The Toronto-Dominion Bank 5 YR RST PFD 1

Record results & operating momentum (good) - TD reported record Q3 2026 earnings of $4.7B and record EPS of $2.77. - Revenue +8% YoY (driven by markets-driven businesses, margin expansion, and volume growth in Canadian P&C). - Operating leverage: positive for the 5th consecutive quarter; expenses were +1% YoY excluding variable comp, FX, and the U.S. strategic cards portfolio (and guided to 3%–4% expense growth for FY26). - ROE 16% (+280 bps YoY), and TD reiterated it remains on track to outperform its medium-term targets (6%–8% EPS growth; 13% ROE) assuming current macro conditions hold.

Credit quality improved; PCL outlook tightened (good + forecast) - Impaired PCLs declined QoQ; credit performance remained strong. - TD guided total PCLs in FY26 near the lower end of 40–50 bps (i.e., closer to ~40 bps than 50 bps). - Ajai cited improving fundamentals vs expectations: formations/GILs down, impaired PCLs down in non-Retail portfolios, with economic resilience and TD underwriting discipline as key drivers. - TD also noted policy/trade risk provisioning: ~$500M reserves set aside for policy/trade risks.

Capital strength + buyback capacity to reach 13% CET1 (good + forecast) - CET1 14.3% at quarter-end (down 3 bps QoQ); organic capital accretion remained strong, offset by consistent share buybacks. - TD highlighted more capital flexibility than before due to changes to DSB requirement/range. - Forecast/plan: TD expects to reach 13% CET1 by 2H FY27. - Capital return sizing (surprising/important): based on current expectations, TD said it could return $13B+ in capital in FY27 via buybacks to reach the 13% CET1 target. - Dividend vs buyback: management clarified the referenced $13B is specifically buybacks, not incremental dividends.