The foregoing contains forward-looking statements. Refer to the "Caution Regarding Forward-Looking Statements" on page 3.

__________

¹

IFIC. As of September 30^th, 2024.

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", "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, 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; 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 civil and criminal investigations into the Bank's U.S. BSA/AML program; the impact of the global resolution of the civil and criminal 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; the risk of large declines in the value of Bank's Schwab equity investment and corresponding impact on TD's market value; 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" or "Significant and Subsequent Events" in the relevant MD&A, which applicable releases may be found on www.td.com.

All such factors, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements, should be considered carefully when making decisions with respect to the Bank. The Bank cautions readers not to place undue reliance on the Bank's forward-looking statements. Material economic assumptions underlying the forward-looking statements contained in this document are set out in the 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.

(millions of Canadian dollars, except as noted)

As at or for the three months ended

As at or for the twelve months ended

October 31

July 31

October 31

October 31

October 31

2024

2024

2023

2024

2023

Results of operations

Total revenue – reported¹

$

15,514

$

14,176

$

13,178

$

57,223

$

50,690

Total revenue – adjusted^1,2

14,897

14,238

13,242

56,789

52,037

Provision for (recovery of) credit losses

1,109

1,072

878

4,253

2,933

Insurance services expenses (ISE)¹

2,364

1,669

1,346

6,647

5,014

Non-interest expenses – reported¹

8,050

11,012

7,628

35,493

29,855

Non-interest expenses – adjusted^1,2

7,731

7,208

6,988

29,148

26,517

Net income (loss) – reported¹

3,635

(181)

2,866

8,842

10,634

Net income – adjusted^1,2

3,205

3,646

3,485

14,277

14,995

Financial positions (billions of Canadian dollars)

Total loans net of allowance for loan losses

$

949.5

$

938.3

$

895.9

$

949.5

$

895.9

Total assets¹

2,061.8

1,967.2

1,955.1

2,061.8

1,955.1

Total deposits

1,268.7

1,220.6

1,198.2

1,268.7

1,198.2

Total equity

115.2

111.6

112.1

115.2

112.1

Total risk-weighted assets (RWA)³

630.9

610.5

571.2

630.9

571.2

Financial ratios

Return on common equity (ROE) – reported^1,4

13.4

%

(1.0)

%

10.5

%

8.2

%

9.9

%

Return on common equity – adjusted^1,2

11.7

14.1

12.9

13.6

14.2

Return on tangible common equity (ROTCE)^1,2,4

17.8

(1.0)

14.3

11.2

13.4

Return on tangible common equity – adjusted^1,2

15.4

18.8

17.1

18.0

18.7

Efficiency ratio – reported^1,4

51.9

77.7

57.9

62.0

58.9

Efficiency ratio – adjusted, net of ISE^1,2,4,5

61.7

57.3

58.7

58.1

56.4

Provision for (recovery of) credit losses as a % of net

   average loans and acceptances 

0.47

0.46

0.39

0.46

0.34

Common share information – reported (Canadian dollars)

Per share earnings (loss)¹

   Basic

$

1.97

$

(0.14)

$

1.48

$

4.73

$

5.53

   Diluted

1.97

(0.14)

1.48

4.72

5.52

Dividends per share

1.02

1.02

0.96

4.08

3.84

Book value per share⁴

59.59

57.61

56.56

59.59

56.56

Closing share price⁶

76.97

81.53

77.46

76.97

77.46

Shares outstanding (millions)

   Average basic

1,748.2

1,747.8

1,806.3

1,758.8

1,822.5

   Average diluted

1,749.3

1,747.8

1,807.8

1,760.0

1,824.4

   End of period

1,750.1

1,747.9

1,790.7

1,750.1

1,790.7

Market capitalization (billions of Canadian dollars)

$

134.7

$

142.5

$

138.7

$

134.7

$

138.7

Dividend yield⁴

5.0

%

5.3

%

4.7

%

5.1

%

4.6

%

Dividend payout ratio⁴

51.8

n/m⁷

64.6

86.1

69.3

Price-earnings ratio^1,4

16.3

19.2

14.0

16.3

14.0

Total shareholder return (1 year)⁴

4.5

(1.4)

(6.9)

4.5

(6.9)

Common share information – adjusted (Canadian dollars)^1,2

Per share earnings¹

   Basic

$

1.72

$

2.05

$

1.82

$

7.82

$

7.92

   Diluted

1.72

2.05

1.82

7.81

7.91

Dividend payout ratio

59.2

%

49.7

%

52.4

%

52.1

%

48.4

%

Price-earnings ratio¹

9.9

10.3

9.8

9.9

9.8

Capital Ratios³

Common Equity Tier 1 Capital ratio

13.1

%

12.8

%

14.4

%

13.1

%

14.4

%

Tier 1 Capital ratio

14.8

14.6

16.2

14.8

16.2

Total Capital ratio

16.8

16.3

18.1

16.8

18.1

Leverage ratio

4.2

4.1

4.4

4.2

4.4

Total Loss Absorbing Capacity (TLAC) ratio

28.7

29.1

32.7

28.7

32.7

TLAC Leverage ratio

8.1

8.3

8.9

8.1

8.9

¹ 

For the three and twelve months ended October 31, 2023, certain amounts have been restated for the adoption of IFRS 17, Insurance Contracts (IFRS 17). Refer to Note 4 of the Bank's 2024 Consolidated Financial Statements for further details.

² 

The Toronto-Dominion Bank ("TD" or the "Bank") prepares its Consolidated Financial Statements in accordance with 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 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 the "How We Performed" section of this document for further explanation, a list of the items of note, and a reconciliation of adjusted to reported results. Non-GAAP financial measures and ratios used in this document are not defined terms under IFRS and, therefore, may not be comparable to similar terms used by other issuers.

³ 

These measures have been included in this document in accordance with the Office of the Superintendent of Financial Institutions Canada's (OSFI's) Capital Adequacy Requirements, Leverage Requirements, and TLAC guidelines. Refer to the "Capital Position" section in the Bank's 2024 MD&A for further details.

⁴ 

For additional information about this metric, refer to the Glossary in the Bank's 2024 MD&A, which is incorporated by reference.

⁵

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 – Q4 2024: $12,533 million, Q3 2024: $12,569 million, Q4 2023: $11,896 million, 2024: $50,142 million, 2023: $47,023 million. Effective fiscal 2024, the composition of this non-GAAP ratio and the comparative amounts have been revised.

⁶ 

Toronto Stock Exchange closing market price.

⁷

Not meaningful.

Order/Agreement

Key Requirements

Plea Agreements between the DOJ and TDBUSH and TDBNA dated October 10, 2024

• TDBUSH plead guilty to BSA/AML program violations (31 U.S.C. § 5318(h) and 5322) and currency transaction report violations (31 U.S.C. § 5313 and 5324).
• TDBNA plead guilty to conspiracy (18 U.S.C. § 371) with three objects: BSA/AML program violations (31 U.S.C. § 5318(h)) and 5322), currency transaction report violations (31 U.S.C. § 5313 and 5324), and money laundering (18 U.S.C. § 1956(a)(2)(B)(i)).
• Monetary Penalty: fine of US$1,434,013,478.40 (US$1,428,513,478.40 after crediting) for TDBUSH and a fine of US$500,000 and a forfeiture of US$452,432,302 (US$328,932,302 after crediting) for TDBNA.
• Term of Probation: Five-year term of probation.
• Remediation requirements:
  • Independent Compliance Monitor. Retain an independent compliance monitor for a period of three years to oversee the Bank's compliance remediation and enhancement.
  • BSA/AML Compliance Obligations. Continue to implement and enhance its AML compliance program such that, at minimum, it meets the requirements as set forth in Attachment C to the Plea Agreements, which lays out compliance commitments, including with respect to tone from the top; policies, procedures, and internal controls; transaction monitoring and reporting; oversight and independence; insider risk; training; internal reporting; employee discipline; monitoring, testing, and audit; and address any deficiencies in its AML compliance program, as specified in the Plea Agreements.
• Cooperation: Cooperate with the DOJ in any investigation or prosecution relating to the conduct, individuals, and entities described in the Plea Agreements and the Statement of Facts attached to the Plea Agreements, as well as any other conduct, individuals, and entities under investigation by the DOJ at any time during the length of the Agreements' obligations.
• Disclosure: To the extent that the Bank learns of any evidence or allegation of conduct by the Bank, its affiliates, or their employees that may be a violation of U.S. federal law, promptly report to the DOJ any such evidence or allegation.
• Sale/Merger/Transfer: Any change in corporate form, including a sale, merger, or transfer of business operations that are material to the Bank's consolidated operations, or to the operations of any subsidiaries, branches, or affiliates involved in the conduct described in the Statement of Facts, as they exist as of the date of the Agreements, whether such transaction is structured as a sale, asset sale, merger, transfer, or other change in corporate form, the Bank must include in any such contract a provision binding the purchaser, or any successor in interest thereto, to the obligations described in the Agreements, and the other party to the contract must agree in writing to the terms and obligations to the Agreements; meet other requirements prior to any such change in corporate form, including a sale, merger, or transfer of business operations, as specified in the Agreements.
• Breach of Agreements: The following would constitute a breach of the Agreements: (a) any felony under U.S. federal law; (b) providing deliberately false, incomplete, or misleading information to the DOJ; (c) failing to cooperate with the DOJ; (d) failing to implement a compliance program as set forth in the Plea Agreements and Attachment C to the Plea Agreements and complete the monitorship as set forth in the Plea Agreements and Attachment D to the Plea Agreements; (e) committing any acts that, had they occurred within the jurisdictional reach of the United States, would be a violation of federal money laundering laws or the Bank Secrecy Act; or (f) otherwise failing specifically to perform or to fulfill completely each of the obligations under the Agreements. In the event of a breach of the Agreements, the Bank will be subject to prosecution for any federal criminal violation of which the DOJ is aware, including the charges to which the Bank pleaded guilty.
• Non-Contradiction: The Bank will not make any public statement, in litigation or otherwise, contradicting its acceptance of responsibility or the facts described in the Information or Statement of Facts. The Bank will seek preclearance from the DOJ before issuing any affirmative public statement in connection with the resolutions, including via press release, press conference remarks, or a scripted statement to investors.
• Acknowledgement by the Bank and TDGUS of the Agreements by TDBNA and TDBUSH and agreement to undertake the cooperation commitments outlined in the Agreements and ensure that TDBNA and TDBUSH comply with all terms of the Agreements.

FinCEN Consent Order involving TDBNA and TD Bank USA, N.A. (TDBUSA)

• BSA/AML program violations (31 U.S.C. § 5318 (h)(1) and 31 C.F.R. § 1020.210(a)), suspicious activity report violations (31 U.S.C. § 5318(g) and 31 C.F.R. § 1020.320), and currency transaction report violations (31 U.S.C. § 5313 and 31 C.F.R. § 1010.311).
• BSA/AML program violations (31 U.S.C. § 5318 (h)(1) and 31 C.F.R. § 1020.210(a)), suspicious activity report violations (31 U.S.C. § 5318(g) and 31 C.F.R. § 1020.320), and currency transaction report violations (31 U.S.C. § 5313 and 31 C.F.R. § 1010.311).
• Monetary Penalty: US$1.3 billion (requiring a payment of US$757 million after crediting).
• Remediation Requirements:
  • Independent Compliance Monitor. The Order requires the Bank to retain an independent compliance monitor for a period of 4 years, which will be required to undertake various reviews and issue reports as outlined in the Order.
  • Suspicious activity report (SAR) Lookback. The Order recognized that the Bank has retained an independent third party to conduct a SAR lookback review, which will be overseen by the independent compliance monitor. Within 150 days from the engagement of the monitor, the SAR lookback consultant must deliver to FinCEN and the monitor a report summarizing the proposed scope and methodology of the review. Within 18 months from the date of the SAR lookback report, the SAR lookback consultant must deliver a detailed report that summarizes the findings of its review.
  • BSA/AML Program Review. The Order requires the Bank to retain an independent third party to conduct a review of the effectiveness of its BSA/AML program, similar to the review required by the FRB and OCC. Within 60 days from the engagement of the monitor, the monitor must propose an AML program consultant or elect to serve as the consultant. Within 90 days from the engagement of the consultant, the consultant must deliver to FinCEN a report summarizing the proposed scope and methodology of the review. Within 60 days from the end of the consultant's review, but no later than one year from the date of its engagement, the consultant must submit to FinCEN a final written report.
  • Accountability Review. The Order requires the independent compliance monitor to assess the accountability review work that the Bank has conducted concerning the involvement of personnel in the conduct described in the Order. Within 120 days from the engagement of the monitor, the monitor must deliver to FinCEN a report summarizing the proposed scope and methodology of the review. Within 60 days from the end of the monitor's review, but no later than one year from the date of its engagement, the monitor must submit to FinCEN a final written report.
  • Data Governance Review. The Order requires the independent compliance monitor to oversee a data governance review, which will involve an assessment of the Bank's data governance framework. Within 120 days from the engagement of the monitor, the monitor must deliver to FinCEN a report summarizing the proposed scope and methodology of the review. Within 60 days from the end of the monitor's review, but no later than one year from the date of its engagement, the monitor must submit to FinCEN a final written report.
• Cooperation: The Order requires the Bank to cooperate with FinCEN in all matters within the scope of or related to the resolution.
• Non-Contradiction: The Order requires the Bank not to make any public statement that contradicts the admissions or acceptance of responsibility or any terms of the Order.

OCC Consent Orders involving TDBNA and TDBUSA

• BSA/AML program violation (12 C.F.R. § 21.21), suspicious activity report violations (12 C.F.R. § 21.11), currency transaction report violations (31 C.F.R. § 1010.312), customer due diligence violation (31 C.F.R. § 1020.210(a)(2)(v)) and recklessly engaging in unsafe or unsound practices related to the Bank's BSA/AML Compliance Program.
• Monetary Penalty: US$450 million.
• The Orders will remain in effect until amended, suspended, waived, or terminated, in writing by the OCC.
• Remediation Requirements (dates listed below may be extended by written approval from the OCC):
  • Compliance Committee. Appoint, within 15 days of the Order's effective date, a Compliance Committee to monitor and oversee the TDBNA's and TDBUSA's compliance with the Orders.
  • BSA/AML Action Plan. Submit a written plan, within 150 days of the Order's effective date, detailing the remedial actions necessary to achieve and sustain compliance with the BSA, its implementing regulations, and specified articles of the Orders, and to address all BSA/AML deficiencies, violations, and corrective actions (the "BSA/AML Action Plan"). Adopt and implement the BSA/AML Action Plan and provide progress reports.
  • BSA/AML Program Assessment and Remediation. Retain, within 60 days of the Order's effective date or as otherwise specified in the BSA/AML Action Plan, an independent third-party consultant to conduct an end-to-end review and assessment of their BSA/AML Program and draft a written report documenting its findings and recommendations, to be submitted to the boards of directors (Boards) of TDBNA and TDBUSA, and the OCC, at the same time. Effectively remediate any identified gaps and deficiencies.
  • New Products, Services, Branches, and Markets. Submit, within 150 days of the Order's effective date, or as otherwise specified in the BSA/AML Action Plan, to the OCC for review and prior written determination of no supervisory objection, improved policies and procedures for evaluating the BSA/AML risks posed by adding a new product or service and ensuring the Bank has adequate controls to mitigate such risks, prohibits TDBNA and TDBUSA from adding new products or services until they receive a determination of no supervisory objection to the improved policies and procedures. After receiving no supervisory objection to the policies and procedures, the Orders prohibit TDBNA and TDBUSA from adding any new medium or high BSA/AML risk product or service without, among other requirements, a prior determination of no supervisory objection. Prohibition from opening a new branch or entering a new market without first receiving no supervisory objection.
  • BSA Officer and Staffing. Maintain a qualified BSA Officer vested with sufficient independence, authority, stature, and resources, and requires the Boards to ensure that TDBNA and TDBUSA have sufficient managers and staff with the appropriate skills, expertise, and with the requisite authority, to support the BSA Officer and BSA/AML program. Following the Independent Consultant review, ensure there is an annual review of the adequacy of the Bank's BSA Officer and staff, with the determinations finalized in writing, to be submitted to the OCC, and the Boards are responsible for ensuring any necessary changes are implemented. Ensure that the BSA Officer and staff have sufficient training, authority, resources, and skill, that management has the necessary knowledge to oversee the Bank's compliance with the BSA, that information systems are effective, and that there are clear lines of authority and responsibility for the BSA/AML compliance function and staff, including giving the BSA Officer the ultimate accountability for and authority over all the U.S. BSA/AML Program components.
  • BSA/AML Training. Implement, within 120 days of the Order's effective date, or as otherwise specified in the BSA/AML Action Plan, an effective BSA/AML Training Program that meets certain minimum requirements, as detailed in the Orders.

Order/Agreement

Key Requirements

OCC Consent Orders involving TDBNA and TDBUSA

• • BSA/AML Internal Controls. Develop and implement, within 120 days of the Order's effective date, or as otherwise specified in the BSA/AML Action Plan, an effective Internal Controls Program to identify and control the risks associated with money laundering and terrorist financing and other illicit financial activity, and to achieve and maintain compliance with the BSA. The Internal Controls Program must meet certain minimum requirements, as detailed in the Orders.
  • Customer Due Diligence and Risk Identification. Develop and implement, within 120 days of the Order's effective date, or as otherwise specified in the BSA/AML Action Plan, an effective customer due diligence (CDD) program to ensure appropriate collection and analysis of customer information when opening new accounts, when renewing or modifying existing accounts for customers, and when the Bank obtains event-driven information indicating that it would be prudent to obtain updated information and maintain accurate customer risk profiles. The CDD Program must meet certain minimum requirements, as detailed in the Orders.
  • Suspicious Activity Identification, Evaluation, and Reporting. Develop and implement, within 120 days of the Order's effective date, or as otherwise specified in the BSA/AML Action Plan, an effective suspicious activity monitoring and reporting program to ensure the timely and appropriate identification, review, and disposition of unusual activity, and the filing of SARs. The Suspicious Activity Review Program must meet certain minimum requirements, as detailed in the Orders.
  • BSA/AML Independent Testing. Develop and implement, within 120 days of the Order's effective date, or as otherwise specified in the BSA/AML Action Plan, an effective BSA/AML independent testing program to test the Bank's compliance with the BSA, relative to its risk profile, and the overall adequacy of the Bank's BSA/AML Program. The BSA/AML Audit Program must meet certain minimum requirements, as detailed in the Orders. Develop risk assessment and planning processes that clearly document AML risk, and for management to require reporting on no less than a quarterly basis of all deficiencies in BSA/AML processes and controls identified through the BSA/AML Audit Program to the Bank's Board or BSA/AML Audit Committee, and to senior management, after which the Boards or BSA/AML Audit Committee must ensure that management takes prompt action to remediate the cited deficiencies and validates corrective action.
  • Suspicious Activity Review Lookback. Retain, within 60 days of the Order's effective date, or as otherwise specified in the BSA/AML Action Plan, an independent third-party consultant to conduct a review and provide a written report on the Bank's suspicious activity monitoring, investigation, decisioning, and reporting. The OCC has discretion to expand the scope of the look-back after its review of the report.
  • Accountability for Employees Involved in Misconduct. TDBNA and TDBUSA are prohibited from retaining, now or in the future, any individual as an officer, employee, agent, consultant, or contractor who participated in, was subject to formal discipline, or was separated or terminated in connection with the underlying conduct described in the Orders, and TDBNA and TDBUSA are required to submit, within 30 days of the Order's effective date, to the OCC policies, procedures, and reporting requirements for ensuring compliance with the accountability requirements. The Orders also require the HR senior executive officers of TDBNA and TDBUSA to submit, on a quarterly basis, compliance with the accountability requirements.
  • General Board Requirements. Ensure timely adoption and implementation of all corrective actions required by the Orders, verification of adherence to the corrective actions, and ensure the corrective actions are effective in addressing the deficiencies that led to the Orders.
• Limits on Growth. TDBNA and TDBUSA may not take any action that would cause the average of the Bank's total consolidated assets for the current calendar quarter and the immediately preceding calendar quarter to exceed the total consolidated assets reported as of September 30, 2024. If TDBNA and TDBUSA do not meet the deadline for compliance with all actionable articles in the Orders, the OCC may require TDBNA and TDBUSA to reduce their total consolidated assets by up to 7% from their total consolidated assets as reported as of the most recent quarter, and for each year TDBNA and TDBUSA continue to be in noncompliance with the Orders, the OCC may require further reductions up to 7% from their total consolidated assets as reported as of the most recent calendar quarter. The Deputy Comptroller of the OCC may, at their discretion, temporarily suspend the asset limit in light of unusual circumstances at TDBNA or TDBUSA.
• Prioritization of Expenditure on Remediation. Prior to declaring or paying dividends, engaging in share repurchases, or making any other capital distribution, the Boards of TDBNA and TDBUSA must certify in writing to the OCC that the Bank has allocated appropriate resources and staffing to the remediation required by the Orders.

Order/Agreement

Key Requirements

Federal Reserve Cease & Desist Order with TD Bank, TD Group US Holdings LLC (TDGUS) and TDBUSH

• Issued pursuant to 12 U.S.C. § 1818(b) and (i)(2)(B)
• Monetary Penalty: US$123.5 million.
• The Order will remain in effect until stayed, modified, terminated, or suspended in writing by the FRB.
• Remediation Requirements (dates listed below may be extended by written approval from the FRB):
  • Board Oversight. Submit to the FRB, within 90 days of the Order's effective date, a written plan to oversee the matters identified in the Order.
  • Corporate Governance and Management Review. Retain, within 30 days of the Order's effective date, an independent third party to assess the effectiveness of the corporate governance, board and U.S. management structure, and staffing needs at TD Bank, TDGUS, and TDBUSH and draft a written report of findings and recommendations, which will be provided to the FRB and to the Office of the Superintendent of Financial Institutions (OSFI) at the same time it is provided to the Boards of TD Bank and TDGUS. Submit to the FRB and OSFI a written board oversight plan that is designed to address the findings and recommendations in the report and that describes the actions the Boards of TD Bank and TDGUS will take to strengthen the management and corporate governance structure of TD Bank, TDGUS, and TDBUSH.
  • U.S. Remediation Office: Submit, within 90 days of the Order's effective date, a written plan to establish a Remediation Office in the United States to operate under the oversight of the Boards. The Remediation Office will be responsible for several undertakings pursuant to the Order.
  • U.S. Law Compliance Program. Submit, within 60 days of the Order's effective date, a compliance program (U.S. Law Compliance Program) to the FRB, including a timeline for implementation. The U.S. Law Compliance Program related obligations include, among other requirements, the relocation to the U.S. the part of the TD Bank, TDGUS, and TDBUSH compliance function that is responsible for establishing and maintaining compliance with the applicable BSA/AML requirements by the branches, affiliates, and global business lines of TD Bank, TDGUS, and TDBUSH.
  • BSA/AML Compliance Review. Retain, within 30 days of the Order's effective date, an independent third party to conduct a review of the BSA/AML compliance elements of the U.S. Law Compliance Program. The independent third party will be responsible for preparing a written report of findings and recommendations, which will be provided to the FRB at the same time it is provided to the Boards. TD Bank, TDGUS, and TDBUSH must submit a written plan that is designed to fully address the findings and recommendations in the report and that describes the actions that will be taken to strengthen compliance with the applicable BSA/AML requirements.
  • Resource Allocation for Remediation. Prior to TDGUS or TDBUSH declaring or paying dividends, engaging in share repurchases, or making any other capital distribution, the Boards must certify to the FRB that the appropriate resources and staffing have been allocated to remediation, as required by the Order.
  • Accountability for Employees Involved in Misconduct. TD Bank, TDGUS, and TDBUSH are prohibited from retaining, now or in the future, any individual as an officer, employee, agent, consultant, or contractor who participated in, was subject to formal discipline, or was separated or terminated in connection with the underlying described in the Order.
  • Ongoing Reporting. Submit quarterly progress reports detailing the form and manner of actions taken to comply with the Order, a timetable and schedule to implement specific remedial actions to be taken, and the results thereof. Pursuant to the Order, the written OCC progress reports will be sent to the FRB.

(i)

People and Talent: The Bank has overhauled its U.S. BSA/AML program resourcing across all three lines of defence. The Bank has established a dedicated and expanded U.S. Financial Crime Risk Management leadership team and structure, with emphasis on specific experience and subject matter expertise, including the appointment of the BSA Officer as required by the OCC order. The Bank has also created and hired new resources across the first line of defence with years of risk management and control experience, particularly in Financial Crime areas. The Internal Audit function has also been further developed to include resources with specialized testing experience in the domain as well as specific to remediation validation work.

(ii)

Governance and Structure: The Bank has strengthened its oversight structure and accountability across all three lines of defence, including the risk management and audit functions, and has established a dedicated committee at the U.S. boards (the "U.S. Compliance Committee") as well as a dedicated committee of the Bank's Board of Directors (the "Remediation Committee") for remediation oversight. In addition, the Bank has established an executive U.S. Remediation Office, which will be responsible for overseeing the execution of the remediation program and engaging with the U.S. regulators in relation to the actions required to be taken by the Bank under the Global Resolution. The Bank also anticipates that the monitorship will be appointed in fiscal 2025².

(iii)

Policy and Risk Assessment: The Bank has introduced new standards with the goal of enhancing capabilities to measure financial crime risk more effectively. Specifically, new risk limits have been designed and implemented, and changes to certain risk assessment processes were introduced to help highlight specific products and areas of specific risk.

(iv)

Process and Control: The Bank has enhanced customer onboarding procedures for cash intensive clients. In addition, the Bank has added additional transactions to the Bank's monitoring system and added new scenarios to help increase the detection of potentially suspicious activity across its products and services. The Bank has also implemented role-based targeted training and enhanced Bank-wide general training to reinforce understanding and accountability.

(v)

Data and Technology: The Bank has deployed new data-driven technology solutions and has deployed the first phases of an enhanced transaction monitoring platform. The new system has an enhanced data model and new capabilities to modernize and manage the Bank's detection proficiency into the future. Advanced analytics have been introduced to improve the speed of investigation activities, and to do proactive modeling of current risks that impact the Bank.

 Under the terms of the plea agreements and consent orders, the selection of the monitor will be made by the DOJ and FinCEN. Accordingly, the timing of the appointment of the monitorship is not entirely within the Bank's control.

i.

People & Talent: Similar to investments made in the U.S., the Bank has recruited AML program leadership and talent with a focus on deep subject matter expertise, with additional recruitment underway.

ii.

Governance & Structure: The Bank is redefining its enterprise AML governance approach, including strengthening oversight structure and reporting across all three lines of defense.

iii.

Policy & Risk Assessment: Similar to the changes being made in the U.S., new enterprise standards and capabilities are being updated to measure financial crime risk more effectively, and strengthen oversight across key areas of the program, including high risk and high cash customer activity.

iv.

Process & Control: The Bank is in the process of enhancing enterprise customer onboarding procedures, updating approaches to transaction and customer monitoring, and implementing training to support enhanced processes and reinforce accountability.

v.

Data & Technology: The Bank has established an enhancement plan to deliver new technology solutions with stronger detection and data management capabilities, advanced analytics, new scenarios, and modelling capabilities.

__________________

³

Operating leverage is a non-GAAP measure. At the total Bank level, TD calculates operating leverage as the difference between the % change in adjusted revenue (U.S. Retail in source currency) net of insurance service expense, and adjusted expenses (U.S. Retail in US$) grossed up by the retailer program partners' share of PCL for the Bank's U.S. strategic card portfolio. Collectively, these adjustments provide a measure of operating leverage that management believes is more reflective of underlying business performance.

⁴

The Bank's expectations regarding expense growth is based on the Bank's assumptions regarding risk and control investments, employee-related expenses, foreign exchange impact, and productivity and restructuring savings. These 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 in the Bank's 2024 MD&A for additional information about risks and uncertainties that may impact the Bank's estimates.

TABLE 2: OPERATING RESULTS – Reported

(millions of Canadian dollars)

For the three months ended

For the twelve months ended

October 31

July 31

October 31

October 31

October 31

2024

2024

2023

2024

2023

Net interest income

$

7,940

$

7,579

$

7,494

$

30,472

$

29,944

Non-interest income¹

7,574

6,597

5,684

26,751

20,746

Total revenue¹

15,514

14,176

13,178

57,223

50,690

Provision for (recovery of) credit losses

1,109

1,072

878

4,253

2,933

Insurance service expenses¹

2,364

1,669

1,346

6,647

5,014

Non-interest expenses¹

8,050

11,012

7,628

35,493

29,855

Income before income taxes and share of net income from

investment in Schwab¹

3,991

423

3,326

10,830

12,888

Provision for (recovery of) income taxes¹

534

794

616

2,691

3,118

Share of net income from investment in Schwab

178

190

156

703

864

Net income (loss) – reported¹

3,635

(181)

2,866

8,842

10,634

Preferred dividends and distributions on other equity instruments

193

69

196

526

563

Net income (loss) available to common shareholders¹

$

3,442

$

(250)

$

2,670

$

8,316

$

10,071

¹ 

For the three and twelve months ended October 31, 2023, certain amounts have been restated for the adoption of IFRS 17. Refer to Note 4 of the Bank's 2024 Consolidated Financial Statements for further details.

TABLE 3: NON-GAAP FINANCIAL MEASURES – Reconciliation of Adjusted to Reported Net Income

(millions of Canadian dollars)

For the three months ended

For the twelve months ended

October 31

July 31

October 31

October 31

October 31

2024

2024

2023

2024

2023

Operating results – adjusted

Net interest income^1,2

$

8,034

$

7,641

$

7,558

$

30,749

$

30,394

Non-interest income^1,3,4

6,863

6,597

5,684

26,040

21,643

Total revenue³

14,897

14,238

13,242

56,789

52,037

Provision for (recovery of) credit losses

1,109

1,072

878

4,253

2,933

Insurance service expenses³

2,364

1,669

1,346

6,647

5,014

Non-interest expenses^3,5

7,731

7,208

6,988

29,148

26,517

Income before income taxes and share of net income from

investment in Schwab

3,693

4,289

4,030

16,741

17,573

Provision for (recovery of) income taxes

695

868

779

3,355

3,651

Share of net income from investment in Schwab⁶

207

225

234

891

1,073

Net income – adjusted³

3,205

3,646

3,485

14,277

14,995

Preferred dividends and distributions on other equity instruments

193

69

196

526

563

Net income available to common shareholders – adjusted³

3,012

3,577

3,289

13,751

14,432

Pre-tax adjustments for items of note

Amortization of acquired intangibles⁷

(60)

(64)

(92)

(290)

(313)

Acquisition and integration charges related to the Schwab transaction^5,6

(35)

(21)

(31)

(109)

(149)

Share of restructuring and other charges from investment in Schwab⁶

–

–

(35)

(49)

(35)

Restructuring charges⁵

–

(110)

(363)

(566)

(363)

Acquisition and integration-related charges⁵

(82)

(78)

(197)

(379)

(434)

Charges related to the terminated FHN acquisition⁵

–

–

–

–

(344)

Payment related to the termination of the FHN transaction⁵

–

–

–

–

(306)

Impact from the terminated FHN acquisition-related capital hedging strategy¹

(59)

(62)

(64)

(242)

(1,251)

Impact of retroactive tax legislation on payment card clearing services⁴

–

–

–

–

(57)

Gain on sale of Schwab shares⁴

1,022

–

–

1,022

–

U.S. balance sheet restructuring⁴

(311)

–

–

(311)

–

Indirect tax matters^2,5

(226)

–

–

(226)

–

Civil matter provision/Litigation settlement^4,5

–

–

–

(274)

(1,642)

FDIC special assessment⁵

72

–

–

(442)

–

Global resolution of the investigations into the Bank's U.S. BSA/AML program⁵

(52)

(3,566)

–

(4,233)

–

Less: Impact of income taxes

Amortization of acquired intangibles

(8)

(8)

(9)

(41)

(42)

Acquisition and integration charges related to the Schwab transaction

(9)

(3)

(5)

(23)

(25)

Restructuring charges

–

(29)

(97)

(150)

(97)

Acquisition and integration-related charges

(18)

(18)

(36)

(82)

(89)

Charges related to the terminated FHN acquisition

–

–

–

–

(85)

Impact from the terminated FHN acquisition-related capital hedging strategy

(14)

(16)

(16)

(60)

(308)

Impact of retroactive tax legislation on payment card clearing services

–

–

–

–

(16)

U.S. balance sheet restructuring

(77)

–

–

(77)

–

Indirect tax matters

(53)

–

–

(53)

–

Civil matter provision/Litigation settlement

–

–

–

(69)

(456)

FDIC special assessment

18

–

–

(109)

–

Canada Recovery Dividend (CRD) and federal tax rate increase for fiscal 2022⁸

–

–

–

–

585

Total adjustments for items of note

430

(3,827)

(619)

(5,435)

(4,361)

Net income (loss) available to common shareholders – reported³

$

3,442

$

(250)

$

2,670

$

8,316

$

10,071

¹

Prior to May 4, 2023, the impact shown covers periods before the termination of the FHN transaction and includes the following components, reported in the Corporate segment: i) mark-to-market gains (losses) on interest rate swaps recorded in non-interest income – 2023: ($1,386) million, ii) basis adjustment amortization related to de-designated fair value hedge accounting relationships, recorded in net interest income – 2023: $262 million, and iii) interest income (expense) recognized on the interest rate swaps, reclassified from non-interest income to net interest income with no impact to total adjusted net income – 2023: $585 million. After the termination of the merger agreement, the residual impact of the strategy is reversed through net interest income – Q4 2024: ($59) million, Q3 2024: ($62) million, 2024: ($242) million, Q4 2023: ($64) million, 2023: ($127) million.

² 

Adjusted net interest income excludes the following item of note:

i.

Indirect tax matters – Q4 2024: $35 million, 2024: $35 million, reported in the Corporate segment. Refer to "Taxes" in the "Financial Results Overview" section in the Bank's 2024 MD&A for further details.

³ 

For the three and twelve months ended October 31, 2023, certain amounts have been restated for the adoption of IFRS 17. Refer to Note 4 of the Bank's 2024 Consolidated Financial Statements for further details.

⁴ 

Adjusted non-interest income excludes the following items of note:

i.

Impact of retroactive tax legislation on payment card clearing services – 2023: $57 million, reported in the Corporate segment;

ii.

The Bank sold 40.5 million shares of common stock of Schwab and recognized a gain on the sale – Q4 2024: $1,022 million, 2024: $1,022 million, reported in the Corporate segment;

iii.

U.S. balance sheet restructuring – Q4 2024: $311 million, 2024: $311 million, reported in the U.S. Retail segment; and

iv.

Stanford litigation settlement – 2023: $39 million. This reflects the foreign exchange loss and is reported in the Corporate segment.

⁵ 

Adjusted non-interest expenses exclude the following items of note:

i.

Amortization of acquired intangibles – Q4 2024: $33 million, Q3 2024: $34 million, 2024: $172 million, Q4 2023: $62 million, 2023: $193 million, reported in the Corporate segment;

ii.

The Bank's own acquisition and integration charges related to the Schwab transaction – Q4 2024: $33 million, Q3 2024: $16 million, 2024: $88 million, Q4 2023: $18 million, 2023: $95 million, reported in the Corporate segment;

iii.

Restructuring charges – Q3 2024: $110 million, 2024: $566 million, Q4 2023: $363 million, 2023: $363 million, reported in the Corporate segment;

iv.

Acquisition and integration-related charges – Q4 2024: $82 million, Q3 2024: $78 million, 2024: $379 million, Q4 2023: $197 million, 2023: $434 million, reported in the Wholesale segment;

v.

Charges related to the terminated FHN acquisition – 2023: $344 million, reported in the U.S. Retail segment;

vi.

Payment related to the termination of the FHN transaction – 2023: $306 million, reported in the Corporate segment;

vii.

Indirect tax matters – Q4 2024: $191 million, 2024: $191 million, reported in the Corporate segment. Refer to "Taxes" in the "Financial Results Overview" section in the Bank's 2024 MD&A for further details;

viii.

Civil matter provision/Litigation settlement – 2024: $274 million in respect of a civil matter, 2023: $1,603 million in respect of the Stanford litigation settlement, reported in the Corporate segment;

ix.

FDIC special assessment – Q4 2024: ($72) million, 2024: $442 million, reported in the U.S. Retail segment; and

x.

Charges for the global resolution of the investigations into the Bank's U.S. BSA/AML program – Q4 2024: $52 million, Q3 2024: $3,566 million, 2024: $4,233 million, reported in the U.S. Retail segment.

⁶ 

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 – Q4 2024: $27 million, Q3 2024: $30 million, 2024: $118 million, Q4 2023: $30 million, 2023: $120 million;

ii.

The Bank's share of acquisition and integration charges associated with Schwab's acquisition of TD Ameritrade – Q4 2024: $2 million, Q3 2024: $5 million, 2024: $21 million, Q4 2023: $13 million, 2023: $54 million;

iii.

The Bank's share of restructuring charges incurred by Schwab – 2024: $27 million; Q4 2023: $35 million, 2023: $35 million; and

iv.

The Bank's share of the FDIC special assessment charge incurred by Schwab – 2024: $22 million.

⁷

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 5 and 6 for amounts.

⁸ 

CRD and impact from increase in the Canadian federal tax rate for fiscal 2022 recognized in the first quarter of 2023, reported in the Corporate segment.

TABLE 4: RECONCILIATION OF REPORTED TO ADJUSTED EARNINGS PER SHARE¹

(Canadian dollars)

For the three months ended

For the twelve months ended

October 31

July 31

October 31

October 31

October 31

2024

2024

2023

2024

2023

Basic earnings (loss) per share – reported²

$

1.97

$

(0.14)

$

1.48

$

4.73

$

5.53

Adjustments for items of note

(0.25)

2.19

0.34

3.09

2.39

Basic earnings per share – adjusted²

$

1.72

$

2.05

$

1.82

$

7.82

$

7.92

Diluted earnings (loss) per share – reported²

$

1.97

$

(0.14)

$

1.48

$

4.72

$

5.52

Adjustments for items of note

(0.25)

2.19

0.34

3.09

2.39

Diluted earnings per share – adjusted²

$

1.72

$

2.05

$

1.82

$

7.81

$

7.91

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.

² 

For the three and twelve months ended October 31, 2023, certain amounts have been restated for the adoption of IFRS 17. Refer to Note 4 of the Bank's 2024 Consolidated Financial Statements for further details.

TABLE 5: NON-GAAP FINANCIAL MEASURES – Reconciliation of Reported to Adjusted Provision for Income Taxes

(millions of Canadian dollars, except as noted)

For the three months ended

For the twelve months ended

October 31

July 31

October 31

October 31

October 31

2024

2024

2023

2024

2023

Provision for income taxes – reported¹

$

534

$

794

$

616

$

2,691

$

3,118

Total adjustments for items of note

161

74

163

664

533

Provision for income taxes – adjusted^1,2

$

695

$

868

$

779

$

3,355

$

3,651

Effective income tax rate – reported¹

13.4

%

187.7

%

18.5

%

24.8

%

24.2

%

Effective income tax rate – adjusted^1,2

18.8

20.2

19.3

20.0

20.8

¹

For the three and twelve months ended October 31 2023, certain amounts have been restated for the adoption of IFRS 17. Refer to Note 4 of the Bank's 2024 Consolidated Financial Statements for further details.

²

For additional information about this metric, refer to the Glossary in the Bank's 2024 MD&A.

TABLE 6: RETURN ON COMMON EQUITY¹

(millions of Canadian dollars, except as noted)

For the three months ended

For the twelve months ended

October 31

July 31

October 31

October 31

October 31

2024

2024

2023

2024

2023

Average common equity¹

$

102,051

$

100,677

$

100,998

$

100,979

$

101,608

Net income (loss) available to common shareholders – reported¹

3,442

(250)

2,670

8,316

10,071

Items of note, net of income taxes

(430)

3,827

619

5,435

4,361

Net income available to common shareholders – adjusted¹

$

3,012

$

3,577

$

3,289

$

13,751

$

14,432

Return on common equity – reported¹

13.4

%

(1.0)

%