The Toronto-Dominion Bank

Good afternoon, everyone, and welcome to the TD Bank Group Q3 2020 to Earnings Conference Call. I would now like to turn the meeting over to Ms. Brooke Hales. Please go ahead, Ms. Hales.

Thank you, Operator. Good afternoon, and welcome to TD Bank Group's third quarter 2022 investor presentation. We will begin today's presentation with remarks from Barrett Mizrani, the bank's CEO, after which Kelvin Tran, the bank's CFO, will present our third quarter operating results. Ajay Bambawali, Chief Risk Officer, will then offer comments on credit quality, after which we will invite questions from pre-qualified analysts and investors on the phone. Also present today to answer your questions are Michael Rhodes, Group Head, Canadian Personal Banking, Paul Douglas, Group Head, Canadian Business Banking, Raymond Chun, Group Head, Wealth Management and Insurance, Leo Salam, President and CEO, TD Bank, America's Most Convenient Bank, and Riyaz Ahmed, Group Head, Wholesale Banking. Please turn to slide two. At this time, I would like to caution our listeners that this presentation contains forward-looking statements, that there are risks that actual results could differ materially from what is discussed, and that certain material factors or assumptions were applied in making these forward-looking statements. Any forward-looking statements contained in this presentation represent the views of management and are presented for the purpose of assisting the bank's shareholders and analysts in understanding the bank's financial position, objectives and priorities, and anticipated financial performance. Forward-looking statements may not be appropriate for other purposes. I would also like to remind listeners that the bank uses non-GAAP financial measures, such as adjusted results, to assess each of its businesses and to measure overall bank performance. The bank believes that adjusted results provide readers with a better understanding of how management views the bank's performance. Barrett will be referring to adjusted results in his remarks. Additional information on items of note, the bank's use of non-GAAP and other financial measures, the bank's reported results, and factors and assumptions related to forward-looking information are all available in our Q3 2022 report to shareholders. With that, let me turn the presentation over to Barrett.

Thank you, Brooke, and thank you, everyone, for joining us today. Q3 was a good quarter for TD. Earnings increased 5% to $3.8 billion, and EPS rose 6% to $2.09. Revenue grew 8% year-over-year, reflecting increased customer activity and the benefits of our deposit-rich franchise. Credit quality remains sound, and we continue to build the bank of the future with investments in frontline colleagues and data and mobile capabilities. The bank's common equity Tier 1 ratio ended the quarter at 14.9%, reflecting robust organic capital generation and the activation of the DRIP discount last quarter. A long track record of delivering consistent earnings growth has positioned TD to close two strategic acquisitions, First Horizon and Cowen, while remaining strongly capitalized. We expect TD's common equity Tier 1 ratio to be comfortably above 11% post-closing of both transactions. Overall, I'm pleased with our results this quarter. They reflect the benefits of our diversified business mix and North American scale while maintaining our risk discipline. Let me now turn to each of our businesses and review some highlights from Q3. Our Canadian retail segment earned $2.3 billion with record revenue of $7 billion in the quarter. The personal bank performed well. We saw industry-leading market share gains on non-term deposits, contributing to 8% growth in personal deposits year over year. In our real estate secured lending business, volumes were up 3% from Q2, a second quarter of very good sequential loan growth, demonstrating momentum from our investments across frontline sales channels, operations, and account management. We remain confident in the quality and mix of our real estate secured lending book, supported by prudent underwriting practices. Accard's business continued its strong run, with loan volume up 10% year-over-year on record spend. Last quarter, we spoke about the next evolution of work, or NEW for short. The new model enables us to deliver innovations faster, deploy technology faster, more efficiently and continue to meet and exceed the rapidly evolving expectations of our customers. The Canadian Personal Bank delivered several key initiatives this quarter, leveraging the new model, including migrating its flagship mobile application entirely to the public cloud, enabling our teams to drive customer-centric innovations at the speed of the market. The next evolution of work also powered enhancements for our New to Canada customers, where we delivered our strongest quarter to date in new account acquisition. In business banking, TD again achieved double-digit loan growth, driven by strength across Canada in verticals including commercial real estate, agriculture, middle market, dealer financing, and small business banking, demonstrating our commitment to grow with our clients over the long term. In our wealth business, TD Asset Management, already the number one Canadian institutional asset manager, grew its market share and remained focused on delivering for its clients with 90% of managed funds AUM ranked in the first or second quartile in three-year performance. And TD Direct Investing was recognized as the number one online broker in Canada in Money Sense Magazine's 2022 review. In our insurance business, we opened a 24th location of our best-in-class auto centers, further extending our ability to provide superior customer experiences through a one-stop shop while managing claims costs in the face of inflationary pressures. Turning to the U.S., a U.S. retail bank had record earnings of $913 million for the quarter. Commercial loan volumes, excluding PPP runoff, accelerated their momentum, increasing 3% quarter over quarter, reflecting growth in middle market and specialty lending. We saw robust personal loan growth of 8% year over year, driven by increased customer activity and moderating paydowns. Retail deposits also grew 8% year over year, as customers continue to entrust TD Bank, America's most convenient bank, with their business. To further enhance the customer experience, this quarter the U.S. Retail Bank launched TD Workshop, which combines a fully functional store with space designed for researching, collaborating, and bringing the community together. The information collected at TD Workshop will help inform how TD evolves its interactions, store formats, and the financial services offered to our customers. A retail card services business established financing partnerships with home furnishings brand RH, formerly Restoration Hardware, and jewelry retailer Blue Nile to launch private label credit card programs. In addition, for the third year in a row, TD Auto Finance received the highest ranking in the J.D. Power U.S. Dealer Finance Satisfaction Study. With the contribution from our investment in Schwab, of 226 million U.S. dollars, segment earnings were 1.1 billion U.S. dollars this quarter. Before we leave the U.S. retail segment, I want to provide an update on our acquisition of First Horizon. We were pleased that our commitment to the communities we serve was reflected in the support we heard for the transaction at the joint public meeting held by the Federal Reserve and the OCC on August 18th. We are excited about the benefits that our combined banks will deliver for all of our stakeholders and continue to expect the transaction to close in the first fiscal quarter of 2023. Turning to our wholesale banking business, net income for the quarter was $271 million, a decrease of 18% compared to the third quarter last year, reflecting continued investments in our U.S. dollar strategy including the hiring of banking, sales, and trading and technology professionals. Revenue was roughly flat year over year, as the impact of weaker underwriting environment was offset by strength in other parts of our business, including higher trading and net interest income, again reflecting the benefits of our diversified business model. This quarter, TD Securities was named the Canadian FX Service Quality Leader for Corporates in 2022 by TD. the coalition Greenwich study for the third consecutive year as the wholesale bank continues to lead in the Canadian market. As I said on our call earlier this month, the acquisition of Cowen will build TD Securities' strong foundation. This combination will further accelerate our growth in the U.S. and position TD Securities as an integrated North American dealer with global reach. We're incredibly excited about this opportunity, and we have heard from many TD Securities and Cowen clients and colleagues that they are equally excited about the combined offering, added scale, and capabilities. We are delighted with the enthusiastic support for this strategic transaction and have already started work on our integration plans ahead of the anticipated closing in the first calendar quarter of 2023. Three quarters into fiscal 2022, we have made significant strategic progress and seen positive momentum in our businesses. As we enter the final quarter of the year, we continue to navigate heightened uncertainty and a volatile environment. We will maintain our prudent approach and focus on building our business for the future and delivering long-term value for our shareholders. united by our purpose to enrich the lives of our customers, colleagues, and communities. That purpose comes to life in our business and in how we engage with all of our stakeholders. We continue to strengthen our brand as an employer of choice, attracting fantastic talent to the bank. This quarter, TD Bank, America's most convenient bank, was recognized by Forbes as one of America's best employers for women. and in partnership with the Black Professionals in Tech Network, TD recently announced the launch of UCD Academy, an engineering boot camp for black individuals to help them build careers in technology. We will hire program graduates and cohorts over the next three years. We've also committed $1 million to organizations working here and overseas to assist refugees to help them settle in Canada. In addition to this financial commitment, TD is hiring arriving Ukrainians for roles at the bank, helping to provide meaningful employment and stability upon arrival in Canada. TD colleagues are committed to the communities in which we live and work. Recently, our digital and research teams volunteered their skills in customer experience and design to help the Wellspring Cancer Support Foundation create a virtual platform for families dealing with cancer. TD has supported Wellspring for 30 years, and now we are helping guide them through their digital transformation. TD Security's Underwriting Hope campaign is another longstanding example of our commitment, celebrating its 25th anniversary this year. Colleagues raised almost $2 million in support of children's charities in June, bringing the total raise since inception to nearly $25 million. At TD, we are privileged to serve more than 27 million customers around the globe. This month, we launched TD Thanks You, our signature annual North American program that recognizes and celebrates TD customers, spotlighting their contributions and helping them continue to make an impact. I encourage you to follow these inspiring stories online. To wrap up, I would like to thank all of our TD bankers for living our shared commitments every day. I'm very proud of what we have accomplished together, and I look forward to a strong finish to the year. With that, I'll turn things over to Kelvin.