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Enter Symbol
or Name
USA
CA



Toronto-Dominion Bank
Symbol TD
Shares Issued 1,844,212,331
Close 2014-08-27 C$ 57.82
Market Cap C$ 106,632,356,978
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Toronto-Dominion earns $2.107-billion in Q3 2014

2014-08-28 07:01 ET - News Release

Mr. Ed Clark reports

TD BANK GROUP REPORTS THIRD QUARTER 2014 RESULTS

Toronto-Dominion Bank has released its financial results for the third quarter ended July 31, 2014. Adjusted earnings were $2.2-billion, a 37-per-cent increase from the third quarter last year, reflecting strong earnings contributions from all business segments. Results from the third quarter in 2013 included additional charges taken in the insurance business.

Third-quarter financial highlights, compared with the third quarter a year ago:

  • Reported diluted earnings per share were $1.11, compared with 79 cents.
  • Adjusted diluted earnings per share were $1.15, compared with 82 cents.
  • Reported net income was $2,107-million, compared with $1,523-million.
  • Adjusted net income was $2,167-million, compared with $1,584-million.

Year-to-date financial highlights, nine months ended July 31, 2014, compared with the corresponding period a year ago:

  • Reported diluted earnings per share were $3.22, compared with $2.61.
  • Adjusted diluted earnings per share were $3.29, compared with $2.77.
  • Reported net income was $6,137-million, compared with $5,024-million.
  • Adjusted net income was $6,265-million, compared with $5,321-million.

Third-quarter adjustments (items of note)

The third-quarter reported earnings figures included the following items of note:

  • Amortization of intangibles of $60-million after tax (three cents per share), compared with $59-million after tax (three cents per share) in the third quarter last year;
  • Integration charges of $27-million after tax (two cents per share) relating to the acquisition of the credit card portfolio of MBNA Canada, compared with $24-million after tax (one cent per share) in the third quarter last year;
  • A release of $19-million after tax (one cent per share), due to the impact of the Alberta flood on the loan portfolio, compared with a loss of $48-million after tax (three cents per share) in the third quarter last year;
  • A gain of $24-million after tax (one cent per share), due to the change in fair value of derivatives hedging the reclassified available-for-sale securities portfolio, compared with a gain of $70-million after tax (four cents per share) in the third quarter last year;
  • Set-up and conversion costs totalling $16-million after tax (one cent per share) related to the affinity relationship with Aimia and the acquisition of 50 per cent of CIBC's existing Aeroplan Visa credit card accounts.

"TD's third quarter was especially strong, even after taking into account the additional charges in our insurance business last year," said Ed Clark, group president and chief executive officer. "Our performance was fuelled by good organic growth, support from recent acquisitions and continued favourable credit conditions. We're very pleased that we achieved these results, while at the same time maintaining our investments in future growth."

Canadian retail

Canadian retail delivered net income of $1.4-billion for the third quarter, representing a 54-per-cent increase in adjusted earnings over the same quarter last year. This solid performance was driven by good loan and deposit growth, good credit quality, Aeroplan contribution, higher wealth assets, and very strong operating leverage. Insurance earnings reflected a significant rebound from last year when the business was affected by a combination of severe weather-related impacts and increased general insurance claims.

"Canadian retail delivered a strong third quarter with all business lines contributing," said Tim Hockey, group head, Canadian banking, auto finance and wealth management. "We were once again recognized as an industry leader in customer service and we will continue to focus on increasing our market share, driving efficiency, and delivering industry-leading comfort and convenience through strategic investments in the business."

U.S. retail

U.S. retail generated net income of $518-million (U.S.), an increase of 4 per cent compared with the third quarter last year. Excluding the bank's investment in TD

Ameritrade, the segment generated net income of $449-million (U.S.), an increase of 4 per cent. Earnings were driven by strong organic growth, expense management, and improved asset quality, partially offset by lower gains on sales of securities.

TD Ameritrade contributed $69-million (U.S.) in earnings to the segment, an increase of 1 per cent compared with the third quarter last year.

"U.S. retail continued to deliver on our organic growth strategy," said Mike Pedersen, group head, U.S. banking. "Customer acquisition and deposit and lending growth were strong, with business lending especially good in the third quarter. The U.S. banking environment continues to face headwinds, but we remain focused on building the franchise and delivering legendary customer experiences."

Wholesale banking

Wholesale banking net income for the quarter was $216-million, an increase of 46 per cent compared with the third quarter last year. The increase in earnings was primarily due to broad-based revenue growth across core businesses and favourable credit quality, partially offset by higher non-interest expenses.

"We are pleased with our earnings this quarter, which saw good origination, robust capital markets, and trading activity," said Bob Dorrance, group head, wholesale banking. "We will continue to attract new clients and expand existing relationships, and manage risks and expenses for the remainder of 2014."

Capital

TD's common equity Tier 1 capital ratio on a Basel III fully phased-in basis was 9.3 per cent, compared with 9.2 per cent last quarter.

Conclusion

"These results exemplify the many strengths of TD: our franchise-driven model, relentless focus on the customer and ability to grow our North American platform," said Mr. Clark. "Our exceptional team remains committed to making us the better bank for all of our stakeholders."

                                     FINANCIAL HIGHLIGHTS
                      (millions of dollars, except per share amounts)

                                                 For the three months ended  For the nine months ended
                                                 July 31, April 30, July 31,     July 31,      July 31,
                                                    2014      2014     2013         2014          2013
Results of operations
Total revenue                                   $  7,509  $  7,435  $ 7,085   $   22,509     $  20,259
Provision for credit losses                          338       392      477        1,186         1,279
Insurance claims and related expenses                771       659    1,140        2,113         2,345
Non-interest expenses                              4,040     4,029    3,771       12,165        10,905
                                                --------- --------- --------  -----------    ----------
Net income -- reported                          $  2,107  $  1,988  $ 1,523   $    6,137     $   5,024
                                                ========= ========= ========  ===========    ==========
Net income -- adjusted                             2,167     2,074    1,584        6,265         5,321
Common share information -- reported
Per share earnings
Basic                                           $   1.12  $   1.05 $   0.79   $     3.23     $    2.61
Diluted                                             1.11      1.04     0.79         3.22          2.61
Dividends per share                                 0.47      0.47     0.40         1.37          1.19

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