Toronto Dominion Bank (The) (TD) FY2025 40-F and Q3 FY2026 6-K Summary

Business

Source: annual report on Form 40-F for fiscal 2025 (year ended October 31, 2025), accession 0001562762-25-000289: Annual Information Form (Exhibit 99.1) and 2025 Management's Discussion and Analysis (Exhibit 99.2).

TD Bank Group is a Canadian-headquartered bank that takes deposits and lends to individuals and businesses in Canada and along the U.S. East Coast. It also sells wealth management, insurance and investment-banking services. It describes itself as the sixth-largest bank in North America by assets. It serves about 28 million clients and had total assets of $1.50 trillion at October 31, 2025.

TD earns its money in two roughly equal streams:

• Net interest income. This is the spread between what it earns on loans and securities and what it pays on deposits. It was $23.61 billion of fiscal 2025 reported revenue of $48.39 billion.
• Non-interest income ($24.79 billion). This covers brokerage and investment-management fees, insurance premiums, card and service fees, trading and underwriting. The fiscal 2025 total was inflated by a one-time gain on selling its stake in Charles Schwab (see MD&A below).

TD had an average of 102,218 full-time-equivalent employees in fiscal 2025.

The bank runs four operating segments plus a Corporate segment. Their fiscal 2025 reported net income adds up to the consolidated $14.66 billion:

• Canadian Personal and Commercial Banking ($5.22 billion). TD Canada Trust and TD Auto Finance Canada serve about 16 million clients. They sell deposits, mortgages and other consumer loans, credit cards and payments through 1,051 branches and 3,370 ATMs plus digital channels. Business Banking serves business owners and commercial clients, and the segment also provides retail auto loans through dealerships. This is TD's largest and most profitable segment.
• U.S. Banking ($1.39 billion reported; $2.83 billion on TD's adjusted basis). This segment was called U.S. Retail until fiscal 2026. TD Bank, "America's Most Convenient Bank", serves more than 10 million customers through 1,100 stores and 2,401 ATMs from Maine to Florida, alongside TD Auto Finance U.S., a U.S. wealth business and a U.S. credit card business. The card business includes private-label and co-brand programs with national retailers such as Nordstrom. The gap between reported and adjusted profit in fiscal 2025 reflects losses on the balance-sheet restructuring described below.
• Wealth Management and Insurance ($1.99 billion). This segment serves more than 6 million Canadian customers. TD Wealth and TD Direct Investing provide advice-based and self-directed investing and asset management, including asset management for institutional clients. TD Insurance writes property and casualty insurance (sold directly and through affinity groups) and life and health insurance.
• Wholesale Banking ($1.15 billion reported; $1.24 billion adjusted). Operating as TD Securities and TD Cowen, it provides global markets, corporate and investment banking to more than 10,000 corporate, government and institutional clients in North America, Europe and Asia-Pacific. TD acquired Cowen Inc. on March 1, 2023 to build out this business in the U.S.
• Corporate ($4.91 billion reported, almost entirely the Schwab gain; an adjusted net loss of $561.20 million). This segment holds treasury and balance-sheet management and the bank's control and service functions.

TD sold its remaining 10.1% stake in Schwab on February 12, 2025. Schwab came from TD's earlier ownership of TD Ameritrade. The sale ended equity-method earnings from Schwab, but TD still takes sweep deposits from Schwab clients. These come under an insured deposit account agreement that runs initially to July 1, 2034 and carries a deposit floor of $60 billion.

Regulation. TD is a Schedule I bank under Canada's Bank Act, supervised by the Office of the Superintendent of Financial Institutions (OSFI). Its two U.S. banks, TD Bank, N.A. and TD Bank USA, N.A., are national banks supervised by the OCC. Since October 2024 they have operated under the anti-money-laundering consent orders and asset limit described under Risk factors.

Strategy and targets. After a strategic review in fiscal 2025, TD set out three pillars at its 2025 Investor Day:

• Deeper Relationships: share of wallet, digital engagement and fee income.
• Simpler & Faster: client experience, a leaner operating model, and technology including AI.
• Disciplined Execution: governance and controls, cost and capital.

Its fiscal 2026 targets are an adjusted ROE of about 13%, adjusted EPS growth of 6–8%, positive adjusted operating leverage and a CET1 ratio of at least 13%. Its medium-term (fiscal 2029) targets are an adjusted ROE of about 16%, adjusted EPS growth of 7–10%, positive operating leverage, a strong CET1 ratio and a 40–50% dividend payout ratio.

Risk factors

Source: "Top and Emerging Risks" and "Risk Factors That May Affect Future Results" in the 2025 MD&A (Form 40-F Exhibit 99.2, accession 0001562762-25-000289). Updated by the Third Quarter 2026 Report to Shareholders (Form 6-K Exhibit 99.1, accession 0001562762-26-000098), including its Note 17 on legal matters.

• U.S. anti-money-laundering remediation (the "Global Resolution"). This is TD's defining risk. In October 2024 TD resolved U.S. investigations into its Bank Secrecy Act / anti-money-laundering program:
  • TD Bank, N.A. and TD Bank US Holding Company pleaded guilty. The bank paid $3.088 billion, which was provisioned in fiscal 2024 and paid in full by early fiscal 2025.
  • It accepted consent orders with the OCC, the Federal Reserve and FinCEN, an independent compliance monitor and five years of DOJ probation.
  • The two U.S. banks may not let average combined assets exceed $434 billion. If they fail to comply with the OCC orders, the OCC may require a further cut of up to 7% in total assets, and can repeat this for each year they remain non-compliant.
  • New U.S. products, services, markets and stores need OCC approval.
  • Dividends from key U.S. subsidiaries need board certification.
  • The resolution led to credit-rating downgrades and cost TD the "qualified professional asset manager" exemption for U.S. pension-plan clients.
  • TD warns that failure to remediate on time could bring further fines, business restrictions, higher capital requirements, management or governance changes, or extended probation. It also says the timeline is not entirely in its control because regulators and the monitor must accept each step.
• Enterprise-wide AML program. TD is also remediating its AML, anti-terrorist-financing and sanctions programs outside the U.S. Canada's FINTRAC has been reviewing the remediation steps since early fiscal 2025, and its review could lead to further regulatory action. TD says the work is turning up more reportable transactions, which adds to backlogs in its financial-crime investigation queues.
• Trade and geopolitics. TD's earnings depend on the Canadian and U.S. economies. In the third quarter of 2026 it added to this risk:
  • The U.S. decision not to extend the Canada-United States-Mexico Agreement (CUSMA) has raised uncertainty over tariffs and cross-border trade. TD says this could mean higher credit losses, slower loan growth and more market volatility, especially among export-dependent borrowers.
  • It also cites the risk of a prolonged Middle East conflict and shipping blockades disrupting energy supply.
• Inflation, interest rates and recession. Rate moves change TD's funding costs and margins. A downturn, particularly in employment, would raise delinquencies, impairments and provisions. TD notes that borrowers' actual stress may differ from what its credit models assume.
• Regulatory and compliance burden. TD faces extensive and diverging rules in Canada, the U.S. and elsewhere, and regulators signal escalating consequences for banks that leave issues open. Meeting consent orders and new rules raises costs and can force changes to products and operations.
• Strategy execution. TD warns it may not deliver the restructuring, cost-savings and AI targets in its medium-term plan, and that the U.S. limits could hold back some of its strategies.
• Schwab deposit agreement. If Schwab does not perform under the sweep-deposit agreement and does not pay the compensation it requires, TD could lose revenue, pay more to replace the funding and incur hedging losses.
• Technology, cyber and third parties. TD's scale and its reliance on cloud, internet and third-party providers expose it to cyber-attacks, including AI-assisted attacks, as well as data breaches and outages. It has already had service disruptions caused by third parties.
• Insurance catastrophe losses. Hurricanes, wildfires, floods, hail and severe winter weather drive volatile claims at TD Insurance, and climate change makes them harder to model. Catastrophe claims were the main reason insurance service expenses rose in the third quarter of 2026.
• Competition. TD names fintech and big-technology entrants that face lighter regulation as a threat to its payments, lending and self-directed investing businesses.
• Litigation and investigations. TD estimates reasonably possible losses beyond its provisions at between zero and about $285.14 million as at July 31, 2026, below its October 31, 2025 estimate. The matters include:
  • Proposed shareholder class actions in the U.S. (consolidated as Tiessen, where a motion to dismiss is pending) and in Ontario (Parkin, where a certification decision is pending), alleging misleading AML disclosures.
  • Derivative actions. An Ontario court declined leave for one of them in May 2026, and an appeal is set for March 2027.
  • Suits by First Horizon shareholders over the terminated merger. A proposed class action was dismissed in November 2025 and is on appeal. Three Cayman Islands funds filed individual suits in New Jersey state court in February 2026.
  • U.S. government inquiries into fair access to banking under Executive Order 14331.
  • Several fee and practice class actions in Canada.

MD&A: fiscal 2025

Source: 2025 Management's Discussion and Analysis (Form 40-F Exhibit 99.2, accession 0001562762-25-000289), "Significant Events", "Financial Results Overview" and "Business Segment Analysis".

Fiscal 2025 headline numbers were dominated by one-time items, so TD's own "adjusted" figures, which exclude items of note, are the better guide to the underlying business. On that basis earnings grew modestly. Reported figures moved much more:

• Reported net income was $14.66 billion, up 125.6% from $6.50 billion. Reported diluted EPS was $8.25, against $3.47.
• Adjusted net income was $10.73 billion, up 2.2% from $10.49 billion (up 5.2% in Canadian dollars). Adjusted diluted EPS was $5.98, against $5.74.
• Returns. Reported ROE was 17.8% and adjusted ROE 12.9%, down from 13.6%.

Four items explain the gap between reported and adjusted results:

• Schwab sale gain. Selling the 184.7 million Schwab shares on February 12, 2025 raised $14.6 billion and produced a net gain of $5.8 billion, as TD states both in US dollars. The sale added 238 basis points to CET1 capital.
• U.S. balance-sheet restructuring. To create room under the asset cap, U.S. Retail cut assets by its 10% target, creating about $52 billion of headroom. It did so by:
  • exiting about $22 billion of non-core loans, including the sale of a $9 billion correspondent mortgage portfolio and the wind-down of a $3 billion point-of-sale financing business;
  • repositioning its investment portfolio, which TD says added $500 million of net interest income in fiscal 2025.

The repositioning losses are the main reason U.S. Retail's reported profit sat far below its adjusted profit.

• Restructuring. TD took $489.80 million of pre-tax restructuring charges, mainly for severance, asset impairments, business wind-downs and real-estate consolidation. In December 2025 it expected about $89.61 million more in the following quarter, bringing the program to roughly $591.40 million. It expected about $537.63 million of fully realized annual savings, including an approximately 3% workforce reduction.
• Prior-year charges. Fiscal 2024's reported earnings had been depressed by charges for the AML resolution.

Revenue and margin. Reported revenue rose 15.1% to $48.39 billion. Net interest income grew on higher treasury income, Canadian volume growth and the U.S. restructuring, and the bank-wide net interest margin rose 4 basis points to 1.76%. Wholesale Banking had higher trading, underwriting and equity commissions. Wealth and Insurance had higher premiums and fee income.

Expenses. Reported non-interest expenses fell to $23.95 billion because the prior year carried the AML resolution charges. Adjusted expenses rose 12% to $23.24 billion, above TD's own guidance. TD attributes the overshoot to accelerated investment in growth and to governance and control spending, including $507 million on U.S. AML remediation. Insurance service expenses fell to $4.35 billion because fiscal 2024 had carried heavy catastrophe claims.

Credit. Provisions for credit losses rose to $3.22 billion, or 0.47% of credit volume. The increase came mainly from consumer-lending credit migration in Canada and from performing-loan provisions built for tariff and trade uncertainty.

Capital and dividend. Year-end CET1 was 14.7%, and the dividend was $3.00 per share for the year.

Guidance for fiscal 2026. TD guided to:

• total provisions of 40–50 basis points;
• about $500 million of U.S. AML remediation and related governance spending;
• conclusion of the restructuring program in the first quarter.

Current quarter: third quarter of fiscal 2026

Source: Third Quarter 2026 Report to Shareholders, including MD&A and unaudited interim consolidated financial statements (Form 6-K, accession 0001562762-26-000098, Exhibit 99.1, dated August 26, 2026; furnished August 27, 2026).

Headline. It was a clean, strong quarter with few one-off items.

• Reported net income was $3.31 billion, up 36.2% from $2.43 billion. Reported diluted EPS was $1.96, against $1.38.
• Adjusted net income was $3.35 billion, up 18.8% from $2.82 billion. Adjusted diluted EPS was $1.99, against $1.60.
• The only items of note were amortization of acquired intangibles and the residual hedging effect of the terminated First Horizon acquisition.
• Reported ROE was 15.8%, against 11.3% a year earlier, and adjusted ROE was 16.0%.
• CEO Raymond Chun called it a quarter of record earnings in the Canadian businesses and Wholesale Banking, with positive operating leverage.

Drivers. Revenue rose 8.7% to $12.11 billion:

• Net interest income was up 7.4% at $6.67 billion, on wider margins and volume growth in Canada, more Wholesale lending revenue, and higher U.S. loan and deposit margins.
• Non-interest income was up 10.4% at $5.44 billion, on Wholesale fees and trading and on Wealth asset growth and insurance premiums. The year-earlier quarter also carried U.S. restructuring losses.

Provisions for credit losses fell 7.0% to $657.49 million, or 0.37% of credit volume. Impaired provisions were lower in business and government lending but higher in Canadian and U.S. consumer lending. Insurance service expenses rose 3.7% to $1.18 billion on catastrophe claims. Reported non-interest expenses fell 2.1% to $6.08 billion because the prior-year quarter carried restructuring charges. On an adjusted basis they rose 2.3% to $6.05 billion. The reported efficiency ratio improved to 50.2% from 55.7%.

Segments.

• Canadian Personal and Commercial Banking earned $1.50 billion, up 5.6%, a record. Revenue was $3.96 billion. Net interest margin widened 5 basis points to 2.88%. Average loans grew 5% (personal 4%, business 8%) and average deposits grew 2%. The efficiency ratio was 38.6% and ROE was 32.3%.
• U.S. Banking earned $771 million (as TD reports it in US dollars), up 39% in US dollars on a reported basis and 11% on an adjusted basis.
  • Returns and revenue: ROE rose to 10.2% from 7.1%. Revenue was $2.987 billion, up 13% reported and 5% adjusted.
  • Margin: net interest margin rose 28 basis points to 3.47%. Part of the increase came from bringing the Nordstrom credit-card portfolio onto TD's own servicing platform, which gives TD a larger share of that portfolio's revenue.
  • Volumes: average loans fell 4% as the restructuring ran off non-core portfolios, but core loans grew 3%. Average deposits fell 5%, led by a 13% drop in sweep deposits.
  • Expenses were $1.830 billion, including $125 million of AML remediation costs. The efficiency ratio was 61.3%.
• Wealth Management and Insurance earned $603.00 million, up 17.8%, a record.
  • Wealth Management contributed $468.20 million, up 23.4%. Assets under administration reached $592.39 billion and assets under management $459.08 billion. New accounts rose 26% and average trades per day at TD Direct Investing rose 20%.
  • Insurance contributed $134.80 million, up 1.7%, held back by $83.89 million of estimated catastrophe claims.
• Wholesale Banking earned $532.73 million, up 83.9%, its best quarter on record. Revenue rose 23.2% to $1.85 billion on lending revenue, underwriting fees and trading. Provisions were low and ROE reached 16.7%.
• Corporate posted a net loss of $98.95 million, against $347.98 million a year earlier, when it carried restructuring charges.

Balance sheet and capital. At July 31, 2026:

• total assets were $1.51 trillion, net loans $706.47 billion and deposits $898.72 billion;
• CET1 was 14.3%, unchanged from the prior quarter and down from 14.8% a year earlier;
• the 2026 buyback had repurchased 37.7 million shares since January 20, 2026 for $3.90 billion, at an average price of $103.47; the third quarter alone accounted for about 14.5 million shares and $1.72 billion.

On June 19, 2026 OSFI cut the Domestic Stability Buffer to 3.0% from 3.5%, lowering TD's regulatory CET1 target to 11.0%. The quarterly dividend was $0.80 per share, up 5.1% from $0.76 a year earlier.

Year to date. For the nine months to July 31, 2026:

• Reported net income was $9.32 billion, down 24.1% from $12.29 billion, which had included the Schwab gain.
• Adjusted net income rose 19.0% to $9.43 billion. Adjusted diluted EPS rose to $5.48 from $4.41, an increase TD gives as 23% in Canadian-dollar terms, against its fiscal 2026 target of 6–8%.
• Year-to-date adjusted ROE was 14.8%, against the target of about 13%.

Earlier in fiscal 2026.

• Nordstrom card conversion. In the second quarter TD finished converting the Nordstrom card portfolio and took a $144 million pre-tax charge, stated in US dollars, for amounts it will no longer recover from Nordstrom.
• Schwab tax estimate. In the same quarter TD revised its estimate of taxes owed on the Schwab gain, which reduced its tax provision by $210.06 million.
• Restructuring. The restructuring program concluded on January 31, 2026.
• Reporting changes. The U.S. segment was renamed U.S. Banking from the first quarter. Effective June 1, 2026, Small Business Banking moved from Canadian Business Banking to Canadian Personal Banking.

Outlook and guidance (as of August 26, 2026).

• Credit losses: total fiscal 2026 provisions near the lower end of the 40–50 basis-point range.
• Expenses: adjusted expense growth of 3–4%, assuming fiscal 2025 levels of variable compensation, currency translation and U.S. card-portfolio effects.
• Margins: a modest further rise in net interest margin in the fourth quarter in both Canadian Personal and Commercial Banking and U.S. Banking.
• AML spending: fiscal 2026 U.S. AML remediation and related governance spending raised to about $550 million from $500 million because lookback reviews are costing more. The Suspicious Activity Report lookback required by the OCC is expected to finish in calendar 2027, and TD cautions that the overall timeline could run beyond 2027 after validation by internal audit, the monitor and regulators.
• U.S. stores: U.S. Banking plans to open 100 new stores by the end of calendar 2028, subject to OCC approval.

Subsequent events

Source: Note 11 of the interim consolidated financial statements in the Third Quarter 2026 Report to Shareholders (Form 6-K accession 0001562762-26-000098, Exhibit 99.1); dividend declaration in the same filing (Exhibits 99.1 and 99.5); and Forms 6-K 0001279569-26-000710, 0001279569-26-000773, 0001279569-26-000854, 0001193125-26-389340, 0001193125-26-405316 and 0001279569-26-000934.

TD disclosed no acquisitions or divestitures after July 31, 2026. Its post-quarter events are capital and funding transactions, a dividend and a leadership change:

• August 5, 2026: subordinated debt issued. TD issued $273.16 million (SGD 350 million) of 3.125% fixed-rate-reset NVCC subordinated notes due August 5, 2036, redeemable at TD's option on August 5, 2031. The notes are expected to count as Tier 2 capital.
• August 11, 2026: redemption announced. TD said it would redeem all $1.5 billion of its 3.625% NVCC subordinated notes due 2031 at par on September 15, 2026.
• August 26, 2026: dividend. The board declared a common dividend unchanged from the third quarter's, payable on and after October 31, 2026 to holders of record on October 9, 2026.
• September 3, 2026: leadership changes, effective September 4. Vlad Shpilsky became Group Head, Global Technology and Solutions. Renu Gupta became Senior Executive Vice President and Chief Strategy and Commercial Officer, covering strategy, corporate development, digital assets, payments and partnerships. Paul Whitehead became Senior Executive Vice President, Global Corporate Services, adding corporate affairs and enterprise AI. Group Head and Chief Operating Officer Taylan Turan is leaving the bank.
• September 2026: senior notes issued. TD sold $3.75 billion of senior medium-term notes (Series F) under its U.S. shelf registration, priced September 21 and issued September 28, 2026:
  • $1.0 billion of 5.198% notes due 2028;
  • $400 million of floating-rate notes due 2028;
  • $1.1 billion of 5.473% notes due 2031;
  • $1.25 billion of 5.801% notes due 2036.
• September 25, 2026: 2026 buyback completed. TD completed the $4.95 billion of repurchases planned under its 2026 normal course issuer bid, buying back 47.2 million shares. The bid itself remains in effect until January 15, 2027.
• September 30, 2026: new buyback planned. Subject to OSFI approval, TD intends a new buyback of up to $7.04 billion, capped at 61 million shares. That is up to 3.74% of the 1,633,130,726 shares outstanding at August 31, 2026. It aims to complete the buyback by July 2027, starting under the existing bid and continuing under a new TSX bid, which needs TSX approval. In the same release TD gave its July 31, 2026 capital ratios as CET1 14.26%, Tier 1 16.12%, Total Capital 17.90% and leverage 4.55%.