The Toronto-Dominion Bank

Record profitability in Q3; capital generation strong (good) - TD reported record earnings of $4.7B and record EPS of $2.77 in Q3 2026. - Revenue up 8% YoY, driven by markets momentum, margin expansion, and volume growth in Canadian Personal & Commercial Banking (P&C). - ROE = 16%, +280 bps YoY; positive operating leverage for the 5th consecutive quarter. - CET1 = 14.3% (down 3 bps QoQ). Organic capital accretion remained strong and share buybacks continued.

Credit quality better than expected; PCL guidance tightened (good/surprising) - Impaired PCLs declined QoQ and provisions eased: PCL ratio improved (provision for credit losses 37 bps, down 6 bps QoQ). - Gross impaired loans down (to 51 bps, down 3 bps QoQ), with formations also decreasing. - 2026 total PCL outlook: now expected near the lower end of the prior 40–50 bps range (i.e., better-than-previously-guided credit trajectory). - Management attributed performance to economic resilience, client adaptation, and TD underwriting discipline; also noted RESL delinquency slightly higher as a relative offset.

U.S. banking momentum is real, but costs/overhangs remain (good + watch-outs) - U.S. Banking earnings +11% YoY; ROTCE 15.6% (up 210 bps YoY). - Net interest margin (NIM) record 3.47%, up 6 bps QoQ; management expects modestly higher NIM in Q4. - Total loans turned positive sequentially in Q3; strong growth in bank card balances (+20% YoY), mid-market lending (+15% YoY), home equity lending (+6% YoY). - Cost pressure: expenses +6% YoY in the U.S., reflecting strategic cards conversion costs and higher employee expenses.