Reported results conform to generally accepted accounting principles (GAAP), in accordance with IFRS. Adjusted measures are financial measures. For additional information about the Bank’s use of financial measures, refer to and Other Financial Measures” in the “How We Performed” section of this document.

“TD had a strong start to 2023 with Canadian and U.S. retail businesses delivering robust revenue growth and record earnings, demonstrating the benefits of our diversified business mix,” said Bharat Masrani, Group President and Chief Executive Officer, TD Bank Group. “We continued to invest to strengthen our businesses and deliver the legendary customer experiences our customers and clients have come to expect from TD.”

“Yesterday, we announced the close of the Cowen Inc. acquisition, an important step forward in the expansion of our global dealer. TD Securities now has 6,500 colleagues in 40 cities around the world and is able to serve clients with an even broader product and services offering,” added Masrani.

Canadian Personal and Commercial Banking net income was $1,729 million, an increase of 7% compared with the first quarter last year reflecting higher margins and volume growth. Revenue was $4,589 million, an increase of 17%, which represents the fifth consecutive quarter of record revenue.

Canadian Personal and Commercial Banking started the year with strong momentum, delivering a record quarter for new chequing account openings and credit card activations. The Canadian Personal Bank also had record account openings in the first quarter for New to Canada customers and announced an exclusive relationship with CanadaVisa to help newcomers navigate financial services as they settle in Canada. To further its support of Black business owners, the Canadian Business Bank launched the Black Entrepreneur Credit Access Program, which seeks to improve access to credit, wealth management, and specialized advice.

after-tax.

The U.S. Retail Bank, which excludes the Bank’s investment in Schwab, reported record net income of $1,288 million (US$955 million), an increase of 26% (18% in U.S. dollars) from the first quarter last year. On an adjusted basis, net income of $1,368 million (US$1,014 million) was also a record.

The U.S. Retail Bank delivered strong loan growth of 9% (10% excluding Paycheck Protection Program (PPP) loan volumes) year-over-year, supported by personal loan growth of 11% and business loan growth of 6% (9% excluding PPP). Personal deposits remained flat despite high inflation and the rising interest rate environment and business deposits declined 4% year-over-year.

®

co-locating

 

On February 15, 2023, TD AMCB announced a five-year Community Benefits Plan with an estimated US$50 billion impact to local communities across its expanded footprint following the approval and close of TD’s planned acquisition of First Horizon.

The closing of the First Horizon transaction is subject to customary closing conditions, including U.S. and Canadian regulatory approvals, which are not expected to be obtained by the outside date of May 27, 2023.

“TD is fully committed to the transaction and we are in discussions with First Horizon about a potential further extension beyond May 27,” said Masrani. “This is a great transaction that offers scale and new capabilities for the U.S. bank.”

Wealth Management and Insurance net income was $550 million, a decrease of 14% compared with the first quarter last year amid challenging market conditions. This quarter’s revenue growth of 4% underscored the strength of the segment’s diversified business model as higher insurance revenue and net interest income largely offset the impact of market volatility and trading normalization.

TD’s investments in customer-centric innovation continued to drive market momentum and gain recognition, with TD Direct Investing ranked as the #1 Direct Investing Brokerage in Canada by the Globe and Mail, and TD Asset Management was ranked as the #1 Money Manager for Canadian Pension Assets. TD insurance opened a second Auto Centre in Nova Scotia, extending its ability to drive superior experiences to more customers while lowering claims severity in the face of inflationary pressures.

non-interest

TD Securities continued to lead important Environmental, Social, and Governance (ESG) mandates, including acting as joint bookrunner on the Government of Canada’s $500 million Ukraine Sovereignty Bond to assist the Government of Ukraine in providing essential services and restoring energy infrastructure.

TD’s Common Equity Tier 1 Capital ratio was 15.5%.

“As the economic landscape continues to evolve, we remain committed to helping our customers and clients navigate change and achieve their financial goals,” said Masrani. “I want to thank our colleagues around the globe for continuing to live our purpose and deliver for our customers every day.”

The foregoing contains forward-looking statements. Please refer to the “Caution Regarding Forward-Looking Statements” on page 4.

 

 

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 2023 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 2023 RTS, Management’s Discussion and Analysis, or the Interim Consolidated Financial Statements. Certain disclosure references have been made to the Bank’s 2022 Annual Report.

 

 

 

 

 

 

http://www.td.com

http://www.sedar.com

http://www.sec.gov

 

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 . Forward-looking statements include, but are not limited to, statements made in this document, the Management’s Discussion and Analysis (“2022 MD&A”) in the Bank’s 2022 Annual Report under the heading “Economic Summary and Outlook”, under the headings “Key Priorities for 2023” 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 “2022 Accomplishments and Focus for 2023” for the Corporate segment, and in other statements regarding the Bank’s objectives and priorities for 2023 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”, “plan”, “goal”, “target”, “may”, and “could”.

By their very nature, these forward-looking statements require the Bank to make assumptions and are subject to inherent risks and uncertainties, general and specific. Especially in light of the uncertainty related to the physical, financial, economic, political, and regulatory environments, such risks and uncertainties – many of which are beyond the Bank’s control and the effects of which can be difficult to predict – may cause actual results to differ materially from the expectations expressed in the forward-looking statements. Risk factors that could cause, individually or in the aggregate, such differences include: strategic, credit, market (including equity, commodity, foreign exchange, interest rate, and credit spreads), operational (including technology, cyber security, and infrastructure), model, insurance, liquidity, capital adequacy, legal, regulatory compliance and conduct, reputational, environmental and social, and other risks. Examples of such risk factors include general business and economic conditions in the regions in which the Bank operates; geopolitical risk; inflation, rising rates and recession; the economic, financial, and other impacts of pandemics, including the pandemic; the ability of the Bank to execute on long-term strategies and shorter-term key strategic priorities, including the successful completion and integration of acquisitions and dispositions, business retention plans, and strategic plans; technology and cyber security risk (including cyber-attacks, data security breaches or technology failures) on the Bank’s information technology, internet, network access or other voice or data communications systems or services; model risk; fraud activity; 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-party service providers; the impact of new and changes to, or application of, current laws and regulations, including without limitation tax laws, capital guidelines and liquidity regulatory guidance; regulatory oversight and compliance risk; increased competition from incumbents and new entrants (including Fintechs and big technology competitors); shifts in consumer attitudes and disruptive technology; exposure related to significant litigation and regulatory matters; ability of the Bank to attract, develop, and retain key talent; changes to the Bank’s credit ratings; changes in foreign exchange rates, interest rates, credit spreads and equity prices; increased funding costs and market volatility due to market illiquidity and competition for funding; Interbank Offered Rate (IBOR) transition risk; critical accounting estimates and changes to accounting standards, policies, and methods used by the Bank; existing and potential international debt crises; environmental and social risk (including climate change); 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 2022 MD&A, as may be updated in subsequently filed quarterly reports to shareholders and news releases (as applicable) related to any events or transactions discussed under the heading “Significant Acquisitions” or “Significant and Subsequent Events, and Pending Acquisitions” 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.

 

 

 

all-cash

non-voting

de-designated

de-designation,

de-designation

non-interest

non-interest

Fall Economic Statement Implementation Act, 2022

 

The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group (“TD” or the “Bank”). TD is the fifth largest bank in North America by assets and serves more than 27 million customers in four key businesses operating in a number of locations in financial centres around the globe: Canadian Personal and Commercial Banking, including TD Canada Trust and TD Auto Finance Canada; U.S. Retail, including TD Bank, America’s Most Convenient Bank, TD Auto Finance U.S., TD Wealth (U.S.), and an investment in The Charles Schwab Corporation; Wealth Management and Insurance, including TD Wealth (Canada), TD Direct Investing, and TD Insurance; and Wholesale Banking. TD also ranks among the world’s leading online financial services firms, with more than 15 million active online and mobile customers. TD had $1.9 trillion in assets on January 31, 2023. The Toronto-Dominion Bank trades under the symbol “TD” on the Toronto and New York Stock Exchanges.

The Bank prepares its Interim Consolidated Financial Statements in accordance with IFRS and refers to results prepared in accordance with IFRS as “reported” results.

and Other Financial Measures

non-GAAP

non-GAAP

Non-GAAP

Non-GAAP

non-GAAP

non-GAAP

non-GAAP

non-GAAP

Non-GAAP

non-GAAP

co-branded

Non-interest

non-voting

On November 25, 2019, the Bank and Schwab entered into an insured deposit account agreement (the “Schwab IDA Agreement”), which became effective upon closing of the Schwab transaction and has an initial expiration date of July 1, 2031. Pursuant to the Schwab IDA Agreement, the Bank makes sweep deposit accounts available to clients of Schwab. Starting July 1, 2021, deposits can be reduced at Schwab’s option by up to US$10 billion in a year (subject to certain limitations and adjustments), with a floor of US$50 billion. In addition, Schwab has requested some operational flexibility such that the sweep deposit balances may fluctuate over time, under certain conditions and subject to certain limitations. Refer to the “Related Party Transactions” section in the 2022 MD&A for further details.

The following table provides the operating results on a reported basis for the Bank.

 

 

The following table provides a reconciliation between the Bank’s adjusted and reported results.

 

 

 

 

 

 

 

 

 

 

 

 

 

non-GAAP

ROE for the business segments is calculated as the segment net income attributable to common shareholders as a percentage of average allocated capital. The Bank’s methodology for allocating capital to its business segments is largely aligned with the common equity capital requirements under Basel III. Capital allocated to the business segments was increased to 11% CET1 Capital in the first quarter of 2023, compared with 10.5% in fiscal 2022.

 

 

after-tax

non-GAAP

non-GAAP

 

 

 

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.

 

 

 

 

 

 

“Non-GAAP

Quarterly comparison – Q1 2023 vs. Q1 2022

non-interest

By segment, the decrease in reported net income reflects a decrease in the Corporate segment of $2,390 million, a decrease in Wholesale Banking of $103 million, and a decrease in Wealth Management and Insurance of $86 million, partially offset by an increase in U.S. Retail of $317 million, and an increase in Canadian Personal and Commercial Banking of $111 million.

Quarterly comparison – Q1 2023 vs. Q4 2022

non-interest

By segment, the decrease in reported net income reflects a decrease in the Corporate segment of $5,278 million, partially offset by an increase in Wholesale Banking of $70 million, an increase in U.S. Retail of $50 million, an increase in Canadian Personal and Commercial Banking of $35 million, and an increase in Wealth Management and Insurance of $34 million.

Quarterly comparison – Q1 2023 vs. Q1 2022

Reported net interest income for the quarter was $7,733 million, an increase of $1,431 million, or 23%, compared with the first quarter last year reflecting margin and volume growth in the personal and commercial banking businesses, and the impact of foreign exchange translation, partially offset by lower net interest income in Wholesale Banking. Adjusted net interest income was $7,862 million, an increase of $1,560 million, or 25%, compared with the first quarter last year.

 

By segment, the increase in reported net interest income reflects an increase in U.S. Retail of $1,054 million, an increase in Canadian Personal and Commercial Banking of $663 million, and an increase in Wealth Management and Insurance of $72 million, partially offset by a decrease in Wholesale Banking of $184 million, and a decrease in the Corporate segment of $174 million.

Quarterly comparison – Q1 2023 vs. Q4 2022

Reported net interest income for the quarter increased $103 million, or 1%, compared with the prior quarter, primarily reflecting margin growth in the personal and commercial banking businesses, and the impact of foreign exchange translation, partially offset by lower net interest income in Wholesale Banking. Adjusted net interest income increased $235 million, or 3%, compared with the prior quarter.

By segment, the increase in reported net interest income reflects an increase in U.S. Retail of $212 million, an increase in Canadian Personal and Commercial Banking of $151 million, and an increase in Wealth Management and Insurance of $9 million, partially offset by a decrease in Wholesale Banking of $158 million, and a decrease in the Corporate segment of $111 million.

Income

Quarterly comparison – Q1 2023 vs. Q1 2022

non-interest

non-interest

non-interest

Quarterly comparison – Q1 2023 vs. Q4 2022

non-interest

non-interest

fee-based

non-interest

Quarterly comparison – Q1 2023 vs. Q1 2022

PCL for the quarter was $690 million, an increase of $618 million, compared with the first quarter last year. PCL – impaired was $553 million, an increase of $224 million, or 68%, reflecting some further normalization of credit performance. PCL – performing was $137 million, compared with a recovery of $257 million in the prior year. The performing build this quarter reflects volume growth and some further normalization of credit performance. Total PCL for the quarter as an annualized percentage of credit volume was 0.32%.

By segment, PCL was higher by $295 million in Canadian Personal & Commercial Banking, by $179 million in U.S. Retail, by $108 million in the Corporate segment, by $37 million in Wholesale Banking, and lower by $1 million in Wealth Management and Insurance.

Quarterly comparison – Q1 2023 vs. Q4 2022

PCL increased $73 million compared with prior quarter. PCL – impaired increased by $99 million, or 22%, reflecting some further normalization of credit performance. PCL – performing decreased by $26 million, or 16%. The performing build this quarter reflects volume growth and some further normalization of credit performance. Total PCL for the quarter as an annualized percentage of credit volume was 0.32%.

By segment, PCL was higher by $98 million in Canadian Personal & Commercial Banking, by $6 million in Wholesale Banking, lower by $25 million in U.S. Retail, and by $6 million in the Corporate segment.

 

 

 

 

Quarterly comparison – Q1 2023 vs. Q1 2022

non-interest

Quarterly comparison – Q1 2023 vs. Q4 2022

non-interest

Expenses and Efficiency Ratio

Quarterly comparison – Q1 2023 vs. Q1 2022

non-interest

non-interest

non-interest

The Bank’s reported efficiency ratio was 68.0% compared to 52.9% in the first quarter last year. The Bank’s adjusted efficiency ratio was 49.9%, compared with 52.3% in the first quarter last year.

Quarterly comparison – Q1 2023 vs. Q4 2022

non-interest

non-interest

non-interest

The Bank’s reported efficiency ratio was 68.0% compared with 42.1% in the prior quarter. The Bank’s adjusted efficiency ratio was 49.9%, compared with 52.5% in the prior quarter.

“Non-GAAP

The Bank’s effective income tax rate on a reported basis was 42.2% for the current quarter, compared with 21.9% in the first quarter last year and 16.9% in the prior quarter. The year-over-year increase primarily reflects the tax adjustments associated with the implementation of the CRD and the 1.5% Canadian federal tax rate increase, partially offset by the remeasurement of certain Canadian deferred tax assets and liabilities arising from the tax rate increase and favourable earnings mix. The quarter-over-quarter increase primarily reflects tax adjustments associated with the CRD and the tax rate increase, as well as favourable items in the prior quarter, partially offset by the remeasurement of certain Canadian deferred tax assets and liabilities.

after-tax

 

 

 

 

zero-COVID

COVID-19

The U.S. economy expanded by 2.7% annualized in the fourth calendar quarter of 2022. However, headline growth was boosted by temporary factors. In contrast, underlying domestic demand grew by a more modest 0.7% annualized, as the ongoing downturn in the housing market weighed on the economy. Consumer spending growth remained resilient, advancing 1.4% annualized, as a strong labour market continued to support income growth.

Higher interest rates are expected to continue to weigh on economic growth in 2023, and lead to eventual cooling in the job market. As of January, the unemployment rate was 3.4%, the lowest level in over 50 years. Inflation has shown signs of cooling, particularly for consumer goods. However, services inflation has been more persistent. Measures of underlying services inflation continue to run well above the U.S. Federal Reserve’s 2% target.

5.00-5.25%.

The Canadian economy has begun to slow after growing at a very healthy pace in the first half of calendar 2022. The housing market has continued to weaken, due to higher borrowing costs, and the downturn is weighing on economic growth. Canadian inflation has also begun to cool, although the labour market remains quite strong with the unemployment rate at 5.0% in January 2023. With the aggregate spending of households and businesses expected to stagnate in the coming quarters, TD Economics expects job market conditions to ease. Given the weak growth backdrop and uncertainty surrounding the impact of past interest rate hikes on highly indebted Canadian households, the risk of recession also remains elevated in Canada.

mid-70

 

 

For management reporting purposes, the Bank’s 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 2022 MD&A, and Note 29 of the Bank’s Consolidated Financial Statements for the year ended October 31, 2022.

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.

non-taxable

tax-exempt

before-tax

Share of net income from investment in Schwab is reported in the U.S. Retail segment. Amounts for amortization of acquired intangibles and the acquisition and integration charges related to the Schwab transaction are recorded in the Corporate segment.

 

 

 

Quarterly comparison – Q1 2023 vs. Q1 2022

non-interest

Revenue for the quarter was $4,589 million, an increase of $669 million, or 17%, compared with the first quarter last year.

Net interest income was $3,539 million, an increase of $663 million, or 23%, compared with the first quarter last year, reflecting higher margins and volume growth. Average loan volumes increased $37 billion, or 8%, reflecting 6% growth in personal loans and 14% growth in business loans. Average deposit volumes increased $14 billion, or 3%, reflecting 8% growth in personal deposits, and 5% decline in business deposits. Net interest margin was 2.80%, an increase of 36 bps, primarily due to higher margins on deposits reflecting rising interest rates, partially offset by lower margins on loans.

Non-interest

PCL was $327 million, an increase of $295 million, compared with the first quarter last year. PCL – impaired for the quarter was $220 million, an increase of $70 million, or 47%, reflecting some further normalization of credit performance. PCL – performing was $107 million, compared with a recovery of $118 million in the prior year. The performing build this quarter reflects some further normalization of credit performance and volume growth. Total PCL as an annualized percentage of credit volume was 0.25%, an increase of 22 bps compared with the first quarter last year.

Non-interest

The efficiency ratio for the quarter was 40.6%, compared with 43.1% in the first quarter last year.

Quarterly comparison – Q1 2023 vs. Q4 2022

non-interest

Revenue increased $135 million, or 3%, compared with the prior quarter. Net interest income increased $151 million, or 4% reflecting higher margins and volume growth. Average loan volumes increased $4 billion, or 1%, reflecting relatively flat personal loans growth and 3% growth in business loans. Average deposit volumes increased $3 billion, or 1%, reflecting 1% growth in personal deposits and 1% decline in business deposits. Net interest margin was 2.80%, an increase of 10 bps, primarily due to higher margins on deposits reflecting rising interest rates, partially offset by lower margins on loans.

Non-interest

PCL increased by $98 million compared with the prior quarter. PCL – impaired increased by $36 million, or 20%, reflecting some further normalization of credit performance. PCL – performing increased by $62 million. The performing build this quarter reflects some further normalization of credit performance and volume growth. Total PCL as an annualized percentage of credit volume was 0.25%, an increase of 8 bps.

Non-interest

non-credit

The efficiency ratio was 40.6%, compared with 43.1%, in the prior quarter.