The Toronto-Dominion Bank

Good morning, everyone. Welcome to the TD Bank Group First Quarter 2026 Earnings Conference Call. I would now like to turn the meeting over to Ms. Brooke Hills, Head of Investor Relations. Please go ahead, Ms. Hills.

Thank you, operator. Good morning and welcome to TD Bank Group's first quarter 2026 results presentation. We will begin today's presentation with remarks from Raymond Chun, the bank's CEO, followed by Leo Salome, group head, U.S. Banking, after which Kelvin Tran, the bank's CFO, will present our first quarter operating results. Ajay Bambwale, Chief Risk Officer, will then offer comments on credit quality, after which we will invite questions from analysts on the phone. Also present today to answer your questions are Sona Mehta, Group Head, Canadian Personal Banking, Barbara Hooper, Group Head, Canadian Business Banking, Paul Clark, Group Head, Wealth Management and Insurance, and Tim Wiggin, Group Head, Wholesale Banking. Please turn to the next slide. Our comments during this call may contain forward-looking statements, which involve assumptions and have inherent risks and uncertainties. Actual results could differ materially. I would also remind listeners that the bank uses non-GAAP financial measures to arrive at adjusted results. The bank believes that adjusted results with a better understanding of how management views the bank's performance. Ray, Leo, and Kelvin will be referring to adjusted results Additional information about non-GAAP measures and material factors and assumptions is available in our Q1 2026 MD&A. I would also like to note that, effective this quarter, the bank renamed its U.S. retail segment to U.S. Banking to better reflect the segment's financial products and services. With that, let me turn the presentation over to Ray.

Thank you, Brooke, and good morning, everyone. Thanks for joining us. We had another strong quarter as we continue to demonstrate momentum across our strategic priorities. In Q1, the bank delivered a strong quarter with record earnings of $4.2 billion and EPS of $2.44, powering an ROE of 4.2%, up 100 basis points year over year. We saw robust trading and fee income growth in our markets-driven businesses, volume growth in Canadian P&C banking, and margin expansion. Impaired PCLs ticked up quarter over quarter in wholesale and U.S. commercial, reflecting a small number of borrowers across various industries. Overall, credit performance was in line with our expectations. We continue to expect fiscal 2026 PCLs to fall within a range of 40 to 50 basis points. Ajay will share more details shortly in his remarks. Our year-over-year expense growth continued to moderate this quarter, and we delivered positive offering leverage for the third consecutive quarter. We are on track to achieve our 3% to 4% expense growth target for fiscal 2026. The bank's Q1 CET1 ratio was 14.5% with strong organic capital accretion in the quarter. In January, we completed our $8 billion share buyback and launched our new $7 billion share buyback. As of the end of Q1, we had bought back approximately 84 million shares across these two buyback programs. We remain committed to consistently returning excess capital to our shareholders. We have conviction that TD's current share price does not fully reflect the bank's intrinsic value. TD has strong momentum and we see considerable upside from here. Even with significant share buybacks, TD's robust organic capital accretion means it will take time for the bank to reach a 13% CET1 ratio. This is an enviable position for any bank and a unique advantage for TD. We are managing towards a 13% CET1 ratio by the second half of fiscal 2027. Overall, we have momentum across our businesses as we continue to deliver on our strategies to deepen relationships, make TD simpler and faster, and execute with discipline. We continue to see potential upside to our 6% to 8% EPS growth and 13% ROE targets for fiscal 2026. provided that positive macroeconomic conditions continue. Please turn to slide three. Canadian personal and commercial banking delivered record revenue, PPPP, earnings, deposit, and loan volumes. In real estate secured lending, loans were up 5% year-over-year, and we continued to achieve sequential origination margin expansion. In addition, we saw record Q1 originations in our proprietary channels. In cards, we delivered the highest quarterly acquisition in a decade, driven by record pre-approvals for our existing clients and record point-of-sale deepening in our branches. We saw continued acceleration in the business bank, with loans and non-term deposits up 6% and 7% year-over-year, respectively. At Investor Day, we laid out our strategy to capture deepening opportunities, including frontline expansion. we have added over 300 business bankers, an increase of 10% since the end of fiscal 2024, and we are seeing the benefits of that strategy play through. In U.S. banking, we saw continued momentum across our core business lines as we deepen relationships with our clients. Mid-market lending balances were up 4% year over year, and we saw strong pipeline growth with commitments of 15% over the same period. U.S. proprietary credit card balances were up 15% year-over-year with record digital acquisition. Earlier this month, we completed the conversion of Nordstrom's card clients onto our servicing platform. This is an important strategic milestone that provides scale as we build out our credit card franchise. In our U.S. wealth business, total client assets were up 12% year-over-year with mass affluent client assets up 18% year-over-year. Wealth management and insurance delivered record earnings and assets. Let me start by congratulating the direct investing team. Last week, our leadership in the market was once again recognized when personal finance expert Rob Carrick said TD direct investing is still king among Canadians' online trading platforms. As we saw in Canadian business banking, our frontline expansion strategy is also delivering results in wealth. We added almost 200 financial planners and advisors since the end of fiscal 2024. In the most recent data, TD took 19 basis points of market share in financial planning, with newly hired planners delivering strong growth. This month, we successfully combined our discretionary business and private wealth management. This simplifies our business model, enhances our value proposition to clients, and helps position us for outsized growth. It is expected to unlock $40 million in platform and operational efficiencies, as outlined at Investor Day. And in insurance, we continue to build on our position as Canada's leading digital direct insurer, with almost 80% of our clients digitally engaged, strong progress to our Investor Day target of 90% plus. We have significant growth aspirations for our insurance business, and we are mitigating the volatility that comes with that growth. This quarter, we issued another innovative cap bond in the Canadian market, the first that offers protection against aggregate losses of small and medium-sized cap events. Wholesale banking delivered record revenue and earnings, supported by strong client activities across global markets and corporate investment banking. The team continued to make progress on disciplined execution, achieving improved ROE and moderated year-over-year expense growth this quarter. Reflecting continued momentum, TD Cowen ranked in the top 10 in 10 categories in the 2025 EXTEL Global Fixed Income Survey, and TD Securities was awarded the Best Trade Finance Bank in North America by Trade Treasury Payments. Please turn to slide 4. This quarter, we continue to make progress against our strategy to deepen relationships, make TD simpler and faster, and execute with discipline. As we shared at Investor Day, TD has significant opportunities to grow franchise relationships across the bank. This quarter, we drove increased penetration rates in both consumer and small business credit cards in Canada and in our proprietary bank card in the U.S., We are also making progress on our deepening targets in TD securities. We launched synthetic prime in the U.S. and Europe. Our clients have told us they want to diversify their prime providers, and our robust balance sheet and capabilities position us well for this opportunity. Our target of $1 billion in value from AI over the medium term reflects both our progress to date and our confidence in what's ahead. A core tenant of our AI strategy is to build once and use many times, scaling AI through repeatable patterns that lead to faster AI deployments and reduce cost of delivery. We saw the benefits of this approach with our GenAI knowledge management solution, which we first introduced in our contact centers last year and have now deployed across our over 1,000 branches in Canada. Questions that used to have colleagues jumping through screens are now answered in seconds. We are taking the same approach with agentic AI. We launched the initial scaling of an agentic AI solution to simplify the Ressel pre-adjudication process. This provides the foundation for broader agentic AI adoption across Ressel and other businesses. We are executing with discipline across the bank. Calvin will share more details on our efforts to deliver structural cost reduction in his remarks. We have a clear strategy that is driving higher ROE with four consecutive quarters of ROE improvement in U.S. banking and ROE up over 400 basis points year-over-year in wholesale banking. I remain confident that we will achieve the medium-term targets that we laid out at Investor Day. In fact, for ROE, we may get there faster than we expected. At our current earnings, achieving a 13% CET1 ratio through share repurchases translates into approximately 100 basis points of ROE. Delivering on our $2 to $2.5 billion cost takeout would yield an additional 150 basis points of ROE. And all our businesses are laser-focused on driving ROE to their investor day targets. With these levers and our strong performance in Q1, I am confident in our path to 16%, are we? Please turn to slide five. TD is the only Canadian company ranked in the top 100 most valuable brands in the world by brand finance, and we continue to invest to extend this leadership and deepen our client relationships. Earlier this month, we launched our new brand, reinforcing that in this complex digital first world, TD will always be more human by delivering simpler, more intuitive, and more connected banking experiences in every interaction and in every channel. Thank you to our colleagues across the bank for your dedication and commitment. TD is back to winning because of you. With that, I will hand it over to Leo.