and right-of-use assets, deferred tax assets, amounts receivable from
brokers, dealers, and clients, and other assets on the balance sheet not reported in the above categories.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 40
LIQUIDITY STRESS TESTING AND CONTINGENCY
FUNDING PLANS
In addition to the Bank’s internal liquidity stress
metric, the Bank performs liquidity
stress testing on multiple alternate scenarios.
These scenarios consist of a mix
of TD-specific and market-wide stress
events designed to evaluate the potential
impact of risk factors material to the
Bank’s risk profile. Liquidity assessments are
also part of the Bank’s EWST program.
The Bank has designed CFPs for the enterprise
and material subsidiaries operating in foreign
jurisdictions. As they provide a
playbook for managing stressed liquidity conditions,
these plans are an integral component of
the Bank’s overall liquidity risk management framework.
The CFPs
outline different contingency levels based on the
severity and duration of the liquidity situation
and identify recovery actions appropriate
for each level. To support
operational readiness, CFPs provide key
steps required to implement each recovery
action. Regional CFPs identify recovery
actions to address region-specific
stress events. The actions and governance
structure outlined in the Bank’s CFP are aligned
with the Bank’s Crisis Management Recovery
Plan.
CREDIT RATINGS
Credit ratings may impact the Bank’s access to,
and cost of, raising funding and its ability
to engage in certain business activities
on a cost-effective basis. Credit
ratings and outlooks provided by rating agencies
reflect their views and methodologies and
are subject to change based on a number
of factors including the
Bank’s financial strength, competitive position, and
liquidity, as well as factors not entirely within the Bank’s control, including
conditions affecting the overall
financial services industry.
TABLE 37: CREDIT RATINGS
1
As at
January 31, 2025
Moody’s
S&P
Fitch
DBRS
Deposits/Counterparty
2
Aa2
A+
AA
AA (high)
Legacy Senior Debt
3
Aa3
A+
AA
AA (high)
Senior Debt
4
A2
A-
AA-
AA
Covered Bonds
Aaa
–
AAA
AAA
Legacy Subordinated Debt – non-NVCC
A3
A-
A
AA (low)
Tier 2 Subordinated Debt – NVCC
A3 (hyb)
BBB+
A
A
AT1 Perpetual Debt – NVCC
Baa2 (hyb)
BBB-
BBB+
–
Limited Recourse Capital Notes – NVCC
Baa2 (hyb)
BBB-
BBB+
A (low)
Preferred Shares – NVCC
Baa2 (hyb)
BBB-
BBB+
Pfd-2 (high)
Short-Term Debt (Deposits)
P-1
A-1
F1+
R-1 (high)
Outlook
Stable
Stable
Negative
Negative (Long Term);
Stable (Short Term)
1
The above ratings are for The Toronto-Dominion
Bank legal entity. Subsidiaries’ ratings are available
on the Bank’s website at http://www.td.com/investor/credit.jsp. Credit
ratings are not
recommendations to purchase, sell, or hold a financial obligation in as much as they do not comment on market
price or suitability for a particular investor. Ratings are subject
to revision
or withdrawal at any time by the rating organization.
2
Represents Moody’s Long-Term
Deposits Ratings and Counterparty Risk Rating, S&P’s Issuer Credit Rating, Fitch’s
Long-Term Deposits Rating and DBRS
’
Long-Term Issuer Rating.
3
Includes (a) Senior debt issued prior to September 23, 2018; and (b) Senior debt issued on or after September
23, 2018, which is excluded from the bank recapitalization “bail-in” regime.
4
Subject to conversion under the bank recapitalization “bail-in”
regime.
The Bank regularly reviews the level
of increased collateral its trading counterparties
would require in the event of a downgrade of
TD’s credit rating. The following
table presents the additional collateral that
could have been contractually required
to be posted to over-the-counter (OTC) derivative
counterparties as of the
reporting date in the event of one, two, and
three-notch downgrades of the Bank’s credit
ratings.
TABLE 38: ADDITIONAL COLLATERAL REQUIREMENTS FOR RATING DOWNGRADES
1
(millions of Canadian dollars)
Average for the three months ended
January 31
October 31
2025
2024
One-notch downgrade
$
83
$
78
Two-notch downgrade
772
505
Three-notch downgrade
3,028
1,334
1
The above collateral requirements are based on each OTC trading counterparty’s Credit Support Annex
and the Bank’s credit rating across applicable rating agencies.
LIQUIDITY COVERAGE RATIO
The LCR is a Basel III standard that aims to ensure
that an institution has an adequate stock
of unencumbered high-quality liquid assets
(HQLA), consisting of
cash or assets that could be converted into
cash to meet its liquidity needs for a 30-calendar
day liquidity stress scenario.
Other than during periods of financial stress,
the Bank must maintain the LCR above 100%
in accordance with the published OSFI
LAR requirement. The
Bank’s LCR is calculated according to the scenario
parameters in the LAR guideline, including
prescribed HQLA eligibility criteria and haircuts,
deposit run-off
rates, and other outflow and inflow rates.
HQLA held by the Bank that are eligible
for the LCR under the LAR are primarily
central bank reserves, sovereign-issued
or sovereign-guaranteed securities, and
high-quality securities issued by non-financial
entities.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 41
The following table summarizes the Bank’s average
daily LCR as of the relevant dates.
TABLE 39: AVERAGE LIQUIDITY COVERAGE RATIO
1
(millions of Canadian dollars, except
as noted)
Average for the three months ended
January 31, 2025
Total unweighted
Total weighted
value (average)
2
value (average)
3
High-quality liquid assets
Total high-quality liquid assets
$
n/a
4
$
381,731
Cash outflows
Retail deposits and deposits from small business
customers, of which:
$
506,165
$
32,523
Stable deposits
271,520
8,146
Less stable deposits
234,645
24,377
Unsecured wholesale funding, of which:
392,739
198,078
Operational deposits (all counterparties)
and deposits in networks of cooperative banks
137,010
32,351
Non-operational deposits (all counterparties)
235,903
145,901
Unsecured debt
19,826
19,826
Secured wholesale funding
n/a
46,318
Additional requirements, of which:
377,502
121,146
Outflows related to derivative exposures and
other collateral requirements
71,480
60,025
Outflows related to loss of funding on debt products
9,906
9,906
Credit and liquidity facilities
296,116
51,215
Other contractual funding obligations
17,851
9,844
Other contingent funding obligations
856,826
12,957
Total cash outflows
$
n/a
$
420,866
Cash inflows
Secured lending
$
237,223
$
40,346
Inflows from fully performing exposures
26,150
12,518
Other cash inflows
97,961
97,961
Total cash inflows
$
361,334
$
150,825
Average for the three months ended
January 31, 2025
October 31, 2024
Total adjusted
Total adjusted
value
value
Total high-quality liquid assets
$
381,731
$
361,452
Total net cash outflows
270,041
261,900
Liquidity coverage ratio
141
%
138
%
1
The LCR is calculated in accordance with OSFI’s LAR guideline, which is reflective of liquidity-related
requirements published by the BCBS. The LCR for the quarter ended
January 31, 2025 is calculated as an average of the 62 daily data points in the quarter.
2
Unweighted inflow and outflow values are outstanding balances maturing or callable within 30 days.
3
Weighted values are calculated after the application of respective HQLA haircuts or inflow and outflow
rates, and caps as prescribed by the OSFI LAR guideline.
4
Not applicable as per the LCR common disclosure template.
The Bank’s average LCR was 141%
for the quarter ended January 31, 2025 and
continues to meet regulatory requirements.
The Bank holds a variety of liquid assets
commensurate with its liquidity needs.
Most of these liquid assets also qualify as
HQLA under the OSFI LAR guideline.
LCR is expected to normalize as the
Bank is beginning to target more typical LCR levels.
However, the Bank expects LCR to remain elevated in
the near-term
reflecting proceeds from sale of Schwab equity
investment
13
. The average HQLA of the Bank for the
quarter ended January 31, 2025 was $382 billion
(October 31,
2024 – $361 billion), with Level 1 assets representing
86%
(October 31, 2024 – 86%). The Bank’s reported
HQLA excludes excess HQLA from U.S. Retail
operations, as required by the OSFI LAR guideline,
to reflect liquidity transfer considerations between
U.S. Retail and its affiliates as a result of the U.S.
Federal
Reserve Board’s regulations. By excluding excess
HQLA, the U.S. Retail LCR is effectively capped
at 100% prior to total Bank consolidation.
As described in the “How TD Manages Liquidity
Risk” section of the Bank’s 2024 MD&A, the Bank
manages its HQLA and other liquidity buffers to
the higher of
TD’s internal 90-day surplus requirement and its
target buffers over regulatory requirements including
those for LCR, NSFR, and the Net Cumulative
Cash Flow
metrics.
NET STABLE
FUNDING RATIO
The NSFR is a Basel III metric calculated as
the ratio of total available stable funding
(ASF) over total required stable funding (RSF)
in accordance with OSFI’s
LAR guideline. The Bank must maintain an
NSFR equal to or above 100% as required by
LAR. The Bank’s ASF comprises the Bank’s liability
and capital
instruments (including deposits and wholesale
funding). The assets that require
stable funding are based on the Bank’s on and off-balance
sheet activities and a
function of their liquidity characteristics and
the requirements of OSFI’s LAR guideline.
13
The Bank’s expectations regarding liquidity levels are based on the Bank’s assumptions
regarding certain factors, including product growth, strategic plans, pace of share repurchases
under the Bank’s normal course issuer bid (which is subject to regulatory approval, financial forecasts
and capital requirements). The Bank’s assumptions are subject to inherent
uncertainties and may vary based on factors both within and outside the Bank’s control, including general
market conditions, economic outlooks and geopolitical matters. Refer to the
“Risk Factors That May Affect Future Results” section of this document for additional information about risks and
uncertainties that may impact the Bank’s estimates.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 42
TABLE 40: NET STABLE FUNDING RATIO
1
(millions of Canadian dollars, except
as noted)
As at
January 31, 2025
Unweighted value by residual maturity
6 months to
No
Less than
less than
More than
Weighted
maturity
2
6 months
1 year
1 year
value
3
Available Stable Funding Item
Capital
$
115,431
$
n/a
$
n/a
$
13,353
$
128,783
Regulatory capital
115,431
n/a
n/a
13,353
128,783
Other capital instruments
n/a
n/a
n/a
–
–
Retail deposits and deposits from small business
customers:
464,436
77,099
37,205
31,283
566,927
Stable deposits
260,709
30,109
15,372
15,736
306,616
Less stable deposits
203,727
46,990
21,833
15,547
260,311
Wholesale funding:
261,876
418,652
96,190
244,205
469,079
Operational deposits
109,451
2,113
1
–
55,782
Other wholesale funding
152,425
416,539
96,189
244,205
413,297
Liabilities with matching interdependent assets
4
–
2,260
1,740
29,010
–
Other liabilities:
56,907
83,532
2,291
NSFR derivative liabilities
n/a
1,786
n/a
All other liabilities and equity not included
in the above categories
56,907
78,380
2,150
1,216
2,291
Total Available Stable Funding
$
1,167,080
Required Stable Funding Item
Total NSFR high-quality liquid assets
$
n/a
$
n/a
$
n/a
$
n/a
$
61,200
Deposits held at other financial institutions for
operational purposes
–
–
–
–
–
Performing loans and securities
114,833
268,173
119,272
684,248
791,519
Performing loans to financial institutions
secured by Level 1 HQLA
–
69,088
7,919
–
9,280
Performing loans to financial institutions
secured by non-Level 1
HQLA and unsecured performing loans to
financial institutions
–
73,138
8,899
10,562
22,900
Performing loans to non-financial corporate
clients, loans to retail
and small business customers, and loans
to sovereigns, central
banks and PSEs, of which:
39,391
67,531
48,423
300,528
350,384
With a risk weight of less than or equal
to 35% under the Basel II
standardized approach for credit risk
n/a
–
–
–
–
Performing residential mortgages, of which:
34,065
48,848
51,410
307,523
311,222
With a risk weight of less than or equal
to 35% under the Basel II
standardized approach for credit risk
34,065
48,848
51,410
307,523
311,222
Securities that are not in default and do not
qualify as HQLA,
including exchange-traded equities
41,377
9,568
2,621
65,635
97,733
Assets with matching interdependent liabilities
4
–
2,289
2,758
27,964
–
Other assets:
84,097
131,733
125,606
Physical traded commodities, including gold
15,343
n/a
n/a
n/a
13,443
Assets posted as initial margin for derivative
contracts and
contributions to default funds of CCPs
18,209
15,477
NSFR derivative assets
n/a
11,688
9,901
NSFR derivative liabilities before deduction
of variation margin
posted
n/a
18,890
945
All other assets not included in the above
categories
68,754
74,025
1,570
7,351
85,840
Off-balance sheet items
n/a
859,769
31,250
Total Required Stable Funding
$
1,009,575
Net Stable Funding Ratio
116
%
As at
October 31, 2024
Total Available Stable Funding
$
1,154,060
Total Required Stable Funding
994,567
Net Stable Funding Ratio
116
%
1
The NSFR is calculated in accordance with OSFI’s LAR guideline, which is reflective of liquidity-related
requirements published by the BCBS.
2
Items in the “no maturity” time bucket do not have a stated maturity. These
may include, but are not limited to, items such as capital with perpetual maturity,
non-maturity deposits, short
positions, open maturity positions, non-HQLA equities, and physical traded commodities.
3
Weighted values are calculated after the application of respective NSFR weights, as prescribed by the
OSFI LAR guideline.
4
Interdependent asset and liability items are deemed by OSFI to be interdependent and have RSF and ASF risk factors
adjusted to zero. Interdependent liabilities cannot fall due while the
asset is still on balance sheet, cannot be used to fund any other assets and principal payments from the asset cannot
be used for anything other than repaying the liability.
As such, the
only interdependent assets and liabilities that qualify for this treatment at the Bank are the liabilities arising from the
Canada Mortgage Bonds Program and their corresponding
encumbered assets.
The Bank’s NSFR for the quarter ended January
31, 2025 is 116%
(October 31, 2024 – 116%) representing a surplus of $158 billion
and adherence to regulatory
requirements. The ratio is unchanged as increases
in deposits were offset by growth in assets.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 43
FUNDING
The Bank has access to a variety of unsecured
and secured funding sources. The Bank’s
funding activities are conducted in accordance
with liquidity risk
management policies that require assets be
funded to the appropriate term and to a prudent
diversification profile.
The Bank’s primary approach to managing
funding activities is to maximize the use of
deposits raised through its personal and
commercial banking channels.
The Bank’s base of personal and commercial,
wealth, and Schwab sweep deposits make
up approximately
70
% (October 31, 2024 –
70
%) of the Bank’s total
funding.
TABLE 41: SUMMARY OF DEPOSIT FUNDING
(millions of Canadian dollars)
As at
January 31
October 31
2025
2024
P&C deposits – Canadian
$
572,347
$
566,329
P&C deposits – U.S.
1
450,820
433,406
Total
$
1,023,167
$
999,735
1
P&C deposits in U.S. are presented on a Canadian equivalent basis and therefore period-over-period movements
reflect both underlying growth and changes in the foreign exchange
rate.
WHOLESALE FUNDING
The Bank maintains various registered external
wholesale term (greater than 1 year) funding
programs to provide access to diversified
funding sources, including
asset securitization, covered bonds, and
unsecured wholesale debt. The Bank raises
term funding through Senior Notes, NHA
MBS, notes backed by credit card
receivables (Evergreen Credit Card Trust) and home equity
lines of credit (Genesis Trust II). The Bank’s wholesale
funding is diversified by geography, currency,
and funding types. The Bank raises short-term
(1 year or less) funding using certificates
of deposit, commercial paper, and up until June 28, 2024,
bankers’
acceptances.
The following table summarizes the registered
term funding and capital programs by geography, with the related
program size as at January 31, 2025.
Canada
United States
Europe
Capital Securities Program ($20 billion)
Canadian Senior Medium-Term Linked Notes
Program ($5 billion)
HELOC ABS Program (Genesis Trust II) ($7
billion)
U.S. SEC (F-3) Registered Capital and
Debt
Program (US$75 billion)
U.K. Financial Conduct Authority (FCA) Registered
Legislative Covered Bond Program ($100 billion)
FCA Registered Global Medium-Term Note Program
(US$40 billion)
The following table presents a breakdown of
the Bank’s term debt by currency and funding
type. Term funding as at January 31, 2025, was $189.7 billion (October
31, 2024 – 184.5 billion).
Note that Table 42: Long-Term Funding and Table
43: Wholesale Funding do not include
any funding accessed via repurchase transactions
or securities financing.
TABLE 42: LONG-TERM FUNDING
1
As at
January 31
October 31
Long-term funding by currency
2025
2024
Canadian dollar
25
%
25
%
U.S. dollar
35
31
Euro
30
33
British pound
5
5
Other
5
6
Total
100
%
100
%
Long-term funding by type
Senior unsecured medium-term notes
52
%
51
%
Covered bonds
40
40
Mortgage securitization
2
7
7
Term asset-backed securities
1
2
Total
100
%
100
%
1
The table includes funding issued to external investors
only.
2
Mortgage securitization excludes the residential
mortgage trading business.
The Bank maintains depositor concentration
limits in respect of short-term wholesale
deposits so that it is not overly reliant
on individual depositors for funding.
The Bank further limits short-term wholesale
funding maturity concentration in an effort to
mitigate refinancing risk during a stress event.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 44
The following table represents the remaining
maturity of various sources of funding outstanding
as at January 31, 2025 and October 31, 2024.
TABLE 43: WHOLESALE FUNDING
(millions of Canadian dollars)
As at
January 31
October 31
2025
2024
Less than
1 to 3
3 to 6
6 months
Up to 1
Over 1 to
Over
1 month
months
months
to 1 year
year
2 years
2 years
Total
Total
Deposits from banks
1
$
308
$
146
$
210
$
396
$
1,060
$
–
$
–
$
1,060
$
1,856
Bearer deposit notes
43
520
222
762
1,547
–
–
1,547
787
Certificates of deposit
7,273
24,686
27,326
41,597
100,882
156
–
101,038
101,168
Commercial paper
7,288
18,724
16,649
16,605
59,266
508
–
59,774
60,339
Covered bonds
–
1,800
10,332
144
12,276
22,232
40,813
75,321
75,399
Mortgage securitization
2
64
1,100
1,141
2,008
4,313
4,430
25,091
33,834
32,684
Legacy senior unsecured medium-term
notes
3
–
–
–
110
110
99
–
209
88
Senior unsecured medium-term notes
4
–
1,750
5,840
11,764
19,354
19,516
59,002
97,872
93,157
Subordinated notes and debentures
5
–
–
200
–
200
–
13,471
13,671
11,473
Term asset-backed
securitization
871
1,764
3,985
4,560
11,180
1,273
1,788
14,241
9,604
Other
6
31,592
1,815
18,643
7,995
60,045
832
2,160
63,037
70,951
Total
$
47,439
$
52,305
$
84,548
$
85,941
$
270,233
$
49,046
$
142,325
$
461,604
$
457,506
Of which:
Secured
$
6,378
$
4,664
$
32,513
$
13,970
$
57,525
$
27,935
$
67,696
$
153,156
$
153,855
Unsecured
41,061
47,641
52,035
71,971
212,708
21,111
74,629
308,448
303,651
Total
$
47,439
$
52,305
$
84,548
$
85,941
$
270,233
$
49,046
$
142,325
$
461,604
$
457,506
1
Only includes fixed-term commercial bank deposits.
2
Includes mortgage-backed securities (MBS) issued to external investors and Wholesale Banking residential mortgage
trading business.
3
Includes a) senior debt issued prior to September 23, 2018; and b) senior debt issued on or after September 23,
2018 which is excluded from the bank recapitalization “bail-in” regime,
including debt with an original term-to-maturity of less than 400 days.
4
Comprised of senior debt subject to conversion under the bank recapitalization “bail-in”
regime. Excludes $4.0 billion of structured notes subject to conversion under the “bail-in”
regime (October 31, 2024 – $4.4 billion).
5
Subordinated notes and debentures are not considered wholesale funding as they may be raised primarily for capital
management purposes.
6
Includes fixed-term deposits from non-bank institutions (unsecured) of $17.0 billion (October 31, 2024 – $17.3
billion) and the remaining are non-term deposits.
Excluding the Wholesale Banking residential
mortgage trading business, the Bank’s total
mortgage-backed securities issued to external
investors for the three
months ended January 31, 2025, was $1.0
billion (three months ended January 31, 2024
– $0.2 billion) and other asset-backed
securities issued for the three
months ended January 31, 2025, was $0.2
billion (three months ended January 31, 2024
– nil). Total unsecured medium-term notes and covered bond issuances
for the three months ended January 31, 2025,
were $10.8 billion and nil respectively (three
months ended January 31, 2024 – $0.7 billion and
$4.7 billion).
MATURITY ANALYSIS OF ASSETS, LIABILITIES, AND OFF-BALANCE SHEET COMMITMENTS
The following table summarizes on-balance
sheet and off-balance sheet categories by remaining
contractual maturity. Off-balance sheet commitments include
contractual obligations to make future payments
on certain lease-related commitments, certain
purchase obligations, and other liabilities.
The values of credit
instruments reported in the following
table represent the maximum amount of additional
credit that the Bank could be obligated to extend
should such instruments
be fully drawn or utilized. Since a significant
portion of guarantees and commitments
are expected to expire without being
drawn upon, the total of the contractual
amounts is not representative of expected future
liquidity requirements. These contractual
obligations have an impact on the Bank’s short-term
and long-term
liquidity and capital resource needs.
The maturity analysis presented does not depict
the degree of the Bank’s maturity transformation or
the Bank’s exposure to interest rate and liquidity risk.
The
Bank’s objective is to fund its assets appropriately
to protect against borrowing cost volatility
and potential reductions to funding market
availability. The Bank
utilizes stable non-maturity deposits (chequing
and savings accounts) and term deposits
as the primary source of long-term funding
for the Bank’s non-trading
assets including personal and business
term loans and the stable balance of revolving
lines of credit. Additionally, the Bank issues long-term funding in
respect of
such non-trading assets and raises short
term funding primarily to finance trading assets.
The liquidity of trading assets under stressed
market conditions is
considered when determining the appropriate
term of the funding.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 45
TABLE 44: REMAINING CONTRACTUAL MATURITY
(millions of Canadian dollars)
As at
January 31, 2025
No
Less than
1 to 3
3 to 6
6 to 9
9 months
Over 1 to
Over 2 to
Over
specific
1 month
months
months
months
to 1 year
2 years
5 years
5 years
maturity
Total
Assets
Cash and due from banks
$
6,552
$
–
$
–
$
–
$
–
$
–
$
–
$
–
$
–
$
6,552
Interest-bearing deposits with banks
134,675
23
–
–
–
–
–
–
1,742
136,440
Trading loans, securities, and other
1
3,874
5,151
6,767
4,271
4,601
14,146
30,941
30,644
98,460
198,855
Non-trading financial assets at fair
value through profit or loss
31
180
1,582
118
–
747
1,569
710
1,873
6,810
Derivatives
9,774
9,846
6,533
3,712
4,999
12,817
19,357
16,847
–
83,885
Financial assets designated at fair
value through profit or loss
517
230
588
326
132
1,336
1,737
1,433
–
6,299
Financial assets at fair value through
other comprehensive income
2,878
4,287
8,945
8,848
4,975
5,780
26,575
42,157
4,246
108,691
Debt securities at amortized cost,
net of allowances for credit losses
1,396
4,142
6,466
4,194
5,037
25,103
86,156
123,253
(4)
255,743
Securities purchased under
reverse repurchase agreements
2
156,940
26,509
22,642
9,135
2,817
2,291
70
–
1,715
222,119
Loans
Residential mortgages
7,478
8,653
14,748
15,395
5,712
88,490
126,833
66,794
–
334,103
Consumer instalment and other personal
1,037
1,761
2,654
3,930
6,106
28,541
89,568
36,041
63,037
232,675
Credit card
–
–
–
–
–
–
–
–
41,585
41,585
Business and government
54,279
11,215
20,965
18,781
16,552
48,485
95,686
63,275
36,365
365,603
Total loans
62,794
21,629
38,367
38,106
28,370
165,516
312,087
166,110
140,987
973,966
Allowance for loan losses
–
–
–
–
–
–
–
–
(8,654)
(8,654)
Loans, net of allowance for loan losses
62,794
21,629
38,367
38,106
28,370
165,516
312,087
166,110
132,333
965,312
Investment in Schwab
–
–
–
–
–
–
–
–
9,242
9,242
Goodwill
3
–
–
–
–
–
–
–
–
19,579
19,579
Other intangibles
3
–
–
–
–
–
–
–
–
3,163
3,163
Land, buildings, equipment, and other depreciable
assets, and right-of-use assets
3
2
2
2
6
23
81
640
3,201
6,194
10,151
Deferred tax assets
–
–
–
–
–
–
–
–
5,072
5,072
Amounts receivable from brokers, dealers, and clients
26,086
–
32
–
–
–
–
–
–
26,118
Other assets
5,157
6,182
969
397
637
324
302
158
15,397
29,523
Total assets
$
410,676
$
78,181
$
92,893
$
69,113
$
51,591
$
228,141
$
479,434
$
384,513
$
299,012
$
2,093,554
Liabilities
Trading deposits
$
1,324
$
2,582
$
2,360
$
3,722
$
2,945
$
4,609
$
7,298
$
2,358
$
–
$
27,198
Derivatives
9,519
9,620
5,674
4,291
5,208
10,051
15,276
15,378
–
75,017
Securitization liabilities at fair value
61
278
709
97
1,042
2,917
10,345
5,732
–
21,181
Financial liabilities designated at
fair value through profit or loss
46,170
50,026
50,420
45,040
18,082
666
75
–
221
210,700
Deposits
4,5
Personal
16,640
26,633
25,551
24,109
17,840
16,112
15,001
8
518,578
660,472
Banks
12,890
23
17,055
7,257
1
–
3
1
13,466
50,696
Business and government
20,415
19,054
23,636
10,086
10,346
43,681
75,062
26,934
350,104
579,318
Total deposits
49,945
45,710
66,242
41,452
28,187
59,793
90,066
26,943
882,148
1,290,486
Obligations related to securities sold short
1
3,940
2,337
1,255
832
350
7,008
14,740
14,616
1,008
46,086
Obligations related to securities sold under repurchase
agreements
2
169,636
16,544
2,460
851
455
1,246
20
–
2,644
193,856
Securitization liabilities at amortized cost
–
819
433
147
721
1,514
5,021
3,997
–
12,652
Amounts payable to brokers, dealers, and clients
26,622
–
–
–
–
–
–
–
–
26,622
Insurance contract liabilities
214
412
617
618
651
1,124
1,705
766
803
6,910
Other liabilities
11,800
11,360
7,870
1,336
1,938
1,928
1,604
5,755
6,580
50,171
Subordinated notes and debentures
–
–
200
–
–
–
–
13,471
–
13,671
Equity
–
–
–
–
–
–
–
–
119,004
119,004
Total liabilities and equity
$
319,231
$
139,688
$
138,240
$
98,386
$
59,579
$
90,856
$
146,150
$
89,016
$
1,012,408
$
2,093,554
Off-balance sheet commitments
Credit and liquidity commitments
6,7
$
22,267
$
25,516
$
36,101
$
22,451
$
24,001
$
56,363
$
180,492
$
4,794
$
2,036
$
374,021
Other commitments
8
116
211
250
194
365
1,018
1,625
377
38
4,194
Unconsolidated structured entity commitments
28
6
133
806
546
109
–
–
–
1,628
Total off-balance sheet commitments
$
22,411
$
25,733
$
36,484
$
23,451
$
24,912
$
57,490
$
182,117
$
5,171
$
2,074
$
379,843
1
Amount has been recorded according to the remaining contractual maturity of the underlying security.
2
Certain contracts considered short-term are presented in ‘less than 1 month’ category.
3
Certain non-financial assets have been recorded as having ‘no specific maturity’.
4
As the timing of demand deposits and notice deposits is non-specific and callable by the depositor,
obligations have been included as having ‘no specific maturity’.
5
Includes $
75
billion of covered bonds with remaining contractual maturities of $
2
billion in ‘over 1 to 3 months’, $
10
billion in ‘over 3 to 6 months’, $
22
billion in ‘over 1 to 2 years’,
$
33
billion in ‘over 2 to 5 years’, and $
8
billion in ‘over 5 years’.
6
Includes $
633
million in commitments to extend credit to private equity investments.
7
Commitments to extend credit exclude personal lines of credit and credit card lines, which are unconditionally cancellable
at the Bank’s discretion at any time.
8
Includes various purchase commitments as well as commitments for leases not yet commenced, and lease-related
payments
.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 46
TABLE 44: REMAINING CONTRACTUAL MATURITY
(continued)
(millions of Canadian dollars)
As at
October 31, 2024
No
Less than
1 to 3
3 to 6
6 to 9
9 months
Over 1 to
Over 2 to
Over
specific
1 month
months
months
months
to 1 year
2 years
5 years
5 years
maturity
Total
Assets
Cash and due from banks
$
6,437
$
–
$
–
$
–
$
–
$
–
$
–
$
–
$
–
$
6,437
Interest-bearing deposits with banks
165,665
23
–
–
–
–
–
–
4,242
169,930
Trading loans, securities, and other
1
3,773
4,852
6,777
4,852
4,729
11,756
28,458
27,484
83,089
175,770
Non-trading financial assets at fair value through
profit or loss
–
2
301
1,431
96
702
810
694
1,833
5,869
Derivatives
11,235
12,059
5,501
4,257
2,587
10,485
17,773
14,164
–
78,061
Financial assets designated at fair value through
profit or loss
367
251
486
613
292
1,144
1,865
1,399
–
6,417
Financial assets at fair value through other comprehensive
income
357
7,284
6,250
6,459
9,367
5,766
19,729
34,270
4,415
93,897
Debt securities at amortized cost, net of allowance
for credit losses
1,620
4,237
4,763
6,367
4,072
30,513
93,429
126,617
(3)
271,615
Securities purchased under reverse repurchase
agreements
2
134,310
35,360
19,897
10,119
5,299
1,722
482
–
1,028
208,217
Loans
Residential mortgages
7,502
11,817
13,066
16,074
4,353
86,112
132,381
60,344
–
331,649
Consumer instalment and other personal
974
1,758
2,509
4,077
6,137
28,498
88,052
35,096
61,281
228,382
Credit card
–
–
–
–
–
–
–
–
40,639
40,639
Business and government
55,591
15,405
10,866
19,340
18,982
47,488
98,362
61,904
29,035
356,973
Total loans
64,067
28,980
26,441
39,491
29,472
162,098
318,795
157,344
130,955
957,643
Allowance for loan losses
–
–
–
–
–
–
–
–
(8,094)
(8,094)
Loans, net of allowance for loan losses
64,067
28,980
26,441
39,491
29,472
162,098
318,795
157,344
122,861
949,549
Investment in Schwab
–
–
–
–
–
–
–
–
9,024
9,024
Goodwill
3
–
–
–
–
–
–
–
–
18,851
18,851
Other intangibles
3
–
–
–
–
–
–
–
–
3,044
3,044
Land, buildings, equipment, other depreciable
assets, and right-of-use assets
3
–
8
1
4
12
81
562
3,130
6,039
9,837
Deferred tax assets
–
–
–
–
–
–
–
–
4,937
4,937
Amounts receivable from brokers, dealers, and clients
22,115
–
–
–
–
–
–
–
–
22,115
Other assets
6,556
2,478
2,989
556
367
373
312
153
14,397
28,181
Total assets
$
416,502
$
95,534
$
73,406
$
74,149
$
56,293
$
224,640
$
482,215
$
365,255
$
273,757
$
2,061,751
Liabilities
Trading deposits
$
4,522
$
2,516
$
2,768
$
2,101
$
3,715
$
5,488
$
7,566
$
1,736
$
–
$
30,412
Derivatives
9,923
11,556
5,740
3,319
2,783
8,800
12,877
13,370
–
68,368
Securitization liabilities at fair value
–
1,004
328
644
97
3,313
9,443
5,490
–
20,319
Financial liabilities designated at
fair value through profit or loss
50,711
25,295
51,967
40,280
37,964
1,477
–
–
220
207,914
Deposits
4,5
Personal
14,229
31,997
30,780
16,971
19,064
15,120
15,590
7
497,909
641,667
Banks
14,714
4,287
2,434
16,343
6,954
–
3
–
12,963
57,698
Business and government
23,536
24,136
11,295
19,038
9,020
37,681
76,667
24,144
343,798
569,315
Total deposits
52,479
60,420
44,509
52,352
35,038
52,801
92,260
24,151
854,670
1,268,680
Obligations related to securities sold short
1
1,431
2,392
750
971
603
8,303
10,989
12,610
1,466
39,515
Obligations related to securities sold under repurchase
agreements
2
173,741
21,172
2,096
1,036
30
1,225
23
–
2,577
201,900
Securitization liabilities at amortized cost
119
589
819
438
144
1,843
4,823
3,590
–
12,365
Amounts payable to brokers, dealers, and clients
26,598
–
–
–
–
–
–
–
–
26,598
Insurance-related liabilities
224
448
671
671
705
1,184
1,656
727
883
7,169
Other liabilities
12,396
14,478
7,279
1,114
876
1,886
1,421
5,608
6,820
51,878
Subordinated notes and debentures
–
–
–
200
–
–
–
11,273
–
11,473
Equity
–
–
–
–
–
–
–
–
115,160
115,160
Total liabilities and equity
$
332,144
$
139,870
$
116,927
$
103,126
$
81,955
$
86,320
$
141,058
$
78,555
$
981,796
$
2,061,751
Off-balance sheet commitments
Credit and liquidity commitments
6,7
$
31,198
$
28,024
$
26,127
$
24,731
$
21,440
$
52,706
$
174,388
$
4,743
$
1,948
$
365,305
Other commitments
8
113
266
270
400
254
1,019
1,591
403
50
4,366
Unconsolidated structured entity commitments
–
–
–
125
766
490
19
–
–
1,400
Total off-balance sheet commitments
$
31,311
$
28,290
$
26,397
$
25,256
$
22,460
$
54,215
$
175,998
$
5,146
$
1,998
$
371,071
1
Amount has been recorded according to the remaining contractual maturity of the underlying security.
2
Certain contracts considered short-term are presented in ‘less than 1 month’ category.
3
Certain non-financial assets have been recorded as having ‘no specific maturity’.
4
As the timing of demand deposits and notice deposits is non-specific and callable by the depositor,
obligations have been included as having ‘no specific maturity’.
5
Includes $
75
billion of covered bonds with remaining contractual maturities of $
2
billion in ‘over 3 months to 6 months’, $
10
billion in ‘over 6 months to 9 months’, $
18
billion in ‘over 1 to
2 years’, $
37
billion in ‘over 2 to 5 years’, and $
8
billion in ‘over 5 years’.
6
Includes $
609
million in commitments to extend credit to private equity investments.
7
Commitments to extend credit exclude personal lines of credit and credit card lines, which are unconditionally cancellable
at the Bank’s discretion at any time.
8
Includes various purchase commitments as well as commitments for leases not yet commenced, and lease-related
payments.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 47
ISSB – IFRS S1 and IFRS S2
On June 26, 2023, the International Sustainability
Standards Board (ISSB) under the IFRS
Foundation, issued its first two sustainability
standards, IFRS S1
General Requirements for Disclosures of Sustainability-related
Financial Information
and IFRS S2
Climate-related Disclosures
. IFRS S1 sets out the disclosure
requirements for financially material information
about sustainability-related risks and
opportunities to meet investor information needs,
and IFRS S2 specifically
sets the disclosure requirements
for Climate-related risks and opportunities.
On December 18, 2024, the Canadian Sustainability
Standards Board (CSSB)
released its Canadian Sustainability Disclosure
Standards (CSDS), CSDS 1,
General Requirements for Disclosure
of Sustainability-related Financial Information
,
and CSDS 2,
Climate-related Disclosures
, which largely align to IFRS S1 and S2
while providing some additional reliefs on
transition. On the same date, the
Canadian Securities Administrators (CSA)
reiterated its work on a climate-related
disclosure rule and its intention to initially
adopt provisions necessary to support
climate-related disclosures. To become a regulatory requirement in Canada,
the CSSB Standards would need to be incorporated
into a CSA rule. The Bank is
currently assessing the impact of adopting
these standards and monitoring developments
from the CSA.
SECURITIZATION AND
OFF-BALANCE SHEET ARRANGEMENTS
The Bank enters into securitization and off-balance
sheet arrangements in the normal course of
operations. The Bank is involved with
structured entities (SEs) that
it sponsors, as well as entities sponsored
by third parties. Refer to “Securitization and
Off-Balance Sheet Arrangements”
section, Note 9: Transfers of Financial
Assets and Note 10: Structured Entities of
the Bank’s 2024 Annual Report for further details.
There have been no significant changes
to the Bank’s securitization
and off-balance sheet arrangements during the quarter
ended January 31, 2025.
Securitization of Third-Party Originated
Assets
Significant Unconsolidated Special Purpose
Entities
The Bank securitizes third-party originated
assets through Bank-sponsored SEs, including
its Canadian multi-seller conduits which are
not consolidated. These
Canadian multi-seller conduits securitize
Canadian originated third-party assets.
The Bank administers these multi-seller
conduits and provides liquidity facilities
as
well as securities distribution services; it
may also provide credit enhancements.
TD’s total potential exposure to loss through the
provision of liquidity facilities for
multi-seller conduits was $17.9 billion as
at January 31, 2025
(October 31, 2024 – $16.8 billion). As at January
31, 2025, the Bank had funded exposure
of
$16.3 billion under such liquidity facilities relating
to outstanding issuances of asset-backed
commercial paper (October 31, 2024
– $15.4 billion).
ACCOUNTING POLICIES AND ESTIMATES
The Bank’s
unaudited Interim Consolidated Financial
Statements have been prepared in accordance
with IFRS. For details of the Bank’s
accounting policies under
IFRS, refer to Note 2 of the Bank’s first quarter
2025 Interim Consolidated Financial Statements
and 2024
Annual Consolidated Financial Statements.
For details
of the Bank’s significant accounting judgments,
estimates, and assumptions under IFRS,
refer to Note 3 of the Bank’s first quarter
2025 Interim Consolidated
Financial Statements and the Bank’s 2024
Annual Consolidated Financial Statements.
CURRENT CHANGES IN ACCOUNTING
POLICIES
There were no new accounting policies adopted
by the Bank for the three months ended
January 31, 2025.
ACCOUNTING JUDGMENTS, ESTIMATES,
AND ASSUMPTIONS
The estimates used in the Bank’s accounting
policies are essential to understanding its
results of operations and financial condition.
Some of the Bank’s policies
require subjective, complex judgments and
estimates as they relate to matters
that are inherently uncertain. Changes in these judgments
or estimates and
changes to accounting standards and policies
could have a materially adverse impact
on the Bank’s Interim Consolidated Financial Statements.
The Bank has
established procedures to ensure that accounting
policies are applied consistently and that
the processes for changing methodologies,
determining estimates, and
adopting new accounting standards are well-controlled
and occur in an appropriate and systematic
manner.
Impairment – Expected Credit Loss Model
The ECL model requires the application of judgments,
estimates,
and assumptions in the assessment of the
current and forward-looking economic
environment.
There remains elevated economic uncertainty, and management
continues to exercise expert credit judgment
in assessing if an exposure has experienced
significant increase in credit risk since initial
recognition and in determining the amount
of ECLs at each reporting date. To the extent that certain effects are not
fully incorporated into the model calculations,
temporary quantitative and qualitative adjustments
have been applied,
including for risks related to elevated
uncertainty associated with policy and trade,
and such adjustments will be updated as appropriate
in future quarters.
FUTURE CHANGES IN ACCOUNTING
POLICIES
There were no new accounting standards
or amendments issued during the three
months ended January 31, 2025. Refer to Note
2 of the Bank’s 2024 Annual
Consolidated Financial Statements for a description
of future changes in accounting policies.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL
REPORTING
During the most recent interim period, there
have been no changes in the Bank’s policies and
procedures and other processes that
comprise its internal control
over financial reporting, that have materially affected,
or are reasonably likely to materially
affect, the Bank’s internal control over financial
reporting. Refer to
Note 2 and Note 3 of the Bank’s first quarter
2025 Interim Consolidated Financial Statements
for further information regarding the Bank’s changes
to accounting
policies, procedures, and estimates.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 48
GLOSSARY
Financial and Banking Terms
Adjusted Results:
Non-GAAP financial measures
used to assess each of 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. The
items of note relate to items which management
does not believe are indicative
of underlying business performance.
Allowance for Credit Losses:
Represent expected credit losses (ECLs)
on
financial assets, including any off-balance sheet
exposures, at the balance
sheet date. Allowance for credit losses consists
of Stage 3 allowance for
impaired financial assets and Stage 2 and
Stage 1 allowance for performing
financial assets and off-balance sheet instruments.
The allowance is increased
by the provision for credit losses,
decreased by write-offs net of recoveries and
disposals,
and impacted by foreign exchange.
Amortized Cost:
The amount at which a financial asset or
financial liability is
measured at initial recognition minus principal
repayments, plus or minus the
cumulative amortization, using EIRM, of any
differences between the initial
amount and the maturity amount, and
minus any reduction for impairment.
Assets under Administration (AUA):
Assets that are beneficially owned by
customers where the Bank provides services
of an administrative nature, such
as the collection of investment income and
the placing of trades on behalf of the
clients (where the client has made his or
her own investment selection). The
majority of these assets are not reported on
the Bank’s Consolidated Balance
Sheet.
Assets under Management (AUM):
Assets that are beneficially owned by
customers, managed by the Bank, where
the Bank has discretion to make
investment selections on behalf of the
client (in accordance with an investment
policy). In addition to the TD family of mutual
funds, the Bank manages assets
on behalf of individuals, pension funds, corporations,
institutions, endowments
and foundations. These assets are not reported
on the Bank’s Consolidated
Balance Sheet. Some assets under management
that are also administered by
the Bank are included in assets under administration.
Asset-Backed Commercial Paper (ABCP):
A form of commercial paper that is
collateralized by other financial assets.
Institutional investors usually purchase
such instruments in order to diversify their assets
and generate short-term
gains.
Asset-Backed Securities (ABS):
A security whose value and income
payments are derived from and collateralized
(or “backed”) by a specified pool
of underlying assets.
Average Common Equity:
Average common equity for the business
segments
reflects the 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.
Average Interest-Earning Assets:
A non-GAAP financial measure that depicts
the Bank’s financial position, and is calculated
as the average carrying value of
deposits with banks, loans and securities based
on daily balances for the period
ending October 31 in each fiscal year.
Basic Earnings per Share (EPS)
: A performance measure calculated by
dividing net income attributable to common
shareholders by the weighted
average number of common shares outstanding
for the period. Adjusted basic
EPS is calculated in the same manner using
adjusted net income.
Basis Points
(bps):
A unit equal to 1/100 of 1%. Thus, a 1%
change is equal to
100 basis points.
Book Value per Share:
A measure calculated by dividing common
shareholders’
equity by number of common shares at the
end of the period.
Carrying Value:
The value at which an asset or liability
is carried at on the
Consolidated Balance Sheet.
Catastrophe Claims:
Insurance claims that relate to any single
event that
occurred in the period, for which the aggregate
insurance claims are equal to
or greater than an internal threshold of $5
million before reinsurance. The
Bank’s internal threshold may change from time
to time.
Collateralized Mortgage Obligation (CMO):
They are collateralized debt
obligations consisting of mortgage-backed
securities that are separated and
issued as different classes of mortgage pass-through
securities with different
terms, interest rates, and risks. CMOs by private
issuers are collectively
referred to as non-agency CMOs.
Common Equity Tier 1 (CET1) Capital:
This is a primary Basel III capital
measure comprised mainly of common equity, retained earnings and
qualifying
non-controlling interest in subsidiaries. Regulatory
deductions made to arrive
at the CET1 Capital include goodwill
and intangibles, unconsolidated
investments in banking, financial, and insurance
entities, deferred tax assets,
defined benefit pension fund assets, and
shortfalls in allowances.
Common Equity Tier 1 (CET1) Capital Ratio:
CET1 Capital ratio represents
the predominant measure of capital adequacy
under Basel III
and equals CET1 Capital divided by RWA.
Compound Annual Growth Rate (CAGR):
A measure of growth over multiple
time periods from the initial investment value
to the ending investment value
assuming that the investment has been compounding
over the time period.
Credit Valuation Adjustment (CVA):
CVA represents a capital charge that
measures credit risk due to default of derivative
counterparties. This charge
requires banks to capitalize for the potential
changes in counterparty credit
spread for the derivative portfolios.
Diluted EPS:
A performance measure calculated by dividing
net income
attributable to common shareholders by the
weighted average number of
common shares outstanding adjusting
for the effect of all potentially dilutive
common shares. Adjusted diluted EPS is
calculated in the same manner using
adjusted net income.
Dividend Payout Ratio:
A ratio represents the percentage of Bank’s earnings
being paid to common shareholders in
the form of dividends and is calculated
by dividing common dividends by net income
available to common
shareholders. Adjusted dividend payout ratio
is calculated in the same manner
using adjusted net income.
Dividend Yield:
A ratio calculated as the dividend per
common share for the
year divided by the daily average closing
stock price during the year.
Effective Income Tax Rate:
A rate and performance indicator calculated
by
dividing the provision for income taxes as a percentage
of net income before
taxes. Adjusted effective income tax rate is calculated
in the same manner
using adjusted results.
Effective Interest Rate (EIR):
The rate that discounts expected future cash
flows for the expected life of the financial instrument
to its carrying value. The
calculation takes into account the contractual
interest rate, along with any fees
or incremental costs that are directly
attributable to the instrument and all other
premiums or discounts.
Effective Interest Rate Method (EIRM):
A technique for calculating the actual
interest rate in a period based on the amount
of a financial instrument’s book
value at the beginning of the accounting period.
Under EIRM,
the effective
interest rate, which is a key component of
the calculation, discounts the
expected future cash inflows and outflows expected
over the life of a financial
instrument.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 49
Efficiency Ratio:
The efficiency ratio measures operating efficiency and
is
calculated by taking the non-interest expenses
as a percentage of total revenue.
A lower ratio indicates a more efficient business
operation. Adjusted efficiency
ratio is calculated in the same manner using
adjusted non-interest expenses
and total revenue.
Enhanced Disclosure Task Force (EDTF):
Established by the Financial
Stability Board in May 2012, comprised of
banks, analysts, investors, and
auditors, with the goal of enhancing the risk
disclosures of banks and other
financial institutions.
Expected Credit Losses (ECLs):
ECLs are the probability-weighted present
value of expected cash shortfalls over
the remaining expected life of the
financial instrument and considers reasonable
and supportable information
about past events, current conditions, and forecasts
of future events and
economic conditions that impact the Bank’s
credit risk assessment.
Fair Value:
The price that would be received to sell an
asset or paid to transfer
a liability in an orderly transaction between
market participants at the
measurement date, under current market
conditions.
Fair value through other comprehensive
income (FVOCI):
Under IFRS 9, if
the asset passes the contractual cash
flows test (named SPPI), the business
model assessment determines how the instrument
is classified. If the instrument
is being held to collect contractual cash flows,
that is, if it is not expected to be
sold, it is measured as amortized cost. If the
business model for the instrument
is to both collect contractual cash flows and
potentially sell the asset, it is
measured at FVOCI.
Fair value through profit or loss (FVTPL):
Under IFRS 9, the classification is
dependent on two tests, a contractual
cash flow test (named SPPI) and a
business model assessment. Unless the
asset meets the requirements of both
tests, it is measured at fair value with all
changes in fair value reported in profit
or loss.
Federal Deposit Insurance Corporation
(FDIC):
A U.S. government
corporation which provides deposit insurance
guaranteeing the safety of a
depositor’s accounts in member banks.
The FDIC also examines and
supervises certain financial institutions for
safety and soundness, performs
certain consumer-protection functions, and
manages banks in receiverships
(failed banks).
Forward Contracts:
Over-the-counter contracts between two parties
that oblige
one party to the contract to buy and the other
party to sell an asset for a fixed
price at a future date.
Futures:
Exchange-traded contracts to buy or
sell a security at a predetermined
price on a specified future date.
Hedging:
A risk management technique intended
to mitigate the Bank’s
exposure to fluctuations in interest rates,
foreign currency exchange rates, or
other market factors. The elimination or
reduction of such exposure is
accomplished by engaging in capital markets
activities to establish offsetting
positions.
Impaired Loans:
Loans where, in management’s opinion,
there has been a
deterioration of credit quality to the extent
that the Bank no longer has
reasonable assurance as to the timely collection
of the full amount of principal
and interest.
Loss Given Default (LGD):
It is the amount of the loss the Bank
would likely
incur when a borrower defaults on a loan,
which is expressed as a percentage
of exposure at default.
Mark-to-Market (MTM):
A valuation that reflects current market rates
as at the
balance sheet date for financial instruments
that are carried at fair value.
Master Netting Agreements:
Legal agreements between two parties
that have
multiple derivative contracts with each other
that provide for the net settlement
of all contracts through a single payment, in
a single currency, in the event of
default or termination of any one contract.
Net Corporate Expenses:
Non-interest expenses related to corporate
service
and control groups which are not allocated to a
business segment.
Net Interest Margin:
A non-GAAP ratio calculated as net interest
income as a
percentage of average interest-earning assets
to measure performance. This
metric is an indicator of the profitability of
the Bank’s earning assets less the
cost of funding. Adjusted net interest
margin is calculated in the same manner
using adjusted net interest income.
Non-Viability Contingent Capital (NVCC):
Instruments (preferred shares and
subordinated debt) that contain a feature or
a provision that allows the financial
institution to either permanently convert these
instruments into common shares
or fully write-down the instrument, in the event
that the institution is no longer
viable.
Notional:
A reference amount on which payments
for derivative financial
instruments are based.
Office of the Superintendent of Financial
Institutions Canada (OSFI):
The
regulator of Canadian federally chartered
financial institutions and federally
administered pension plans.
Options:
Contracts in which the writer of the option grants
the buyer the future
right, but not the obligation, to buy or to sell a
security, exchange rate, interest
rate, or other financial instrument or commodity
at a predetermined price at or
by a specified future date.
Price-Earnings Ratio:
A ratio calculated by dividing the closing
share price by
EPS based on a trailing four quarters to indicate
market performance.
Adjusted
price-earnings ratio is calculated in the
same manner using adjusted EPS.
Probability of Default (PD):
It is the likelihood that a borrower will not
be able
to meet its scheduled repayments.
Provision for Credit Losses (PCL):
Amount added to the allowance for credit
losses to bring it to a level that management
considers adequate to reflect
expected credit-related losses on its
portfolio.
Return on Common Equity (ROE):
The consolidated Bank ROE is calculated
as net income available to common shareholders
as a percentage of average
common shareholders’
equity,
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. Adjusted ROE is calculated in
the same manner using adjusted net
income.
Return on Risk-weighted Assets:
Net income available to common
shareholders as a percentage of average risk-weighted
assets.
Return on Tangible Common Equity (ROTCE):
A non-GAAP financial
measure 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
Tangible common
equity. Adjusted ROTCE is calculated in the same manner using
adjusted net
income.
Both measures can be utilized in assessing
the Bank’s use of equity.
Risk-Weighted Assets (RWA):
Assets calculated by applying a regulatory
risk-weight factor to on and off-balance sheet
exposures. The risk-weight
factors are established by the OSFI to
convert on and off-balance sheet
exposures to a comparable risk level.
Securitization:
The process by which financial assets,
mainly loans, are
transferred to structures,
which normally issue a series of asset-backed
securities to investors to fund the purchase
of loans.
Solely Payments of Principal and Interest
(SPPI):
Contractual cash flows of
a financial asset that are consistent with a
basic lending arrangement.
Swaps:
Contracts that involve the exchange of fixed
and floating interest rate
payment obligations and currencies on a notional
principal for a specified
period of time.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 50
Tangible common equity (TCE):
A non-GAAP financial measure calculated
as
common shareholders’ equity less goodwill,
imputed goodwill, and intangibles
on an investment in Schwab and TD
Ameritrade and other acquired intangible
assets, net of related deferred tax liabilities.
It can be utilized in assessing the
Bank’s use of equity.
Taxable Equivalent Basis (TEB):
A calculation method (not defined in GAAP)
that increases revenues and the provision
for income taxes on certain tax-
exempt securities to an equivalent before-tax
basis to facilitate comparison of
net interest income from both taxable and
tax-exempt sources.
Tier 1 Capital Ratio:
Tier 1 Capital represents the more permanent
forms of
capital, consisting primarily of common
shareholders’
equity, retained earnings,
preferred shares and innovative instruments.
Tier 1 Capital ratio is calculated as
Tier 1 Capital divided by RWA.
Total Capital Ratio:
Total Capital is defined as the total of net Tier 1 and Tier 2
Capital. Total Capital ratio is calculated as Total Capital divided by RWA.
Total Shareholder Return (TSR):
The total return earned on an investment
in
TD’s common shares. The return measures the
change in shareholder value,
assuming dividends paid are reinvested in
additional shares.
Trading-Related Revenue:
A non-GAAP financial measure that is
the total of
trading income (loss), net interest income on
trading positions, and income from
financial instruments designated at FVTPL
that are managed within a trading
portfolio. Trading-related revenue (TEB) in the Wholesale
Banking segment is
also a non-GAAP financial measure and is
calculated in the same manner,
including TEB adjustments. Both are used
for measuring trading performance.
Value-at-Risk (VaR):
A metric used to monitor and control overall
risk levels
and to calculate the regulatory capital required
for market risk in trading
activities. VaR measures the adverse impact that potential changes
in market
rates and prices could have on the value
of a portfolio over a specified period of
time.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 51
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
INTERIM CONSOLIDATED BALANCE
SHEET
(unaudited)
(As at and in millions of Canadian dollars)
January 31, 2025
October 31, 2024
ASSETS
Cash and due from banks
$
6,552
$
6,437
Interest-bearing deposits with banks
136,440
169,930
142,992
176,367
Trading loans, securities, and other
(Note 4)
198,855
175,770
Non-trading financial assets at fair value through profit or
loss
(Note 4)
6,810
5,869
Derivatives
(Note 4)
83,885
78,061
Financial assets designated at fair value through profit or
loss
(Note 4)
6,299
6,417
Financial assets at fair value through other comprehensive income
(Note 4)
108,691
93,897
404,540
360,014
Debt securities at amortized cost, net of allowance for
credit losses (Notes 4, 5)
255,743
271,615
Securities purchased under reverse repurchase agreements
222,119
208,217
Loans (Notes 4, 6)
Residential mortgages
334,103
331,649
Consumer instalment and other personal
232,675
228,382
Credit card
41,585
40,639
Business and government
365,603
356,973
973,966
957,643
Allowance for loan losses
(Note 6)
(8,654)
(8,094)
Loans, net of allowance for loan losses
965,312
949,549
Other
Investment in Schwab
(Note 7)
9,242
9,024
Goodwill
19,579
18,851
Other intangibles
3,163
3,044
Land, buildings, equipment, other depreciable assets and
right-of-use assets
10,151
9,837
Deferred tax assets
5,072
4,937
Amounts receivable from brokers, dealers, and clients
26,118
22,115
Other assets
(Note 8)
29,523
28,181
102,848
95,989
Total assets
$
2,093,554
$
2,061,751
LIABILITIES
Trading deposits
(Notes 4, 9)
$
27,198
$
30,412
Derivatives
(Note 4)
75,017
68,368
Securitization liabilities at fair value
(Note 4)
21,181
20,319
Financial liabilities designated at fair value through
profit or loss
(Notes 4, 9)
210,700
207,914
334,096
327,013
Deposits (Notes 4, 9)
Personal
660,472
641,667
Banks
50,696
57,698
Business and government
579,318
569,315
1,290,486
1,268,680
Other
Obligations related to securities sold short
(Note 4)
46,086
39,515
Obligations related to securities sold under repurchase agreements
193,856
201,900
Securitization liabilities at amortized cost
(Note 4)
12,652
12,365
Amounts payable to brokers, dealers, and clients
26,622
26,598
Insurance contract liabilities
6,910
7,169
Other liabilities
(Note 10)
50,171
51,878
336,297
339,425
Subordinated notes and debentures (Notes 4, 11)
13,671
11,473
Total liabilities
1,974,550
1,946,591
EQUITY
Shareholders’ Equity
Common shares
(Note 12)
25,528
25,373
Preferred shares and other equity instruments
(Note 12)
11,138
10,888
Treasury – common shares
(Note 12)
(38)
(17)
Treasury – preferred shares and other
equity instruments
(Note 12)
(51)
(18)
Contributed surplus
189
204
Retained earnings
71,718
70,826
Accumulated other comprehensive income (loss)
10,520
7,904
Total equity
119,004
115,160
Total liabilities and equity
$
2,093,554
$
2,061,751
The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 52
INTERIM CONSOLIDATED STATEMENT OF INCOME (LOSS)
(unaudited)
(millions of Canadian dollars, except
as noted)
For the three months ended
January 31
January 31
2025
2024
Interest income
1
(Note 19)
Loans
$
13,467
$
12,995
Reverse repurchase agreements
2,606
2,938
Securities
Interest
4,702
5,276
Dividends
523
548
Deposits with banks
1,574
1,056
22,872
22,813
Interest expense (Note 19)
Deposits
11,223
11,484
Securitization liabilities
228
257
Subordinated notes and debentures
135
94
Repurchase agreements and short sales
2,990
3,205
Other
430
285
15,006
15,325
Net interest income
7,866
7,488
Non-interest income
Investment and securities services
2,014
1,745
Credit fees
419
569
Trading income (loss)
1,305
925
Service charges
686
654
Card services
773
762
Insurance revenue
1,870
1,676
Other income (loss)
(Note 5)
(884)
(105)
6,183
6,226
Total revenue
14,049
13,714
Provision for (recovery of) credit losses
(Note 6)
1,212
1,001
Insurance service expenses
1,507
1,366
Non-interest expenses
Salaries and employee benefits
4,650
4,314
Occupancy, including depreciation
512
468
Technology and equipment, including depreciation
689
638
Amortization of other intangibles
187
185
Communication and marketing
341
325
Restructuring charges
–
291
Brokerage-related and sub-advisory fees
129
130
Professional, advisory and outside services
893
565
Other
669
1,114
8,070
8,030
Income before income taxes and share
of net income from investment
in Schwab
3,260
3,317
Provision for (recovery of) income taxes
698
634
Share of net income from investment
in Schwab (Note 7)
231
141
Net income (loss)
2,793
2,824
Preferred dividends and distributions
on other equity instruments
86
74
Net income (loss) attributable to common
shareholders
$
2,707
$
2,750
Earnings (loss) per share
(Canadian dollars)
(Note 16)
Basic
$
1.55
$
1.55
Diluted
1.55
1.55
Dividends per common share
(Canadian dollars)
1.05
1.02
1
Includes $
20,746
million and $
20,499
million, for the three months ended January 31, 2025 and January 31, 2024, respectively,
which have been calculated based on the effective
interest rate method (EIRM).
The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 53
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(unaudited)
(millions of Canadian dollars)
For the three months ended
January 31
January 31
2025
2024
Net income
$
2,793
$
2,824
Other comprehensive income (loss)
Items that will be subsequently reclassified
to net income
Net change in unrealized gain/(loss) on
financial assets at fair value
through other comprehensive income
Change in unrealized gain/(loss)
134
339
Reclassification to earnings of net loss/(gain)
9
(6)
Changes in allowance for credit losses recognized
in earnings
(1)
(1)
Income taxes relating to:
Change in unrealized gain/(loss)
(35)
(85)
Reclassification to earnings of net loss/(gain)
2
3
109
250
Net change in unrealized foreign currency
translation gain/(loss) on
investments in foreign operations, net
of hedging activities
Unrealized gain/(loss)
5,219
(3,883)
Net gain/(loss) on hedges
(3,576)
2,432
Income taxes relating to:
Net gain/(loss) on hedges
993
(676)
2,636
(2,127)
Net change in gain/(loss) on derivatives
designated as cash flow hedges
Change in gain/(loss)
1,489
275
Reclassification to earnings of loss/(gain)
(1,184)
2,440
Income taxes relating to:
Change in gain/(loss)
(381)
(89)
Reclassification to earnings of loss/(gain)
281
(658)
205
1,968
Share of other comprehensive income (loss)
from investment in Schwab
(338)
882
Items that will not be subsequently reclassified
to net income
Remeasurement gain/(loss) on employee
benefit plans
Gain/(loss)
23
(227)
Income taxes
(5)
63
18
(164)
Change in net unrealized gain/(loss)
on equity securities designated at
fair value through other comprehensive income
Change in net unrealized gain/(loss)
14
200
Income taxes
(3)
(54)
11
146
Gain/(loss) from changes in fair value due
to own credit risk on
financial liabilities designated at fair value
through profit or loss
Gain/(loss)
(10)
(54)
Income taxes
3
15
(7)
(39)
Total other comprehensive income (loss)
2,634
916
Total comprehensive income (loss)
$
5,427
$
3,740
Attributable to:
Common shareholders
$
5,341
$
3,666
Preferred shareholders and other equity instrument
holders
86
74
The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 54
INTERIM CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
(unaudited)
(millions of Canadian dollars)
For the three months ended
January 31, 2025
January 31, 2024
Common shares (Note 12)
Balance at beginning of period
$
25,373
$
25,434
Proceeds from shares issued on exercise of stock options
25
42
Shares issued as a result of dividend reinvestment plan
130
137
Purchase of shares for cancellation and other
–
(295)
Balance at end of period
25,528
25,318
Preferred shares and other equity instruments (Note 12)
Balance at beginning of period
10,888
10,853
Issuance of shares and other equity instruments
750
–
Redemption of shares and other equity instruments
(500)
–
Balance at end of period
11,138
10,853
Treasury – common shares (Note 12)
Balance at beginning of period
(17)
(64)
Purchase of shares
(3,504)
(3,096)
Sale of shares
3,483
3,102
Balance at end of period
(38)
(58)
Treasury – preferred shares and other equity instruments (Note 12)
Balance at beginning of period
(18)
(65)
Purchase of shares and other equity instruments
(1,120)
(98)
Sale of shares and other equity instruments
1,087
136
Balance at end of period
(51)
(27)
Contributed surplus
Balance at beginning of period
204
155
Net premium (discount) on sale of treasury instruments
(12)
13
Issuance of stock options, net of options exercised
–
5
Other
(3)
(1)
Balance at end of period
189
172
Retained earnings
Balance at beginning of period
70,826
73,008
Impact of reclassification of securities supporting insurance operations
related to the adoption of IFRS 17
1
–
(10)
Net income attributable to equity instrument holders
2,793
2,824
Common dividends
(1,836)
(1,807)
Preferred dividends and distributions on other equity instruments
(86)
(74)
Share and other equity instrument issue expenses
(2)
–
Net premium on repurchase of common shares and redemption of preferred shares and other
equity instruments
(Note 12)
–
(1,428)
Remeasurement gain/(loss) on employee benefit plans
18
(164)
Realized gain/(loss) on equity securities designated at fair value through
other comprehensive income
5
(2)
Balance at end of period
71,718
72,347
Accumulated other comprehensive income (loss)
Net unrealized gain/(loss) on financial assets at fair value through other comprehensive income:
Balance at beginning of period
(208)
(413)
Impact of reclassification of securities supporting insurance operations
related to the adoption of IFRS 17
1
–
10
Other comprehensive income (loss)
110
241
Allowance for credit losses
(1)
(1)
Balance at end of period
(99)
(163)
Net unrealized gain/(loss) on equity securities designated at fair value through
other comprehensive income:
Balance at beginning of period
35
(127)
Other comprehensive income (loss)
16
144
Reclassification of loss/(gain) to retained earnings
(5)
2
Balance at end of period
46
19
Gain/(loss) from changes in fair value due to own credit risk on financial liabilities
designated at fair value through profit or loss:
Balance at beginning of period
(22)
(38)
Other comprehensive income (loss)
(7)
(39)
Balance at end of period
(29)
(77)
Net unrealized foreign currency translation gain/(loss) on investments in foreign
operations, net of hedging activities:
Balance at beginning of period
12,893
12,677
Other comprehensive income (loss)
2,636
(2,127)
Balance at end of period
15,529
10,550
Net gain/(loss) on derivatives designated as cash flow hedges:
Balance at beginning of period
(2,924)
(5,472)
Other comprehensive income (loss)
205
1,968
Balance at end of period
(2,719)
(3,504)
Share of accumulated other comprehensive income (loss) from investment in Schwab
(2,208)
(2,995)
Total accumulated other comprehensive income
10,520
3,830
Total equity
$
119,004
$
112,435
1
Refer to Note 4 of the Bank’s 2024 Annual Consolidated Financial Statements for details on the adoption
of IFRS 17.
The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 55
INTERIM CONSOLIDATED STATEMENT
OF CASH FLOWS
(unaudited)
(millions of Canadian dollars)
For the three months ended
January 31
January 31
2025
2024
Cash flows from (used in) operating activities
Net income
$
2,793
$
2,824
Adjustments to determine net cash flows from (used in) operating
activities
Provision for (recovery of) credit losses
(Note 6)
1,212
1,001
Depreciation
345
314
Amortization of other intangibles
187
185
Net securities loss/(gain)
(Note 5)
920
(6)
Share of net income from investment in Schwab
(Note 7)
(231)
(141)
Deferred taxes
(70)
(67)
Changes in operating assets and liabilities
Interest receivable and payable
(Notes 8, 10)
(237)
164
Securities sold under repurchase agreements
(8,044)
7,275
Securities purchased under reverse repurchase agreements
(13,902)
5,254
Securities sold short
6,571
(1,786)
Trading loans, securities, and other
(23,085)
(9,430)
Loans net of securitization and sales
(17,124)
(9,413)
Deposits
18,592
(17,282)
Derivatives
825
9,241
Non-trading financial assets at fair value through profit or
loss
(941)
355
Financial assets and liabilities designated at fair value through
profit or loss
2,904
(12,170)
Securitization liabilities
1,149
1,769
Current taxes
(1,581)
1,568
Brokers, dealers, and clients amounts receivable and
payable
(3,979)
(1,214)
Other, including unrealized foreign currency
translation loss/(gain)
(16,583)
1,447
Net cash from (used in) operating activities
(50,279)
(20,112)
Cash flows from (used in) financing activities
Issuance of subordinated notes and debentures
(Note 11)
2,112
–
Redemption or repurchase of subordinated notes and
debentures
(67)
(24)
Common shares issued, net of issuance costs
(Note 12)
22
37
Repurchase of common shares, including tax on net value
of share repurchases
(Note 12)
–
(1,723)
Preferred shares and other equity instruments issued,
net of issuance costs
(Note 12)
748
–
Redemption of preferred shares and other equity instruments
(Note 12)
(500)
–
Sale of treasury shares and other equity instruments
(Note 12)
4,558
3,251
Purchase of treasury shares and other equity instruments
(Note 12)
(4,624)
(3,194)
Dividends paid on shares and distributions paid on other equity
instruments
(1,792)
(1,744)
Repayment of lease liabilities
(169)
(167)
Net cash from (used in) financing activities
288
(3,564)
Cash flows from (used in) investing activities
Interest-bearing deposits with banks
39,040
21,136
Activities in financial assets at fair value through other comprehensive
income
Purchases
(20,977)
(7,301)
Proceeds from maturities
8,306
3,308
Proceeds from sales
840
738
Activities in debt securities at amortized cost
Purchases
(7,133)
(3,238)
Proceeds from maturities
12,590
8,707
Proceeds from sales
17,752
498
Net purchases of land, buildings, equipment, other depreciable
assets, and other intangibles
(497)
(471)
Net cash acquired from divestitures
–
70
Net cash from (used in) investing activities
49,921
23,447
Effect of exchange rate changes on cash and
due from banks
185
(159)
Net increase (decrease) in cash and due from banks
115
(388)
Cash and due from banks at beginning of period
6,437
6,721
Cash and due from banks at end of period
$
6,552
$
6,333
Supplementary disclosure of cash flows from operating
activities
Amount of income taxes paid (refunded) during the period
$
1,321
$
582
Amount of interest paid during the period
15,478
15,178
Amount of interest received during the period
22,584
22,282
Amount of dividends received during the period
626
676
The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 56
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1: NATURE OF OPERATIONS
CORPORATE INFORMATION
The Toronto-Dominion Bank is a bank chartered under the
Bank Act (Canada)
. The shareholders of a bank are not, as
shareholders, liable for any liability, act, or
default of the bank except as otherwise provided
under the
Bank Act (Canada)
. The Toronto-Dominion Bank and its subsidiaries are collectively known
as
TD Bank Group (“TD” or the “Bank”). The Bank
was formed through the amalgamation on
February 1, 1955,
of The Bank of Toronto (chartered in 1855) and The
Dominion Bank (chartered in 1869). The Bank
is incorporated and domiciled in Canada
with its registered and principal business
offices located at 66 Wellington
Street West, Toronto, Ontario. TD serves customers in four business segments
operating in a number of locations in key
financial centres around the globe:
Canadian Personal and Commercial
Banking, U.S. Retail, Wealth Management and
Insurance, and Wholesale Banking.
BASIS OF PREPARATION
The accompanying Interim Consolidated
Financial Statements and accounting principles
followed by the Bank have been prepared in
accordance with
International Financial Reporting Standards
(IFRS), as issued by the International
Accounting Standards Board (IASB), including
the accounting requirements of
the Office of the Superintendent of Financial Institutions
Canada (OSFI).
The Interim Consolidated Financial Statements
are presented in Canadian dollars, unless
otherwise indicated.
These Interim Consolidated Financial Statements
were prepared on a condensed basis in
accordance with International Accounting Standard
34,
Interim
Financial Reporting
using the accounting policies as described
in Note 2 of the Bank’s 2024 Annual Consolidated
Financial Statements. Certain comparative
amounts have been revised to conform
with the presentation adopted in the current period.
The preparation of the Interim Consolidated
Financial Statements requires that management
make judgments, estimates, and assumptions
regarding the
reported amount of assets, liabilities, revenue
and expenses, and disclosure of contingent
assets and liabilities, as further described in
Note 3 of the Bank’s 2024
Annual Consolidated Financial Statements
and in Note 3 of this report. Accordingly, actual results may differ from estimated
amounts as future confirming events
occur.
The Bank’s Interim Consolidated Financial Statements
have been prepared using uniform accounting
policies for like transactions and events
in similar
circumstances. All intercompany transactions,
balances,
and unrealized gains and losses on
transactions are eliminated on consolidation.
The Interim Consolidated Financial Statements
for the three months ended January 31, 2025,
were approved and authorized for issue by
the Bank’s Board of
Directors, in accordance with a recommendation
of the Audit Committee, on February
26, 2025.
As the Interim Consolidated Financial Statements
do not include all of the disclosures normally
provided in the Annual Consolidated Financial
Statements, they
should be read in conjunction with the Bank’s 2024
Annual Consolidated Financial Statements
and the accompanying Notes, and
the shaded sections of the 2024
Management’s Discussion and Analysis (MD&A).
The risk management policies and procedures
of the Bank are provided in the MD&A.
The shaded sections of
the “Managing Risk” section of the MD&A in
this report,
relating to market, liquidity, and insurance risks, are an integral
part of these Interim Consolidated Financial
Statements, as permitted by IFRS.
NOTE 2: CURRENT AND FUTURE
CHANGES IN ACCOUNTING POLICIES
CURRENT CHANGES IN ACCOUNTING
POLICIES
There were no new accounting policies adopted
by the Bank for the three months ended
January 31, 2025.
FUTURE CHANGES IN ACCOUNTING
POLICIES
There were no new accounting standards
or amendments issued during the three
months ended January 31, 2025. Refer to Note
2 of the Bank’s 2024 Annual
Consolidated Financial Statements for a description
of future changes in accounting policies.
NOTE 3: SIGNIFICANT ACCOUNTING
JUDGMENTS, ESTIMATES, AND ASSUMPTIONS
The estimates used in the Bank’s accounting policies
are essential to understanding its results
of operations and financial condition. Some
of the Bank’s policies
require subjective, complex judgments and
estimates as they relate to matters
that are inherently uncertain. Changes in these judgments
or estimates and
changes to accounting standards and policies
could have a materially adverse impact on
the Bank’s Interim Consolidated Financial
Statements. The Bank has
established procedures to ensure that accounting
policies are applied consistently and that the
processes for changing methodologies,
determining estimates, and
adopting new accounting standards are well-controlled
and occur in an appropriate and systematic
manner. Refer to Note 3 of the Bank’s 2024
Annual
Consolidated Financial Statements for a description
of significant accounting judgments, estimates,
and assumptions.
Impairment – Expected Credit Loss Model
The expected credit loss (ECL) model requires
the application of judgments, estimates,
and assumptions in the assessment of the
current and forward-looking
economic environment. There remains elevated
economic uncertainty, and management continues to exercise
expert credit judgment in assessing if an
exposure
has experienced significant increase in credit
risk since initial recognition and in determining
the amount of ECLs at each reporting date.
To the extent that certain
effects are not fully incorporated into the model
calculations, temporary quantitative and qualitative
adjustments have been applied,
including for risks related to
elevated uncertainty associated with policy and
trade, and such adjustments will be updated
as appropriate in future quarters.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 57
NOTE 4: FAIR VALUE MEASUREMENTS
There have been no significant changes to
the Bank’s approach and methodologies used
to determine fair value measurements for
the three months ended
January 31, 2025.
(a)
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES NOT CARRIED AT FAIR VALUE
The following table reflects the fair value
of the Bank’s financial assets and liabilities not
carried at fair value.
Financial Assets and Liabilities not carried
at Fair Value
1
(millions of Canadian dollars)
As at
January 31, 2025
October 31, 2024
Carrying
Fair
Carrying
Fair
value
value
value
value
FINANCIAL ASSETS
Debt securities at amortized cost, net of allowance
for credit losses
Government and government-related
securities
$
195,194
$
192,005
$
206,815
$
202,667
Other debt securities
60,549
59,641
64,800
63,509
Total debt securities at amortized cost, net of allowance for credit losses
255,743
251,646
271,615
266,176
Total loans, net of allowance for loan losses
965,312
966,640
949,549
949,227
Total financial assets not carried at fair value
$
1,221,055
$
1,218,286
$
1,221,164
$
1,215,403
FINANCIAL LIABILITIES
Deposits
$
1,290,486
$
1,289,027
$
1,268,680
$
1,266,562
Securitization liabilities at amortized
cost
12,652
12,492
12,365
12,123
Subordinated notes and debentures
13,671
13,961
11,473
11,628
Total financial liabilities not carried at fair value
$
1,316,809
$
1,315,480
$
1,292,518
$
1,290,313
1
This table excludes financial assets and liabilities where the carrying value approximates their fair value.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 58
(b)
FAIR VALUE HIERARCHY
The following table presents the levels within
the fair value hierarchy for each of the assets
and liabilities measured at fair value on
a recurring basis as at
January 31, 2025 and October 31, 2024.
Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value on a Recurring Basis
(millions of Canadian dollars)
As at
January 31, 2025
October 31, 2024
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
FINANCIAL ASSETS AND COMMODITIES
Trading loans, securities, and other
1
Government and government-related securities
Canadian government debt
Federal
$
967
$
10,231
$
–
$
11,198
$
691
$
9,551
$
–
$
10,242
Provinces
–
7,057
–
7,057
–
6,398
–
6,398
U.S. federal, state, municipal governments,
and agencies debt
–
22,890
–
22,890
–
18,861
–
18,861
Other OECD
2
government-guaranteed debt
–
9,475
–
9,475
–
9,722
–
9,722
Mortgage-backed securities
–
1,237
–
1,237
–
1,352
–
1,352
Other debt securities
Canadian issuers
–
7,171
10
7,181
–
6,611
12
6,623
Other issuers
–
17,043
1
17,044
–
15,845
14
15,859
Equity securities
76,844
56
8
76,908
68,682
34
12
68,728
Trading loans
–
24,178
–
24,178
–
23,518
–
23,518
Commodities
21,136
550
–
21,686
13,504
962
–
14,466
Retained interests
–
1
–
1
–
1
–
1
98,947
99,889
19
198,855
82,877
92,855
38
175,770
Non-trading financial assets at fair value
through profit or loss
Securities
407
1,738
1,287
3,432
391
1,188
1,233
2,812
Loans
–
3,378
–
3,378
–
3,057
–
3,057
407
5,116
1,287
6,810
391
4,245
1,233
5,869
Derivatives
Interest rate contracts
4
16,582
–
16,586
2
15,440
–
15,442
Foreign exchange contracts
40
56,711
23
56,774
47
51,001
13
51,061
Credit contracts
–
18
–
18
–
6
–
6
Equity contracts
118
6,649
–
6,767
64
6,167
–
6,231
Commodity contracts
376
3,349
15
3,740
548
4,756
17
5,321
538
83,309
38
83,885
661
77,370
30
78,061
Financial assets designated at
fair value through profit or loss
Securities
1
–
6,299
–
6,299
–
6,417
–
6,417
–
6,299
–
6,299
–
6,417
–
6,417
Financial assets at fair value through other
comprehensive income
Government and government-related securities
Canadian government debt
Federal
–
16,457
–
16,457
–
18,139
–
18,139
Provinces
–
21,911
–
21,911
–
21,270
–
21,270
U.S. federal, state, municipal governments,
and agencies debt
–
45,217
–
45,217
–
35,197
–
35,197
Other OECD government-guaranteed debt
–
5,251
–
5,251
–
1,679
–
1,679
Mortgage-backed securities
–
2,093
–
2,093
–
2,137
–
2,137
Other debt securities
Asset-backed securities
–
3,032
–
3,032
–
1,384
–
1,384
Corporate and other debt
–
10,264
3
10,267
–
9,439
7
9,446
Equity securities
1,070
2
3,174
4,246
1,058
2
3,355
4,415
Loans
–
217
–
217
–
230
–
230
1,070
104,444
3,177
108,691
1,058
89,477
3,362
93,897
Securities purchased under reverse
repurchase agreements
–
8,800
–
8,800
–
10,488
–
10,488
FINANCIAL LIABILITIES
Trading deposits
–
26,739
459
27,198
–
29,907
505
30,412
Derivatives
Interest rate contracts
4
14,100
155
14,259
3
13,283
158
13,444
Foreign exchange contracts
56
47,169
2
47,227
30
40,936
12
40,978
Credit contracts
–
456
–
456
–
403
–
403
Equity contracts
–
8,869
29
8,898
–
7,974
24
7,998
Commodity contracts
389
3,769
19
4,177
673
4,845
27
5,545
449
74,363
205
75,017
706
67,441
221
68,368
Securitization liabilities at fair value
–
21,181
–
21,181
–
20,319
–
20,319
Financial liabilities designated at fair value
through profit or loss
–
210,699
1
210,700
–
207,890
24
207,914
Obligations related to securities sold short
1
3,111
42,975
–
46,086
1,783
37,732
–
39,515
Obligations related to securities sold
under repurchase agreements
–
12,236
–
12,236
–
9,736
–
9,736
1
Balances reflect the reduction of securities owned (long positions) by the amount of identical securities sold but
not yet purchased (short positions).
2
Organisation for Economic Co-operation and Development (OECD).
(c)
TRANSFERS BETWEEN FAIR VALUE HIERARCHY LEVELS FOR ASSETS
AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
The Bank’s policy is to record transfers of assets
and liabilities between the different levels of
the fair value hierarchy using the fair values
as at the end of each
reporting period.
There were no significant transfers between
Level 1 and Level 2 during the three months
ended January 31, 2025
and January 31, 2024.
There were no significant transfers between
Level 2 and Level 3 during the three
months ended January 31, 2025
and January 31, 2024.
There were no significant changes to the unobservable
inputs and sensitivities for assets and liabilities
classified as Level 3 during the three
months ended
January 31, 2025, and January 31, 2024.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 59
(d)
RECONCILIATION OF CHANGES IN FAIR VALUE FOR LEVEL 3 ASSETS AND LIABILITIES
The following tables set out changes in fair
value of all assets and liabilities measured
at fair value using significant Level 3 unobservable
inputs for the three
months ended January 31, 2025 and January
31, 2024.
Reconciliation of Changes in Fair Value for Level 3 Assets and Liabilities
(millions of Canadian dollars)
Change in
unrealized
Fair
Total realized and
Fair
gains
value as at
unrealized gains (losses)
Movements
1
Transfers
value as at
(losses) on
November 1
Included
Included
Purchases/
Sales/
Into
Out of
January 31
instruments
2024
in income
2
in OCI
3,4
Issuances
Settlements
Level 3
Level 3
2025
still held
5
FINANCIAL ASSETS
Trading loans, securities,
and other
Government and government-
related securities
$
–
$
–
$
–
$
–
$
–
$
–
$
–
$
–
$
–
Other debt securities
26
–
–
–
(15)
–
–
11
(1)
Equity securities
12
2
–
1
(7)
–
–
8
–
38
2
–
1
(22)
–
–
19
(1)
Non-trading financial
assets at fair value
through profit or loss
Securities
1,233
30
–
43
(19)
–
–
1,287
7
1,233
30
–
43
(19)
–
–
1,287
7
Financial assets at fair value
through other
comprehensive income
Other debt securities
7
–
–
–
(4)
–
–
3
–
Equity securities
3,355
–
–
2
(183)
–
–
3,174
–
$
3,362
$
–
$
–
$
2
$
(187)
$
–
$
–
$
3,177
$
–
FINANCIAL LIABILITIES
Trading deposits
6
$
(505)
$
4
$
–
$
(72)
$
114
$
–
$
–
$
(459)
$
6
Derivatives
7
Interest rate contracts
(158)
(6)
–
–
9
–
–
(155)
2
Foreign exchange contracts
1
6
–
–
5
7
2
21
11
Equity contracts
(24)
(5)
–
–
(1)
1
–
(29)
(7)
Commodity contracts
(10)
6
–
–
–
–
–
(4)
7
(191)
1
–
–
13
8
2
(167)
13
Financial liabilities designated
at fair value
through profit or loss
(24)
–
–
(6)
29
–
–
(1)
–
Reconciliation of Changes in Fair Value for Level 3 Assets and Liabilities
(millions of Canadian dollars)
Change in
unrealized
Fair
Total realized and
Fair
gains
value as at
unrealized gains (losses)
Movements
1
Transfers
value as at
(losses) on
November 1
Included
Included
Purchases/
Sales/
Into
Out of
January 31
instruments
2023
in income
2
in OCI
4
Issuances
Settlements
Level 3
Level 3
2024
still held
4
FINANCIAL ASSETS
Trading loans, securities,
and other
Government and government-
related securities
$
67
$
–
$
–
$
–
$
(33)
$
–
$
–
$
34
$
(1)
Other debt securities
65
3
–
72
(81)
2
–
61
(1)
Equity securities
10
(1)
–
–
(2)
–
–
7
–
142
2
–
72
(116)
2
–
102
(2)
Non-trading financial
assets at fair value
through profit or loss
Securities
980
13
–
91
(5)
–
–
1,079
17
980
13
–
91
(5)
–
–
1,079
17
Financial assets at fair value
through other
comprehensive income
Other debt securities
27
–
(3)
3
(1)
–
–
26
(3)
Equity securities
2,377
–
(10)
6
(231)
–
–
2,142
2
$
2,404
$
–
$
(13)
$
9
$
(232)
$
–
$
–
$
2,168
$
(1)
FINANCIAL LIABILITIES
Trading deposits
6
$
(985)
$
(24)
$
–
$
(56)
$
21
$
–
$
5
$
(1,039)
$
(43)
Derivatives
7
Interest rate contracts
(126)
(23)
–
–
12
–
–
(137)
(12)
Foreign exchange contracts
(6)
2
–
–
–
–
3
(1)
(1)
Equity contracts
(21)
(6)
–
–
–
(1)
–
(28)
(5)
Commodity contracts
(1)
10
–
–
(19)
–
–
(10)
(17)
(154)
(17)
–
–
(7)
(1)
3
(176)
(35)
Financial liabilities designated
at fair value
through profit or loss
(22)
38
–
(54)
14
–
–
(24)
38
1
Includes foreign exchange.
2
Gains/losses on financial assets and liabilities are recognized within Non-interest Income on the Interim Consolidated
Statement of Income.
3
Other comprehensive income.
4
Includes realized gains/losses transferred to retained earnings on disposal of equities designated at FVOCI. Refer
to Note 5 for further details.
5
Changes in unrealized gains/losses on financial assets at FVOCI are recognized in AOCI.
6
Issuances and repurchases of trading deposits are reported on a gross basis.
7
Consists of derivative assets of $
38
million (January 31, 2024 – $
10
million; October 31, 2024/November 1, 2024 – $
30
million; October 31, 2023/November 1, 2023 – $
22
million) and
derivative liabilities of $
205
million (January 31, 2024 – $
186
million; October 31, 2024/November 1, 2024 – $
221
million; October 31, 2023/November 1, 2023 – $
176
million) which have
been netted in this table for presentation purposes only.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 60
NOTE 5: SECURITIES
(a)
UNREALIZED SECURITIES GAINS (LOSSES)
The following table summarizes the unrealized
gains and losses as at January 31, 2025
and October 31, 2024.
Unrealized Gains (Losses) for Securities
at Fair Value Through Other Comprehensive Income
(millions of Canadian dollars)
As at
January 31, 2025
October 31, 2024
Cost/
Gross
Gross
Cost/
Gross
Gross
amortized
unrealized
unrealized
Fair
amortized
unrealized
unrealized
Fair
cost
1
gains
(losses)
value
cost
1
gains
(losses)
value
Government and government-related
securities
Canadian government debt
Federal
$
16,603
$
15
$
(161)
$
16,457
$
18,281
$
17
$
(159)
$
18,139
Provinces
21,893
80
(62)
21,911
21,263
77
(70)
21,270
U.S. federal, state, municipal governments, and
agencies debt
45,288
58
(129)
45,217
35,371
22
(196)
35,197
Other OECD government-guaranteed debt
5,249
8
(6)
5,251
1,687
1
(9)
1,679
Mortgage-backed securities
2,072
25
(4)
2,093
2,125
17
(5)
2,137
91,105
186
(362)
90,929
78,727
134
(439)
78,422
Other debt securities
Asset-backed securities
3,037
3
(8)
3,032
1,397
1
(14)
1,384
Corporate and other debt
10,228
98
(59)
10,267
9,419
77
(50)
9,446
13,265
101
(67)
13,299
10,816
78
(64)
10,830
Total debt securities
104,370
287
(429)
104,228
89,543
212
(503)
89,252
Equity securities
Common shares
3,633
174
(82)
3,725
3,810
176
(72)
3,914
Preferred shares
626
49
(154)
521
632
29
(160)
501
4,259
223
(236)
4,246
4,442
205
(232)
4,415
Total securities at fair value through
other comprehensive income
$
108,629
$
510
$
(665)
$
108,474
$
93,985
$
417
$
(735)
$
93,667
1
Includes the foreign exchange translation of amortized cost balances at the period-end spot rate.
(b)
EQUITY SECURITIES DESIGNATED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
The Bank designated certain equity securities
at FVOCI.
The following table summarizes the fair
value of equity securities designated at
FVOCI as at
January 31, 2025
and October 31, 2024, and dividend income
recognized on these securities for
the three months ended January 31, 2025 and
January 31, 2024.
Equity Securities Designated at Fair Value Through
Other Comprehensive Income
(millions of Canadian dollars)
As at
For the three months ended
January 31, 2025
October 31, 2024
January 31, 2025
January 31, 2024
Fair value
Dividend income recognized
Common shares
$
3,725
$
3,914
$
27
$
17
Preferred shares
521
501
39
38
Total
$
4,246
$
4,415
$
66
$
55
The Bank disposed of certain equity securities
in line with the Bank’s investment strategy
and disposed of Federal Home Loan Bank (FHLB)
stock in accordance
with FHLB member stockholding requirements,
as follows:
Equity Securities Net Realized Gains
(Losses)
(millions of Canadian dollars)
For the three months ended
January 31, 2025
January 31, 2024
Equity Securities
Fair value
$
64
$
42
Cumulative realized gain/(loss)
6
–
FHLB Stock
Fair value
318
159
Cumulative realized gain/(loss)
–
–
(c)
DEBT SECURITIES NET REALIZED GAINS
(LOSSES)
The Bank disposed of certain debt securities
measured at amortized cost and FVOCI
during the quarter. The following table summarizes the net realized
gains
and losses on securities disposed of during
the three months ended January 31, 2025
and January 31, 2024, which are included
in Other income (loss) on the
Interim Consolidated Statement of Income.
Debt Securities Net Realized Gains (Losses)
1
(millions of Canadian dollars)
For the three months ended
January 31, 2025
January 31, 2024
Debt securities at amortized cost
$
(911)
$
–
Debt securities at fair value through other
comprehensive income
(9)
6
Total
$
(920)
$
6
1
Includes $
923
million (US$
649
million) (three months ended January 31, 2024 –
nil
) of pre-tax losses on debt securities related to the balance sheet restructuring initiative undertaken in
the U.S. Retail segment. Refer to Note 26 of the Bank’s 2024 Annual Consolidated Financial Statements
for additional information regarding the asset limitation on TD’s two U.S. bank
subsidiaries. As of February 26, 2025, the Bank has sold additional debt securities during the second quarter of
fiscal 2025, resulting in approximately $
281
million (US$
197
million) of
additional pre-tax losses on debt securities.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 61
(d)
CREDIT QUALITY OF DEBT SECURITIES
The Bank evaluates non-retail credit risk
on an individual borrower basis, using both
a borrower risk rating (BRR) and facility
risk rating, as detailed in the shaded
area of the “Managing Risk” section of the 2024
MD&A. This system is used to assess all non-retail
exposures, including debt securities.
The following table provides the gross carrying
amounts of debt securities measured at amortized
cost and debt securities at FVOCI by internal
risk rating for credit
risk management purposes, presenting
separately those debt securities that are
subject to Stage 1, Stage 2, and Stage 3
allowances. Refer to the “Allowance
for
Credit Losses” table in Note 6 for details regarding
the allowance and provision for credit losses
on debt securities.
Debt Securities by Risk Rating
(millions of Canadian dollars)
As at
January 31, 2025
October 31, 2024
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Debt securities
1
Investment grade
$
359,491
$
–
$
n/a
2
$
359,491
$
360,272
$
–
$
n/a
$
360,272
Non-investment grade
312
111
n/a
423
439
91
n/a
530
Watch and classified
n/a
60
n/a
60
n/a
68
n/a
68
Default
n/a
n/a
–
–
n/a
n/a
–
–
Total debt securities
359,803
171
–
359,974
360,711
159
–
360,870
Allowance for credit losses on debt securities
at amortized cost
3
–
–
3
3
–
–
3
Total debt securities, net of
allowance
$
359,800
$
171
$
–
$
359,971
$
360,708
$
159
$
–
$
360,867
1
Includes debt securities backed by government-guaranteed loans of $
112
million (October 31, 2024 – $
113
million), which are reported in Non-investment grade or a lower risk rating
based on the issuer’s credit risk.
2
Not applicable.
As at January 31, 2025, total debt securities,
net of allowance,
in the table above, include debt securities
measured at amortized cost, net of allowance,
of
$
255,743
million (October 31, 2024 – $
271,615
million), and debt securities measured at
FVOCI of $
104,228
million (October 31, 2024 – $
89,252
million). The
difference between probability-weighted ECLs
and base ECLs on debt securities at
FVOCI and at amortized cost as at both
January 31, 2025 and
October 31, 2024, was insignificant.
NOTE 6: LOANS, IMPAIRED LOANS, AND ALLOWANCE FOR CREDIT LOSSES
(a)
LOANS
The following table provides details regarding
the Bank’s loans as at January 31, 2025 and October
31, 2024.
Loans
(millions of Canadian dollars)
As at
January 31, 2025
October 31, 2024
Residential mortgages
$
334,103
$
331,649
Consumer instalment and other personal
232,675
228,382
Credit card
41,585
40,639
Business and government
365,603
356,973
973,966
957,643
Loans at FVOCI
(Note 4)
217
230
Total loans
974,183
957,873
Total allowance for loan losses
8,655
8,094
Total loans, net of allowance
$
965,528
$
949,779
Business and government loans and loans
at FVOCI are grouped together as reflected
below for presentation in the “Loans by
Risk Ratings” table.
Loans – Business and Government
(millions of Canadian dollars)
As at
January 31, 2025
October 31, 2024
Loans at amortized cost
$
365,603
$
356,973
Loans at FVOCI
(Note 4)
217
230
Loans
365,820
357,203
Allowance for loan losses
3,864
3,583
Loans, net of allowance
$
361,956
$
353,620
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 62
(b)
CREDIT QUALITY OF LOANS
In the retail portfolio, including individuals and
small businesses, the Bank manages exposures
on a pooled basis, using predictive credit
scoring techniques. For
non-retail exposures, each borrower is assigned
a BRR that reflects the probability of default
(PD)
of the borrower using proprietary industry
and sector specific
risk models and expert judgment. Refer to
the shaded areas of the “Managing Risk”
section of the 2024 MD&A for further
details, including the mapping of PD
ranges to risk levels for retail exposures
as well as the Bank’s 21-point BRR scale
to risk levels and external ratings for non-retail
exposures.
The following table provides the gross carrying
amounts of loans and credit risk exposures
on loan commitments and financial guarantee
contracts by internal risk
ratings for credit risk management purposes,
presenting separately those that are
subject to Stage 1, Stage 2, and Stage 3
allowances.
Loans by Risk Ratings
(millions of Canadian dollars)
As at
January 31, 2025
October 31, 2024
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Residential mortgages
1,2,3
Low Risk
$
244,306
$
667
$
n/a
$
244,973
$
238,101
$
655
$
n/a
$
238,756
Normal Risk
61,347
14,132
n/a
75,479
65,318
13,620
n/a
78,938
Medium Risk
360
9,236
n/a
9,596
370
9,614
n/a
9,984
High Risk
6
3,159
409
3,574
5
3,201
347
3,553
Default
n/a
n/a
481
481
n/a
n/a
418
418
Total loans
306,019
27,194
890
334,103
303,794
27,090
765
331,649
Allowance for loan losses
114
181
73
368
116
189
60
365
Loans, net of allowance
305,905
27,013
817
333,735
303,678
26,901
705
331,284
Consumer instalment and other personal
4
Low Risk
104,356
2,550
n/a
106,906
101,171
2,624
n/a
103,795
Normal Risk
66,013
12,497
n/a
78,510
66,105
12,054
n/a
78,159
Medium Risk
27,687
6,101
n/a
33,788
27,188
6,352
n/a
33,540
High Risk
4,090
8,313
447
12,850
4,017
7,881
412
12,310
Default
n/a
n/a
621
621
n/a
n/a
578
578
Total loans
202,146
29,461
1,068
232,675
198,481
28,911
990
228,382
Allowance for loan losses
658
1,175
282
2,115
667
1,120
262
2,049
Loans, net of allowance
201,488
28,286
786
230,560
197,814
27,791
728
226,333
Credit card
Low Risk
9,775
15
n/a
9,790
6,902
16
n/a
6,918
Normal Risk
11,866
191
n/a
12,057
11,714
188
n/a
11,902
Medium Risk
11,929
1,099
n/a
13,028
12,908
1,122
n/a
14,030
High Risk
2,522
3,584
472
6,578
2,832
4,382
437
7,651
Default
n/a
n/a
132
132
n/a
n/a
138
138
Total loans
36,092
4,889
604
41,585
34,356
5,708
575
40,639
Allowance for loan losses
731
1,079
498
2,308
704
1,015
378
2,097
Loans, net of allowance
35,361
3,810
106
39,277
33,652
4,693
197
38,542
Business and government
1,2,3,5
Investment grade or Low/Normal Risk
161,478
134
n/a
161,612
158,425
102
n/a
158,527
Non-investment grade or Medium Risk
171,458
11,977
n/a
183,435
166,892
11,851
n/a
178,743
Watch and classified or High Risk
578
17,304
118
18,000
704
16,610
89
17,403
Default
n/a
n/a
2,773
2,773
n/a
n/a
2,530
2,530
Total loans
333,514
29,415
2,891
365,820
326,021
28,563
2,619
357,203
Allowance for loan losses
1,095
1,804
965
3,864
983
1,758
842
3,583
Loans, net of allowance
332,419
27,611
1,926
361,956
325,038
26,805
1,777
353,620
Total loans
877,771
90,959
5,453
974,183
862,652
90,272
4,949
957,873
Total allowance for loan losses
2,598
4,239
1,818
8,655
2,470
4,082
1,542
8,094
Total loans, net of allowance
$
875,173
$
86,720
$
3,635
$
965,528
$
860,182
$
86,190
$
3,407
$
949,779
1
Includes impaired loans with a balance of $
212
million (October 31, 2024 – $
259
million) which did not have a related allowance for loan losses as the realizable value of the collateral
exceeded the loan amount.
2
Excludes trading loans and non-trading loans at fair value through profit or loss (FVTPL) with a fair value of $
24
billion (October 31, 2024 – $
24
billion) and $
3
billion (October 31, 2024 –
$
3
billion), respectively.
3
Includes insured mortgages of $
71
billion (October 31, 2024 – $
71
billion).
4
Includes Canadian government-insured real estate personal loans of $
5
billion (October 31, 2024 – $
6
billion).
5
Includes loans guaranteed by government agencies of $
24
billion (October 31, 2024 – $
24
billion), which are primarily reported in Non-investment grade or a lower risk rating based on
the borrowers’ credit risk.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 63
Loans by Risk Ratings
(Continued)
– Off-Balance Sheet Credit Instruments
1
(millions of Canadian dollars)
As at
January 31, 2025
October 31, 2024
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Retail Exposures
2
Low Risk
$
322,804
$
1,281
$
n/a
$
324,085
$
268,234
$
1,365
$
n/a
$
269,599
Normal Risk
55,011
1,331
n/a
56,342
93,576
1,332
n/a
94,908
Medium Risk
14,826
1,094
n/a
15,920
18,562
1,247
n/a
19,809
High Risk
1,093
710
–
1,803
1,126
1,181
–
2,307
Default
n/a
n/a
–
–
n/a
n/a
–
–
Non-Retail Exposures
3
Investment grade
300,630
–
n/a
300,630
287,830
–
n/a
287,830
Non-investment grade
104,961
6,875
n/a
111,836
99,866
6,968
n/a
106,834
Watch and classified
490
6,122
–
6,612
328
5,418
–
5,746
Default
n/a
n/a
133
133
n/a
n/a
252
252
Total off-balance sheet credit
instruments
799,815
17,413
133
817,361
769,522
17,511
252
787,285
Allowance for off-balance sheet credit
instruments
398
535
6
939
439
593
11
1,043
Total off-balance sheet credit
instruments, net of allowance
$
799,417
$
16,878
$
127
$
816,422
$
769,083
$
16,918
$
241
$
786,242
1
Excludes mortgage commitments.
2
Includes $
396
billion (October 31, 2024 – $
384
billion) of personal lines of credit and credit card lines, which are unconditionally cancellable at the Bank’s
discretion at any time.
3
Includes $
69
billion (October 31, 2024 – $
66
billion) of the undrawn component of uncommitted credit and liquidity facilities.
(c)
ALLOWANCE FOR CREDIT LOSSES
The following table provides details on
the Bank’s allowance for credit losses as at and
for the three months ended January 31, 2025
and January 31, 2024,
including allowance for off-balance sheet instruments
in the applicable categories.
Allowance for Credit Losses
(millions of Canadian dollars)
Foreign
Foreign
exchange,
exchange,
Balance at
Provision
Write-offs,
disposals,
Balance
Balance at
Provision
Write-offs,
disposals,
Balance
beginning
for credit
net of
and other
at end of
beginning
for credit
net of
and other
at end of
of period
losses
recoveries
adjustments
period
of period
losses
recoveries
adjustments
period
For the three months ended
January 31, 2025
January 31, 2024
Residential mortgages
$
365
$
(1)
$
(1)
$
5
$
368
$
403
$
8
$
(2)
$
1
$
410
Consumer instalment and other
personal
2,133
356
(334)
34
2,189
1,895
382
(275)
(23)
1,979
Credit card
2,699
450
(436)
84
2,797
2,577
430
(369)
(61)
2,577
Business and government
3,940
407
(186)
79
4,240
3,310
181
(113)
(79)
3,299
Total allowance for loan losses,
including off-balance sheet
instruments
9,137
1,212
(957)
202
9,594
8,185
1,001
(759)
(162)
8,265
Debt securities at amortized cost
3
–
–
–
3
2
–
–
–
2
Debt securities at FVOCI
1
–
–
–
1
2
–
–
(1)
1
Total allowance for credit
losses on debt securities
4
–
–
–
4
4
–
–
(1)
3
Total allowance for credit losses
$
9,141
$
1,212
$
(957)
$
202
$
9,598
$
8,189
$
1,001
$
(759)
$
(163)
$
8,268
Comprising:
Allowance for credit losses on
loans at amortized cost
$
8,094
$
8,654
$
7,136
$
7,265
Allowance for credit losses on
loans at FVOCI
–
1
–
–
Allowance for loan losses
8,094
8,655
7,136
7,265
Allowance for off-balance sheet
instruments
1,043
939
1,049
1,000
Allowance for credit losses on
debt securities
4
4
4
3
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 64
(d)
ALLOWANCE FOR LOAN LOSSES BY STAGE
The following table provides details on
the Bank’s allowance for loan losses by
stage as at and for the three months ended
January 31, 2025 and
January 31, 2024.
Allowance for Loan Losses by Stage
(millions of Canadian dollars)
For the three months ended
January 31, 2025
January 31, 2024
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Residential Mortgages
Balance at beginning of period
$
116
$
189
$
60
$
365
$
154
$
192
$
57
$
403
Provision for credit losses
Transfer to Stage 1
1
35
(34)
(1)
–
36
(33)
(3)
–
Transfer to Stage 2
(6)
11
(5)
–
(10)
15
(5)
–
Transfer to Stage 3
–
(11)
11
–
–
(9)
9
–
Net remeasurement due to transfers into stage
2
(7)
4
–
(3)
(6)
7
–
1
New originations or purchases
3
7
n/a
n/a
7
8
n/a
n/a
8
Net repayments
4
(1)
(1)
–
(2)
(1)
–
–
(1)
Derecognition of financial assets (excluding
disposals and write-offs)
5
(4)
(4)
(6)
(14)
(2)
(5)
(4)
(11)
Changes to risk, parameters, and models
6
(28)
26
13
11
(40)
45
6
11
Disposals
–
–
–
–
–
–
–
–
Write-offs
–
–
(1)
(1)
–
–
(2)
(2)
Recoveries
–
–
–
–
–
–
–
–
Foreign exchange and other adjustments
2
1
2
5
(2)
–
3
1
Balance at end of period
$
114
$
181
$
73
$
368
$
137
$
212
$
61
$
410
Consumer Instalment and Other Personal
Balance, including off-balance sheet instruments,
at beginning of period
$
696
$
1,175
$
262
$
2,133
$
688
$
1,010
$
197
$
1,895
Provision for credit losses
Transfer to Stage 1
1
185
(184)
(1)
–
131
(130)
(1)
–
Transfer to Stage 2
(64)
87
(23)
–
(72)
91
(19)
–
Transfer to Stage 3
(3)
(73)
76
–
(3)
(60)
63
–
Net remeasurement due to transfers into stage
2
(82)
76
2
(4)
(54)
86
2
34
New originations or purchases
3
84
n/a
n/a
84
89
n/a
n/a
89
Net repayments
4
(22)
(25)
(4)
(51)
(18)
(21)
(3)
(42)
Derecognition of financial assets (excluding
disposals and write-offs)
5
(21)
(30)
(10)
(61)
(17)
(20)
(10)
(47)
Changes to risk, parameters, and models
6
(102)
181
309
388
(71)
146
273
348
Disposals
–
–
–
–
–
–
–
–
Write-offs
–
–
(412)
(412)
–
–
(347)
(347)
Recoveries
–
–
78
78
–
–
72
72
Foreign exchange and other adjustments
12
17
5
34
(9)
(12)
(2)
(23)
Balance, including off-balance sheet instruments,
at end of period
683
1,224
282
2,189
664
1,090
225
1,979
Less: Allowance for off-balance sheet instruments
7
25
49
–
74
30
55
–
85
Balance at end of period
$
658
$
1,175
$
282
$
2,115
$
634
$
1,035
$
225
$
1,894
Credit Card
8
Balance, including off-balance sheet instruments,
at beginning of period
$
947
$
1,374
$
378
$
2,699
$
988
$
1,277
$
312
$
2,577
Provision for credit losses
Transfer to Stage 1
1
485
(474)
(11)
–
246
(239)
(7)
–
Transfer to Stage 2
(86)
107
(21)
–
(95)
111
(16)
–
Transfer to Stage 3
(5)
(242)
247
–
(6)
(223)
229
–
Net remeasurement due to transfers into stage
2
(222)
112
7
(103)
(108)
139
7
38
New originations or purchases
3
36
n/a
n/a
36
39
n/a
n/a
39
Net repayments
4
18
4
18
40
22
5
17
44
Derecognition of financial assets (excluding
disposals and write-offs)
5
(27)
(22)
(75)
(124)
(10)
(16)
(84)
(110)
Changes to risk, parameters, and models
6
(247)
473
375
601
(175)
300
294
419
Disposals
–
–
–
–
–
–
–
–
Write-offs
–
–
(529)
(529)
–
–
(444)
(444)
Recoveries
–
–
93
93
–
–
75
75
Foreign exchange and other adjustments
28
40
16
84
(21)
(29)
(11)
(61)
Balance, including off-balance sheet instruments,
at end of period
927
1,372
498
2,797
880
1,325
372
2,577
Less: Allowance for off-balance sheet instruments
7
196
293
–
489
240
366
–
606
Balance at end of period
$
731
$
1,079
$
498
$
2,308
$
640
$
959
$
372
$
1,971
1
Transfers represent stage transfer movements prior to ECL remeasurement.
2
Represents the mechanical remeasurement between twelve-month (i.e., Stage 1) and lifetime ECLs (i.e., Stage 2
or 3) due to stage transfers necessitated by credit risk migration, as
described in the “Significant Increase in Credit Risk” section of Note 2 and Note 3 of the Bank’s 2024
Annual Consolidated Financial Statements, holding all other factors impacting the
change in ECLs constant.
3
Represents the increase in the allowance resulting from loans that were newly originated, purchased, or renewed.
4
Represents the changes in the allowance related to cash flow changes associated with new draws or repayments
on loans outstanding.
5
Represents the decrease in the allowance resulting from loans that were fully repaid and excludes the decrease
associated with loans that were disposed or fully written off.
6
Represents the changes in the allowance related to current period changes in risk (e.g.,
PD) caused by changes to macroeconomic factors, level of risk, parameters,
and/or models,
subsequent to stage migration. Refer to the “Measurement of Expected Credit Losses”, “Forward-Looking Information
”
and “Expert Credit Judgment”
sections of Note 2 and Note 3 of the
Bank’s 2024 Annual Consolidated Financial Statements for further details.
7
The allowance for loan losses for off-balance sheet instruments is recorded in Other liabilities on the Interim
Consolidated Balance Sheet.
8
Credit cards are considered impaired and migrate to Stage 3 when they are 90 days past due and written off
at 180 days past due. Refer to Note 2 of the Bank’s 2024 Annual
Consolidated Financial Statements for further details.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 65
Allowance for Loan Losses by Stage
(Continued)
(millions of Canadian dollars)
For the three months ended
January 31, 2025
January 31, 2024
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Business and Government
1
Balance, including off-balance sheet instruments,
at beginning of period
$
1,150
$
1,937
$
853
$
3,940
$
1,319
$
1,521
$
470
$
3,310
Provision for credit losses
Transfer to Stage 1
2
88
(88)
–
–
62
(62)
–
–
Transfer to Stage 2
(153)
158
(5)
–
(117)
120
(3)
–
Transfer to Stage 3
(3)
(152)
155
–
(14)
(55)
69
–
Net remeasurement due to transfers into stage
2
(28)
58
1
31
(21)
42
4
25
New originations or purchases
2
300
n/a
n/a
300
271
n/a
n/a
271
Net repayments
2
17
(19)
(10)
(12)
8
(8)
(26)
(26)
Derecognition of financial assets (excluding
disposals and write-offs)
2
(169)
(196)
(76)
(441)
(172)
(99)
(45)
(316)
Changes to risk, parameters, and models
2
29
250
250
529
(162)
202
187
227
Disposals
–
–
(9)
(9)
–
–
–
–
Write-offs
–
–
(202)
(202)
–
–
(124)
(124)
Recoveries
–
–
16
16
–
–
11
11
Foreign exchange and other adjustments
41
49
(2)
88
(35)
(30)
(14)
(79)
Balance, including off-balance sheet instruments,
at end of period
1,272
1,997
971
4,240
1,139
1,631
529
3,299
Less: Allowance for off-balance sheet instruments
3
177
193
6
376
154
151
4
309
Balance at end of period
1,095
1,804
965
3,864
985
1,480
525
2,990
Total Allowance, including
off-balance sheet
instruments, at end of period
2,996
4,774
1,824
9,594
2,820
4,258
1,187
8,265
Less: Total Allowance for
off-balance sheet
instruments
3
398
535
6
939
424
572
4
1,000
Total Allowance for Loan Losses
at end of period
$
2,598
$
4,239
$
1,818
$
8,655
$
2,396
$
3,686
$
1,183
$
7,265
1
Includes allowance for loan losses related to customers’ liability under acceptances.
2
For explanations regarding this line item, refer to the “Allowance for Loan Losses by Stage” table on the previous
page in this Note.
3
The allowance for loan losses for off-balance sheet instruments is recorded in Other liabilities on the Interim
Consolidated Balance Sheet.
The allowance for credit losses on all remaining
financial assets is not significant.
(e)
FORWARD-LOOKING INFORMATION
Relevant macroeconomic factors are incorporated
in risk parameters as appropriate. Additional
risk factors that are industry or segment
specific are also
incorporated, where relevant. The key macroeconomic
variables used in determining ECLs include
regional unemployment rates for all retail exposures
and
regional housing price indices for residential
mortgages and home equity lines of credit.
For business and government loans,
the key macroeconomic variables
include gross domestic product (GDP), unemployment
rates, interest rates, and credit spreads.
Refer to Note 3 of the Bank’s 2024 Annual
Consolidated Financial
Statements for a discussion of how forward-looking
information is generated and considered
in determining whether there has been a
significant increase in credit
risk and in measuring ECLs.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 66
Macroeconomic Variables
Select macroeconomic variables are projected
over the forecast period.
The following table sets out average values
of the macroeconomic variables over the
four
calendar quarters starting with the current
quarter, and the remaining 4-year forecast period for the base
forecast and upside and downside scenarios
used in
determining the Bank’s ECLs as at January 31, 2025.
As the forecast period increases, information
about the future becomes less readily available
and projections
are anchored on assumptions around structural
relationships between economic parameters
that are inherently much less certain.
The baseline forecasts reflect
some tempering to growth considering policy
and trade uncertainty, but do not factor in the pending
March 4, 2025 tariffs by the U.S. administration on
Canada
and Mexico as well as retaliatory actions.
These actions – along with the potential
for additional measures on these and other
countries – represent a significant
downside risk to the global outlook.
Macroeconomic Variables
As at
January 31, 2025
Base Forecast
Upside Scenario
Downside Scenario
Average
Remaining
Average
Remaining
Average
Remaining
Q1 2025-
4-year
Q1 2025-
4-year
Q1 2025-
4-year
Q4 2025
1
period
1
Q4 2025
1
period
1
Q4 2025
1
period
1
Unemployment rate
Canada
6.5
%
5.9
%
5.7
%
5.6
%
7.6
%
7.2
%
United States
4.3
4.0
3.9
3.8
5.4
5.4
Real GDP
Canada
1.7
1.9
2.0
2.2
(0.5)
2.2
United States
2.0
1.9
2.7
2.3
(0.2)
2.3
Home prices
Canada (average existing price)
2
8.0
2.7
8.7
3.2
(3.7)
3.2
United States (CoreLogic HPI)
3
3.3
3.0
5.1
3.7
(6.1)
4.0
Central bank policy interest rate
Canada
2.63
2.25
3.25
2.55
1.63
1.56
United States
3.88
3.02
4.50
3.31
2.31
2.19
U.S. 10-year treasury yield
4.02
3.70
4.50
4.01
3.78
3.61
U.S. 10-year BBB spread (%-pts)
1.71
1.80
1.43
1.74
2.48
2.10
Exchange rate (U.S. dollar/Canadian dollar)
$
0.70
$
0.75
$
0.73
$
0.76
$
0.66
$
0.70
1
The numbers represent average values for the quoted periods, and average of year-on-year growth for real GDP and home prices.
2
The average home price is the average transacted sale price of homes sold via the Multiple Listing Service; data is collected by the Canadian Real Estate Association.
3
The CoreLogic home price index (HPI) is a repeat-sales index which tracks increases and decreases in the same home’s sales price over time.
(f)
SENSITIVITY OF ALLOWANCE FOR CREDIT LOSSES
ECLs are sensitive to the inputs used in internally
developed models, the macroeconomic
variables in the forward-looking forecasts and
respective probability
weightings in determining the probability-weighted
ECLs, and other factors considered when
applying expert credit judgment. Changes
in these inputs,
assumptions, models, and judgments would
affect the assessment of significant increase in
credit risk and the measurement of ECLs.
The following table presents the base ECL
scenario compared to the probability-weighted ECLs,
with the latter derived from three ECL
scenarios for performing
loans and off-balance sheet instruments. The difference
reflects the impact of deriving multiple
scenarios around the base ECLs and resultant
change in ECLs due
to non-linearity and sensitivity to using
macroeconomic forecasts.
Change from Base to Probability-Weighted
ECLs
(millions of Canadian dollars, except
as noted)
As at
January 31, 2025
October 31, 2024
Probability-weighted ECLs
$
7,770
$
7,584
Base ECLs
7,379
7,185
Difference – in amount
$
391
$
399
Difference – in percentage
5.3
%
5.6
%
ECLs for performing loans and off-balance sheet instruments
consist of an aggregate amount of Stage 1 and
Stage 2 probability-weighted ECLs
which are twelve-
month ECLs and lifetime ECLs, respectively. Transfers from Stage 1 to Stage
2 ECLs result from a significant increase
in credit risk since initial recognition
of the
loan.
The following table shows the estimated
impact of staging on ECLs by presenting all
performing loans and off-balance sheet instruments
calculated using
twelve-month ECLs compared to the current
aggregate probability-weighted ECLs, holding
all risk profiles constant.
Incremental Lifetime ECLs Impact
(millions of Canadian dollars)
As at
January 31, 2025
October 31, 2024
Probability-weighted ECLs
$
7,770
$
7,584
All performing loans and off-balance sheet instruments
using 12-month ECLs
5,908
5,631
Incremental lifetime ECLs impact
$
1,862
$
1,953
(g)
FORECLOSED ASSETS
Foreclosed assets are repossessed non-financial
assets where the Bank gains title, ownership,
or possession of individual properties,
such as real estate
properties, which are managed for sale in an
orderly manner with the proceeds used
to reduce or repay any outstanding debt.
The Bank does not generally occupy
foreclosed properties for its business use.
The Bank predominantly relies on third-party
appraisals to determine the carrying value of
foreclosed assets.
Foreclosed
assets held for sale were $
174
million as at January 31, 2025 (October 31, 2024
– $
126
million) and were recorded in Other assets
on the Interim Consolidated
Balance Sheet.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 67
(h)
LOANS PAST DUE BUT NOT IMPAIRED
A loan is classified as past due when a borrower
has failed to make a payment by the
contractual due date.
The following table summarizes loans that are
past
due but not impaired.
Loans less than 31 days contractually past
due are excluded as they do not generally
reflect a borrower’s ability to meet
their payment
obligations.
Loans Past Due but not Impaired
1
(millions of Canadian dollars)
As at
January 31, 2025
October 31, 2024
31-60
61-89
31-60
61-89
days
days
Total
days
days
Total
Residential mortgages
$
345
$
193
$
538
$
443
$
111
$
554
Consumer instalment and other personal
990
367
1,357
983
335
1,318
Credit card
392
261
653
375
269
644
Business and government
198
136
334
244
83
327
Total
$
1,925
$
957
$
2,882
$
2,045
$
798
$
2,843
1
Includes loans that are measured at FVOCI.
(i)
SALE OF U.S. RESIDENTIAL MORTGAGE
LOANS
Subsequent to quarter end, the Bank reached
an agreement to sell approximately US$
9
billion of certain U.S. residential mortgage loans
(correspondent lending
loans), which is expected to result in
a recognition of a pre-tax loss of approximately
US$
600
million in the second quarter of 2025. The
sale relates to the U.S.
balance sheet restructuring activities outlined
in the fourth quarter of fiscal 2024.
NOTE 7: INVESTMENT IN ASSOCIATES AND JOINT VENTURES
INVESTMENT IN THE CHARLES SCHWAB CORPORATION
As at January 31, 2025, the Bank had
significant influence over The Charles Schwab
Corporation (“Schwab”) and the ability
to participate in the financial and
operational policy-making decisions
of Schwab through a combination of the Bank’s ownership,
board representation and the insured
deposit account agreement
(“IDA Agreement”) between the Bank and
Schwab. As such, the Bank accounted
for its investment in Schwab using the equity
method. The Bank’s share of
Schwab’s earnings available to common shareholders
was reported with a one-month lag. The Bank
took into account changes in the one-month
lag period that
would significantly affect the results.
On August 21, 2024, the Bank sold
40.5
million shares of common stock of Schwab for
proceeds of approximately $
3.4
billion (US$
2.5
billion). The share sale
reduced the Bank’s ownership interest in Schwab
from
12.3
% to
10.1
%. The Bank recognized approximately
$
1.0
billion (US$
0.7
billion) as other income (net of
$
0.5
billion (US$
0.4
billion) loss from AOCI reclassified
to earnings), in the fourth quarter of fiscal 2024.
As at January 31, 2025, the Bank’s reported investment
in Schwab was approximately
10.1
% (October 31, 2024 –
10.1
%), which consisted of
7.5
% of the
outstanding voting common shares and the remainder
in non-voting common shares of Schwab
with an aggregate fair value of $
22
billion (US$
15
billion) (October
31, 2024 – $
18
billion (US$
13
billion)) based on the closing price of
US$
82.72
(October 31, 2024 – US$
70.83
) on the New York Stock Exchange.
As at January 31, 2025, the Bank and Schwab
were party to a stockholder agreement
(the “Stockholder Agreement”) under
which the Bank had the right to
designate two members of Schwab’s Board of
Directors and had representation on two Board
Committees, subject to the Bank meeting
certain conditions. The
Bank’s designated directors as at January 31, 2025
were the Bank’s Group President and Chief Executive
Officer and the Bank’s former Chair of the Board. Under
the Stockholder Agreement, the Bank was not
permitted to own more than
9.9
% voting common shares of Schwab, and
the Bank was subject to customary
standstill restrictions and subject to certain
exceptions, transfer restrictions.
The carrying value of the Bank’s investment in
Schwab of $
9.2
billion as at January 31, 2025 (October
31, 2024 – $
9.0
billion) represented the Bank’s share of
Schwab’s stockholders’ equity, adjusted for goodwill, other intangibles,
and cumulative translation adjustment.
The Bank’s share of net income from its investment
in Schwab of $
231
million during the three months ended January
31, 2025 (January 31, 2024 – $
141
million), reflects net income after adjustments
for
amortization of certain intangibles net of tax.
On February 12, 2025, the Bank sold its entire
remaining equity investment in Schwab
through a registered offering and share repurchase
by Schwab.
Immediately prior to the sale, TD held
184.7
million shares of Schwab’s common stock, representing
10.1
% economic ownership. The sale of the shares
resulted
in proceeds of approximately $
21.0
billion (US$
14.6
billion). In the second quarter of fiscal 2025,
the Bank is expected to recognize a net
gain on sale of its
investment in Schwab of approximately $
8.6
billion (US$
5.8
billion). This gain is net of the release
of related cumulative foreign currency translation
from AOCI, the
release of AOCI on designated net investment
hedging items, direct transaction costs, and
taxes. The Bank will also recognize $
0.2
billion of underwriting fees in
its Wholesale segment as a result of TD
Securities acting as a lead bookrunner on
the transaction.
The transaction is expected to increase
Common Equity Tier 1 (CET1) capital by approximately
238
bps, based on the Bank’s CET1 capital as at
January 31, 2025. The Bank continues to have
a business relationship with Schwab through
the IDA Agreement. The Stockholder Agreement
was terminated by
the Bank’s sale of its equity investment in Schwab
and the Bank will discontinue recording
its share of earnings available to common
shareholders from its
investment in Schwab in the second quarter
of fiscal 2025.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 68
The following tables represent the gross
amount of Schwab’s total assets, liabilities, net revenues,
net income available to common stockholders,
other
comprehensive income (loss), and comprehensive
income (loss).
Summarized Financial Information
(millions of Canadian dollars)
As at
December 31
September 30
2024
2024
Total assets
$
690,710
$
630,363
Total liabilities
621,077
566,502
(millions of Canadian dollars)
For the three months ended
December 31
December 31
2024
2023
Total net revenues
$
7,455
$
6,073
Total net income available to common stockholders
2,402
1,261
Total other comprehensive income (loss)
(322)
3,570
Total comprehensive income (loss)
2,080
4,831
Insured Deposit Account Agreement
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”
or the “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
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 had 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.
During the first quarter of fiscal 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 fiscal 2024, Schwab had completed its buydown
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.
Refer to Note 27 of the Bank’s 2024 Annual
Consolidated Financial Statements for further details
on the Schwab IDA Agreement.
NOTE 8: OTHER ASSETS
Other Assets
(millions of Canadian dollars)
As at
January 31
October 31
2025
2024
Accounts receivable and other items
$
14,050
$
12,931
Accrued interest
5,274
5,509
Cheques and other items in transit
–
1,656
Current income tax receivable
5,688
4,061
Defined benefit asset
1,045
1,042
Prepaid expenses
2,345
1,794
Reinsurance contract assets
1,121
1,188
Total
$
29,523
$
28,181
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 69
NOTE 9: DEPOSITS
Demand deposits are those for which the Bank does not have the right to require notice prior to withdrawal, which
primarily include business and government
chequing accounts. Notice deposits are those for which the Bank can legally require notice prior to withdrawal,
which include both savings and chequing
accounts. Term
deposits are payable on a given date of maturity and are purchased by customers to earn interest over a fixed period, with terms ranging from
one day to ten years and generally include fixed term deposits, guaranteed investment certificates, senior debt, and similar
instruments. The aggregate amount
of term deposits in denominations of $100,000 or more as at January 31, 2025, was $
547
billion (October 31, 2024 – $
546
billion).
Deposits
(millions of Canadian dollars)
As at
January 31
October 31
By Type
By Country
2025
2024
Demand
Notice
Term
1
Canada
United States
International
Total
Total
Personal
$
20,403
$
498,175
$
141,894
$
345,373
$
315,099
$
–
$
660,472
$
641,667
Banks
13,176
290
37,230
20,008
29,987
701
50,696
57,698
Business and government
2
152,599
197,505
229,214
411,173
165,729
2,416
579,318
569,315
186,178
695,970
408,338
776,554
510,815
3,117
1,290,486
1,268,680
Trading
–
–
27,198
21,155
2,664
3,379
27,198
30,412
Designated at fair value through
profit or loss
3
–
–
210,474
57,577
79,800
73,097
210,474
207,668
Total
$
186,178
$
695,970
$
646,010
$
855,286
$
593,279
$
79,593
$
1,528,158
$
1,506,760
Non-interest-bearing deposits
included above
4
Canada
$
59,441
$
58,873
United States
74,731
73,509
International
–
–
Interest-bearing deposits
included above
4
Canada
795,845
781,526
United States
5
518,548
504,896
International
79,593
87,956
Total
2,6
$
1,528,158
$
1,506,760
1
Includes $
101.9
billion (October 31, 2024 – $
97.6
billion) of senior debt which is subject to the bank recapitalization “bail-in” regime. This regime provides certain
statutory powers to the
Canada Deposit Insurance Corporation, including the ability to convert specified eligible shares and liabilities into
common shares in the event that the Bank becomes non-viable.
2
Includes $
75.3
billion relating to covered bondholders (October 31, 2024 – $
75.4
billion).
3
Financial liabilities designated at FVTPL on the Consolidated Balance Sheet also includes $
225.5
million (October 31, 2024 – $
246.0
million) of loan commitments and financial
guarantees designated at FVTPL.
4
The geographical splits of the deposits are based on the point of origin of the deposits.
5
Includes $
8.8
billion (October 31, 2024 – $
13.1
billion) of U.S. federal funds deposited and $
29.8
billion (October 31, 2024 – $
36.2
billion) of deposits and advances with the FHLB.
6
Includes deposits of $
833.9
billion (October 31, 2024 – $
810.2
billion) denominated in U.S. dollars and $
129.1
billion (October 31, 2024 – $
140.7
billion) denominated in other foreign
currencies.
NOTE 10: OTHER LIABILITIES
Other Liabilities
(millions of Canadian dollars)
As at
January 31
October 31
2025
2024
Accounts payable, accrued expenses, and
other items
$
8,130
$
7,706
Accrued interest
5,087
5,559
Accrued salaries and employee benefits
4,080
5,386
Cheques and other items in transit
1,326
–
Current income tax payable
113
67
Deferred tax liabilities
358
300
Defined benefit liability
1,387
1,380
Lease liabilities
5,198
5,013
Liabilities related to structured entities
23,113
22,792
Provisions
(Note 17)
1,379
3,675
Total
$
50,171
$
51,878
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 70
NOTE 11: SUBORDINATED NOTES AND DEBENTURES
Issues
On January 23, 2025, the Bank issued EUR
750
million of Fixed Rate Reset Subordinated
Notes (Non-Viability Contingent Capital (NVCC))
constituting
subordinated indebtedness of the Bank (the
“Euro Notes”), maturing on January 23, 2036.
The Euro Notes will bear interest at a fixed rate
of
4.030
% per annum
(paid annually) until January 23, 2031, and at
the 5-year mid-swap rate plus
1.500
% thereafter (paid annually) until maturity on
January 23, 2036. With prior
approval of OSFI, the Bank may, at its option, redeem the Euro
Notes on January 23, 2031, in whole but not in
part, at par plus accrued and unpaid interest
by
giving not more than
60
nor less than
10
days’ notice to holders.
On January 31, 2025, the Bank issued $
1
billion of NVCC medium-term notes
constituting subordinated indebtedness of
the Bank (the “Notes”), maturing on
February 1, 2035. The Notes will bear interest
at a fixed rate of
4.231
% per annum (paid semi-annually) until
February 1, 2030, and at Daily Compounded
Canadian Overnight Repo Rate Average plus
1.54
% thereafter (paid quarterly) until maturity
on February 1, 2035. With prior approval
of OSFI, the Bank may, at its
option, redeem the Notes on or after February
1, 2030, in whole or in part, at par plus
accrued and unpaid interest by giving not
more than
60
nor less than
10
days’ notice to holders.
NOTE 12: EQUITY
The following table summarizes the changes
to the shares and other equity instruments
issued and outstanding,
and treasury instruments held as at and
for the
three months ended January 31, 2025 and
January 31, 2024.
Shares and Other Equity Instruments
Issued and Outstanding and Treasury Instruments
Held
(millions of shares or other equity instruments
and millions of Canadian dollars)
For the three months ended
January 31, 2025
January 31, 2024
Number
Number
of shares
Amount
of shares
Amount
Common Shares
Balance as at beginning of period
1,750.3
$
25,373
1,791.4
$
25,434
Proceeds from shares issued on exercise
of stock options
0.3
25
0.6
42
Shares issued as a result of dividend
reinvestment plan
1.6
130
1.7
137
Purchase of shares for cancellation and other
–
–
(20.9)
(295)
Balance as at end of period – common shares
1,752.2
$
25,528
1,772.8
$
25,318
Preferred Shares and Other Equity Instruments
Preferred Shares – Class A
Balance as at beginning of period
91.6
$
3,900
143.6
$
5,200
Redemption of shares
1
(20.0)
(500)
–
–
Balance as at end of period
71.6
$
3,400
143.6
$
5,200
Other Equity Instruments
2
Balance as at beginning of period
5.8
$
6,988
5.0
$
5,653
Issue of limited recourse capital notes
3
0.7
750
–
–
Balance as at end of period
6.5
7,738
5.0
5,653
Balance as at end of period – preferred
shares
and other equity instruments
78.1
$
11,138
148.6
$
10,853
Treasury – common shares
4
Balance as at beginning of period
0.2
$
(17)
0.7
$
(64)
Purchase of shares
44.9
(3,504)
37.5
(3,096)
Sale of shares
(44.6)
3,483
(37.5)
3,102
Balance as at end of period – treasury
– common shares
0.5
$
(38)
0.7
$
(58)
Treasury – preferred shares and
other equity instruments
4
Balance as at beginning of period
0.2
$
(18)
0.1
$
(65)
Purchase of shares and other equity instruments
2.4
(1,120)
1.7
(98)
Sale of shares and other equity instruments
(2.1)
1,087
(1.7)
136
Balance as at end of period – treasury
– preferred shares and other equity
instruments
0.5
$
(51)
0.1
$
(27)
1
On January 31, 2025, the Bank redeemed all of its
20
million outstanding Non-Cumulative 5-Year
Rate Reset Class A First Preferred Shares NVCC, Series 5 (“Series 5 Preferred
Shares”), at a redemption price of $
25.00
per Series 5 Preferred Share, for a total redemption cost of approximately $
500
million.
2
For Other Equity Instruments, the number of shares represents the number of notes issued.
3
On December 18, 2024, the Bank issued $
750
million
5.909
% Fixed Rate Reset Limited Recourse Capital Notes, Series 5 NVCC (the “LRCNs”). The LRCNs
will bear interest at a rate of
5.909
per cent annually, payable quarterly,
for the initial period ending on, but excluding, January 1, 2030. Thereafter, the interest
rate on the LRCNs will reset every
five years
at a rate
equal to the prevailing Government of Canada Yield plus
3.10
per cent. The LRCNs will mature on January 1, 2085. Concurrently with the issuance of the LRCNs, the
Bank issued
750,000
Non-Cumulative
5.909
% Fixed Rate Reset Preferred Shares, Series 32 NVCC (“Preferred Shares Series 32”). The Preferred
Shares Series 32 are eliminated on the Bank’s
Consolidated Financial Statements.
4
When the Bank purchases its own equity instruments as part of its trading business, they are classified as treasury
instruments and the cost of these instruments is recorded as a
reduction in equity.
DIVIDENDS
On February 26, 2025, the Board approved
a dividend in an amount of one dollar and
five cents ($
1.05
) per fully paid common share in the capital
stock of the
Bank for the quarter ending April 30, 2025, payable
on and after April 30, 2025, to shareholders
of record at the close of business on April
10, 2025.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 71
DIVIDEND REINVESTMENT PLAN
The Bank offers a dividend reinvestment plan
for its common shareholders. Participation in
the plan is optional and under the terms of the
plan, cash dividends on
common shares are used to purchase additional
common shares. At the option of the Bank,
the common shares may be issued from treasury
at an average
market price based on the last five trading
days before the date of the dividend payment,
with a discount of between
0
% to
5
% at the Bank’s discretion or
purchased from the open market at market
price.
During the three months ended January 31,
2025, the Bank issued
1.6
million (three months ended January 31,
2024 –
2.0
million) common shares from
treasury with
no
discount.
NORMAL COURSE ISSUER BID
On August 28, 2023,
the Bank announced that the Toronto Stock Exchange and OSFI approved
a normal course issuer bid (NCIB) to
repurchase for cancellation
up to
90
million of its common shares. The NCIB commenced
on August 31, 2023 and continued until
August 31, 2024. From the commencement
of the NCIB to
August 31, 2024, the Bank repurchased
71.4
million shares under the program. The NCIB
terminated on August 31, 2024 and therefore,
there was
no
repurchase
of common shares by the Bank under the
NCIB during the three months ended
January 31, 2025. During the three months
ended January 31, 2024,
the Bank
repurchased
20.9
million common shares, at an average price
of $
82.39
per share for a total amount of $
1.7
billion.
Subsequent to the quarter end, on February
24, 2025, the Bank announced that the
Toronto Stock Exchange and OSFI had
approved the Bank’s previously
announced NCIB to purchase for cancellation
up to
100
million of its common shares. The NCIB
will commence on March 3, 2025 and end
on February 28, 2026,
or such earlier date as the Bank may determine.
NOTE 13: SHARE-BASED COMPENSATION
For the three months ended January 31,
2025, the Bank recognized compensation
expense for stock option awards of $
3.1
million (three months ended
January 31, 2024 – $
10.1
million). During the three months ended
January 31, 2025,
2.0
million (three months ended January 31, 2024
–
2.5
million) stock options
were granted by the Bank at a weighted-average
fair value of $
12.80
per option (January 31, 2024 – $
14.36
per option).
The following table summarizes the assumptions
used for estimating the fair value of options
for the three months ended January 31,
2025 and January 31, 2024.
Assumptions Used for Estimating the
Fair Value of Options
(in Canadian dollars, except as noted)
For the three months ended
January 31
January 31
2025
2024
Risk-free interest rate
3.08
%
3.41
%
Option contractual life
10 years
10 years
Expected volatility
19.47
%
18.92
%
Expected dividend yield
3.94
%
3.78
%
Exercise price/share price
$
75.76
$
81.78
The risk-free interest rate is based on Government
of Canada benchmark bond yields as
at the grant date. Expected volatility is
calculated based on the historical
average daily volatility and expected dividend
yield is based on dividend payouts in the last
fiscal year. These assumptions are measured over a period
corresponding to the option contractual life.
NOTE 14: EMPLOYEE BENEFITS
The following table summarizes expenses for
the Bank’s principal pension and non-pension post-retirement
defined benefit plans and the Bank’s other
material
defined benefit pension plans, for the
three months ended January 31, 2025
and January 31, 2024. Other employee defined
benefit plans operated by the Bank
and certain of its subsidiaries are not considered
material for disclosure purposes.
Defined Benefit Plan Expenses
(millions of Canadian dollars)
Principal post-retirement
Principal pension plans
benefit plan
Other pension plans
1
For the three months ended
January 31
January 31
January 31
January 31
January 31
January 31
2025
2024
2025
2024
2025
2024
Service cost – benefits earned
$
69
$
54
$
2
$
1
$
5
$
4
Net interest cost (income) on net defined
benefit liability (asset)
(12)
(20)
4
5
6
6
Interest cost on asset limitation and minimum
funding
requirement
–
3
–
–
–
1
Defined benefit administrative expenses
3
2
–
–
1
1
Total
$
60
$
39
$
6
$
6
$
12
$
12
1
Includes Canada Trust defined benefit pension plan, TD Banknorth defined benefit pension
plan, TD Auto Finance defined benefit pension plan, TD Insurance defined benefit pension
plan, and supplemental executive defined benefit pension plans.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 72
The following table summarizes expenses for
the Bank’s defined contribution plans for the three
months ended January 31, 2025 and January
31, 2024.
Defined Contribution Plan Expenses
(millions of Canadian dollars)
For the three months ended
January 31
January 31
2025
2024
Defined contribution pension plans
1
$
106
$
85
Government pension plans
2
220
197
Total
$
326
$
282
1
Includes defined contribution portion of the TD Pension Plan (Canada) and TD Bank, N.A. defined contribution 401(k)
plan.
2
Includes Canada Pension Plan, Quebec Pension Plan, and Social Security under the U.S.
Federal Insurance Contributions Act
.
The following table summarizes the remeasurements
recognized in OCI for the Bank’s principal pension
and post-retirement defined benefit plans
and certain of
the Bank’s other material defined benefit pension
plans, for the three months ended January
31, 2025 and January 31, 2024.
Amounts Recognized in Other Comprehensive
Income for Remeasurement of Defined
Benefit Plans
1,2,3
(millions of Canadian dollars)
Principal post-retirement
Principal pension plans
benefit plan
Other pension plans
For the three months ended
January 31
January 31
January 31
January 31
January 31
January 31
2025
2024
2025
2024
2025
2024
Remeasurement gain/(loss) – financial
$
(139)
$
(1,124)
$
(7)
$
(36)
$
(10)
$
(43)
Remeasurement gain/(loss) – return on plan
assets less
interest income
182
800
–
–
–
–
Change in asset limitation and minimum
funding requirement
(3)
176
–
–
–
–
Total
$
40
$
(148)
$
(7)
$
(36)
$
(10)
$
(43)
1
Excludes the Canada Trust defined benefit pension plan, TD Banknorth defined benefit
pension plan, TD Auto Finance defined benefit pension plan, TD Insurance defined benefit pension
plan, and other employee defined benefit plans operated by the Bank and certain of its subsidiaries not considered material for
disclosure purposes as these plans are not remeasured on
a quarterly basis.
2
Changes in discount rates and return on plan assets are reviewed and updated on a quarterly basis. All other assumptions
are updated annually.
3
Amounts are presented on a pre-tax basis.
NOTE 15: INCOME TAXES
International Tax Reform – Pillar Two Global Minimum Tax
On December 20, 2021, the OECD published
Pillar Two model rules as part of its efforts toward international
tax reform. The Pillar Two model rules provide for the
implementation of a 15% global minimum
tax for large multinational enterprises,
which is to be applied on a jurisdiction-by-jurisdiction
basis. Pillar Two legislation
was enacted in Canada on June 20, 2024
under Bill C-69, which includes the
Global Minimum Tax Act
addressing the Pillar Two model rules. Similar legislation
has passed in other jurisdictions in which
the Bank operates and will result in additional
taxes being paid in these countries. The rules
were effective and
implemented by the Bank on November 1, 2024.
The IASB previously issued amendments
to IAS 12
Income Taxes
for a temporary mandatory exception
from the
recognition and disclosure of deferred
taxes related to the implementation of Pillar
Two model rules, which the Bank has applied. For the three
months ended
January 31, 2025, the Bank’s effective tax rate increased
by approximately
0.5
% due to Pillar Two taxes.
Other Tax Matters
The Canada Revenue Agency (CRA), Revenu
Québec Agency (RQA) and Alberta
Tax and Revenue Administration (ATRA) are denying certain dividend and
interest deductions claimed by the Bank.
During the quarter, the CRA reassessed the Bank for $
7
million of additional income tax and interest
in respect of the
2019 taxation year. As at January 31, 2025, the CRA has
reassessed the Bank for $
1,668
million for the years 2011 to 2019, the RQA has reassessed the
Bank
for $
52
million for the years 2011 to 2018, and the ATRA has reassessed the Bank for $
71
million for the years 2011 to 2018. In total, the Bank has been
reassessed for $
1,791
million of income tax and interest. The Bank
expects to continue to be reassessed
for open years. The Bank is of the view that its
tax filing
positions were appropriate and filed a
Notice of Appeal with the Tax Court of Canada on March 21, 2023.
NOTE 16: EARNINGS PER SHARE
Basic earnings per share is calculated by
dividing net income attributable to common
shareholders by the weighted-average number
of common shares
outstanding for the period.
Diluted earnings per share is calculated using
the same method as basic earnings per
share except that certain adjustments are made
to net income
attributable to common shareholders and
the weighted-average number of shares outstanding
for the effects of all dilutive potential common
shares that are
assumed to be issued by the Bank.
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 73
The following table presents the Bank’s basic and
diluted earnings per share for the three
months ended January 31, 2025 and January
31, 2024.
Basic and Diluted Earnings Per Share
(millions of Canadian dollars, except
as noted)
For the three months ended
January 31
January 31
2025
2024
Basic earnings per share
Net income attributable to common shareholders
$
2,707
$
2,750
Weighted-average number of common shares outstanding
(millions)
1,749.9
1,776.7
Basic earnings per share
(Canadian dollars)
$
1.55
$
1.55
Diluted earnings per share
Net income attributable to common shareholders
$
2,707
$
2,750
Net income attributable to common shareholders
including impact of dilutive securities
2,707
2,750
Weighted-average number of common shares outstanding
(millions)
1,749.9
1,776.7
Effect of dilutive securities
Stock options potentially exercisable (millions)
1
0.8
1.5
Weighted-average number of common shares outstanding
– diluted (millions)
1,750.7
1,778.2
Diluted earnings per share
(Canadian dollars)
1
$
1.55
$
1.55
1
For the three months ended January 31, 2025, the computation of diluted earnings per share excluded average
options outstanding of
5.9
million, with a weighted-average exercise price
of $
84.34
, as the option price was greater than the average market price of the Bank’s common shares.
For the three months ended January 31, 2024, the computation of diluted
earnings per share excluded average options outstanding of
4.9
million, with a weighted-average exercise price of $
92.89
, as the option price was greater than the average market price
of the Bank’s common shares.
NOTE 17: PROVISIONS AND CONTINGENT
LIABILITIES
Other than as described below, there have been no new significant
events or transactions except as previously
identified in Note 26 of the Bank’s 2024 Annual
Consolidated Financial Statements.
(a)
LEGAL AND REGULATORY MATTERS
In the ordinary course of business, the Bank
and its subsidiaries are involved in various
legal and regulatory actions, including but
not limited to civil claims and
lawsuits, regulatory examinations, investigations,
audits, and requests for information by
governmental, regulatory and self-regulatory
agencies and law
enforcement authorities in various jurisdictions,
in respect of our businesses and compliance
programs. The Bank establishes provisions
when it becomes
probable that the Bank will incur a loss and
the amount can be reliably estimated.
The Bank also estimates the aggregate range
of reasonably possible losses
(RPL) in its legal and regulatory actions (that
is, those which are neither probable nor
remote), in excess of provisions. However, the Bank does
not disclose the
specific possible loss associated with each underlying
matter given the substantial uncertainty associated
with each possible loss as described below and
the
negative consequences to the Bank’s resolution
of the matters that comprise the
RPL should individual possible losses be disclosed.
As at January 31, 2025, the
Bank’s RPL is from
zero
to approximately $
497
million (October 31, 2024 – from
zero
to approximately $
625
million). The Bank’s provisions and RPL represent
the
Bank’s best estimates based upon currently available
information for actions for which estimates
can be made, but there are a number of factors
that could cause
the Bank’s actual losses to be significantly different
from its provisions or RPL. For example,
the Bank’s estimates involve significant judgment
due to the varying
stages of the proceedings, the existence of
multiple defendants in many proceedings
whose share of liability has yet to be determined,
the numerous yet-
unresolved issues in many of the proceedings,
some of which are beyond the Bank’s control and/or
involve novel legal theories and interpretations,
the attendant
uncertainty of the various potential outcomes
of such proceedings, and the fact that the underlying
matters will change from time to time. In addition,
some actions
seek very large or indeterminate damages.
Refer to Note 26 of the Bank’s 2024 Annual Consolidated
Financial Statements for details on the Bank’s significant
legal and regulatory matters. Based on
the Bank’s current knowledge, and subject to
the factors listed above as well as other uncertainties
inherent in litigation and
regulatory matters, other than as described
below: (i) there have been no notable developments
to the matters previously identified in Note 26
of the Bank’s 2024
Annual Consolidated Financial Statements; and
(ii) since October 31, 2024, no other legal
or regulatory matter has arisen or progressed
to the point that it would
reasonably be expected to result in a material
financial impact to the Bank.
As previously disclosed in Note 26 of the
Bank’s 2024 Annual Consolidated Financial
Statements, on October 10, 2024, the Bank
announced that, following
active cooperation and engagement with
authorities and regulators, it reached a resolution
of previously disclosed investigations related
to its U.S. BSA and AML
compliance programs (the “Global Resolution”).
The Bank and certain of its U.S. subsidiaries
consented to orders with the Office of the
Comptroller of the
Currency (OCC), the Federal Reserve Board,
and the Financial Crimes Enforcement
Network (FinCEN) and entered into plea agreements
with the Department of
Justice (DOJ), Criminal Division, Money Laundering
and Asset Recovery Section and the
United States Attorney’s Office for the District of New Jersey. The Bank
is focused on meeting the terms of the
consent orders and plea agreements, including
meeting its requirements to remediate the Bank’s
U.S. BSA/AML programs.
During the first fiscal quarter, the Bank fully paid the remainder
of the monetary penalty owed pursuant
to the consent orders and plea agreements
that were
entered into as part of the Global Resolution.
The payment was covered by provisions previously
taken by the Bank for this matter.
As previously disclosed in Note 26 of the
Bank’s 2024 Annual Consolidated Financial
Statements, the Bank and some former
and current directors, officers and
employees have been named as defendants
in proposed class action lawsuits in
the United States and Canada purporting
to be brought on behalf of TD
shareholders alleging, among other things, that
a decline in the price of TD’s shares was
the result of misleading disclosures
with respect to the Bank’s AML
program and/or the potential outcomes of
the government agencies’ or regulators’ investigations.
The two proposed class actions filed in the
United States have
been consolidated under the caption
Tiessen v. The Toronto-Dominion Bank, et al.
, in the United States District Court for the
Southern District of New York.
A
putative shareholder derivative action has also
been filed purportedly on behalf of TD in
the United States in the Supreme Court of
the State of New York, New
York County, against certain former and current TD directors, officers and employees, and certain of
TD’s U.S. affiliates and subsidiaries. The complaint, captioned
Rubin v. Masrani, et al,
asserts alleged breaches of duties and
other claims against the individual defendants
in connection with the Bank’s U.S. AML program.
All
of the proceedings are still in early stages
and none have been certified to proceed
as a class action. Losses or damages cannot
be estimated at this time.
As previously disclosed in Note 26 of the
Bank’s 2024 Annual Consolidated Financial
Statements, the Bank has been named
as defendant in a purported class
action lawsuit in the United States purporting
to be brought on behalf of First Horizon shareholders
alleging that a decline in the price of First
Horizon shares was
the result of alleged misleading disclosures
TD made with respect to TD’s U.S. AML program
and its effect on the Bank’s contemplated merger
with First Horizon.
The lawsuit also names some of the
Bank’s former and current officers and a former employee
as defendants. These proceedings are still
in early stages and have
not been certified to proceed as a class
action. Losses or damages cannot be estimated
at this time.
As previously disclosed in Note 26 of the
Bank’s 2024 Annual Consolidated Financial
Statements, the Bank is a defendant in
Canada and/or the United States
in a number of matters brought by customers,
including class actions, alleging claims
in connection with various fees, practices
and credit decisions. The cases are
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 74
in various stages of maturity and include, among
others: a Quebec action against members
of the financial services industry (including
the Bank) regarding the
existence and amount of the insufficient or non-sufficient
funds fee (NSF fee), a Quebec action
against certain brokers (including TD Direct
Investing) regarding
disclosure of foreign conversion fees, and a
Quebec action against members of the automobile
insurance industry (including Primmum Insurance
Company)
regarding underwriting practices in Quebec.
Refer to Note 15 for disclosures related
to tax matters.
NOTE 18: SEGMENTED INFORMATION
For management reporting purposes, the Bank
reports its results from business operations
and activities under 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.
Canadian Personal and Commercial
Banking provides financial products and services
to personal, small business and commercial
customers, and includes
TD Auto Finance Canada. U.S. Retail is comprised
of personal and business banking in
the U.S., TD Auto Finance U.S., the U.S. wealth
business,
as well as the
Bank’s equity investment in Schwab. Wealth Management
and Insurance includes the Canadian
wealth business which provides investment products
and services
to institutional and retail investors, and the insurance
business which provides property and
casualty insurance, as well as life and health
insurance products to
customers across Canada. Wholesale Banking
provides a wide range of capital markets, investment
banking, and corporate banking products and
services,
including underwriting and distribution of
new debt and equity issues, providing advice
on strategic acquisitions and divestitures, and
meeting the daily trading,
funding, and investment needs of the Bank’s
clients. The Corporate segment includes
the effects of certain asset securitization programs,
treasury management,
elimination of taxable equivalent adjustments
and other management reclassifications,
corporate level tax items, and residual unallocated
revenue and expenses.
Effective the first quarter of 2025, certain U.S. governance
and control investments, including
costs for U.S. BSA/AML remediation, previously
reported in the
Corporate segment are now reported in the
U.S. Retail segment. Comparative amounts
have been reclassified to conform with the
presentation adopted in the
current period.
The following table summarizes the segment
results for the three months ended January
31, 2025 and January 31, 2024.
Results by Business Segment
1
(millions of Canadian dollars)
Canadian
Wealth
Personal and
Management
Commercial Banking
U.S. Retail
and Insurance
Wholesale Banking
2
Corporate
2
Total
For the three months ended January 31
2025
2024
2025
2024
2025
2024
2025
2024
2025
2024
2025
2024
Net interest income (loss)
$
4,135
$
3,833
$
3,064
$
2,899
$
369
$
285
$
(107)
$
198
$
405
$
273
$
7,866
$
7,488
Non-interest income (loss)
1,014
1,051
(282)
604
3,229
2,850
2,107
1,582
115
139
6,183
6,226
Total revenue
5,149
4,884
2,782
3,503
3,598
3,135
2,000
1,780
520
412
14,049
13,714
Provision for (recovery of)
credit losses
521
423
451
385
–
–
72
10
168
183
1,212
1,001
Insurance service expenses
–
–
–
–
1,507
1,366
–
–
–
–
1,507
1,366
Non-interest expenses
2,086
1,984
2,380
2,459
1,173
1,047
1,535
1,500
896
1,040
8,070
8,030
Income (loss) before income taxes
and share of net income from
investment in Schwab
2,542
2,477
(49)
659
918
722
393
270
(544)
(811)
3,260
3,317
Provision for (recovery of)
income taxes
711
692
(192)
(17)
238
167
94
65
(153)
(273)
698
634
Share of net income from
investment in Schwab
3,4
–
–
199
194
–
–
–
–
32
(53)
231
141
Net income (loss)
$
1,831
$
1,785
$
342
$
870
$
680
$
555
$
299
$
205
$
(359)
$
(591)
$
2,793
$
2,824
1
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 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 the Bank under the agreements.
2
Net interest income within Wholesale Banking is calculated on a taxable equivalent basis (TEB). The TEB adjustment
reflected in Wholesale Banking is reversed in the Corporate
segment.
3
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 Federal
Deposit Insurance Corporation special assessment charge are recorded in the Corporate segment.
4
The Bank’s share of Schwab’s earnings is reported with a one-month lag. Refer to
Note 7 for further details.
Total Assets by Business Segment
(millions of Canadian dollars)
Canadian
Wealth
Personal and
Management
Wholesale
Commercial Banking
U.S. Retail
and Insurance
Banking
Corporate
Total
As at January 31, 2025
Total assets
$
587,920
$
590,732
$
23,823
$
729,329
$
161,750
$
2,093,554
As at October 31, 2024
Total assets
$
584,468
$
606,572
$
23,217
$
686,795
$
160,699
$
2,061,751
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 75
NOTE 19: INTEREST INCOME AND EXPENSE
The following tables present interest income
and interest expense by basis of accounting
measurement.
Interest Income
(millions of Canadian dollars)
For the three months ended
January 31, 2025
January 31, 2024
Measured at amortized cost
1
$
19,844
$
19,566
Measured at FVOCI – Debt instruments
1
902
933
20,746
20,499
Measured or designated at FVTPL
2,061
2,250
Measured at FVOCI – Equity instruments
65
64
Total
$
22,872
$
22,813
1
Interest income is calculated using EIRM.
Interest Expense
(millions of Canadian dollars)
For the three months ended
January 31, 2025
January 31, 2024
Measured at amortized cost
1
$
11,820
$
12,192
Measured or designated at FVTPL
3,186
3,133
Total
$
15,006
$
15,325
1
Interest expense is calculated using EIRM.
NOTE 20: REGULATORY CAPITAL
The Bank manages its capital under guidelines
established by OSFI. The regulatory
capital guidelines measure capital in relation
to credit, market, and operational
risks. The Bank has various capital policies,
procedures, and controls which it utilizes
to achieve its goals and objectives. The
Bank is designated as a domestic
systemically important bank (D-SIB) and
a global systemically important bank (G-SIB).
Canadian banks designated as D-SIBs are required
to comply with OSFI’s minimum targets for risk-based
capital and leverage ratios. The minimum
targets
include a D-SIB surcharge and Domestic Stability
Buffer (DSB) for CET1, Tier 1, Total Capital and risk-based Total Loss Absorbing Capacity (TLAC) ratios. The
DSB level was increased to
3.5
% as of November 1, 2023, which
sets these minimum target ratios at
11.5
%,
13.0
%,
15.0
% and
25.0
%, respectively. The OSFI
target includes the greater of the D-SIB or
G-SIB surcharge, both of which are
currently
1
% for the Bank. On February 1, 2023, OSFI
announced revisions to the
Leverage Requirements Guideline to introduce
a requirement for D-SIBs to hold a leverage
ratio buffer of
0.50
% in addition to the existing minimum requirement.
This sets the minimum targets for leverage
and TLAC leverage ratios at
3.5
% and
7.25
%, respectively.
The Bank complied with all minimum risk-based
capital and leverage ratio requirements
set by OSFI in the three months ended January
31, 2025.
The following table summarizes the Bank’s regulatory
capital positions as at January 31, 2025
and October 31, 2024.
Regulatory Capital Position
(millions of Canadian dollars, except
as noted)
As at
January 31
October 31
2025
2024
Capital
Common Equity Tier 1 Capital
$
85,204
$
82,714
Tier 1 Capital
95,589
93,248
Total Capital
110,238
105,745
Risk-weighted assets used in the calculation
of capital ratios
649,043
630,900
Capital and leverage ratios
Common Equity Tier 1 Capital ratio
13.1
%
13.1
%
Tier 1 Capital ratio
14.7
14.8
Total Capital ratio
17.0
16.8
Leverage ratio
4.2
4.2
TLAC Ratio
29.5
28.7
TLAC Leverage Ratio
8.5
8.1
TD BANK GROUP • FIRST QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 76
SHAREHOLDER AND INVESTOR INFORMATION
Shareholder Services
If you:
And your inquiry relates to:
Please contact:
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.
General Information
Products and services: Contact TD
Canada Trust, 24 hours a day, seven
days a week: 1-866-567-8888
French: 1-866-233-2323
Cantonese/Mandarin: 1-800-328-3698
Telephone device for the hearing impaired
(TTY): 1-800-361-1180
Website:
www.td.com
Email:
customer.service@td.com
Quarterly Earnings Conference Call
TD Bank Group will host an earnings conference
call in Toronto, Ontario on February
27, 2025. The call will be audio webcast
live through TD’s website at
9:30 a.m. ET. The call will feature presentations
by TD executives on the Bank’s
financial results for the first 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
on February 27,
2025, in advance of the call.
A listen-only telephone line
is available at 416-340-2217 or 1-800-806-5484
(toll free) and the
passcode is 2829533#.
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
February 27, 2025, until 11:59 p.m. ET on
March 14, 2025, by calling 905-694-9451 or 1-800-408-3053
(toll free). The passcode is 8753393#.
Annual Meeting
Thursday, April 10, 2025
Toronto, Ontario
ex992
THE TORONTO-DOMINION BANK
EARNINGS COVERAGE ON SUBORDINATED
NOTES AND DEBENTURES,
PREFERRED SHARES CLASSIFIED AS EQUITY,
AND LIABILITIES FOR
PREFERRED SHARES AND OTHER EQUITY INSTRUMENTS
AND CAPITAL
TRUST SECURITIES
FOR THE TWELVE
MONTHS ENDED JANUARY 31,
2025
TD Bank Group (“TD” or the “Bank”) dividend
requirements on all its outstanding preferred
shares and other equity instruments in respect
of the twelve months
ended January 31,
2025 and adjusted to a before-tax equivalent
using an effective tax rate of approximately
23.1% for the twelve months ended January
31, 2025,
amounted to $700 million. The Bank’s interest and
dividend requirements on all subordinated notes
and debentures, preferred shares and liabilities
for preferred
shares and other equity instruments and
capital trust securities, after adjustment
for new issues and retirement, amounted
to $1,189 million for the twelve months
ended January 31,
2025.
The Bank’s reported net income, before interest on
subordinated debt and liabilities for preferred
shares and capital trust securities and
income taxes was $11,254 million for the twelve months ended
January 31, 2025,
which was 9.5 times the Bank’s aggregate dividend
and interest requirement for
this period.
On an adjusted basis, the Bank’s net income before
interest on subordinated debt and liabilities
for preferred shares and other equity instruments
and capital
trust securities and income taxes for the twelve
months ended January 31, 2025, was $17,271
million, which was 14.5 times the Bank’s aggregate
dividend and
interest requirement for this period.
The Bank prepares its interim consolidated
financial statements in accordance with International
Financial Reporting Standards (IFRS),
the current generally
accepted accounting principles (GAAP),
and refers to results prepared in accordance
with IFRS as “reported”
results. The Bank also utilizes non-GAAP
financial
measures such as “adjusted”
results (i.e. reports results excluding
“items of note”) and non-GAAP ratios to
assess each of its businesses and measure
overall
Bank performance. 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 ratios used
in this presentation are not defined under
IFRS, and, therefore, may
not be comparable to similar terms used by
other issuers. See “How We Performed”
and “Quarterly Results” sections of the
Bank’s first quarter 2025 MD&A
(available at www.td.com/investor and www.sedarplus.ca), which are incorporated
by reference, for further explanation,
reported basis results, a list of the items
of
note, and a reconciliation of adjusted to reported
results.
ex993
RETURN ON ASSETS, DIVIDEND PAYOUTS, AND EQUITY TO ASSETS RATIOS
1
For the three months ended
For the year ended
January 31, 2025
October 31, 2024
October 31, 2024
Return on Assets – reported
2
0.52
%
0.67
%
0.42
%
Return on Assets – adjusted
3
0.68
0.59
0.70
Dividend Payout Ratio – reported
4
67.9
5
51.8
86.3
Dividend Payout Ratio – adjusted
6
52.0
59.2
52.2
Equity to Asset Ratio
7
5.7
5.5
5.7
1
The Bank prepares its consolidated financial statements in accordance with International Financial Reporting Standards
(IFRS), the current generally accepted accounting principles
(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 (i.e. reported
results excluding “items of note”) and non-GAAP ratios to assess each of its businesses and measure overall Bank
performance. 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 ratios used in this
presentation are not defined terms under IFRS and, therefore, may not be comparable to similar terms used by other
issuers. For further explanation regarding reported basis results, list
of the items of note, and a reconciliation of adjusted to reported results,
refer to “Significant and Subsequent Events”
and “How We Performed” sections
of the Bank’s first quarter 2025
MD&A (available at www.td.com/investor and www.sedar.com),
which are incorporated by reference.
2
Calculated as reported net income available to common shareholders divided by average total assets.
3
Calculated as adjusted net income available to common shareholders divided by average total assets.
4
Calculated as dividends declared per common share divided by reported basic earnings per share.
5
Not meaningful.
6
Calculated as dividends declared per common share divided by adjusted basic earnings per share.
7
Calculated as average total equity divided by average total assets.
ex994
TD BANK GROUP • FIRST QUARTER 2025
• EARNINGS NEWS RELEASE
Page 1
TD Bank Group Reports First Quarter 2025 Results
Earnings News Release
•
Three months ended January 31, 2025
This quarterly Earnings News Release should
be read in conjunction with the Bank’s
unaudited first quarter 2025 Report
to Shareholders for the three months
ended January 31,
2025,
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 February 26, 2025.
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 and Subsequent Events” and
“Non-GAAP and Other
Financial Measures” in the “How We Performed”
section of this document.
FIRST QUARTER FINANCIAL HIGHLIGHTS,
compared with the first quarter last year:
●
Reported diluted earnings per share were
$1.55, compared with $1.55.
●
Adjusted diluted earnings per share were
$2.02, compared with $2.00.
●
Reported net income was $2,793 million,
compared with $2,824 million.
●
Adjusted net income was $3,623 million,
compared with $3,637 million.
FIRST QUARTER ADJUSTMENTS (ITEMS
OF NOTE)
The first quarter reported earnings figures
included the following items of note:
●
Amortization of acquired intangibles
of $61 million ($52 million after tax or 3
cents per share), compared with $94 million
($79 million after tax or
4 cents per share) in the first quarter last
year.
●
Acquisition and integration charges related
to the Cowen acquisition of $52 million
($41 million after tax or 2 cents per share),
compared with
$117 million ($93 million after tax or 5 cents per share)
in the first quarter last year.
●
Impact from the terminated First Horizon
Corporation (FHN) acquisition-related
capital hedging strategy of $54 million ($41
million after tax or
2 cents per share), compared with $57 million
($43 million after tax or 2 cents per
share) in the first quarter last year.
●
U.S. balance sheet restructuring of $927
million ($696
million after tax or 40 cents per share).
TORONTO
, February 27, 2025 – TD Bank Group (“TD” or
the “Bank”) today announced its financial results
for the first quarter ended January 31, 2025. Reported
and
adjusted earnings were $2.8 billion and $3.6 billion,
respectively, relatively flat
compared with the first quarter last year.
“TD started the year with strong momentum and record revenue
across many of our businesses. While expenses remain
somewhat elevated, we delivered solid earnings,
which positions us well as we begin the new fiscal year,”
said Raymond Chun, Group President and Chief Executive
Officer, TD Bank Group.
“U.S. AML remediation remains
our top priority and we continue to make consistent progress
to strengthen the Bank. The strategic review is
advancing as planned, and we have taken early
action, such as
our divestiture of Schwab, as we develop our strategy
and roadmap for the future.”
Canadian Personal and Commercial Banking delivered
record revenue supported by continued volume growth
Canadian Personal and Commercial Banking net income was
$1,831 million, an increase of 3% compared to the first
quarter last year. This increase
reflects higher revenue,
partially offset by higher non-interest expenses and provisions
for credit losses (PCL). Revenue was a record $5,149
million, an increase of 5%, primarily reflecting loan
and
deposit volume growth.
This quarter, the Canadian Personal Bank
continued to build momentum, including deepening
customer relationships by launching Real Estate Secured
Lending and
Investing specialists in its highest opportunity branches.
In addition, the TD Aeroplan Visa Infinite Card
was recognized by Rewards Canada as Canada
’s top airline credit
card for the fourth year in a row
1
. In Business Banking, TD Auto Finance achieved record retail
originations this quarter and a significant expansion
of new dealer floor plan
relationships.
The U.S. Retail Bank delivered continued momentum
while making progress on balance sheet restructuring
U.S. Retail reported net income for the quarter was $342
million (US$247 million), down 61% (62% in U.S. dollars),
compared with the first quarter last year.
On an adjusted
basis, net income was $1,038 million (US$736 million),
down 12% (15% in U.S. dollars). Reported net income
for the quarter from the Bank’s investment in
The Charles
Schwab Corporation (“Schwab”) was $199 million (US$142 million),
up 3% (down 1% in U.S. dollars), compared with
the first quarter last year.
The U.S. Retail Bank, which excludes the Bank’s investment
in Schwab, reported net income was $143 million (US$10
5
million), down 79% (79% in U.S. dollars), compared
with the first quarter last year, primarily
reflecting the impact of balance sheet restructuring activities,
governance and control investments including the
Bank’s U.S. BSA/AML
remediation program, and higher PCL, partially offset
by the impact of the FDIC special assessment charge in the
first quarter last year. On
an adjusted basis, net income was
$839 million (US$594 million), down 15% (18% in U.S.
dollars) compared with the first quarter last year,
reflecting higher non-interest expenses and higher PCL,
partially
offset by higher revenue.
This quarter, the U.S. Retail Bank continued
to deliver operating momentum, with its fifth consecutive
quarter of personal deposit growth and double-digit
growth in
U.S. Wealth assets year-over-year.
The business also made significant progress in its
balance sheet restructuring strategy to ensure it can continue
to support its customers’
needs under the asset limitation.
Wealth Management and Insurance delivered record
Wealth revenue, earnings and assets, and
strong Insurance premium growth
Wealth Management and Insurance net income
was $680 million, an increase of 23% compared with
the first quarter last year, driven
by record revenue, earnings and assets
in Wealth Management and strong insurance premiums
growth. This quarter’s 15% revenue increase reflected insurance
premiums growth and higher fee-based revenue
driven by market and asset growth, as well as higher interest
income from deposits and increased transaction
revenue.
1
Awarded by AwardsCanada.ca on January 3, 2025: https://rewardscanada.ca/TopTravelCreditCard/
TD BANK GROUP • FIRST QUARTER 2025
• EARNINGS NEWS RELEASE
Page 2
This quarter, Wealth Management
and Insurance continued to deliver investment excellence
and innovative solutions.
TD Direct Investing was ranked #1 Digital Brokerage in
Canada by The Globe and Mail for the third consecutive
year. TD Asset Management received
24 Fundata FundGrade A+® Awards and was
recognized in six categories at
the 2024 Canada LSEG Lipper Fund Awards. In addition,
TD Insurance, with TD Securities as joint bookrunner,
diversified its reinsurance capacity by becoming
the first
Canadian insurer to sponsor a catastrophe bond solely focused
on catastrophe perils in Canada.
Wholesale Banking delivered record revenue driven by
its Global Markets business
Wholesale Banking reported net income for the quarter was
$299 million, an increase of 46% compared with the first
quarter last year, primarily reflecting
higher revenue,
partially offset by higher PCL and non-interest expenses.
On an adjusted basis, net income was $339 million,
an increase of 14% compared with the first quarter last
year.
Revenue for the quarter was a record $2 billion,
an increase of 12% compared with the first quarter last
year, primarily reflecting higher
trading-related revenue and
underwriting fees.
Wholesale Banking continued to drive growth from the enhanced
capabilities of the franchise. TD Cowen won the
2024 IFR U.S. Mid-Market Equity House Award,
which
recognizes the leading underwriter of U.S. equity offerings
between US$50-US$500 million. Following the quarter
end, TD Cowen also acted as a lead bookrunner on the
marquee US$15 billion secondary offering of Schwab
shares by TD, an important milestone.
Capital
TD’s Common Equity Tier 1 Capital
ratio was 13.1%.
Conclusion
“TD’s strength and stability,
combined with our unrelenting focus on meeting the
needs of our customers and clients, will serve the Bank well
in this period of geopolitical
and
macroeconomic uncertainty,
”
added Chun. “I want to thank our colleagues across
the globe for their tremendous efforts and commitment.
”
The foregoing contains forward-looking statements. Please refer to the “Caution Regarding Forward-Looking Statements”
on page 3.
TD BANK GROUP • FIRST QUARTER 2025
• 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 (“2024 MD&A”) in the Bank’s 2024 Annual Report under the heading
“Economic
Summary and Outlook”, under the headings “Key Priorities for 2025” 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 “2024 Accomplishments and Focus for
2025” for the Corporate segment, and in other statements regarding the Bank’s objectives and priorities for
2025 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 are typically identified by words such as “will”, “would”, “should”, “believe”,
“expect”, “anticipate”, “intend”, “estimate”, “forecast”, “outlook”, “plan”, “goal”, “target”, “possible”,
“potential”, “predict”,
“project”, “may”, and “could” 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, process, systems, data, third-party, fraud, infrastructure, insider and conduct), model, insurance, liquidity, capital adequacy, legal and regulatory compliance (including financial crime),
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 (including the economic, financial, and other impacts of pandemics); geopolitical
risk (including the
potential impact of new or elevated tariffs); inflation, interest rates and recession uncertainty; regulatory oversight
and compliance risk; risks associated with the Bank’s ability to satisfy the terms of the global resolution
of
the investigations into the Bank’s U.S.
Bank Secrecy Act
(BSA)/anti-money laundering (AML) program; the impact of the global resolution of the
investigations into the Bank’s U.S. BSA/AML program on the Bank’s
businesses, operations, financial condition, and reputation; 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; data risk; model risk; fraud activity; insider risk; conduct 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 consumer protection laws and regulations, 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-related risk); exposure related to litigation and
regulatory matters; ability of the Bank to attract, develop, and retain key talent; changes in
foreign exchange rates, interest
rates, credit spreads and equity prices; downgrade, suspension or withdrawal of ratings assigned
by any rating agency, the value and market price of the Bank’s common shares and other securities may be impacted by
market conditions and other factors; 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; critical accounting estimates and changes to accounting standards, policies, and methods
used by the Bank; 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 2024 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 headings
“Significant Events”, “Significant and Subsequent Events” or “Update on U.S. Bank Secrecy
Act (BSA)/Anti-Money Laundering (AML) Program Remediation and Enterprise AML Program Improvement
Activities“ 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 2024 MD&A under the headings “Economic Summary and Outlook” and “Significant Events”,
under
the headings “Key Priorities for 2025” 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 “2024 Accomplishments and Focus for 2025” for the Corporate segment,
each as may be updated in subsequently filed quarterly reports to shareholders and news releases (as
applicable).
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 securities legislation.
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 • FIRST QUARTER 2025
• EARNINGS NEWS RELEASE
Page 4
TABLE 1: FINANCIAL HIGHLIGHTS
(millions of Canadian dollars, except
as noted)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Results of operations
Total revenue – reported
$
14,049
$
15,514
$
13,714
Total revenue – adjusted
1
15,030
14,897
13,771
Provision for (recovery of) credit losses
1,212
1,109
1,001
Insurance service expenses (ISE)
1,507
2,364
1,366
Non-interest expenses – reported
8,070
8,050
8,030
Non-interest expenses – adjusted
1
7,983
7,731
7,125
Net income (loss) – reported
2,793
3,635
2,824
Net income – adjusted
1
3,623
3,205
3,637
Financial position
(billions of Canadian dollars)
Total loans net of allowance for loan losses
$
965.3
$
949.5
$
904.3
Total assets
2,093.6
2,061.8
1,910.9
Total deposits
1,290.5
1,268.7
1,181.3
Total equity
119.0
115.2
112.4
Total risk-weighted assets
2
649.0
630.9
579.4
Financial ratios
Return on common equity (ROE) – reported
3
10.1
%
13.4
%
10.9
%
Return on common equity – adjusted
1
13.2
11.7
14.1
Return on tangible common equity (ROTCE)
1,3
13.4
17.8
14.9
Return on tangible common equity – adjusted
1
17.2
15.4
18.7
Efficiency ratio – reported
3
57.4
51.9
58.6
Efficiency ratio – adjusted, net of ISE
1,3,4
59.0
61.7
57.4
Provision for (recovery of) credit losses
as a % of net
average loans and acceptances
0.50
0.47
0.44
Common share information – reported
(Canadian dollars)
Per share earnings (loss)
Basic
$
1.55
$
1.97
$
1.55
Diluted
1.55
1.97
1.55
Dividends per share
1.05
1.02
1.02
Book value per share
3
61.61
59.59
57.34
Closing share price
5
82.91
76.97
81.67
Shares outstanding (millions)
Average basic
1,749.9
1,748.2
1,776.7
Average diluted
1,750.7
1,749.3
1,778.2
End of period
1,751.7
1,750.1
1,772.1
Market capitalization (billions of Canadian dollars)
$
145.2
$
134.7
$
144.7
Dividend yield
3
5.4
%
5.0
%
4.9
%
Dividend payout ratio
3
67.8
51.8
65.7
Price-earnings ratio
3
17.5
16.3
13.1
Total shareholder return (1 year)
3
6.9
4.5
(6.9)
Common share information – adjusted
(Canadian dollars)
Per share earnings
Basic
$
2.02
$
1.72
$
2.01
Diluted
2.02
1.72
2.00
Dividend payout ratio
51.9
%
59.2
%
50.7
%
Price-earnings ratio
10.6
9.9
10.6
Capital ratios
3
Common Equity Tier 1 Capital ratio
13.1
%
13.1
%
13.9
%
Tier 1 Capital ratio
14.7
14.8
15.7
Total Capital ratio
17.0
16.8
17.6
Leverage ratio
4.2
4.2
4.4
TLAC ratio
29.5
28.7
30.8
TLAC Leverage ratio
8.5
8.1
8.6
1
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
and Subsequent 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.
2
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 first
quarter of 2025 Management’s Discussion and Analysis
(MD&A) for further details.
3
For additional information about this metric, refer to the Glossary in the first quarter of 2025 MD&A,
which is incorporated by reference.
4
Efficiency ratio – adjusted, net of ISE is calculated by dividing adjusted non-interest expenses by adjusted
total revenue, net of ISE. Adjusted total revenue, net of ISE –
Q1 2025: $13,523 million, Q4 2024: $12,533 million, Q1 2024: $12,405 million.
5
Toronto Stock Exchange closing market
price.
TD BANK GROUP • FIRST QUARTER 2025
• EARNINGS NEWS RELEASE
Page 5
SIGNIFICANT AND SUBSEQUENT EVENTS
Sale of Schwab Common Shares
On February 12, 2025, the Bank sold its entire
remaining equity investment in Schwab
through a registered offering and share repurchase
by Schwab.
Immediately prior to the sale, TD held 184.7
million shares of Schwab’s common stock, representing
10.1% economic ownership. The sale of
the shares resulted
in proceeds of approximately $21.0 billion
(US$14.6 billion). In the second quarter
of fiscal 2025, the Bank is expected
to recognize a net gain on sale of its
investment in Schwab of approximately $8.6
billion (US$5.8 billion). This gain is net of
the release of related cumulative foreign currency
translation from AOCI, the
release of AOCI on designated net investment
hedging items, direct transaction costs, and
taxes. The Bank will also recognize $0.2
billion of underwriting fees in
its Wholesale segment as a result of TD
Securities acting as a lead bookrunner on
the transaction.
The transaction is expected to increase
Common Equity Tier 1 (CET1) capital by approximately
238 bps, based on the Bank’s CET1 capital
as at
January 31, 2025. Additionally, assuming the $8.0 billion planned
share repurchases
pursuant to the Bank’s proposed normal course issuer
bid were completed as
of January 31, 2025, the Bank’s pro forma CET1
capital as at January 31, 2025 would be
approximately 14.2%. The Bank
continues to have a business
relationship with Schwab through the IDA Agreement.
The Bank will discontinue recording
its share of earnings available to common
shareholders from its
investment in Schwab in the second quarter
of fiscal 2025.
UPDATE ON U.S. BANK
SECRECY ACT (BSA)/ANTI-MONEY LAUNDERING (AML
)
PROGRAM REMEDIATION
AND
ENTERPRISE AML PROGRAM IMPROVEMENT ACTIVITIES
As previously disclosed in the Bank’s 2024
MD&A, on October 10, 2024, the Bank announced
that, following active cooperation and engagement
with authorities
and regulators, it reached a resolution of previously
disclosed investigations related to its
U.S. BSA/AML compliance programs (the “Global
Resolution”). The Bank
and certain of its U.S. subsidiaries consented
to orders with the Office of the Comptroller
of the Currency (OCC), the Federal Reserve
Board, and the Financial
Crimes Enforcement Network (FinCEN) and
entered into plea agreements with the
Department of Justice (DOJ), Criminal
Division, Money Laundering and Asset
Recovery Section and the United States
Attorney’s Office for the District of New Jersey. The Bank is focused
on meeting the terms of the consent orders and
plea
agreements, including meeting its requirements
to remediate the Bank’s U.S. BSA/AML programs.
In addition, the Bank is also undertaking several
improvements
to the Bank’s enterprise-wide AML/Anti-Terrorist Financing and Sanctions Programs
(“Enterprise AML Program”).
For additional information on the Global
Resolution, the Bank’s U.S. BSA/AML program
remediation activities, the Bank’s Enterprise
AML Program improvement
activities, and the risks associated with the
foregoing, see the “Significant Events – Global
Resolution of the Investigations into the Bankְ’s U.S. BSA/AML
Program”
and “Risk Factors That May Affect Future Results
– Global Resolution of the Investigations into
the Bank’s U.S. BSA/AML Program” sections of
the Bank’s
2024 MD&A.
Remediation of the U.S. BSA/AML Program
The Bank remains focused on remediating
its U.S. BSA/AML program to meet the requirements
of the Global Resolution. The Bank continues
to expect to have
the majority of its management remediation
actions implemented in calendar 2025 and
continues to expect U.S. BSA/AML remediation
and related governance
and control investments of approximately
US$500 million pre-tax in fiscal 2025
2
. Remaining management implementations are
planned for calendar 2026 and into
calendar 2027. Sustainability and testing activities
are planned for calendar 2026 and
calendar 2027 following management implementations,
and the Bank is
targeting to have the Suspicious Activity
Report lookback to be completed in calendar
2027 per the OCC consent order. As noted in the Bank’s 2024
MD&A, all
management remediation actions will be
subject to validation by the Bank’s internal audit function,
followed by the review and acceptance by
the appointed
monitor, demonstrated sustainability, and, ultimately, the review and approval of the Bank’s U.S. banking
regulators and the DOJ. The following
graph illustrates
the Bank’s expected remediation plan and progress
on a calendar year basis,
based on its work to date:
As noted in the Bank’s 2024 MD&A including in
the “Risk Factors That May Affect Future
Results – Global Resolution of the Investigations
into the Bank’s U.S.
BSA/AML Program” section thereof, the Bank’s
remediation timeline is based on the Bank’s
current plans, as well as assumptions
related to the duration of
planning activities, including the completion
of external benchmarking and lookback
reviews. As an example, as the Bank
undertakes the lookback reviews, the
Bank may be required to further expand
the scope of the review, either in terms of the subjects being
addressed and/or the time period reviewed.
The Bank’s
ability to meet its planned remediation milestones
assumes that the Bank will be able
to successfully execute against its
U.S. BSA/AML remediation program plan,
which is subject to inherent risks and uncertainties
including the Bank’s ability to attract and
retain key employees, the ability of third
parties to deliver on their
contractual obligations, and the successful
development and implementation of required
technology solutions. Furthermore, the execution
of the U.S. BSA/AML
remediation plan, including these planned
milestones, will not be entirely within the Bank’s
control because of various factors such as (i)
the requirement to obtain
regulatory approval or non-objection before
proceeding with various steps, and (ii) the
requirement for the various deliverables
to be acceptable to the regulators
and/or the monitor.
While substantial work remains, the
Bank has made progress on its U.S. BSA/AML
program remediation activities over the
first fiscal quarter of 2025, including:
2
The total amount expected to be spent on remediation and governance and control investments is subject to inherent uncertainties
and may vary based on the scope of work in the U.S.
BSA/AML remediation plan which could change as a result of additional findings that are identified as work progresses
as well as the Bank’s ability to successfully execute against the
U.S. BSA/AML remediation program in accordance with the U.S. Retail segment’s fiscal 2025 plan.
TD BANK GROUP • FIRST QUARTER 2025
• EARNINGS NEWS RELEASE
Page 6
1)
the Bank submitted a list of candidates for
the monitorship to both the DOJ and
FinCEN, and they both approved the use of
the same Independent
Compliance Monitor on a go-forward basis;
2)
the implementation of enhanced investigation
practices including the implementation
of technology which centralizes all new investigative
cases in a
single system to provide unified data sets
to help manage financial crime risk
with a single view of the customer;
3)
the continued hiring of investigative analysts,
with the U.S. investigative analyst team
up 4% in size in the first fiscal quarter of
2025;
4)
the completion of the design of machine learning
tools that help analyze customer data to
more effectively and rapidly detect potential activity
of
interest;
5)
the introduction of new reporting on workloads
that has improved the Bank’s ability to forecast resource
needs; and
6)
completed development of a detailed plan
to improve employee accountability
mechanisms to ensure that there are clear
consequences that are
understood throughout the organization.
For the second and third fiscal quarters of
2025, the Bank’s focus will be on the following remediation
activities:
1)
hiring of additional investigative analysts
to help manage case volumes which are
expected to be higher as additional monitoring
capabilities continue
to be implemented;
2)
the implementation of incremental enhancements
for transaction monitoring and client
onboarding, including the implementation of
a further round of
scenarios into the Bank’s transaction monitoring
system;
3)
the introduction of updated investigative procedures
that contain additional guidance on analyzing
customer activity; and
4)
the implementation of machine learning analysis
capabilities beginning in the third fiscal quarter
of 2025.
As noted in the Bank’s 2024 MD&A,
to help ensure that the Bank can continue
to support its customers’ financial needs
in the U.S. while not exceeding the
limitation on the combined total assets of
the U.S. Bank, the Bank is focused on executing
multiple U.S. balance sheet restructuring actions
in fiscal 2025. Refer to
the “Update on U.S. Balance Sheet Restructuring”
section of the U.S. Retail segment section
for additional information on these actions.
For additional information
about expenses associated with the Bank’s
U.S. BSA/AML program remediation activities,
refer to the U.S. Retail segment
section.
Assessment and Strengthening of the
Bank’s Enterprise AML Program
The Bank is continuing to implement improvements
to the Enterprise AML Program and
continues to target implementation of
the majority of its Enterprise AML
Program remediation and enhancement actions
by the end of calendar 2025. As noted in
the Bank’s 2024 MD&A, once implemented,
those remediation and
enhancement actions will then be subject to internal
review, challenge and validation of the activities. Following
the end of the first fiscal quarter, the Financial
Transactions and Reports Analysis Centre of Canada
(“FINTRAC”) commenced a review of
certain remediation steps that the Bank has
taken to date to address
the FINTRAC violations. This review is ongoing,
and subject to the outcome, may result
in additional regulatory actions.
As noted in the “Risk Factors That May
Affect Future Results – Global Resolution of
the Investigations into the Bank’s U.S. BSA/AML
Program” section of the
Bank’s 2024 MD&A, the remediation and enhancement
of the Enterprise AML program is exposed
to similar risks as noted in respect
of the remediation of the
Bank’s U.S. BSA/AML program. In particular, as the Bank makes
remediation and enhancements to the
Enterprise AML Program, it expects an
increase in
identification of reportable transactions and/or
events, which will add to the operational
backlog in the Bank’s Financial Crime
Risk Management (FCRM)
investigations processing that the Bank currently
faces, but is working towards remediating,
across the enterprise. In addition, as the
Bank continues its
remediation and improvement activities of
the Enterprise AML Program, it continues
to assess (i) whether issues that have
been, and continue to be, identified in
the U.S. BSA/AML program exist in the Enterprise
AML Program in Canada, Europe or
Asia, and (ii) the impact of such issues. The results
of these assessments
may also broaden the scope of the remediation
and improvements required for the
Enterprise AML Program. Furthermore, the
Bank’s regulators or law
enforcement agencies may identify other issues
with the Bank’s Enterprise AML Program,
which may result in additional regulatory
actions.
While substantial work remains, the
Bank has made progress on the improvements
to the Enterprise AML Program over the
first fiscal quarter of 2025, including:
1) the consolidation of the Enterprise and
the U.S. AML mandates under the leadership
of the Global Head of FCRM, in order to better
enable strong
and consistent engagement, and delivery of improvements
across both the U.S. and Enterprise
AML programs;
2) additional improvements in the Bank’s process
and procedural guidance, including
additional targeted training across FCRM
and individual business
lines; and
3)
hiring of additional investigative analysts,
to help improve management of case volumes,
with further expansion planned in future fiscal
quarters.
For the second and third fiscal quarters of
2025, the Bank’s focus will be on the following improvements
to the Enterprise AML Program:
1) the implementation of a new centralized
case management tool that is already in production
in the U.S. through the rest of the Bank,
with the goal of
strengthening oversight and investigations of identified
FCRM risks;
2) the implementation of technology initiatives
to consolidate electronic document and data
availability to help improve timeliness of
monitoring and
oversight of escalated AML issues; and
3) the continued rollout of an enhanced risk
assessment methodology and tools to
strengthen identification and measurement
of FCRM risks across
clients, products, and transactions, supported
by improved data capabilities.
TD BANK GROUP • FIRST QUARTER 2025
• EARNINGS NEWS RELEASE
Page 7
HOW WE PERFORMED
ECONOMIC SUMMARY AND OUTLOOK
The evolution of geopolitical and trade-related
risks maintains a high degree of uncertainty
on both the economic outlook and the inflation
trajectory. However,
absent a significant materialization of negative
risks, the global economy remains on
track for a solid growth performance
in calendar 2025. A moderate slowdown
in the U.S. expansion over the past year and
still-soft conditions in Canada, the E.U. and
the U.K., has helped to cool inflation and
enabled central banks to lower
interest rates. TD Economics expects future
interest rate reductions to be gradual,
as central banks assess how growth and inflation
respond.
The U.S. economy grew at a healthy 2.8%
average annual pace in calendar 2024
supported by resilient consumer spending and
strength in business
investment. Lower mortgage rates in the
spring and summer of 2024 delivered a late-year
boost to residential investment, although
a more recent backup in bond
yields is likely to slow the sector’s
momentum in the near term. With U.S.
domestic demand outpacing that of many
of its advanced economy peers, import
growth
continued to run ahead of exports, leading
to little growth support from international
trade.
Based on January 2025 data, the U.S. job
market has stabilized recently, with the unemployment rate at 4.0%,
up modestly from a year ago. This can be
characterized as a normalization following
tight conditions that persisted for longer than
expected after the pandemic. The U.S. economy
carries the markings of a
“soft landing” that has been allowing inflation
pressures to gradually drift lower. Accordingly, the U.S. central bank trimmed
its policy rate by a full percentage point
from September to December 2024, before
pausing in January 2025.
At its January 2025 meeting, the Federal Reserve
indicated that further interest rate reductions
would require additional progress towards
achieving its inflation
mandate. TD Economics expects this condition
to be met by the summer of 2025,
opening the door for the federal funds rate
to be lowered to 3.75-4.00% by the
end of calendar 2025 – a level still on the restrictive
side. The potential for higher federal government
deficits and increased import tariffs represent
upside risks to
both inflation and interest rates, while a strong
U.S. dollar poses a downside risk.
After Canada’s economy slowed notably in calendar
2023, strong population gains and lower
interest rates lifted economic growth
in calendar 2024 to an
estimated 1.9% in real terms on a fourth quarter-over-fourth
quarter basis. Population increases have
also contributed to labour force growth outpacing
job
creation, taking the unemployment rate higher
and cooling labour market conditions. The
unemployment rate was 6.6% in January 2025,
above its pre-pandemic
level, but still below its long-run average. Looking
ahead, TD Economics expects population
growth to slow sharply over the next few
years as the federal
government’s immigration policy changes restrict
immigration. The negative impact of
weaker population inflows on consumer spending
and housing activity is
likely to be more than offset by the boost to activity
from lower interest rates.
The risk of U.S. import tariffs on Canadian goods
has emerged as a major downside
risk to the Canadian economic outlook. Even
if tariffs are not as severe as
proposed, the uncertainty is likely to dampen
business investment in Canada.
No other major central bank has reduced interest
rates as aggressively as the Bank
of Canada in recent years. The Canadian
central bank lowered its overnight
rate further to 3.00% in January 2025,
two percentage points below its peak in
calendar 2024. TD Economics expects the
Bank of Canada to continue trimming
interest rates, reaching 2.25% by the
middle of calendar 2025. Historically-wide interest
rate differentials between Canada and the
U.S. – alongside concerns
around U.S. import tariffs – have weakened the
Canadian dollar. TD Economics expects the Canadian dollar
will trade in the 68 to 70 U.S. cent range over
the
next few quarters assuming major U.S. tariffs are
avoided.
HOW THE BANK REPORTS
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 “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
As at January 31, 2025, the Bank accounted
for its investment in Schwab using the equity
method. The U.S. Retail segment reflected
the Bank’s share of net
income from its investment in Schwab.
The Corporate segment net income (loss)
included
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
was reported with a one-month lag. For further
details, refer to Note 12 of the Bank’s 2024
Annual Consolidated
Financial Statements.
On August 21, 2024, the Bank sold 40.5
million shares of common stock of Schwab for
proceeds of approximately $3.4 billion (US$2.5
billion). The share sale
reduced the Bank’s ownership interest in Schwab
from 12.3% to 10.1%. The Bank recognized
approximately $1.0 billion (US$0.7 billion) as
other income (net of
$0.5 billion (US$0.4 billion) loss from AOCI
reclassified to earnings), in the fourth quarter
of fiscal 2024.
On February 12, 2025, the Bank sold its entire
remaining equity investment in Schwab
through a registered offering and share repurchase
by Schwab. For
further details, refer to “Significant and Subsequent
Events” section of this document.
The Bank will discontinue recording its share
of earnings available to
common shareholders from its investment
in Schwab in the second quarter of fiscal
2025.
TD BANK GROUP • FIRST QUARTER 2025
• EARNINGS NEWS RELEASE
Page 8
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” or the
“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
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 had 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.
During the first quarter of fiscal 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 fiscal 2024, Schwab had completed its buydown
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.
Subsequent to the sale of the Bank’s entire remaining
equity investment in Schwab, the Bank
continues to have a business relationship
with Schwab through
the IDA Agreement.
Refer to Note 27 of the Bank’s 2024 Annual
Consolidated Financial Statements for further details
on the Schwab IDA Agreement.
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
January 31
October 31
January 31
2025
2024
2024
Net interest income
$
7,866
$
7,940
$
7,488
Non-interest income
6,183
7,574
6,226
Total revenue
14,049
15,514
13,714
Provision for (recovery of) credit losses
1,212
1,109
1,001
Insurance service expenses
1,507
2,364
1,366
Non-interest expenses
8,070
8,050
8,030
Income before income taxes and share
of net income from
investment in Schwab
3,260
3,991
3,317
Provision for (recovery of) income taxes
698
534
634
Share of net income from investment in
Schwab
231
178
141
Net income (loss) – reported
2,793
3,635
2,824
Preferred dividends and distributions on other
equity instruments
86
193
74
Net income (loss) attributable to common
shareholders
$
2,707
$
3,442
$
2,750
TD BANK GROUP • FIRST QUARTER 2025
• EARNINGS NEWS RELEASE
Page 9
The following table provides a reconciliation between
the Bank’s adjusted and reported results.
For further details refer to the “Significant
and Subsequent Events”
or “How We Performed” sections.
TABLE 3: NON-GAAP FINANCIAL MEASURES – Reconciliation
of Adjusted to Reported Net Income
(millions of Canadian dollars)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Operating results – adjusted
Net interest income
1,2
$
7,920
$
8,034
$
7,545
Non-interest income
3
7,110
6,863
6,226
Total revenue
15,030
14,897
13,771
Provision for (recovery of) credit losses
1,212
1,109
1,001
Insurance service expenses
1,507
2,364
1,366
Non-interest expenses
4
7,983
7,731
7,125
Income before income taxes and share of net income from
investment in Schwab
4,328
3,693
4,279
Provision for (recovery of) income taxes
962
695
872
Share of net income from investment in Schwab
5
257
207
230
Net income – adjusted
3,623
3,205
3,637
Preferred dividends and distributions on other equity instruments
86
193
74
Net income available to common shareholders –
adjusted
3,537
3,012
3,563
Pre-tax adjustments for items of note
Amortization of acquired intangibles
6
(61)
(60)
(94)
Acquisition and integration charges related to the Schwab
transaction
4,5
–
(35)
(32)
Share of restructuring and other charges from investment
in Schwab
5
–
–
(49)
Restructuring charges
4
–
–
(291)
Acquisition and integration-related charges
4
(52)
(82)
(117)
Impact from the terminated FHN acquisition-related capital
hedging strategy
1
(54)
(59)
(57)
Gain on sale of Schwab shares
3
–
1,022
–
U.S. balance sheet restructuring
3
(927)
(311)
–
Indirect tax matters
2,4
–
(226)
–
FDIC special assessment
4
–
72
(411)
Global resolution of the investigations into the Bank’s
U.S. BSA/AML program
4
–
(52)
–
Less: Impact of income taxes
Amortization of acquired intangibles
(9)
(8)
(15)
Acquisition and integration charges related to the Schwab
transaction
–
(9)
(6)
Restructuring charges
–
–
(78)
Acquisition and integration-related charges
(11)
(18)
(24)
Impact from the terminated FHN acquisition-related capital
hedging strategy
(13)
(14)
(14)
U.S. balance sheet restructuring
(231)
(77)
–
Indirect tax matters
–
(53)
–
FDIC special assessment
–
18
(101)
Total adjustments for items
of note
(830)
430
(813)
Net income (loss) available to common shareholders
– reported
$
2,707
$
3,442
$
2,750
1
After the termination of the merger agreement between the Bank and FHN on May 4, 2023, the residual
impact of the strategy is reversed through net interest income – Q1 2025: ($54) million,
Q4 2024: ($59) million,
Q1 2024: ($57) million, reported in the Corporate segment.
2
Adjusted net interest income excludes the following item of note:
i.
Indirect tax matters – Q4 2024: $35 million, reported in the Corporate segment.
3
Adjusted non-interest income excludes the following items of note:
i.
The Bank sold 40.5 million shares of common stock of Schwab and recognized a gain on the sale
– Q4 2024: $1,022 million, reported in the Corporate segment; and
ii.
U.S. balance sheet restructuring – Q1 2025: $927 million, Q4 2024: $311 million, reported in the U.S. Retail segment.
4
Adjusted non-interest expenses exclude the following items of note:
i.
Amortization of acquired intangibles – Q1 2025: $35 million, Q4 2024: $33 million, Q1 2024: $63 million, reported
in the Corporate segment;
ii.
The Bank’s own acquisition and integration charges related to the Schwab transaction – Q4 2024: $33
million, Q1 2024: $23 million, reported in the Corporate segment;
iii.
Restructuring charges – Q1 2024: $291 million, reported in the Corporate segment;
iv.
Acquisition and integration-related charges – Q1 2025: $52 million, Q4 2024: $82 million, Q1 2024:
$117 million, reported in the Wholesale Banking segment;
v.
Indirect tax matters – Q4 2024: $191 million, reported in the Corporate segment;
vi.
FDIC special assessment – Q4 2024: ($72) million, Q1 2024: $411 million, reported in the U.S. Retail segment; and
vii.
Charges for the global resolution of the investigations into the Bank’s U.S. BSA/AML program – Q4 2024:
$52 million, reported in the U.S. Retail segment.
5
Adjusted Share of net income from investment in Schwab excludes the following items of note
on an after-tax basis. The earnings impact of these items is reported in the Corporate
segment:
i.
Amortization of Schwab-related acquired intangibles – Q1 2025: $26 million, Q4 2024: $27 million,
Q1 2024: $31 million;
ii.
The Bank’s share of acquisition and integration charges associated with Schwab’s acquisition of TD Ameritrade – Q4 2024: $2
million, Q1 2024: $9 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.
TD BANK GROUP • FIRST QUARTER 2025
• EARNINGS NEWS RELEASE
Page 10
TABLE 4: RECONCILIATION OF REPORTED TO ADJUSTED EARNINGS PER SHARE
1
(Canadian dollars)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Basic earnings (loss) per share – reported
$
1.55
$
1.97
$
1.55
Adjustments for items of note
0.47
(0.25)
0.45
Basic earnings per share – adjusted
$
2.02
$
1.72
$
2.01
Diluted earnings (loss) per share – reported
$
1.55
$
1.97
$
1.55
Adjustments for items of note
0.47
(0.25)
0.45
Diluted earnings per share – adjusted
$
2.02
$
1.72
$
2.00
1
EPS is computed by dividing net income available to common shareholders by the weighted-average number of
shares outstanding during the period. Numbers may not add due to
rounding.
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 11.5% Common Equity Tier 1 (CET1) Capital
effective fiscal 2024.
TABLE 5: RETURN ON COMMON EQUITY
(millions of Canadian dollars, except
as noted)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Average common equity
$
106,133
$
102,051
$
100,269
Net income (loss) attributable to common
shareholders – reported
2,707
3,442
2,750
Items of note, net of income taxes
830
(430)
813
Net income available to common shareholders
– adjusted
$
3,537
$
3,012
$
3,563
Return on common equity – reported
10.1
%
13.4
%
10.9
%
Return on common equity – adjusted
13.2
11.7
14.1
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
January 31
October 31
January 31
2025
2024
2024
Average common equity
$
106,133
$
102,051
$
100,269
Average goodwill
19,205
18,568
18,208
Average imputed goodwill and intangibles on investments
in Schwab
5,116
5,328
6,056
Average other acquired intangibles
1
482
508
615
Average related deferred tax liabilities
(237)
(230)
(231)
Average tangible common equity
81,567
77,877
75,621
Net income (loss) attributable to common
shareholders – reported
2,707
3,442
2,750
Amortization of acquired intangibles, net of income
taxes
52
52
79
Net income (loss) attributable to common
shareholders adjusted for
amortization of acquired intangibles,
net of income taxes
2,759
3,494
2,829
Other items of note, net of income taxes
778
(482)
734
Net income available to common shareholders
– adjusted
$
3,537
$
3,012
$
3,563
Return on tangible common equity
13.4
%
17.8
%
14.9
%
Return on tangible common equity – adjusted
17.2
15.4
18.7
1
Excludes intangibles relating to software and asset servicing rights.
TD BANK GROUP • FIRST QUARTER 2025
• EARNINGS NEWS RELEASE
Page 11
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 2024 MD&A, and Note
28 of
the Bank’s Consolidated Financial Statements
for the year ended October 31, 2024. Effective
the first quarter of 2025, certain U.S. governance
and control
investments, including costs for U.S. BSA/AML
remediation, previously reported
in the Corporate segment are now reported
in the U.S. Retail segment.
Comparative amounts have been reclassified
to conform with the presentation adopted
in the current period.
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 $15
million, compared with
$19 million in the prior quarter and $29 million
in the first 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
January 31
October 31
January 31
2025
2024
2024
Net interest income
$
4,135
$
4,058
$
3,833
Non-interest income
1,014
1,006
1,051
Total revenue
5,149
5,064
4,884
Provision for (recovery of) credit losses –
impaired
459
456
364
Provision for (recovery of) credit losses –
performing
62
(26)
59
Total provision for (recovery of) credit losses
521
430
423
Non-interest expenses
2,086
2,102
1,984
Provision for (recovery of) income taxes
711
709
692
Net income
$
1,831
$
1,823
$
1,785
Selected volumes and ratios
Return on common equity
1
31.4
%
32.0
%
34.6
%
Net interest margin (including on securitized
assets)
2
2.81
2.80
2.84
Efficiency ratio
40.5
41.5
40.6
Number of Canadian retail branches
1,063
1,060
1,062
Average number of full-time equivalent staff
27,422
27,930
29,271
1
Capital allocated to the business segment was 11.5% CET1 Capital.
2
Net interest margin is calculated by dividing net interest income by average interest-earning assets. Average
interest-earning assets used in the calculation of net interest margin is a non-
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 first quarter 2025
MD&A for additional information about these metrics.
Quarterly comparison – Q1 2025 vs. Q1 2024
Canadian Personal and Commercial
Banking net income for the quarter was
$1,831 million, an increase of $46
million, or 3%, compared with the first quarter
last
year, reflecting higher revenue, partially offset by higher non-interest
expenses and PCL. The annualized
ROE for the quarter was 31.4%, compared
with 34.6% in
the first quarter last year.
Revenue for the quarter was $5,149 million, an
increase of $265 million, or 5%,
compared with the first quarter last year. Net interest income
was
$4,135 million, an increase of $302 million, or
8%, primarily reflecting volume growth.
Average loan volumes increased $24 billion,
or 4%, reflecting 4% growth in
personal loans and 6% growth in business
loans. Average deposit volumes increased $25
billion, or 5%, reflecting 4% growth in personal
deposits and 7% growth
in business deposits. Net interest margin
was 2.81%, a decrease of 3 basis points
(bps), primarily due to changes to balance
sheet mix reflecting the transition of
Bankers’ Acceptances (BAs) to Canadian Overnight
Repo Rate Average (CORRA)-based loans.
Non-interest income was $1,014 million, a decrease
of
$37 million, or 4%, compared with the
first quarter last year, primarily reflecting lower fees due
to the transition of BAs to CORRA-based loans in
the prior year, the
impact of which is offset in net interest income.
PCL for the quarter was $521 million, an increase
of $98 million compared with the first quarter
last year. PCL – impaired was $459 million, an increase of
$95 million, or 26%, reflecting credit
migration in the consumer and commercial
lending portfolios. PCL – performing was
$62 million, an increase of $3 million
compared to the prior year. The performing provisions this quarter
were largely recorded in the commercial lending
portfolio reflecting policy and trade uncertainty
that could impact the economic trajectory and
credit performance, partially offset by an update
to the economic forecast. Total PCL as an annualized percentage of
credit volume was 0.35%, an increase of
5 bps compared with the first quarter last
year.
Non-interest expenses for the quarter were $2,086
million, an increase of $102 million, or
5%, compared with the first quarter
last year, reflecting higher
technology spend, the impact of the compensation
initiative whereby the Bank’s eligible non-executive
employees received share compensation
(the “TD Share
Compensation Initiative”),
and various other operating expenses.
The efficiency ratio for the quarter was 40.5%,
compared with 40.6% in the first quarter
last year.
Quarterly comparison – Q1 2025 vs. Q4 2024
Canadian Personal and Commercial
Banking net income for the quarter was
$1,831 million, an increase of $8 million, relatively
flat compared with the prior
quarter, primarily reflecting higher revenue and lower non-interest
expenses, partially offset by higher PCL. The annualized
ROE for the quarter was 31.4%,
compared with 32.0% in the prior quarter.
TD BANK GROUP • FIRST QUARTER 2025
• EARNINGS NEWS RELEASE
Page 12
Revenue increased $85 million, or 2%, compared
with the prior quarter. Net interest income increased $77
million, or 2%, reflecting volume growth and higher
margins. Average loan volumes increased $6 billion,
or 1%, reflecting 1% growth in personal
loans and 2% growth in business loans.
Average deposit volumes
increased $8 billion, or 2%, reflecting 1%
growth in personal deposits and 3% growth
in business deposits. Net interest margin
was 2.81%, an increase of 1 basis
point, primarily driven by changes to balance
sheet mix. As we look forward to Q2, while
many factors can impact margins, including
the impact of any further Bank
of Canada rate cuts, competitive market dynamics,
and deposit reinvestment rates and
maturity profiles, we expect NIM to be relatively
stable
3
. Non-interest
income increased $8 million, or 1% compared
with the prior quarter.
PCL for the quarter was $521 million, an increase
of $91 million compared with the prior
quarter. PCL – impaired was $459 million, an increase of
$3 million, or
1%, reflecting credit migration in the consumer
lending portfolios largely offset by lower
provisions in the commercial lending portfolio.
PCL – performing was a
build of $62 million, compared with a recovery
of $26 million in the prior quarter. The performing provisions
this quarter were largely recorded in the commercial
lending portfolio reflecting policy and trade
uncertainty that could impact the economic
trajectory and credit performance, partially offset by
an update to the
economic forecast. Total PCL as an annualized percentage of credit volume
was 0.35%, an increase of 5 bps compared
with the prior quarter.
Non-interest expenses decreased $16 million,
or 1% compared with the prior quarter.
The efficiency ratio was 40.5%, compared with 41.5%
in the prior quarter.
U.S. Retail
Update on U.S. Balance Sheet Restructuring
Activities
The Bank continued to focus on executing
the balance sheet restructuring activities
disclosed in the 2024 MD&A to help ensure
we can continue to support
customers’ financial needs in the U.S. while
not exceeding the limitation on the
combined total assets of TD Bank, N.A. and
TD Bank USA, N.A. (the “U.S. Bank”).
As previously disclosed, the Bank expects
to reposition its U.S. investment portfolio by
selling up to US$50 billion of lower yielding investment
securities and
reinvesting the proceeds into a similar composition
of assets but yielding higher rates.
During the first quarter, the Bank sold approximately US$13.1
billion of
bonds. In the aggregate, since the announcement
of the U.S. balance sheet restructuring
activities on October 10, 2024, through
January 31, 2025, the Bank has
sold approximately US$15.9 billion of bonds
from its U.S. investment portfolio for an
aggregate loss of US$875 million pre-tax
and US$657 million after-tax.
Between February 1, 2025, through February
26, 2025, the Bank sold an additional
US$3.1 billion of bonds, resulting in a loss of
US$197 million pre-tax and
US$148 million after-tax. The Bank expects
to complete its investment portfolio repositioning
no later than the first half of calendar 2025
and expects the net
interest income benefit from these sales
to be at the upper end of the previously disclosed
range of US$300 million to US$500 million pre-tax
in fiscal 2025
4
.
In addition, the Bank continues to target reducing
the U.S. Bank’s assets by approximately 10%
from the asset level as of September 30, 2024,
largely by selling
or winding down certain non-scalable or non-core
U.S. loan portfolios that do not align
with the U.S. Retail segment’s focused strategy
or have lower returns on
investment such as the correspondent lending,
residential jumbo mortgage, export
and import lending, and commercial
auto dealer portfolios. This reduction in
assets combined with natural balance sheet
run-off, is expected to be largely complete by
the end of fiscal 2025 and reduce net interest
income in the U.S. Retail
segment by approximately US$200 million
to US$225 million pre-tax in fiscal 2025
5
.
This quarter, the Bank used proceeds from investment maturities,
plus cash on hand, to pay down US$25
billion of short-term borrowings.
In addition, loans were
reduced by US$2 billion, reflecting loan run-off and
some loan sales in certain non-scalable and
non-core U.S. loan portfolios. Accordingly, as of January 31, 2025,
the combined total assets of the U.S. Bank
were US$402 billion. In the aggregate, total
losses associated with the Bank’s U.S. balance
sheet restructuring
activities from October 10, 2024 through
January 31, 2025 are US$878 million pre-tax
and US$659 million after-tax. In total, the
Bank’s collective balance sheet
restructuring actions are expected to result
in a loss up to US$1.5 billion after-tax, and impact
capital as executed
4
,5
.
Subsequent to quarter end, the Bank reached
an agreement to sell approximately US$9
billion of certain U.S. residential mortgage
loans (correspondent lending
loans), which is expected to result in
a recognition of a pre-tax loss of approximately
US$600 million in the second quarter of
2025
5
.
3
The Bank’s Q2 2025 net interest margin expectations for the segment are based on the Bank’s
assumptions regarding factors such as Bank of Canada rate cuts, competitive market
dynamics, and deposit reinvestment rates and maturity profiles, and are subject to inherent risks and uncertainties,
including those set out in the “Risk Factors That May Affect Future
Results” section of the Bank’s 2024 MD&A and the first quarter 2025 MD&A.
4
The amount of bonds that the Bank sells and the timing of such sales, are subject to market conditions and other
factors. Accordingly, the expected loss incurred as well as the expected
amount of net interest income benefit, are subject to risk and uncertainties and are based on assumptions regarding
the timing of when such bonds are sold, the interest rates at the time
of sale as well as other market factors and conditions which are not entirely within the Bank’s control.
5
The Bank’s estimates regarding net interest income impacts are based on assumptions regarding the timing of
when such assets are sold or wound down. The Bank’s ability to
successfully dispose of the assets is subject to inherent risks and uncertainty and there is no guarantee that the
Bank will be able to sell the assets in the timeline outlined or achieve the
purchase price which it currently expects. The ability to sell the assets will depend on market factors and conditions and any
sale will likely be subject to customary closing terms and
conditions which could involve regulatory approvals which are not entirely within the Bank’s control.
TD BANK GROUP • FIRST QUARTER 2025
• EARNINGS NEWS RELEASE
Page 13
TABLE 8: U.S. RETAIL
(millions of dollars, except as noted)
For the three months ended
January 31
October 31
January 31
Canadian Dollars
2025
2024
2024
Net interest income
$
3,064
$
2,924
$
2,899
Non-interest income (loss) – reported
(282)
287
604
Non-interest income – adjusted
1,2
645
598
604
Total revenue – reported
2,782
3,211
3,503
Total revenue – adjusted
1,2
3,709
3,522
3,503
Provision for (recovery of) credit losses –
impaired
529
418
377
Provision for (recovery of) credit losses –
performing
(78)
(29)
8
Total provision for (recovery of) credit losses
451
389
385
Non-interest expenses – reported
2,380
2,324
2,459
Non-interest expenses – adjusted
1,3
2,380
2,344
2,048
Provision for (recovery of) income taxes – reported
(192)
(50)
(17)
Provision for (recovery of) income taxes – adjusted
1
39
9
84
U.S. Retail Bank net income – reported
143
548
676
U.S. Retail Bank net income – adjusted
1
839
780
986
Share of net income from investment in
Schwab
4,5
199
154
194
Net income – reported
$
342
$
702
$
870
Net income – adjusted
1
1,038
934
1,180
U.S. Dollars
Net interest income
$
2,160
$
2,141
$
2,141
Non-interest income (loss) – reported
(198)
212
446
Non-interest income – adjusted
1,2
454
438
446
Total revenue – reported
1,962
2,353
2,587
Total revenue – adjusted
1,2
2,614
2,579
2,587
Provision for (recovery of) credit losses –
impaired
371
306
279
Provision for (recovery of) credit losses –
performing
(53)
(21)
6
Total provision for (recovery of) credit losses
318
285
285
Non-interest expenses – reported
1,675
1,703
1,815
Non-interest expenses – adjusted
1,3
1,675
1,717
1,515
Provision for (recovery of) income taxes – reported
(136)
(37)
(12)
Provision for (recovery of) income taxes – adjusted
1
27
6
62
U.S. Retail Bank net income – reported
105
402
499
U.S. Retail Bank net income – adjusted
1
594
571
725
Share of net income from investment in
Schwab
4,5
142
114
144
Net income – reported
$
247
$
516
$
643
Net income – adjusted
1
736
685
869
Selected volumes and ratios
Return on common equity – reported
6
2.9
%
6.2
%
8.1
%
Return on common equity – adjusted
1,6
8.6
8.2
11.0
Net interest margin
1,7
2.86
2.77
3.03
Efficiency ratio – reported
85.4
72.4
70.2
Efficiency ratio – adjusted
1
64.1
66.6
58.6
Assets under administration (billions of U.S.
dollars)
8
$
43
$
43
$
40
Assets under management (billions of U.S.
dollars)
8
9
8
7
Number of U.S. retail stores
1,134
1,132
1,176
Average number of full-time equivalent staff
28,276
27,802
27,985
1
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP
and Other Financial Measures” in the “How We Performed” section of this
document.
2
Adjusted non-interest income excludes the following item of note:
i.
U.S. balance sheet restructuring – Q1 2025: $927 million or US$652 million ($696 million or US$489 million after
tax), Q4 2024:
$311 million or US$226 million ($234 million or
US$170 million after tax).
3
Adjusted non-interest expenses exclude the following items of note:
i.
FDIC special assessment – Q4 2024: ($72) million or US($52) million (($54) million or US($39) million after tax), Q1
2024: $411 million or US$300 million ($310 million
or
US$226 million after tax); and
ii.
Charges for the global resolution of the investigations into the Bank’s U.S. BSA/AML program –
Q4 2024: $52 million or US$38 million (before and after tax).
4
The Bank’s share of Schwab’s earnings is reported with a one-month lag. Refer to
Note 7 of the Bank’s first quarter 2025 Interim Consolidated Financial Statements for
further details.
5
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.
6
Capital allocated to the business segment was 11.5% CET1
Capital.
7
Net interest margin is calculated by dividing U.S. Retail segment’s net interest income
by average interest-earning assets excluding the impact related to sweep deposits arrangements
and the impact of intercompany deposits and cash collateral, which management believes better reflects segment
performance.
In addition, 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. Net interest income and
average interest-earning assets used in the calculation are non-GAAP financial measures.
Management believes this calculation better reflects segment performance.
8
For additional information about this metric, refer to the Glossary in the Bank’s first quarter
2025 MD&A.
Quarterly comparison – Q1 2025 vs. Q1 2024
U.S. Retail reported net income for the quarter
was $342 million (US$247 million), a decrease
of $528 million (US$396 million), or 61%
(62% in U.S. dollars),
compared with the first quarter last year. On an adjusted
basis, net income for the quarter was
$1,038 million (US$736 million), a decrease
of $142 million
(US$133 million), or 12% (15% in U.S. dollars).
The reported and adjusted annualized ROE
for the quarter were 2.9% and 8.6%, respectively, compared
with 8.1%
and 11.0%, respectively, in the first 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 $199 million (US$142
million), an increase of $5 million (a decrease
of US$2 million), or 3% (a decrease of 1%
in U.S. dollars),
compared with the first quarter last year.
U.S. Retail Bank reported net income
was $143 million (US$105 million), a decrease
of $533 million (US$394 million), or 79%
(79% in U.S. dollars), compared
with the first quarter last year, primarily reflecting the impact
of U.S. balance sheet restructuring activities,
higher governance and control investments,
including
costs for U.S. BSA/AML remediation,
and higher PCL, partially offset by the impact of
the FDIC special assessment charge in
the first quarter last year. U.S. Retail
TD BANK GROUP • FIRST QUARTER 2025
• EARNINGS NEWS RELEASE
Page 14
Bank adjusted net income was $839 million
(US$594 million), a decrease of $147
million (US$131 million), or 15% (18% in
U.S. dollars), compared with the first
quarter last year, reflecting higher governance and control
investments, including costs for U.S. BSA/AML
remediation and higher PCL, partially offset by higher
revenue.
Reported revenue for the quarter was US$1,962
million, a decrease of US$625 million, or 24%,
compared with the first quarter last year. On an adjusted basis,
revenue for the quarter was US$2,614
million, an increase of US$27 million, or 1%.
Net interest income of US$2,160 million, increased
US$19 million, or 1%,
driven by higher deposit margins and
the impact of U.S. balance sheet restructuring activities.
Net interest margin of 2.86% decreased
17 bps due to maintaining
elevated liquidity levels (which negatively
impacted net interest margin by 19 bps),
partially offset by the impact of U.S. balance sheet
restructuring activities, and
higher deposit margins. Reported non-interest
income (loss) was US($198) million, a
decrease of US$644 million, compared
with the first quarter last year,
reflecting the impact of U.S. balance
sheet restructuring activities, partially offset by higher
fee revenue. On an adjusted basis, non-interest
income of
US$454 million increased US$8 million, or
2%, compared with the first quarter last
year, reflecting higher fee revenue.
Average loan volumes increased US$2 billion,
or 1%, compared with the first quarter last
year. Personal loans increased 3%, reflecting solid mortgage
and auto
originations, and business loans decreased
1%. Excluding the impact of the loan portfolios
identified for sale or run-off under our U.S. balance
sheet restructuring
program, average loan volumes increased
US$5 billion, or 3%
6,7
. Average deposit volumes decreased US$10 billion,
or 3%, reflecting a 11% decrease in sweep
deposits and a 4% decrease in business deposits,
partially offset by a 3% increase in personal
deposit volumes. Excluding sweep deposits,
average deposits were
flat.
Assets under administration (AUA) were
US$43 billion as of January 31, 2025, an increase
of US$3 billion, or 8%, compared with the
first quarter last year,
reflecting net asset growth. Assets under
management (AUM) were US$9 billion
as of January 31, 2025, an increase of
US$2 billion, or 29%, compared with the
first quarter last year.
PCL for the quarter was US$318 million,
an increase of US$33 million compared
with the first quarter last year. PCL – impaired was US$371 million,
an
increase of US$92 million, or 33%, largely
reflecting credit migration in the commercial
lending portfolio, and the adoption impact
of a model update in the U.S.
Cards portfolio. PCL – performing was a recovery
of US$53 million, compared with a build
of US$6 million in the prior year. The performing recovery
this quarter
was largely recorded in the consumer lending
portfolios, reflecting the adoption impact
of a model update in the U.S. Cards portfolio,
partially offset by a build in
the commercial lending portfolio related
to policy and trade uncertainty that could
impact the economic trajectory and
credit performance. 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 0.67%, an increase
of 6 bps, compared with
the first quarter last year.
Effective the first quarter of 2025, U.S. Retail segment
non-interest expenses include certain U.S.
governance and control investments, including
costs for U.S.
BSA/AML remediation which were previously
reported in the Corporate segment.
Comparative amounts have been reclassified
to conform with the presentation
adopted in the current period.
Reported non-interest expenses for the quarter
were US$1,675 million, a decrease of
US$140 million, or 8%, compared to the
first
quarter last year, reflecting the impact of the FDIC special assessment
charge in the first quarter last year, partially offset by higher governance
and control
investments including costs of US$86
million for U.S. BSA/AML remediation, and
higher operating expenses. Our governance
and control investments in this
quarter were higher compared to the first
quarter last year as remediation efforts progressed
over this period and we expect this year-over-year
trend to continue
into the second quarter of 2025
8
. On an adjusted basis, non-interest expenses
increased US$160 million, or 11%, reflecting higher governance
and control
investments including costs for U.S.
BSA/AML remediation, and higher operating
expenses.
The reported and adjusted efficiency ratios for
the quarter were 85.4% and 64.1%, respectively, compared with 70.2%
and 58.6%, respectively, in the first
quarter last year.
Quarterly comparison – Q1 2025 vs. Q4 2024
U.S. Retail reported net income was $342
million (US$247 million), a decrease of $360
million (US$269 million), or 51% (52% in U.S. dollars),
compared with the
prior quarter. On an adjusted basis, net income for the
quarter was $1,038 million (US$736 million),
an increase of $104 million (US$51 million), or
11% (7% in
U.S. dollars). The reported and adjusted annualized
ROE for the quarter were 2.9% and 8.6%,
respectively, compared with 6.2% and 8.2%, respectively, in the
prior quarter.
The contribution from Schwab of $199
million (US$142 million) increased $45
million (US$28 million), or 29% (25%
in U.S. dollars), compared with the prior
quarter.
U.S. Retail Bank reported net income
was $143 million (US$105 million), a decrease
of $405 million (US$297 million), or 74%
(74% in U.S. dollars) compared
with the prior quarter, primarily reflecting the impact of
U.S. balance sheet restructuring activities, higher
PCL, and the expense recovery of the FDIC
special
assessment charge in the prior quarter, partially offset by the impact
of the charges for the global resolution of
the investigations into the Bank’s U.S. BSA/AML
program in the prior quarter. U.S. Retail Bank adjusted net
income was $839 million (US$594
million), an increase of $59 million (US$23 million),
or 8% (4% in
U.S. dollars), compared to the prior quarter, primarily reflecting
higher revenue, partially offset by higher non-interest
expenses (lower in U.S. dollars) and higher
PCL.
Reported revenue was US$1,962 million,
a decrease US$391 million, or 17%,
compared with the prior quarter. Net interest income of US$2,160
million
increased US$19 million, or 1%, reflecting the
impact of U.S. balance sheet restructuring activities,
partially offset by lower deposit margins. Net
interest margin of
2.86% increased 9 bps, compared with the
prior quarter, due to impact of U.S. balance sheet restructuring
activities and normalization of liquidity levels
(which
positively impacted net interest margin by
5 bps), partially offset by lower deposit margins.
Net Interest Margin in the second quarter
is expected to deliver
substantial expansion,
reflecting ongoing U.S. balance sheet
restructuring activities and further normalization
of our elevated liquidity levels
9
. Reported non-
interest income (loss) was US($198)
million, compared with reported non-interest income
of US$212 million in the prior quarter, reflecting the impact
of U.S.
balance sheet restructuring activities. On
an adjusted basis, non-interest income of
US$454 million increased US$16 million,
or 4%, compared with the prior
quarter, reflecting higher fee revenue.
Average loan volumes were relatively flat, compared
with the prior quarter, reflecting a 1% decrease in business
loans, offset by a 1% increase in personal
loans. Excluding the impact of the loan portfolios
identified for sale or run-off under our U.S. balance
sheet restructuring program, average loan
volumes were
6
Loan portfolios identified for sale or run-off include correspondent lending, residential jumbo mortgage,
export and import lending, commercial auto dealer portfolio, and other non-core
portfolios. Q1 2025 average loan volumes: US$192 billion (Q4 2024: US$193 billion; Q1 2024: US$191 billion).
Q1 2025 average loan volumes of loan portfolios identified for sale or run-
off: US$22 billion (Q4 2024: US$23 billion; Q1 2024: US$25 billion). Q1 2025 average loan volumes
excluding loan portfolios identified for sale or run-off: US$170 billion (Q4 2024:
US$170 billion; Q1 2024: US$166 billion).
7
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP and Other Financial Measures”
in the “How We Performed” section of this
document.
8
Expense estimates are subject to inherent risks and uncertainties and may vary based on the Bank’s ability to successfully
execute against its projects or programs in accordance with its
plans, including its ability to successfully execute against the U.S. BSA/AML remediation program. As well, expense estimates may vary if the scope of work in the U.S.
BSA/AML
remediation plan changes as a result of additional findings that are identified as work progresses.
9
The Bank’s Q2 2025 net interest margin expectations for the segment are based on the Bank’s assumptions regarding
interest rates, deposit reinvestment rates, average asset levels,
execution of planned restructuring opportunities, and other variables, and are subject to inherent risks and uncertainties,
including those set out in the “Risk Factors That May Affect
Future Results” section of this document.
TD BANK GROUP • FIRST QUARTER 2025
• EARNINGS NEWS RELEASE
Page 15
flat
6
,7
. Average deposit volumes increased US$3
billion, or 1%, compared with the prior
quarter, reflecting a 1% increase in personal deposits and
a 3% increase in
sweep deposits, partially offset by a 1% decrease
in business deposits.
AUA were US$43 billion as of January 31,
2025, flat compared with the prior quarter. AUM were US$9
billion, an increase of $1 billion, or 13%,
compared with
the prior quarter.
PCL for the quarter was US$318 million,
an increase of US$33 million compared
with the prior quarter. PCL – impaired was US$371 million, an increase
of
US$65 million, or 21%, largely reflected
in the U.S. Cards portfolio, related
to the adoption impact of a model update, and
typical seasonal trends. PCL –
performing was a recovery of US$53
million, compared with a recovery of US$21
million in the prior quarter. The performing recovery this quarter
was largely
recorded in the consumer lending portfolios, reflecting
the adoption impact of a model update in
the U.S. Cards portfolio, partially offset by a build
in the
commercial lending portfolio related to policy
and trade uncertainty that could impact the
economic trajectory and credit performance.
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 0.67%, an increase
of 7 bps, compared with
the prior quarter.
Reported non-interest expenses for the quarter
were US$1,675 million, a decrease of US$28
million, or 2%, compared with the prior quarter, largely reflecting
lower legal and regulatory expenses, partially
offset by higher operating expenses. On an adjusted
basis, non-interest expenses decreased
US$42 million, or 2%.
The reported and adjusted efficiency ratios for
the quarter were 85.4% and 64.1%, respectively, compared with 72.4%
and 66.6%, respectively, in the prior
quarter.
TABLE 9: WEALTH MANAGEMENT AND INSURANCE
(millions of Canadian dollars, except
as noted)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Net interest income
$
369
$
321
$
285
Non-interest income
1
3,229
3,616
2,850
Total revenue
3,598
3,937
3,135
Provision for (recovery of) credit losses –
impaired
–
–
–
Provision for (recovery of) credit losses –
performing
–
–
–
Total provision for (recovery of) credit losses
–
–
–
Insurance service expenses
2
1,507
2,364
1,366
Non-interest expenses
1,173
1,107
1,047
Provision for (recovery of) income taxes
238
117
167
Net income
$
680
$
349
$
555
Selected volumes and ratios
Return on common equity
42.7
%
22.5
%
37.5
%
Return on common equity – Wealth Management
3
61.9
56.6
44.5
Return on common equity – Insurance
21.9
(13.1)
29.3
Efficiency ratio
32.6
28.1
33.4
Efficiency ratio, net of ISE
4
56.1
70.4
59.2
Assets under administration (billions of Canadian
dollars)
5
$
687
$
651
$
576
Assets under management (billions of Canadian
dollars)
556
530
479
Average number of full-time equivalent staff
15,059
14,939
15,386
1
Includes recoveries from reinsurers for catastrophe claims – Q1 2025: nil, Q4 2024: $718 million, Q1 2024: nil.
2
Includes estimated losses related to catastrophe claims – Q1 2025: nil, Q4 2024: $1,020 million, Q1 2024: $10
million.
3
Capital allocated to the business was 11.5% CET1 Capital.
4
Efficiency ratio, net of ISE is calculated by dividing non-interest expenses by total revenue, net of ISE.
Total revenue, net of ISE
– Q1: 2025 $2,091
million, Q4 2024: $1,573 million,
Q1 2024: $1,769 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 first quarter 2025 MD&A for additional information about this metric.
5
Includes
AUA administered by TD Investment Services Inc. which is part of the Canadian Personal and Commercial
Banking segment.
Quarterly comparison – Q1 2025 vs. Q1 2024
Wealth Management and Insurance net income
for the quarter was $680 million, an increase
of $125 million, or 23%,
compared with the first quarter last year,
reflecting Wealth Management net income of
$512 million, an increase of $157 million, or
44%, compared with the first quarter last
year, and Insurance net income
of $168 million, a decrease of $32 million, or 16%,
compared with the first quarter last year. The annualized
ROE for the quarter was 42.7%, compared
with 37.5%
in the first quarter last year. Wealth Management annualized ROE
for the quarter was 61.9%, compared
with 44.5% in the first quarter last year, and Insurance
annualized ROE for the quarter was 21.9%
compared with 29.3% in the first quarter
last year.
Revenue for the quarter was $3,598
million, an increase of $463
million, or 15%, compared with the first quarter
last year. Non-interest income was
$3,229 million, an increase of $379 million, or
13%, reflecting higher insurance
premiums, fee-based revenue, and transaction
revenue. Net interest income was
$369 million, an increase of $84 million, or 29%,
compared with the first quarter last year, reflecting higher
deposit margins and volume growth.
AUA were $687 billion as at January 31, 2025,
an increase of $111 billion, or 19%, and AUM were $556 billion as at January 31, 2025, an
increase of
$77 billion, or 16%, compared with the
first quarter last year, both reflecting market appreciation
and net asset growth.
Insurance service expenses for the quarter
were $1,507 million, an increase of $141
million, or 10%, compared with the first quarter
last year, primarily reflecting
increased claims severity.
Non-interest expenses for the quarter were $1,173
million, an increase of $126 million, or
12%, compared with the first quarter last year, reflecting
higher
variable compensation,
higher spend supporting business growth initiatives
from technology costs and employee-related
expenses including the impact of TD
Share Compensation Initiative.
The efficiency ratio for the quarter was 32.6%,
compared with 33.4% in the first quarter
last year. The efficiency ratio, net of ISE for the quarter was
56.1%,
compared with 59.2% in the first quarter last
year.
Quarterly comparison – Q1 2025 vs. Q4 2024
Wealth Management and Insurance net income
for the quarter was $680 million, an increase
of $331 million, or 95%, compared
with the prior quarter, reflecting
Wealth Management net income of $512 million,
an increase of $64 million, or 14%, compared
with the prior quarter, and Insurance net income of $168
million, an
increase of $267 million, compared with a loss
of $99 million in the prior quarter. The annualized ROE
for the quarter was 42.7%, compared with
22.5% in the prior
quarter. Wealth Management annualized ROE for the quarter was
61.9%, compared with 56.6% in the prior
quarter, and Insurance annualized ROE for the quarter
was 21.9% compared with -13.1% in the
prior quarter.
Revenue decreased $339
million, or 9%, compared with the prior quarter, primarily as
a result of reinsurance recoveries for
catastrophe claims in the prior
quarter of $718 million. Non-interest income
decreased $387
million, or 11%, reflecting lower reinsurance recoveries for
catastrophe claims, partially offset by
TD BANK GROUP • FIRST QUARTER 2025
• EARNINGS NEWS RELEASE
Page 16
lower costs of reinsurance reinstatement
premiums, higher fee-based revenue,
transaction
revenue and insurance premiums. Net
interest income increased
$48 million, or 15%, reflecting higher deposit
volumes and margins.
AUA increased $36 billion, or 6%, and AUM
increased $26
billion, or 5%, compared with the prior
quarter, both reflecting market appreciation and net asset
growth.
Insurance service expenses for the quarter
decreased $857 million, or 36%, compared
with the prior quarter, primarily the result of estimated losses
from
catastrophe claims of $1,020 million in
the prior quarter, partially offset by increased claims severity.
Non-interest expenses increased $66 million,
or 6%, compared with the prior quarter, primarily reflecting
higher employee-related expenses including
the impact
of TD Share Compensation Initiative
and higher variable compensation.
The efficiency ratio for the quarter was 32.6%,
compared with 28.1% in the prior quarter. The efficiency ratio,
net of ISE for the quarter was 56.1%, compared
with 70.4% in the prior quarter.
TABLE 10: WHOLESALE BANKING
1
(millions of Canadian dollars, except
as noted)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Net interest income (loss) (TEB)
$
(107)
$
221
$
198
Non-interest income
2,107
1,550
1,582
Total revenue
2,000
1,771
1,780
Provision for (recovery of) credit losses –
impaired
33
134
5
Provision for (recovery of) credit losses –
performing
39
–
5
Total provision for (recovery of) credit losses
72
134
10
Non-interest expenses – reported
1,535
1,336
1,500
Non-interest expenses – adjusted
1,2
1,483
1,254
1,383
Provision for (recovery of) income taxes (TEB)
– reported
94
66
65
Provision for (recovery of) income taxes
(TEB) – adjusted
1
105
84
89
Net income – reported
$
299
$
235
$
205
Net income – adjusted
1
340
299
298
Selected volumes and ratios
Trading-related revenue (TEB)
3
$
904
$
633
$
730
Average gross lending portfolio (billions of Canadian
dollars)
4
100.9
97.0
96.2
Return on common equity – reported
5
7.3
%
5.9
%
5.3
%
Return on common equity – adjusted
1,5
8.3
7.5
7.6
Efficiency ratio – reported
76.8
75.4
84.3
Efficiency ratio – adjusted
1
74.2
70.8
77.7
Average number of full-time equivalent staff
6,919
6,975
7,100
1
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP
and Other Financial Measures” in the “How We Performed” section of this
document.
2
Adjusted non-interest expenses exclude the acquisition and integration-related charges for the Cowen acquisition
– Q1 2025: $52 million ($41 million after tax), Q4 2024: $82 million
($64 million after tax), Q1 2024: $117 million ($93 million after
tax).
3
Includes net interest income (loss) TEB of ($404) million, Q4 2024: ($149) million, Q1 2024: ($54) million, and trading
income (loss) of $1,308 million, Q4 2024: $782 million, Q1 2024:
$784 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 first quarter 2025
MD&A for additional information about this metric.
4
Includes gross loans and bankers’ acceptances relating to Wholesale Banking, excluding letters of credit, cash
collateral, credit default swaps, and allowance for credit losses.
5
Capital allocated to the business segment was 11.5% CET1 Capital.
Quarterly comparison – Q1 2025 vs. Q1 2024
Wholesale Banking reported net income for
the quarter was $299 million, an increase
of $94 million, or 46%, compared with the
first quarter last year, primarily
reflecting higher revenues, partially offset by higher
PCL and non-interest expenses. On an
adjusted basis, net income was $340
million, an increase of
$42 million, or 14%, compared with the
first quarter last year.
Revenue for the quarter was $2,000 million, an
increase of $220 million, or 12%,
compared with the first quarter last year. Higher revenue
primarily reflects
higher trading-related revenue and underwriting
fees.
PCL for the quarter was $72 million, an increase
of $62 million compared with the first quarter
last year. PCL – impaired was $33 million, an increase of
$28 million compared with the prior year, primarily reflecting
a few new impairments. PCL – performing
was $39
million, an increase of $34 million compared
to the
prior year. The performing build this quarter reflects policy and
trade uncertainty that could impact the economic
trajectory and credit performance.
Reported non-interest expenses for the quarter
were $1,535 million, an increase of $35
million, or 2%, compared with the first quarter
last year, primarily
reflecting higher variable compensation
commensurate with higher revenues, higher
front office and technology costs.
The higher non-interest expenses are
partially offset by the impact of a provision related
to the U.S. record keeping and trading regulatory
matters recorded in the same quarter last year
and lower
acquisition and integration-related costs. On
an adjusted basis, non-interest expenses
were $1,483 million, an increase of $100 million,
or 7%.
Quarterly comparison – Q1 2025 vs. Q4 2024
Wholesale Banking reported net income for
the quarter was $299 million, an increase
of $64 million, or 27%, compared with the prior
quarter, primarily reflecting
higher revenues and lower PCL, partially offset
by higher non-interest expenses. On an adjusted
basis, net income was $340 million, an increase
of $41 million, or
14%.
Revenue for the quarter increased $229 million,
or 13%, compared with the prior quarter. Higher revenue
primarily reflects higher trading-related
revenue.
PCL for the quarter was $72 million, a decrease
of $62 million compared with the prior quarter. PCL – impaired
was $33 million, a decrease of $101 million, due
to higher impairments in the prior period.
PCL – performing was $39 million,
an increase of $39 million. The performing
build this quarter reflects policy and trade
uncertainty that could impact the economic
trajectory and credit performance.
Reported non-interest expenses for the quarter
increased $199 million, or 15%, compared
with the prior quarter, primarily reflecting higher variable
compensation commensurate with higher
revenues, partially offset by lower acquisition
and integration-related costs. On an adjusted
basis, non-interest expenses
increased $229 million, or 18%.
TD BANK GROUP • FIRST QUARTER 2025
• EARNINGS NEWS RELEASE
Page 17
TABLE 11: CORPORATE
(millions of Canadian dollars)
For the three months ended
January 31
October 31
January 31
2025
2024
2024
Net income (loss) – reported
$
(359)
$
526
$
(591)
Adjustments for items of note
Amortization of acquired intangibles
61
60
94
Acquisition and integration charges related
to the Schwab transaction
–
35
32
Share of restructuring and other charges
from investment in Schwab
–
–
49
Restructuring charges
–
–
291
Impact from the terminated FHN acquisition-related
capital hedging strategy
54
59
57
Gain on sale of Schwab shares
–
(1,022)
–
Indirect tax matters
–
226
–
Less: impact of income taxes
22
84
113
Net income (loss) – adjusted
1
$
(266)
$
(200)
$
(181)
Decomposition of items included in net
income (loss) – adjusted
Net corporate expenses
2
$
(370)
$
(389)
$
(217)
Other
104
189
36
Net income (loss) – adjusted
1
$
(266)
$
(200)
$
(181)
Selected volumes
Average number of full-time equivalent staff
22,748
22,826
23,437
1
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP
and Other Financial Measures” in the “How We Performed” section of this
document.
2
For additional information about this metric, refer to the Glossary in the first quarter of 2025 MD&A, which is incorporated
by reference.
Quarterly comparison – Q1 2025 vs. Q1 2024
Corporate segment’s reported net loss for the quarter
was $359 million, compared with a reported
net loss of $591 million in the first quarter
last year. The lower
net loss primarily reflects the impacts of
prior year restructuring charges,
share of restructuring charges from investment
in Schwab and higher revenue from
treasury and balance sheet activities in the
current quarter. Net corporate expenses increased $153
million compared to the prior year, primarily reflecting higher
governance and control costs, pension and
benefit related costs. The adjusted net
loss for the quarter was $266 million,
compared with an adjusted net loss of
$181 million in the first quarter last year.
Quarterly comparison – Q1 2025 vs. Q4 2024
Corporate segment’s reported net loss for the quarter
was $359 million, compared with a reported
net income of $526 million in the prior quarter. The quarter-over-
quarter decrease primarily reflects the impacts
of prior quarter gain on sale of Schwab
shares, partially offset by the provision for indirect
tax matters. Net
corporate expenses decreased $19 million
compared to the prior quarter. The adjusted net loss
for the quarter was $266 million, compared with an
adjusted net
loss of $200 million in the prior quarter.
TD BANK GROUP • FIRST QUARTER 2025
• EARNINGS NEWS RELEASE
Page 18
SHAREHOLDER AND INVESTOR INFORMATION
Shareholder Services
If you:
And your inquiry relates to:
Please contact:
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 first 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 February
27, 2025. The call will be audio webcast
live through TD’s website at
9:30 a.m. ET. The call will feature presentations
by TD executives on the Bank’s
financial results for the first 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
on February 27,
2025, in advance of the call.
A listen-only telephone line
is available at 416-340-2217 or 1-800-806-5484
(toll free) and the
passcode is 2829533#.
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
February 27, 2025, until 11:59 p.m. ET on
March 14, 2025, by calling 905-694-9451 or 1-800-408-3053
(toll free). The passcode is 8753393#.
Annual Meeting
Thursday, April 10, 2025
Toronto, Ontario
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 27.9 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., and TD Wealth (U.S.); 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 $2.09
trillion in assets on January 31, 2025. The
Toronto-Dominion Bank trades under the
symbol “TD” on the Toronto Stock
Exchange and New York Stock Exchange.
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
ex995
TD BANK GROUP DECLARES DIVIDENDS
(all amounts in Canadian dollars)
TORONTO – February 27,
2025 -
The Toronto
-Dominion Bank (the "Bank") today announced
that a dividend in an amount of one dollar and five cents
($1.05) per fully paid common share in
the capital stock of the Bank has been declared for the
quarter ending April 30, 2025, payable on
and after April 30,
2025, to shareholders of record at the close of business
on April 10, 2025.
In lieu of receiving their dividends in cash, holders of the Bank’s
common shares may choose to
have their dividends reinvested in additional common shares
of the Bank in accordance with the
Dividend Reinvestment Plan (the “Plan”).
Under the Plan, the Bank has the discretion to either purchase
the additional common shares in
the open market or issue them from treasury.
If issued from treasury,
the Bank may decide to
apply a discount of up to 5% to the Average Market
Price (as defined in the Plan) of the additional
shares.
For the April 30, 2025 dividend, the Bank will purchase
the additional shares in the open
market and therefore no discount will apply.
Registered holders of record of the Bank's common shares
wishing to join the Plan can obtain an
Enrolment Form from TSX Trust
Company (1-800-387-0825) or on the Bank's website,
www.td.com/investor/drip.jsp.
In order to participate in the Plan in time for this dividend,
Enrolment Forms for registered holders must be received
by TSX Trust Company at P.O.
Box
4229, Postal Station A, Toronto,
Ontario, M5W 0G1, or by facsimile at 1-888-488-1416,
before
the close of business on April 10, 2025.
Beneficial or non-registered holders of the Bank's
common shares wishing to join the Plan must contact their
financial institution or broker for
instructions on how to enroll in advance of the above
date.
Registered holders who participate in the Plan and who wish to
terminate that participation so that
cash dividends to which they are entitled to be paid on and
after April 30,
2025 are not reinvested
in common shares under the Plan must deliver written notice
to TSX Trust Company at the above
address by no later than April 10, 2025.
Beneficial or non-registered holders who participate
in
the Plan and who wish to terminate that participation so that
cash dividends to which they are
entitled to be paid on and after April 30, 2025 are not
reinvested in common shares under the
Plan must contact their financial institution or broker for
instructions on how to terminate
participation in the Plan in advance of April 10, 2025.
The Bank also announced that dividends have been declared
on the following Non-Cumulative
Redeemable Class A First Preferred Shares of the Bank, payable
on and after April 30, 2025, to
shareholders of record at the close of business on April
10, 2025:
●
Series 1, in an amount per share of $0.310625;
●
Series 7, in an amount per share of $0.2000625;
●
Series 9, in an amount per share of $0.202625;
●
Series 16, in an amount per share of $0.3938125;
●
Series 18, in an amount per share of $0.3591875;
●
Series 27, in an amount per share of $28.75; and
●
Series 28, in an amount per share of $36.16.
The Bank for the purposes of the Income Tax
Act (Canada) and any similar provincial legislation
advises that the dividend declared for the quarter ending
April 30, 2025 and all future dividends
will be eligible dividends unless indicated otherwise.
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 27.9
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., and TD Wealth (U.S.); 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 $2.09 trillion in
assets on January 31, 2025. The Toronto
-Dominion Bank trades under the symbol "TD" on the
Toronto
and New York
Stock Exchanges.
For more information contact:
Jennifer dela Cruz
Senior Legal Officer,
Corporate
Legal Department – Shareholder Relations
(416) 944-6367
Toll
free 1-866-756-8936
Elizabeth Goldenshtein
Senior Manager, Corporate
Communications
(416) 994-4124
ex996
FORM 52-109F2
CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE
I, Raymond Chun, Group President and Chief Executive Officer of The Toronto-
Dominion Bank, certify the following:
1.
Review
: I have reviewed the interim financial report and interim MD&A
(together, the
"interim filings") of The Toronto-Dominion Bank (the "issuer") for the interim period
ended January 31, 2025.
2.
No misrepresentations
: Based on my knowledge, having exercised reasonable
diligence, the interim filings do not contain any untrue statement
of a material fact or omit
to state a material fact required to be stated or that is necessary
to make a statement not
misleading in light of the circumstances under which it was
made, with respect to the
period covered by the interim filings.
3.
Fair presentation
: Based on my knowledge, having exercised reasonable diligence,
the interim financial report together with the other financial information
included in the
interim filings fairly present in all material respects the financial condition,
financial
performance and cash flows of the issuer, as of the date of and for the periods
presented in the interim filings.
4.
Responsibility
: The issuer's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures
(DC&P) and internal
control over financial reporting (ICFR), as those terms are defined
in National Instrument
52-109
Certification of Disclosure in Issuers' Annual and Interim Filings
, for the issuer.
5.
Design
: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the
issuer's other certifying officer(s) and I have, as at the end of the period covered
by the
interim filings
(a) designed DC&P,
or caused it to be designed under our supervision, to provide
reasonable assurance that
(i) material information relating to the issuer is made known
to us by others,
particularly during the period in which the interim filings are being prepared;
and
(ii) information required to be disclosed by the issuer in its annual
filings, interim
filings or other reports filed or submitted by it under securities legislation
is recorded,
processed, summarized and reported within the time periods specified
in securities
legislation; and
(b) designed ICFR, or caused it to be designed under our supervision,
to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation
of financial statements for external purposes in accordance with the
issuer's GAAP.
5.1
Control framework
: The control framework the issuer's other certifying officer(s)
and I used to design the issuer's ICFR is
based on criteria established in Internal Control
– Integrated Framework issued by the Committee of Sponsoring
Organizations of the
Treadway Commission (the COSO criteria) in 2013.
5.2
N/A
5.3
N/A
6.
Reporting changes in ICFR
: The issuer has disclosed in its interim MD&A any
change in the issuer's ICFR that occurred during the period beginning
on November 1,
2024 and ended on January 31, 2025 that has materially affected, or
is reasonably likely
to materially affect, the issuer's ICFR.
Date: February 27, 2025
/s/ Raymond Chun
Raymond Chun
Group President and Chief Executive Officer
FORM 52-109F2
CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE
I, Kelvin Tran, Group Head and Chief Financial Officer of The Toronto-Dominion Bank,
certify the following:
1.
Review
: I have reviewed the interim financial report and interim MD&A
(together, the
"interim filings") of The Toronto-Dominion Bank (the "issuer") for the interim period
ended January 31, 2025.
2.
No misrepresentations
: Based on my knowledge, having exercised reasonable
diligence, the interim filings do not contain any untrue statement
of a material fact or omit
to state a material fact required to be stated or that is necessary
to make a statement not
misleading in light of the circumstances under which it was
made, with respect to the
period covered by the interim filings.
3.
Fair presentation
: Based on my knowledge, having exercised reasonable diligence,
the interim financial report together with the other financial information
included in the
interim filings fairly present in all material respects the financial condition,
financial
performance and cash flows of the issuer, as of the date of and for the periods
presented in the interim filings.
4.
Responsibility
: The issuer's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures
(DC&P) and internal
control over financial reporting (ICFR), as those terms are defined
in National Instrument
52-109
Certification of Disclosure in Issuers' Annual and Interim Filings
, for the issuer.
5.
Design
: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the
issuer's other certifying officer(s) and I have, as at the end of the period covered
by the
interim filings
(a) designed DC&P,
or caused it to be designed under our supervision, to
provide
reasonable assurance that
(i) material information relating to the issuer is made known
to us by others,
particularly during the period in which the interim filings are being
prepared; and
(ii) information required to be disclosed by the issuer in its annual
filings, interim
filings or other reports filed or submitted by it under securities legislation
is recorded,
processed, summarized and reported within the time periods specified
in securities
legislation; and
(b) designed ICFR, or caused it to be designed under our supervision,
to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation
of financial statements for external purposes in accordance with the
issuer's GAAP.
5.1
Control framework
: The control framework the issuer's other certifying officer(s)
and I used to design the issuer's ICFR is
based on criteria established in Internal Control
– Integrated Framework issued by the Committee of Sponsoring
Organizations of the
Treadway Commission (the COSO criteria) in 2013.
5.2
N/A
5.3
N/A
6.
Reporting changes in ICFR
: The issuer has disclosed in its interim MD&A any
change in the issuer's ICFR that occurred during the period beginning
on November 1,
2024 and ended on January 31, 2025 that has materially affected, or
is reasonably likely
to materially affect, the issuer's ICFR.
Date: February 27, 2025
/s/ Kelvin Tran
Kelvin Tran
Group Head and Chief Financial Officer