The Toronto-Dominion Bank

Record financial performance (good) - Q3 2026: record earnings of $4.7B and record EPS of $2.77; revenue +8% YoY. - Growth drivers: markets-driven businesses momentum, margin expansion, and volume growth in Canadian Personal & Commercial. - Credit cost improving: impaired PCLs declined QoQ, reflecting strong credit performance. - Structural leverage: positive operating leverage for the 5th consecutive quarter; expenses up ~1% YoY (excluding variable comp, FX, and the U.S. strategic cards portfolio). - ROE: 16%, up 280 bps YoY.

Earnings + credit outlook guidance refined (good / key forecast) - Total PCLs (fiscal 2026): now expected near the lower end of 40–50 bps (i.e., ~closer to 40 bps than 50 bps). - Why: delinquency “stable,” formations/GILs down, and impaired PCLs down across most non-retail portfolios; some consumer classes slightly up, but overall still better than guidance. - Credit resilience attributed to economic adaptation + TD underwriting discipline, plus provisioning for uncertainty. - Forward-looking risk hedge: management cited ~$500M reserves set aside for policy/trade risks.

Capital position + major shareholder returns (surprising / very investor-relevant) - CET1: 14.3% at quarter-end (down 3 bps QoQ), driven by share buybacks (repurchased ~14.5M shares in Q3, reducing CET1 by 37 bps), partially offset by organic accretion and model updates. - CET1 target unchanged in spirit but timing matters: TD expects to reach 13% CET1 by 2H fiscal 2027. - Potential scale of buybacks: management said that assuming continued organic capital accretion and RWA growth, TD could return “over $13B” in capital in fiscal 2027 (explicitly framed as buybacks). - Use of capital hierarchy: primarily organic growth, then selective acquisitions/fee-income opportunities only if compelling (not a priority), and return excess capital if not needed.