2026 q3 transcript vf en

Q3 2026 EARNINGS CONFERENCE CALL

AUGUST 27, 2026

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TD Bank Group – Q3 2026 Earnings Call Transcript – August 27, 2026 Page 1 of 14

Material economic assumptions underlying the forward-looking statements contained in this document and/or on the conference call are set out in the 2025 MD&A under the headings “Economic Summary and Outlook” and “Significant Events”, under the headings

“Key Priorities for 2026” and “Operating Environment and Outlook” for the Canadian Personal and Commercial Banking, U.S. Banking,

Wealth Management and Insurance, and Wholesale Banking segments, each as may be updated in subsequently filed quarterly reports to shareholders and news releases (as applicable).

Any forward-looking statements contained in this document and/or on the conference call represent the views of management only as of the date hereof 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 as at and for the periods ended on the dates presented, and may not be appropriate for other purposes. The Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf, except as required under applicable securities legislation.

CORPORATE PARTICIPANTS

Raymond Chun

TD Bank Group – Group President and Chief Executive Officer

Leo Salom

TD Bank Group – Group Head, U.S. Banking and President and CEO, TD Bank U.S.

Kelvin Tran

TD Bank Group – Group Head and Chief Financial Officer

Ajai Bambawale

TD Bank Group – Group Head and Chief Risk Officer

Tim Wiggan

TD Bank Group – Group Head, Wholesale Banking and President & CEO, TD Securities

Sona Mehta

TD Bank Group – Group Head, Canadian Personal Banking

Brooke Hales

TD Bank Group – Head of Investor Relations

CONFERENCE CALL PARTICIPANTS

Matthew Lee

Canaccord Genuity – Analyst

Gabriel Dechaine

National Bank Financial – Analyst

Doug Young

Desjardins Securities – Analyst

Mike Rizvanovic

Scotia Capital – Analyst

David Konrad

Keefe, Bruyette & Woods – Analyst

Paul Holden

CIBC World Markets – Analyst

TD Bank Group – Q3 2026 Earnings Call Transcript – August 27, 2026 Page 2 of 14

PRESENTATION

Brooke Hales – TD Bank Group – Head of Investor Relations

Thank you, operator. Good morning and welcome to TD Bank Group’s third quarter 2026 results presentation. We will begin today’s presentation with remarks from Raymond Chun, the Bank’s CEO, followed by Leo Salom, Group Head, U.S. Banking, after which Kelvin Tran, the Bank’s CFO, will present our third quarter operating results. Ajai Bambawale, 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

QUESTION AND ANSWER

Operator

[Operator Instructions] Matthew Lee with Canaccord Genuity. Please go ahead.

Matthew Lee – Canaccord Genuity – Analyst

You've talked about opening 100 new U.S. stores within 2028. How should we think about the interaction between that growth plan and the ongoing AML remediation? Like does the regulatory process constrain that path of branch expansion at all or are they completely separate tracks?

Leo Salom – TD Bank Group – Group Head, U.S. Banking and President and CEO, TD Bank U.S.

Good morning Matt, let me take that one. So we are announcing today that we're planning on opening up

100 stores across our footprint from Maine to Florida, and we intend to complete that by the end of calendar

2028. So just by way of context, that's very consistent with what we announced on Investor Day. As you know, we did consolidate about 91 stores over the past 2 years, and this reflects really the reinvestment back to reposition our footprint. You know we have a top 3 deposit share position on the East Coast, and this is really meant to reinforce that and focus on deepening our presence in critical MSAs up and down the

East Coast.

TD Bank Group – Q3 2026 Earnings Call Transcript – August 27, 2026 Page 8 of 14

Obviously, we're – at the same time, I'll say that we're focused very much on our AML program. It still remains our #1 priority. We have made significant progress on that program. I'd say today, the degree of maturity and effectiveness of that program is much stronger. And as a result, in discussions with our regulators, etc. I feel quite comfortable to be able to announce today that we'll be opening up those 100 stores. You'll see we'll try to get some of that accelerated into 2027 – I think the bulk of the openings would be in 2028. But this is an exciting move forward, and it reflects the fact that we've made significant investments, and we're now in a position to be able to invest back into our respective communities.

Matthew Lee – Canaccord Genuity – Analyst

Okay. But you wouldn't necessarily make any inferences from the asset cap that you're under in the U.S. and the branch openings?

Leo Salom – TD Bank Group – Group Head, U.S. Banking and President and CEO, TD Bank U.S.

No. No, Matt. Let me be clear. The consent order is still in place and we are working hard to satisfy every aspect of that consent order, and there is no greater priority for me than resolving that – comprehensively and urgently.

Gabriel Dechaine – National Bank Financial – Analyst

First question is on the capital plan. Ray, targeting 13% by the end of next year – what's going to change in the plan? The CET1 ratio is down 50 basis points over the past year, and we're talking about a more than

100 basis point haircut in the next 16 months.

Raymond Chun – TD Bank Group – Group President and Chief Executive Officer

Thanks for the question, Gabe. As I said at Investor Day and today, the way I think you should all think about the way we will be managing capital is that we are managing it differently, but our primary use of the capital will be for organic growth. And you're seeing some of that where we've deployed our organic growth in our Wholesale Banking business, and we'll continue to find some of those opportunities – as you see some of the investment opportunities I do think that potentially will arise in the sort of supercycle of investment potential in Canada over the next decade.

From there, again, primarily organic growth. And then we sort of say, are there opportunities then where we want to deploy capital – and from an acquisition perspective, and it's not our priority right now, and I know I get lots of questions about it. But if there were selective opportunities in fee income areas that we've been clear from Investor Day, whether it's in Wealth Management, TD Securities, Insurance or our credit card businesses, we would look at those opportunities. But our primary goal right now is organic growth – and then ultimately, if we don't have a need for or have excess capital, Gabe, we've said that we would consistently return capital back to our shareholders, and I see that playing through in 2027, and you see the amount of capital that we would have available to return back to our shareholders. So all that to say, I think we're in an incredibly privileged position as an organization that we have the flexibility to do it all.

I mean we can do – invest in organic growth, we can look selectively if opportunity presents, which is not a priority for us right now from an acquisition, but also, most importantly, return excess capital back to our shareholders.

Maybe I'll take a second and ask Tim to talk about sort of what he's doing in his business and you've seen the growth of the Wholesale Business, but certainly from an opportunity as to how do we deploy our capital organically better. I do think the Wholesale Business, Gabe, is an area of opportunity for us.

Tim Wiggan – TD Bank Group – Group Head, Wholesale Banking and President & CEO, TD

Securities

Thanks Ray. I would maybe just point to the overall growth in RWA in the quarter was 10%, but I always like to compare that to revenue growth – so the revenue growth was 2.5x the RWA growth in the quarter.

So we continue to grow with our clients, whether it be in FIG or CMT, energy across our diversified industry group. The key is doing more with those loans, and I think that's been the major theme that showed up in the quarter as it relates to deepening. And that certainly showed up on the revenue line and on the net

TD Bank Group – Q3 2026 Earnings Call Transcript – August 27, 2026 Page 9 of 14 income within the quarter. And – so I think that gives you one example of how we're utilizing our capital to continue to grow with our clients.

Gabriel Dechaine – National Bank Financial – Analyst

Great, thanks for the clarity. And then second question, margin / balance sheet growth kind of question for mostly the U.S., and I don't want to gloss over the Canadian business here because it looks well positioned there given the deposit growth dynamics, which are pretty impressive. But in the U.S., we're starting to see

– and maybe you can give some more granularity on the loan growth there that you're seeing in the core book. But if I look at – if I consider the U.S. as to be a growth driver over the next year from a lending standpoint, I shouldn't be too concerned about margin compression, considering you still have a lot of excess deposits, so you can be more selective in your funding strategy.

And the reinvestment rate tailwind should still be around for a couple of years because the 7-year swap rates are still well above where they were 7 years ago and even less than 7 years ago. So they're giving the positive NIM commentary for Q4 – I would assume that extends beyond that as well?

Leo Salom – TD Bank Group – Group Head, U.S. Banking and President and CEO, TD Bank U.S.

Gabe, that's a very good summary. So let me just unpack that a bit. I'd say first, the quarter was a really strong quarter, and it begins to show the earnings power of the U.S. franchise. NIAT up 11% on a year-on- year basis and 10% on a quarter-on-quarter basis. And we did achieve sequential total loan – loan growth in the quarter, and we're beginning to see in our core loan growth acceleration. You saw the year-on-year growth of 3%, you saw the quarter-on-quarter growth suggesting some acceleration already – and in the areas that we've said we're going to focus. And Ray highlighted some of those – our bank card business, our HELOC franchise , our core mid-market businesses, all of those saw very, very strong results in the quarter, and we're seeing some degree of acceleration. We're also seeing from a market perspective, greater loan demand, which is encouraging in terms of what we might expect in 2027 as well, particularly in our larger corporate and commercial banking client set.

So I think that from a volume perspective, I feel quite comfortable. And that's before we get to the things that we're doing to deliberately strengthen our distribution and our coverage models. For next year, I talked about the 100 stores, but beyond the 100 branches, we're also leaning in to increase the number of bankers, both in our retail businesses, but as well as in our commercial banking businesses across a number of our critical verticals.

You talked about NIM, and I think we are different than other banks in that we have a loan-to-deposit ratio of 76%. So we've been really deliberate about managing our overall NIM, selectively repricing higher-priced yielding clients and focusing on our core deposit growth. And that's allowed us to be able to do 2 things, fund the core loan growth, but also be able to continue to drive marginal increases in terms of overall NIM.

As we look forward, Kelvin referenced it in his comments, I do think we will see NIM expansion in 2027, albeit slightly more modest than what we've seen in the last 2 quarters as we do begin to try to continue to take share in our respective markets – but long-winded way of saying, I think we've got great growth prospects going into 2027, and likewise, I think we can grow while still being able to maintain and modestly expand our NIM profile.

Doug Young – Desjardins Securities – Analyst

So I was distracted right through some of your remarks, but I think you said $13 – you could return $13 billion of capital to shareholders to get the CET1 ratio down to 13%? And I just want to confirm that when you say return capital to shareholders, that is purely buybacks, that's not so much through dividends? And then to confirm, how do you guys measure or think about buybacks relative to the impact on the book value per share given the valuation?

Raymond Chun – TD Bank Group – Group President and Chief Executive Officer

Sorry, Doug, we're just having some problems trying to hear – you're cutting in and out.

Doug Young – Desjardins Securities – Analyst

TD Bank Group – Q3 2026 Earnings Call Transcript – August 27, 2026 Page 10 of 14

But I just wanted to confirm the $13 billion Ray, that you talked about in terms of returning capital to shareholders, is that all – is that buybacks? That's not including dividends? And the question also just how do you measure that size of buybacks and the potential implications on just book value per share growth?.

Just trying to understand the mechanics there as well.

Raymond Chun – TD Bank Group – Group President and Chief Executive Officer

Just on the $13 billion, it is on specifically buybacks, and that's what we could do from a buyback first, I just want to clarify that, Doug. And so that's – I just wanted to give you the math on the excess capital that we would have available. The way we look at it right now is, again, just from a capital management perspective,

I said in the earlier question that Gabe asked, and so I won't repeat the answer. But our primary purpose for that capital would be to first look at organic growth opportunities. Tim talked about a few of those.

We still think there's significant organic growth opportunities to deploy that capital. And then if there was anything afterwards from an excess perspective, our commitment is to return that – and we still do think there's significant upside opportunity. And as you've seen in our results, and we continue to show accelerated momentum, Doug, I just think back to – it's almost been a year since our Investor Day where we laid out some of our targets and objectives, and I can tell you today that the team has more confidence today in not only delivering against those medium-term outlooks, but in many of those targets, we do see upside and tailwind. So come next quarter, not only will we lay out for you the Q4 numbers, but if there are any adjustments to our medium-term outlook, that's when we'll communicate some of that. So I hope that helps you.

Doug Young – Desjardins Securities – Analyst

That does. And then, Ajai, just on looking at PCL it's obviously tracking better than you had expected in the guidance for the year. Just specifically on the impaired side, I would say, but you can correct me if I'm wrong. Just as you reflect on the year and how things have tracked through the year, what has gone better than maybe you had anticipated when you set the guidance?

Ajai Bambawale – TD Bank Group – Group Head and Chief Risk Officer

Yes. Let me walk you through what's going on in the book. And as I said, the results of the bank are strong.

They're actually better than our stated rates, and I'll elaborate on why that's the case. If you look at delinquency levels across the bank, I'd call them stable. They're slightly higher on RESL, and you'll actually see them in the numbers. If you look at formations and GILs, they're down. If you look at impaired PCLs, they're down pretty much across all of our non-retail portfolios. They are slightly up for some of the consumer asset classes.

But if I answer the heart of your question, how come you're seeing all this good performance? I think it's a combination of factors. You've got economic resilience. Economies have adapted better than we originally thought. You've got businesses and consumers that have also been resilient, and they have also adapted to the new environment. And on top of that, if you lay on TD's discipline and our underwriting standards, that combination gives you very good results, and that's what you're seeing this quarter.

Mike Rizvanovic – Scotia Capital – Analyst

Maybe just sticking with Ajai. Just wanted to maybe follow up on the credit question. And I'm certainly not trying to pin you on timing, but it seems like potentially, we're at the point where we're close to reaching that sort of peak credit losses in this current cycle. I'm just wondering, like you've had some really good progress the last couple of quarters. Is there anything anomalous in terms of what TD might be doing? Is this something in terms of being more proactive in managing risk? Can you just talk about maybe some of the sort of qualitative stuff that you've done the last little while?

Ajai Bambawale – TD Bank Group – Group Head and Chief Risk Officer

I'd really bring it back to discipline. If you remain disciplined through the cycle, it shows up in your results, and we've been very disciplined. And we've also been prudent, and I tried to bring that point out in my prepared remarks, and you just think about tariffs. Right out of the gate, we went and said, where could this tariff story go? How do we build reserves? I know there's a lot of uncertainty, but we tried to get it right the

TD Bank Group – Q3 2026 Earnings Call Transcript – August 27, 2026 Page 11 of 14 first time. And that's what we've done with tariffs. Again, it's evolving, but we think we were prudent upfront.

So it's a combination of factors, I'd say, that's leading to our results being strong.

And then just on peak, I mean, it's very difficult to call a peak. In many ways, I think we're past the peak. If you go back to 2025, you'll find Q2'25 was a peak for total PCL at 58 bps. If you look at Q1'25, impaireds were 50 basis points. So in some ways, we are past the peak. And I think the numbers have come down.

The question really is where do we go from here, and when will there be a new peak. We're working on our forecast for next year, and we'll be coming back to you next quarter.

But the factors my team will consider. One is the strength of the portfolio, which we're calling out, but we'll also take into consideration the uncertainties, whether it's trade, whether it's the Middle East conflict or other factors. And again, on tariffs, we are already in a pretty good spot. So more to come next quarter, but

I do feel we're very well positioned. Our reserves are 96 bps. As I said and emphasize that includes $500 million for tariffs. Hope that's helpful to you.

Mike Rizvanovic – Scotia Capital – Analyst

That's very helpful. Thanks for that Ajai. And then just a quick one for Sona. Just in terms of the mortgage growth in the quarter or I guess it was more flattish this quarter sequentially. Can you maybe just talk about the spread dynamic? Is this just the market getting a bit more competitive and you're looking to protect spreads? Or is there something else sort of driving that flat result?

Sona Mehta – TD Bank Group – Group Head, Canadian Personal Banking

Yes, happy to take you a little deeper. So overall, I would say we've had a productive quarter in the RESL business. As you've heard me say before, we're really anchored on this notion that our strategy is built around speed and specialization, and we see that working. On the speed side, just briefly, we fully scaled our first RESL agentic AI capability, and it's absolutely delivering faster decisions.

What we've been able to do is reinvest and build out our distribution network, adding more in branch home borrowing specialists and building out our mobile mortgage specialist team over the past year. What's really excellent to see is together, they've achieved record proprietary originations this quarter. What I really love is that we haven't had to compromise on profitability. And so to the heart of your question, in fact, it's been quite the opposite. What we've been able to do is maintain disciplined pricing in spite of what's been a competitive market. And so you see this fueling both our NIM expansion and to the broader segment strategy, what you see is leading sequential NIM expansion, NII and PTPP growth. So I think we're sticking to our knitting. We're saying we are doing what we said we would – speed, specialization to drive profitable growth. I couldn't be prouder of the team's hard work.

Mike Rizvanovic – Scotia Capital – Analyst

Okay. And then just on the spread – industry level, are you seeing spreads compressed when you mention a bit more competition? Has it led to that dynamic to some degree?

Sona Mehta – TD Bank Group – Group Head, Canadian Personal Banking

What we've been able to do because we have maintained discipline in pricing, we've been able to expand margins. So in spite of what's been the competitive summer market, so I would say we've been able to balance both – deliver margin expansion as well as RESL volume growth.

David Konrad – KBW – Analyst

I wanted to follow up on the strong quarter in the U.S. Banking group. The one area that really beat my expectations was the fee income up pretty strongly quarter-on-quarter, and it's been a pretty volatile number

– it's even negative first half of 2025. So maybe what drove the strong results this quarter and maybe the outlook for the fee income in the U.S. business?

Leo Salom – TD Bank Group – Group Head, U.S. Banking and President and CEO, TD Bank U.S.

And Dave, are you talking about the U.S. Banking segment? Or are you talking about U.S. fees in the

Wholesale Bank?

TD Bank Group – Q3 2026 Earnings Call Transcript – August 27, 2026 Page 12 of 14

David Konrad – KBW – Analyst

The U.S. Banking segment, the US$584 million, yes.

Leo Salom – TD Bank Group – Group Head, U.S. Banking and President and CEO, TD Bank U.S.

So maybe a couple of things. From a fee-based line perspective, the numbers you're seeing are probably actually a little understated in that with the Nordstrom agreement that we signed, we actually saw a geography shift in some of the revenue recognition from the partnership from the fee line into NII, which trimmed the headline number you're seeing. To your point, we are seeing in our core fee line businesses, both in terms of retail, in terms of service fees and our core operating fees in retail, as well as in our transactional banking areas for the commercial side, we are seeing mid-single-digit growth rates in terms of overall fee income on a year-on-year basis.

I'd probably – if there's one area that I would highlight is really standing out for us, is the partnership between the U.S. Bank and the Wholesale Bank. So if you look at our mid-market business, which has had a really strong run, total balances are up 15%, commitments this quarter were up 9%. Our transactional fee revenues in that subsegment were up 28%. And I'd say a portion of that, a very important portion is the synergy that we're creating between ourselves and being able to afford our corporate clients the ability to avail themselves of broader debt equity capital markets capability and then M&A advisory capabilities in the Wholesale Bank. And I think we've just started to see the power of that model. I'm incredibly encouraged about what that's going to mean in 2027 and beyond.

Paul Holden – CIBC World Markets – Analyst

Another question for Leo. So I don't think the opening of 100 new U.S. stores is necessarily new as you highlighted. But maybe you can give us some comfort around how that's going to impact, I guess, really

PTPP or earnings growth over the next 2 years, right? Like it's roughly expanding the branch footprint by

10%. So it's significant. We all know you open a branch day one, it results in expenses with no revenue.

So just trying to think through that and how that could impact, again, really the PTPP growth over the next couple of years?

Leo Salom – TD Bank Group – Group Head, U.S. Banking and President and CEO, TD Bank U.S.

Let me just give you a sense of some of the areas that we're going to be investing in because I think it speaks to the optimism we have to continue to consolidate ourselves in the U.S. There's two or three pockets of significant investments we've planned. The first is the stores. Clearly, we see that as an important part of expanding our footprint and ensuring that we are located in the demographically attractive areas within our existing MSAs. It's critically important as markets evolve that we remain relevant, and I think this is an important part of that equation.

Number two, we've been – we're very clear on Investor Day that we want to increase our distribution coverage. That means more retail bankers, it's more financial advisors, selectively more mortgage officers.

And in the commercial banking space, more vertically specific bankers supporting our specialized go-to- market strategies. In total, if I add that entire complement, we're probably going to add another 450 bankers to our existing ranks – that's a significant increase in terms of our overall footprint.

And then finally, you've heard us talk about at Investor Day, around our product strategy, the focus on core banking, on cards, and our commercial banking business. I say that because we're being purposeful in the investments we're making. But likewise, as you heard us talk about at Investor Day, we are intending to self-fund a significant portion of that with our productivity agenda and the moderation in our G&C expenses over the course of 2027. So in many ways, if I just – we'll give you more detailed guidance in the fourth quarter, but I fully intend to be able to deliver an expense profile – an expense growth profile in 2027, despite the increased investment in growth initiatives, that is lower than what we have posted in 2026. So we are being very thoughtful about how to invest, how to accelerate our growth rate, but doing it in a responsible way and managing it within our existing expense envelope.

TD Bank Group – Q3 2026 Earnings Call Transcript – August 27, 2026 Page 13 of 14

Raymond Chun – TD Bank Group – Group President and Chief Executive Officer

And Paul, maybe I can jump in for one second – just at the enterprise level, but also would carry through to the business line, you're seeing the discipline that we've put on structural cost reduction across our organization. And we had a goal of $900 million in structural cost reduction this year. We're well ahead of that pace. The $2 to $2.5 billion that we had planned for over the MTO, we're significantly on track to get there sooner and certainly see upside on the $2 to $2.5 billion. So as you think – as we said back in Investor

Day, one of the things that we're trying to do is as we take the structural cost and the unit cost methodology of running this organization, we can actually take out enough cost that will allow us to fuel in a flywheel effect, the right investments, and still deliver from a PTPP, still deliver from an ROE perspective, so it can fund the future while delivering the discipline that we want on positive operating leverage and all of the financial metrics.

And so you're seeing that actually come to fruition. It's actually happening faster than what we had anticipated when we did Investor Day a year ago. But that structural cost reduction and the discipline we have around that is absolutely critical. It's an area of focus for every single leader at TD Bank, and you're seeing that play through both in expense discipline and hopefully, you see it in our efficiency and operating leverage, and we'll continue that as we move forward in making some of these investments.

Paul Holden – CIBC World Markets – Analyst

Very, very, very helpful. And again, actually, very impressive you can grow your store count by 10% without higher expense growth.

Operator

There are no more questions in the queue at this time. I would now like to return the call to Mr. Raymond

Chun for closing remarks.

Raymond Chun – TD Bank Group – Group President and Chief Executive Officer

Thank you, operator, and thank you, everyone, for joining us today. We appreciate your questions and comments. In Q3, we delivered record earnings powered by robust revenue growth, strong credit performance and structural cost reduction. ROE was 16%, up 280 basis points year-over-year. I'm proud of our performance this quarter, and I'm confident TD will continue to deliver for its stakeholders. I look forward to connecting with you all again at the year-end. Thank you.

TD Bank Group – Q3 2026 Earnings Call Transcript – August 27, 2026 Page 14 of 14