THIRD QUARTER FINANCIAL HIGHLIGHTS, compared with the third quarter last year:
- Reported diluted earnings per share were $1.75, compared with $1.92.
- Adjusted diluted earnings per share were $2.09, compared with $1.96.
- Reported net income was $3,214 million, compared with $3,545 million.
- Adjusted net income was $3,813 million, compared with $3,628 million.
YEAR-TO-DATE FINANCIAL HIGHLIGHTS, nine months ended July 31, 2022, compared with the corresponding period last year:
- Reported diluted earnings per share were $5.85, compared with $5.68.
- Adjusted diluted earnings per share were $6.18, compared with $5.83.
- Reported net income was $10,758 million, compared with $10,517 million.
- Adjusted net income was $11,360 million, compared with $10,783 million.
THIRD QUARTER ADJUSTMENTS (ITEMS OF NOTE)
The third quarter reported earnings figures included the following items of note:
- Amortization of acquired intangibles of $58 million ($52 million after-tax or 3 cents per share), compared with $68 million ($61 million after-tax or 3 cents per share) in the third quarter last year.
- Acquisition and integration charges related to the Schwab transaction of $23 million ($20 million after-tax or 1 cent per share), compared with $24 million ($22 million after-tax or 1 cent per share) in the third quarter last year.
- Acquisition and integration-related charges for the First Horizon acquisition of $29 million ($22 million after-tax or 1 cent per share).
- Mitigation of interest rate volatility to closing capital on First Horizon acquisition, net loss of $678 million ($505 million after-tax or 28 cents per share).
TD Bank Group ("TD" or the "Bank") announced its financial results for the third quarter ended July 31, 2022. Reported earnings were $3.2 billion, down 9.3% compared with the third quarter last year, and adjusted earnings were $3.8 billion, up 5.1%.
"Continued business momentum, increased customer activity and the benefits of our deposit rich franchise contributed to TD's strong performance in the third quarter," said Bharat Masrani, Group President and CEO, TD Bank Group. "Investments in talent and innovation, combined with our focus on prudent risk and financial management, strengthened our business and extended our competitive advantage."
Canadian Retail delivered another strong quarter with record revenue
Canadian Retail net income was $2,253 million, an increase of 6% compared with the third quarter last year. Revenue was $7,020 million, an increase of 7%, supported by continued momentum in banking and insurance volumes, rising interest rates, and growth in customer activity, including record credit card sales, partially offset by lower wealth revenue due to market conditions. Expenses increased 8%, reflecting higher spend supporting business growth, including investments in technology and employee-related expenses. Provision for credit losses (PCL) increased by $70 million from the prior year, reflecting higher provisions for performing loans, partially offset by lower impaired PCL.
Canadian Retail continued to build on its momentum delivering record revenue for the quarter and welcoming more customers, which included record new account openings for new Canadians. The Bank continued to support forward-focused investments, such as the addition of the 24th state-of-the-art TD Insurance Auto Centre, further extending its geographic reach and ability to offer superior experiences to more customers. TD Direct Investing was ranked #1 best online broker in Canada in 2022 by MoneySense and the Bank was recognized as a market leader in Digital Customer Engagement by Industry Banking Reports.
The U.S. Retail Bank delivered strong results, fueled by momentum in the consumer and commercial businesses
U.S. Retail reported net income for the quarter was $1,442 million (US$1,122 million), an increase of 11% (7% in U.S. dollars) compared with the third quarter last year. Reported net income included acquisition and integration-related charges for the First Horizon acquisition of $29 million (US$22 million) or $22 million (US$17 million) after-tax. On an adjusted basis, net income for the quarter was $1,464 million (US$1,139 million), an increase of 13% (8% in U.S. dollars). The Bank's investment in The Charles Schwab Corporation (Schwab) contributed $289 million (US$226 million) in earnings, an increase of 47% (40% in U.S. dollars) compared with the third quarter last year.
The U.S. Retail Bank, which excludes the Bank's investment in Schwab, reported net income of $1,153 million (US$896 million), an increase of 5% (1% in U.S. dollars) from the third quarter last year, primarily reflecting higher revenue, partially offset by higher PCL and higher non-interest expenses. On an adjusted basis, net income was a record $1,175 million (US$913 million), an increase of 7% (2% in U.S. dollars), reflecting higher deposit margins and volumes, partially offset by higher PCL, lower income from the Paycheck Protection Program (PPP), and higher employee-related expenses.
U.S. Retail accelerated its business momentum in the third quarter. The U.S. Retail Bank delivered personal loan and deposit growth of 8% each year-over-year. In addition, improving commercial loan growth in middle market and specialty lending helped fuel 2.6% loan growth over the prior quarter. Combined with this growth, the significant wind-down in PPP volumes resulted in only a small decline in average loan volumes overall from the same quarter last year. The business momentum this quarter reflected a combination of strong originations and new customer growth, along with higher commercial line utilization and increased customer activity.
Last week's public meeting before the joint Office of the Comptroller of the Currency and the Federal Reserve Board was another important milestone in TD's ongoing work with community groups and regulators to advance the approval process for the First Horizon transaction. TD continues to expect the transaction to close in the first quarter of fiscal 2023 and looks forward to welcoming First Horizon customers and associates to the Bank.
To further enhance the colleague and customer experience, U.S. Retail launched TD Workshop this quarter – the Bank's first retail innovation lab, which combines a fully-functioning store with space to innovate, design and test new products, and engage with customers and the broader community. For the third consecutive year, TD Auto Finance was proud to be ranked "Highest in Dealer Satisfaction among Non-Captive Lenders with Prime Credit" in the J.D. Power 2022 U.S. Dealer Financing Satisfaction Study.1 This quarter, TD Bank, America's Most Convenient Bank®, was recognized by Forbes as one of America's Best Employers for Women.
