TD Bank Group Reports Second Quarter 2011 Results

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    This quarterly earnings release should be read in conjunction with our
    unaudited second Quarter 2011 Report to Shareholders for the six months
    ended April 30, 2011, which is available on our website at
    http://www.td.com/investor/. This analysis is dated May 26, 2011. Unless
    otherwise indicated, all amounts are expressed in Canadian dollars, and
    have been primarily derived from the Bank's annual or interim
    Consolidated Financial Statements prepared in accordance with Canadian
    generally accepted accounting principles (GAAP). Certain comparative
    amounts have been reclassified to conform to the presentation adopted in
    the current period. Additional information relating to the Bank is
    available on the Bank's website http://www.td.com, as well as on SEDAR at
    http://www.sedar.com and on the U.S. Securities and Exchange Commission's
    (SEC's) website at http://www.sec.gov (EDGAR filers section).
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    SECOND QUARTER FINANCIAL HIGHLIGHTS, compared with the second quarter a
    year ago:
    -  Reported diluted earnings per share were $1.46, compared with $1.30.
    -  Adjusted diluted earnings per share were $1.59, compared with $1.36.
    -  Reported net income was $1,332 million, compared with $1,176 million.
    -  Adjusted net income was $1,451 million, compared with $1,234 million.

    YEAR-TO-DATE FINANCIAL HIGHLIGHTS, six months ended April 30, 2011,
    compared with the corresponding period a year ago:
    -  Reported diluted earnings per share were $3.14, compared with $2.74.
    -  Adjusted diluted earnings per share were $3.33, compared with $2.96.
    -  Reported net income was $2,873 million, compared with $2,473 million.
    -  Adjusted net income was $3,039 million, compared with $2,664 million.

    Adjusted measures are non-GAAP. Refer to the "How the Bank Reports"
    section of the Management's Discussion and Analysis for an explanation of
    reported and adjusted results.

    SECOND QUARTER ADJUSTMENTS (ITEMS OF NOTE)

    The second quarter reported earnings figures included the following items
    of note:
    -  Amortization of intangibles of $108 million after tax (12 cents per
       share), compared with $123 million after tax (14 cents per share) in
       the second quarter last year.
    -  A gain of $6 million after tax (1 cent per share), due to the change
       in fair value of derivatives hedging the reclassified available-for-
       sale debt securities portfolio, compared with a gain of $23 million
       after tax (3 cents per share) in the second quarter last year.
    -  Integration and restructuring charges of $16 million after tax
       (2 cents per share), relating to the U.S. Personal and Commercial
       Banking acquisitions.
    -  A gain of $2 million after tax, due to the change in fair value of
       credit default swaps hedging the corporate loan book, net of provision
       for credit losses (PCL), compared with a loss of $2 million after tax
       in the second quarter last year.
    -  Integration charges of $3 million after tax, relating to the Chrysler
       Financial acquisition.
    >>

TORONTO, May 26, 2011 /CNW/ - TD Bank Group (TD or the Bank) today announced its financial results for the second quarter ended April 30, 2011. Overall results for the quarter reflected very strong retail earnings in Canada and the U.S. During the quarter, TD also completed its purchase of Chrysler Financial.

"TD continued to build on its momentum in the second quarter, delivering double-digit earnings growth across all of our retail businesses," said Ed Clark, Group President and Chief Executive Officer, TD. "Total adjusted retail earnings remained near the record $1.4 billion set in the prior quarter, and are up 17% from a year earlier - a great display of the resilience and earnings capability of our customer-focused franchises."

Canadian Personal and Commercial Banking

Canadian Personal and Commercial Banking posted earnings of $847 million for the quarter, up 11% from the same period last year. TD Canada Trust (TDCT) reported strong volume growth in business loans and deposits and solid growth in personal deposits, mortgages and indirect lending and a continued improvement in PCL. Customer satisfaction hit a new record in the quarter.

"This was the second best quarter on record for Canadian Personal and Commercial Banking, despite fewer days in the quarter and, as expected, some slowing in personal banking volume growth from the exceptional levels seen in 2010," said Tim Hockey, Group Head, Canadian Banking and Insurance, TD. "Having gained significant market share in recent years, our business bank again performed very well, growing both loans and deposits. We continue to expect a strong year for TDCT in 2011, although year-over-year earnings growth will moderate in the third quarter."

Wealth Management

Global Wealth net income, which excludes TD's reported investment in TD Ameritrade, was $150 million in the quarter, up 35% from the same period last year, largely driven by fee revenue from higher client assets, strong trading volume, and higher net interest margin. TD Ameritrade contributed $57 million in earnings to the segment, up 2% from the same period last year.

"These results marked a record profit for our business, driven in part by a very high level of trading activity in the first half of the quarter and the continuing upward trend of the equity markets, which helped revenue growth," said Mike Pedersen, Group Head, Wealth Management, Direct Channels and Corporate Shared Services, TD. "We remain confident we will deliver a very strong year based on the performance we've seen in the first six months of 2011."

U.S. Personal and Commercial Banking

U.S. Personal and Commercial Banking generated US$315 million in reported net income for the quarter, up 31% from the same period last year. On an adjusted basis, the segment earned US$331 million, up 37% from the second quarter of last year. Revenue in U.S. dollar terms grew 23% from the same period last year, primarily driven by very strong growth in loans and deposits and acquisitions.

"This was a very good quarter for TD Bank, America's Most Convenient Bank, thanks to strong organic growth, stabilizing credit, the ongoing expansion of our store network and our focus on our customers," said Bharat Masrani, Group Head, U.S. Personal and Commercial Banking, TD. "We remain confident we will deliver strong volume growth for the balance of the year, even though the economy is still recovering."

Wholesale Banking

Wholesale Banking reported net income of $180 million, down 18% from the same period last year. The results reflected lower revenue in equity derivatives and fixed income trading. Securities gains in the investment portfolio were minimal in the current quarter, as compared with higher gains in the same quarter last year.

"Our results were at the lower end of our expectations reflecting the global shocks and increased competition in fixed income markets that characterized the quarter," said Bob Dorrance, Group Head, Wholesale Banking, TD. "We expect that robust competition in a tentative market will continue, but we're optimistic we will be able to capture new issuance and advisory business as the economy recovers and clients return to the capital markets."

Corporate

The Corporate segment, which includes the Bank's other activities, recorded a net loss of $205 million on a reported basis, compared with $217 million in the same period a year earlier, and a net loss of $102 million on an adjusted basis, compared with $159 million in the same period last year.

Capital

TD's Tier 1 capital ratio was 12.7% in the quarter, consistent with last quarter. Strong organic capital generation was partially offset by the impact of the Chrysler Financial acquisition. Capital quality remained very high, with tangible common equity comprising more than 75% of Tier 1 capital.

Conclusion

"These results show yet again that TD can deliver profitable and sustainable growth thanks to the strength and stability of our retail businesses," Clark said. "We believe the North American economic picture is continuing to improve, but that improvement is gradual and will still take some time. We remain confident that 2011 will be a very good year for the bank as we continue to deliver strong operating results and invest for future growth."

The foregoing contains forward-looking statements. Please see the "Caution Regarding Forward-Looking Statements" on page 3.

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    Caution Regarding Forward-Looking Statements

    From time to time, the Bank makes written and/or oral forward-looking
    statements, including in this earnings news release, in other filings
    with Canadian regulators or the U.S. Securities and Exchange Commission,
    and in other communications. In addition, representatives of the Bank may
    make forward-looking statements orally to analysts, investors, the media
    and others. All such statements are made pursuant to the "safe harbour"
    provisions of, and are intended to be forward-looking statements under,
    applicable Canadian and U.S. securities legislation, including the U.S.
    Private Securities Litigation Reform Act of 1995. Forward-looking
    statements include, but are not limited to, statements made in this
    earnings news release in the "Business Outlook" section for each business
    segment and in other statements regarding the Bank's objectives and
    priorities for 2011 and beyond and strategies to achieve them, and the
    Bank's anticipated financial performance. Forward-looking statements are
    typically identified by words such as "will", "should", "believe",
    "expect", "anticipate", "intend", "estimate", "plan", "may", and "could".

    By their very nature, these statements require the Bank to make
    assumptions and are subject to inherent risks and uncertainties, general
    and specific. Especially in light of the uncertainty related to the
    financial, economic and regulatory environments, such risks and
    uncertainties - many of which are beyond the Bank's control and the
    effects of which can be difficult to predict - may cause actual results
    to differ materially from the expectations expressed in the forward-
    looking statements. Risk factors that could cause such differences
    include: credit, market (including equity, commodity, foreign exchange,
    and interest rate), liquidity, operational, reputational, insurance,
    strategic, regulatory, legal, environmental, and other risks, all of
    which are discussed in the Management's Discussion and Analysis ("MD&A")
    in the Bank's 2010 Annual Report. Additional risk factors include the
    impact of recent U.S. legislative developments, as discussed under
    "Significant Events in 2010" in the "How We Performed" section of the
    2010 MD&A; changes to and new interpretations of capital and liquidity
    guidelines and reporting instructions; increased funding costs for credit
    due to market illiquidity and competition for funding; and the failure of
    third parties to comply with their obligations to the Bank or its
    affiliates relating to the care and control of information. We caution
    that the preceding list is not exhaustive of all possible risk factors
    and other factors could also adversely affect the Bank's results. For
    more detailed information, please see the "Risk Factors and Management"
    section of the 2010 MD&A. All such factors should be considered
    carefully, as well as other uncertainties and potential events, and the
    inherent uncertainty of forward-looking statements, when making decisions
    with respect to the Bank and we caution readers not to place undue
    reliance on the Bank's forward-looking statements.

    Material economic assumptions underlying the forward-looking statements
    contained in this document are set out in the Bank's 2010 Annual Report
    under the headings "Economic Summary and Outlook", as updated in the
    Second Quarter 2011 Report to Shareholders; for each business segment,
    "Business Outlook and Focus for 2011", as updated in this earnings news
    release under the headings "Business Outlook"; and for the Corporate
    segment in this earnings news release under the heading "Outlook".

    Any forward-looking statements contained in this document represent the
    views of management only as of the date hereof and are presented for the
    purpose of assisting the Bank's investors 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.
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    >>

This document was reviewed by the Bank's Audit Committee and was approved by the Bank's Board of Directors, on the Audit Committee's recommendation, prior to its release.

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    TABLE 1: FINANCIAL HIGHLIGHTS
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    (millions of Canadian                                        For the six
     dollars, except          For the three months ended        months ended
     as noted)             --------------------------------------------------
                             Apr. 30   Jan. 31   Apr. 30   Apr. 30   Apr. 30
                                2011      2011      2010      2011      2010
    -------------------------------------------------------------------------
    Results of operations
    Total revenue           $  5,122  $  5,460  $  4,767  $ 10,582  $  9,804
    Provision for credit
     losses                      343       414       365       757       882
    Non-interest expenses      3,201     3,193     2,953     6,394     5,934
    Net income - reported      1,332     1,541     1,176     2,873     2,473
    Net income - adjusted(1)   1,451     1,588     1,234     3,039     2,664
    Economic profit(2)           466       554       200     1,022       572
    Return on common equity
     - reported                14.0%     15.5%     13.0%     14.8%     13.5%
    Return on invested
     capital(2)                13.4%     14.1%     12.0%     13.8%     12.9%
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    Financial position
    Total assets            $629,867  $616,368  $573,905  $629,867  $573,905
    Total risk-weighted
     assets                  202,669   199,235   187,174   202,669   187,174
    Total shareholders'
     equity                   41,330    41,524    38,424    41,330    38,424
    -------------------------------------------------------------------------
    Financial ratios
    Efficiency ratio -
     reported                  62.5%     58.5%     61.9%     60.4%     60.5%
    Efficiency ratio -
     adjusted(1)                59.4      56.4      59.2      57.9      57.1
    Tier 1 capital to
     risk-weighted assets       12.7      12.7      12.0      12.7      12.0
    Provision for credit
     losses as a % of net
     average loans              0.50      0.60      0.58      0.55      0.68
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    Common share information
     - reported (Dollars)
    Per share earnings
      Basic                 $   1.46  $   1.70  $   1.31  $   3.16  $   2.76
      Diluted                   1.46      1.69      1.30      3.14      2.74
    Dividends per share         0.66      0.61      0.61      1.27      1.22
    Book value per share       42.81     43.23     40.35     42.81     40.35
    Closing share price        81.92     74.96     75.50     81.92     75.50
    Shares outstanding
     (millions)
      Average basic            883.1     879.3     863.8     881.2     861.5
      Average diluted          888.3     883.7     869.4     885.9     866.7
      End of period            886.1     882.1     868.2     886.1     868.2
    Market capitalization
     (billions of Canadian
     dollars)               $   72.6  $   66.1  $   65.6  $   72.6  $   65.6
    Dividend yield              3.1%      3.3%      3.5%      3.2%      3.5%
    Dividend payout ratio      45.1%     36.0%     46.8%     40.2%     44.3%
    Price to earnings ratio     14.9      14.0      15.5      14.9      15.5
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    Common share information
     - adjusted (Dollars)(1)
    Per share earnings
      Basic                 $   1.60  $   1.75  $   1.37  $   3.35  $   2.98
      Diluted                   1.59      1.74      1.36      3.33      2.96
    Dividend payout ratio      41.3%     34.9%     44.5%     38.0%     41.0%
    Price to earnings ratio     13.3      12.7      12.8      13.3      12.8
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    (1) Adjusted measures are non-GAAP. Refer to the "How the Bank Reports"
        section for an explanation of reported and adjusted results.
    (2) Economic profit and return on invested capital are non-GAAP financial
        measures. Refer to the "Economic Profit and Return on Invested
        Capital" section for an explanation.
    >>

HOW WE PERFORMED

How the Bank Reports

The Bank prepares its Interim Consolidated Financial Statements in accordance with GAAP and refers to results prepared in accordance with GAAP as "reported" results. The Bank also utilizes non-GAAP financial measures to arrive at "adjusted" results to assess each of its businesses and to measure overall Bank performance. To arrive at adjusted results, the Bank removes "items of note", net of income taxes, from reported results. The items of note relate to items which management does not believe are indicative of underlying business performance. The Bank believes that adjusted results provide the reader with a better understanding of how management views the Bank's performance. The items of note are listed in the table on the following page. As explained, adjusted results are different from reported results determined in accordance with GAAP. Adjusted results, items of note, and related terms used in this document are not defined terms under GAAP and, therefore, may not be comparable to similar terms used by other issuers.

The following table provides the operating results - reported for the Bank.

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    TABLE 2: OPERATING RESULTS - REPORTED
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    (millions of Canadian                                        For the six
     dollars)                 For the three months ended        months ended
                           --------------------------------------------------
                             Apr. 30   Jan. 31   Apr. 30   Apr. 30   Apr. 30
                                2011      2011      2010      2011      2010
    -------------------------------------------------------------------------
    Net interest income     $  3,079  $  3,165  $  2,790  $  6,244  $  5,639
    Non-interest income        2,043     2,295     1,977     4,338     4,165
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    Total revenue              5,122     5,460     4,767    10,582     9,804
    Provision for credit
     losses                      343       414       365       757       882
    Non-interest expenses      3,201     3,193     2,953     6,394     5,934
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    Income before income
     taxes, non-controlling
     interests in
     subsidiaries, and
     equity in net income of
     an associated company     1,578     1,853     1,449     3,431     2,988
    Provision for income
     taxes                       287       343       308       630       578
    Non-controlling interests
     in subsidiaries, net
     of income taxes              25        26        26        51        53
    Equity in net income of
     an associated company,
     net of income taxes          66        57        61       123       116
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    Net income - reported      1,332     1,541     1,176     2,873     2,473
    Preferred dividends           40        49        48        89        97
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    Net income available to
     common shareholders
     - reported             $  1,292  $  1,492  $  1,128  $  2,784  $  2,376
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    TABLE 3: NON-GAAP FINANCIAL MEASURES - RECONCILIATION OF ADJUSTED TO
    REPORTED NET INCOME
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    (millions of Canadian                                        For the six
     dollars)                 For the three months ended        months ended
                           --------------------------------------------------
                             Apr. 30   Jan. 31   Apr. 30   Apr. 30   Apr. 30
                                2011      2011      2010      2011      2010
    -------------------------------------------------------------------------
    Operating results -
     adjusted
    Net interest income     $  3,079  $  3,165  $  2,790  $  6,244  $  5,639
    Non-interest income(1)     2,034     2,202     1,948     4,236     4,110
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    Total revenue              5,113     5,367     4,738    10,480     9,749
    Provision for credit
     losses(2)                   343       414       425       757       942
    Non-interest expenses(3)   3,036     3,028     2,804     6,064     5,565
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    Income before income
     taxes, non-controlling
     interests in
     subsidiaries, and
     equity in net income of
     an associated company     1,734     1,925     1,509     3,659     3,242
    Provision for income
     taxes(4)                    340       385       332       725       680
    Non-controlling interests
     in subsidiaries,
     net of income taxes          25        26        26        51        53
    Equity in net income of
     an associated company,
     net of income taxes(5)       82        74        83       156       155
    -------------------------------------------------------------------------
    Net income - adjusted      1,451     1,588     1,234     3,039     2,664
    Preferred dividends           40        49        48        89        97
    -------------------------------------------------------------------------
    Net income available to
     common shareholders -
     adjusted                  1,411     1,539     1,186     2,950     2,567
    -------------------------------------------------------------------------
    Adjustments for items
     of note: Increase
     (decrease) in net
     income
    Amortization of
     intangibles(6)             (108)     (112)     (123)     (220)     (235)
    Fair value of derivatives
     hedging the reclassified
     available-for-sale
     debt securities
     portfolio(7)                  6        81        23        87        27
    Integration and
     restructuring charges
     relating to U.S.
     Personal and Commercial
     Banking acquisitions(8)     (16)      (13)        -       (29)      (46)
    Fair value of credit
     default swaps hedging
     the corporate loan book,
     net of provision for
     credit losses(9)              2        (3)       (2)       (1)       (9)
    Recovery of income taxes
     due to changes in
     statutory income tax
     rates(10)                     -         -         -         -        11
    Release of insurance
     claims(11)                    -         -         -         -        17
    General allowance in
     Canadian Personal and
     Commercial Banking and
     Wholesale Banking(12)         -         -        44         -        44
    Integration charges
     relating to the
     Chrysler Financial
     acquisition(13)              (3)        -         -        (3)        -
    -------------------------------------------------------------------------
    Total adjustments for
     items of note              (119)      (47)      (58)     (166)     (191)
    -------------------------------------------------------------------------
    Net income available to
     common shareholders -
     reported               $  1,292  $  1,492  $  1,128  $  2,784  $  2,376
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1)  Adjusted non-interest income excludes the following items of note:
         second quarter 2011 - $3 million gain due to change in fair value of
         credit default swaps (CDS) hedging the corporate loan book, as
         explained in footnote 9; $9 million gain due to change in fair value
         of derivatives hedging the reclassified available-for-sale (AFS)
         debt securities portfolio, as explained in footnote 7; first quarter
         2011 - $6 million loss due to change in fair value of CDS hedging
         the corporate loan book; $99 million gain due to change in fair
         value of derivatives hedging the reclassified AFS debt securities
         portfolio; second quarter 2010 - $5 million loss due to change in
         fair value of CDS hedging the corporate loan book; $34 million gain
         due to change in fair value of derivatives hedging the reclassified
         AFS debt securities portfolio; first quarter 2010 - $11 million loss
         due to change in fair value of CDS hedging the corporate loan book;
         $12 million gain due to change in fair value of derivatives hedging
         the reclassified AFS debt securities portfolio; $25 million recovery
         of insurance claims, as explained in footnote 11.
    (2)  Adjusted provision for credit losses (PCL) excludes the following
         items of note: second quarter 2010 - $60 million release in general
         allowance for credit losses in Canadian Personal and Commercial
         Banking and Wholesale Banking.
    (3)  Adjusted non-interest expenses exclude the following items of note:
         second quarter 2011 - $138 million amortization of intangibles as
         explained in footnote 6; $26 million of integration charges related
         to U.S. Personal and Commercial Banking acquisitions, as explained
         in footnote 8; $4 million of integration charges related to the
         Chrysler Financial acquisition, as explained in footnote 13; first
         quarter 2011 - $144 million amortization of intangibles; $21 million
         of integration charges related to U.S. Personal and Commercial
         Banking acquisitions; second quarter 2010 - $149 million
         amortization of intangibles; first quarter 2010 - $149 million
         amortization of intangibles; $71 million of integration and
         restructuring charges related to U.S. Personal and Commercial
         Banking acquisitions.
    (4)  For reconciliation between reported and adjusted provision for
         income taxes, see the "Non-GAAP Financial Measures - Reconciliation
         of Reported to Adjusted Provision for Income Taxes" table in the
         "Income Taxes" section of this document.
    (5)  Adjusted equity in net income of an associated company excludes the
         following items of note: second quarter 2011 - $16 million
         amortization of intangibles, as explained in footnote 6; first
         quarter 2011 - $17 million amortization of intangibles; second
         quarter 2010 - $22 million amortization of intangibles; first
         quarter 2010 - $17 million amortization of intangibles.
    (6)  Amortization of intangibles primarily relates to the Canada Trust
         acquisition in 2000, the TD Banknorth acquisition in 2005 and its
         privatization in 2007, the Commerce acquisition in 2008, and the
         amortization of intangibles included in equity in net income of TD
         Ameritrade. Effective first quarter 2011, amortization of software
         is recorded in amortization of intangibles; however, amortization of
         software is not included for purposes of items of note, which only
         include amortization of intangibles acquired as a result of business
         combinations.
    (7)  Effective August 1, 2008, as a result of deterioration in markets
         and severe dislocation in the credit market, the Bank changed its
         trading strategy with respect to certain trading debt securities.
         The Bank no longer intends to actively trade in these debt
         securities. Accordingly, the Bank reclassified certain debt
         securities from trading to the available-for-sale category in
         accordance with the Amendments to CICA Handbook Section 3855,
         Financial Instruments - Recognition and Measurement. As part of the
         Bank's trading strategy, these debt securities are economically
         hedged, primarily with CDS and interest rate swap contracts. This
         includes foreign exchange translation exposure related to the debt
         securities portfolio and the derivatives hedging it. These
         derivatives are not eligible for reclassification and are recorded
         on a fair value basis with changes in fair value recorded in the
         period's earnings. Management believes that this asymmetry in the
         accounting treatment between derivatives and the securities
         portfolio, which includes the reclassified debt securities, results
         in volatility in earnings from period to period that is not
         indicative of the economics of the underlying business performance
         in Wholesale Banking. Commencing in the second quarter of 2011, the
         Bank may from time to time replace securities within the portfolio
         to best utilize the initial, matched fixed term funding. As a
         result, the derivatives are accounted for on an accrual basis in
         Wholesale Banking and the gains and losses related to the
         derivatives in excess of the accrued amounts are reported in the
         Corporate segment. Adjusted results of the Bank exclude the gains
         and losses of the derivatives in excess of the accrued amount.
    (8)  As a result of U.S. Personal and Commercial Banking acquisitions and
         related integration and restructuring initiatives undertaken, the
         Bank may incur integration and restructuring charges. Restructuring
         charges consist of employee severance costs, the costs of amending
         certain executive employment and award agreements, contract
         termination fees, and the write-down of long-lived assets due to
         impairment. Integration charges consist of costs related to employee
         retention, external professional consulting charges, marketing
         (including customer communication and rebranding), and integration-
         related travel costs. Effective second quarter of 2010, U.S.
         Personal and Commercial Banking elected not to include any further
         Commerce-related integration and restructuring charges in this item
         of note as the efforts in these areas wind down and in light of the
         fact that the integration and restructuring is substantially
         complete. For the three and six months ended April 30, 2011, the
         integration charges were driven by the FDIC-assisted acquisitions
         and there were no restructuring charges recorded.
    (9)  The Bank purchases CDS to hedge the credit risk in Wholesale
         Banking's corporate lending portfolio. These CDS do not qualify for
         hedge accounting treatment and are measured at fair value with
         changes in fair value recognized in current period's earnings. The
         related loans are accounted for at amortized cost. Management
         believes that this asymmetry in the accounting treatment between CDS
         and loans would result in periodic profit and loss volatility which
         is not indicative of the economics of the corporate loan portfolio
         or the underlying business performance in Wholesale Banking. As a
         result, the CDS are accounted for on an accrual basis in Wholesale
         Banking and the gains and losses on the CDS, in excess of the
         accrued cost, are reported in the Corporate segment. Adjusted
         earnings exclude the gains and losses on the CDS in excess of the
         accrued cost. When a credit event occurs in the corporate loan book
         that has an associated CDS hedge, the PCL related to the portion
         that was hedged via the CDS is netted against this item of note.
    (10) This represents the impact of scheduled changes in the income tax
         statutory rates on net future income tax balances.
    (11) The Bank accrued an additional actuarial liability in its insurance
         subsidiary operations for potential losses in the first quarter of
         2008 related to a court decision in Alberta. The Alberta
         government's legislation effectively capping minor injury insurance
         claims was challenged and held to be unconstitutional. In Q3 2009,
         the government of Alberta won its appeal of the decision. The
         plaintiffs sought leave to appeal the decision to the Supreme Court
         of Canada and in Q1 2010, the Supreme Court of Canada denied the
         plaintiffs' application to seek leave to appeal. As a result of this
         favourable outcome, the Bank released its provision related to the
         minor injury cap litigation in Alberta.
    (12) Effective November 1, 2009, TD Financing Services aligned their loan
         loss methodology with that used for all other Canadian Personal and
         Commercial Banking retail loans; any general provisions resulting
         from the revised methodology are included.
    (13) The Bank incurred integration charges as a result of the Chrysler
         Financial acquisition in Canada and the U.S. and related integration
         initiatives undertaken. Integration charges include costs related to
         information technology, employee retention, external professional
         consulting charges, marketing (including customer communication and
         rebranding), and integration-related travel costs. While integration
         charges related to this acquisition were incurred for both Canada
         and the U.S., the majority of the charges are expected to relate to
         integration initiatives undertaken for U.S. Personal and Commercial
         Banking.


    -------------------------------------------------------------------------
    TABLE 4: RECONCILIATION OF REPORTED TO ADJUSTED EARNINGS PER SHARE
    (EPS)(1)
    -------------------------------------------------------------------------
    (Canadian dollars)                                           For the six
                              For the three months ended        months ended
                           --------------------------------------------------
                             Apr. 30   Jan. 31   Apr. 30   Apr. 30   Apr. 30
                                2011      2011      2010      2011      2010
    -------------------------------------------------------------------------
    Basic earnings per
     share - reported       $   1.46  $   1.70  $   1.31  $   3.16  $   2.76
    Adjustments for items
     of note(2)                 0.14      0.05      0.06      0.19      0.22
    -------------------------------------------------------------------------
    Basic earnings per
     share - adjusted       $   1.60  $   1.75  $   1.37  $   3.35  $   2.98
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Diluted earnings per
     share - reported       $   1.46  $   1.69  $   1.30  $   3.14  $   2.74
    Adjustments for items
     of note(2)                 0.13      0.05      0.06      0.19      0.22
    -------------------------------------------------------------------------
    Diluted earnings per
     share - adjusted       $   1.59  $   1.74  $   1.36  $   3.33  $   2.96
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) EPS is computed by dividing net income available to common
        shareholders by the weighted-average number of shares outstanding
        during the period.
    (2) For explanations of items of note, see the "Non-GAAP Financial
        Measures - Reconciliation of Adjusted to Reported net income" table
        in the "How We Performed" section of this document.


    -------------------------------------------------------------------------
    TABLE 5: NON-GAAP FINANCIAL MEASURES - RECONCILIATION OF REPORTED TO
    ADJUSTED PROVISION FOR INCOME TAXES(1)
    -------------------------------------------------------------------------
    (millions of Canadian                                        For the six
     dollars, except          For the three months ended        months ended
     as noted)             --------------------------------------------------
                             Apr. 30   Jan. 31   Apr. 30   Apr. 30   Apr. 30
                                2011      2011      2010      2011      2010
    -------------------------------------------------------------------------
    Provision for income
     taxes - reported       $    287  $    343  $    308  $    630  $    578
    -------------------------------------------------------------------------
    Adjustments for items
     of note: Recovery of
     (provision for)
     income taxes(2)
    Amortization of
     intangibles                  46        49        48        95       102
    Fair value of derivatives
     hedging the reclassified
     available-for-sale debt
     securities portfolio         (3)      (18)      (11)      (21)      (19)
    Integration and
     restructuring charges
     relating to U.S.
     Personal and Commercial
     Banking acquisitions         10         8         -        18        25
    Fair value of credit
     default swaps hedging
     the corporate loan book,
     net of provision for
     credit losses                (1)        3         3         2         7
    Income taxes due to
     changes in statutory
     income tax rates              -         -         -         -        11
    Insurance claims               -         -         -         -        (8)
    General allowance in
     Canadian Personal and
     Commercial Banking
     and Wholesale Banking         -         -       (16)        -       (16)
    Integration charges
     relating to the
     Chrysler Financial
     acquisition                   1         -         -         1         -
    -------------------------------------------------------------------------
    Total adjustments for
     items of note                53        42        24        95       102
    -------------------------------------------------------------------------
    Provision for income
     taxes - adjusted       $    340  $    385  $    332  $    725  $    680
    -------------------------------------------------------------------------
    Effective income tax
     rate - adjusted(3)        19.6%     20.0%     22.0%     19.8%     21.0%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) For explanations of items of note, see the "Non-GAAP Financial
        Measures - Reconciliation of Adjusted to Reported Net Income" table
        in the "How We Performed" section of this document.
    (2) The tax effect for each item of note is calculated using the
        effective statutory income tax rate of the applicable legal entity.
    (3) Adjusted effective income tax rate is the adjusted provision for
        income taxes before other taxes as a percentage of adjusted net
        income before taxes.
    >>

Economic Profit and Return on Invested Capital

The Bank utilizes economic profit as a tool to measure shareholder value creation. Economic profit is adjusted net income available to common shareholders less a charge for average invested capital. Average invested capital is equal to average common equity for the period plus the average cumulative after-tax goodwill and intangible assets amortized as of the reporting date. The rate used in the charge for invested capital is the equity cost of capital calculated using the capital asset pricing model. The charge represents an assumed minimum return required by common shareholders on the Bank's invested capital. The Bank's goal is to achieve positive and growing economic profit.

Return on invested capital (ROIC) is adjusted net income available to common shareholders divided by average invested capital. ROIC is a variation of the economic profit measure that is useful in comparison to the equity cost of capital. Both ROIC and the equity cost of capital are percentage rates, while economic profit is a dollar measure. When ROIC exceeds the equity cost of capital, economic profit is positive. The Bank's goal is to maximize economic profit by achieving ROIC that exceeds the equity cost of capital.

Economic profit and ROIC are non-GAAP financial measures as these are not defined terms under GAAP. Readers are cautioned that earnings and other measures adjusted to a basis other than GAAP do not have standardized meanings under GAAP and, therefore, may not be comparable to similar terms used by other issuers.

    <<
    -------------------------------------------------------------------------
    TABLE 6: ECONOMIC PROFIT AND RETURN ON INVESTED CAPITAL
    -------------------------------------------------------------------------
    (millions of Canadian                                        For the six
     dollars)                 For the three months ended        months ended
                           --------------------------------------------------
                             Apr. 30   Jan. 31   Apr. 30   Apr. 30   Apr. 30
                                2011      2011      2010      2011      2010
    -------------------------------------------------------------------------
    Average common equity   $ 37,773  $ 38,209  $ 35,530  $ 37,971  $ 35,394
    Average cumulative
     goodwill and intangible
     assets amortized, net
     of income taxes           5,283     5,190     4,893     5,237     4,843
    -------------------------------------------------------------------------
    Average invested
     capital                $ 43,056  $ 43,399  $ 40,423  $ 43,208  $ 40,237
    Rate charged for
     invested capital           9.0%      9.0%     10.0%      9.0%     10.0%
    -------------------------------------------------------------------------
    Charge for average
     invested capital       $    945  $    985  $    986  $  1,928  $  1,995
    -------------------------------------------------------------------------
    Net income available to
     common shareholders -
     reported               $  1,292  $  1,492  $  1,128  $  2,784  $  2,376
    Items of note impacting
     income, net of income
     taxes(1)                    119        47        58       166       191
    -------------------------------------------------------------------------
    Net income available to
     common shareholders -
     adjusted               $  1,411  $  1,539  $  1,186  $  2,950  $  2,567
    -------------------------------------------------------------------------
    Economic profit         $    466  $    554  $    200  $  1,022  $    572
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Return on invested
     capital                   13.4%     14.1%     12.0%     13.8%     12.9%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    >>

Significant Events in 2011

Acquisition of Chrysler Financial

On April 1, 2011, the Bank acquired 100% of the outstanding common shares of Chrysler Financial for cash consideration of approximately $6.3 billion. The acquisition was accounted for by the purchase method. The results of Chrysler Financial from the acquisition date to April 30, 2011 have been consolidated with the Bank's results for the quarter ended April 30, 2011. The results of Chrysler Financial in the U.S. are included with TD Bank, N.A. and are reported in the U.S. Personal and Commercial Banking segment. The results of Chrysler Financial in Canada are included with The Toronto-Dominion Bank and are reported in the Canadian Personal and Commercial Banking segment. As at April 1, 2011, the acquisition contributed $3.1 billion of net cash and cash equivalents, $7.3 billion of loans, $2.3 billion of other assets, and $6.6 billion of liabilities. Included in loans is $1.0 billion of acquired impaired loans. The estimated fair value for loans reflects the expected credit losses at the acquisition date. The excess of the fair value of the identifiable assets acquired over that of the liabilities assumed of approximately $0.2 billion has been allocated to goodwill, which decreased from $0.4 billion estimated as at the announcement date on December 21, 2010, primarily due to an increase in net assets. The purchase price allocation is subject to refinement as the Bank completes the valuation of the assets acquired and liabilities assumed.

U.S. Legislative Developments

On July 21, 2010 the President of the United States signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") which provides for widespread reform of the U.S. financial industry. At over 2,300 pages in length, the Dodd-Frank Act affects every financial institution in the United States and many financial institutions, including the Bank, that operate outside the United States. The Dodd-Frank Act makes significant changes in areas such as banking and bank supervision and the resolution of systemically important financial companies, consumer protection, securities, derivatives, and executive compensation, among others. The Dodd-Frank Act also calls for a large number of regulatory rulemaking projects, as well as numerous studies and on-going reports as part of its implementation. Accordingly, while the Dodd-Frank Act will have an effect on the business of the Bank, especially its business operations in the United States, the full impact on the Bank will not be known until such time as the implementing regulations are released and finalized.

Other regulatory changes include the amendments to Regulation E, or the Electronic Funds Transfer Act, which prohibits financial institutions from charging fees to consumers for paying automated teller machine and point of sale transactions that result in an overdraft, and the Credit Card Act, which will, among other things, significantly restrict the Bank's ability to charge interest rates and assess fees to reflect individual customer risk. For more detail on the impact of Regulation E and other regulatory changes, see the U.S. Personal and Commercial Banking segment disclosure in the "How Our Businesses Performed" section of this document.

The Bank continues to monitor closely these and other legislative developments and will analyze the impact such regulatory and legislative changes may have on its businesses.

HOW OUR BUSINESSES PERFORMED

For management reporting purposes, the Bank's operations and activities are organized around four key business segments operating in a number of locations in key financial centres around the globe: Canadian Personal and Commercial Banking, including TD Canada Trust and TD Insurance; Wealth Management, including TD Waterhouse and an investment in TD Ameritrade; U.S. Personal and Commercial Banking including TD Bank, America's Most Convenient Bank; and Wholesale Banking, including TD Securities. The Bank's other activities are grouped into the Corporate segment.

Effective the first quarter of 2011, operating results and associated loans for the U.S. credit cards business were transferred from Canadian Personal and Commercial Banking to U.S. Personal and Commercial Banking for segment reporting purposes. In addition, the Bank implemented a change in its allocation methodologies whereby certain items previously reported in the Corporate segment are now being allocated to other segments. These changes have no impact on the Bank's Interim Consolidated Financial Statements. Prior period results were not reclassified. These changes are referred to as "segment transfers" throughout this document. Refer to the "Segment Transfers" section of this document for further details.

Results of each business segment reflect revenue, expenses, assets, and liabilities generated by the businesses in that segment. The Bank measures and evaluates the performance of each segment based on adjusted results where applicable, and for those segments the Bank notes that the measure is adjusted. Amortization of intangible expenses is included in the Corporate segment. Accordingly, net income for the operating business segments is presented before amortization of intangibles, as well as any other items of note not attributed to the operating segments. For further details, see the "How the Bank Reports" section, the "Business Focus" section in the 2010 MD&A, and Note 33 to the 2010 Consolidated Financial Statements. For information concerning the Bank's measures of economic profit and return on invested capital, which are non-GAAP financial measures, see the "How We Performed" section of this document.

Net interest income within Wholesale Banking is calculated on a taxable equivalent basis (TEB), which means that the value of non-taxable or tax-exempt income, including dividends, is adjusted to its equivalent before-tax value. Using TEB allows the Bank to measure income from all securities and loans consistently and makes for a more meaningful comparison of net interest income with similar institutions. The TEB increase to net interest income and provision for income taxes reflected in Wholesale Banking results is reversed in the Corporate segment. The TEB adjustment for the quarter was $63 million, compared with $110 million in the second quarter last year, and $87 million in the prior quarter.

The Bank securitizes retail loans and receivables, and records a gain or loss on sale, including the recognition of an asset related to retained interests. Credit losses incurred on retained interests after securitization are recorded as a charge to non-interest income in the Bank's Interim Consolidated Financial Statements. For segment reporting, PCL related to securitized volumes is included in Canadian Personal and Commercial Banking but is reversed in the Corporate segment and reclassified as a charge to non-interest income to comply with GAAP.

    <<
    -------------------------------------------------------------------------
    TABLE 7: CANADIAN PERSONAL AND COMMERCIAL BANKING
    -------------------------------------------------------------------------
    (millions of Canadian                                        For the six
     dollars, except          For the three months ended        months ended
     as noted)             --------------------------------------------------
                             Apr. 30   Jan. 31   Apr. 30   Apr. 30   Apr. 30
                                2011      2011      2010      2011      2010
    -------------------------------------------------------------------------
    Net interest income     $  1,765  $  1,822  $  1,717  $  3,587  $  3,461
    Non-interest income          811       842       801     1,653     1,596
    -------------------------------------------------------------------------
    Total revenue              2,576     2,664     2,518     5,240     5,057
    Provision for credit
     losses                      191       213       256       404       571
    Non-interest expenses      1,229     1,212     1,187     2,441     2,381
    Net income              $    847  $    905  $    761  $  1,752  $  1,481
    -------------------------------------------------------------------------
    Selected volumes
     and ratios
    Return on invested
     capital                   37.5%     39.1%     33.7%     38.3%     32.5%
    Margin on average
     earnings assets
     (including
     securitized assets)       2.78%     2.82%     2.92%     2.80%     2.93%
    Efficiency ratio           47.7%     45.5%     47.1%     46.6%     47.1%
    Number of Canadian
     retail stores             1,131     1,129     1,115     1,131     1,115
    Average number of full-
     time equivalent staff    34,281    34,314    33,726    34,298    33,498
    -------------------------------------------------------------------------

    Quarterly comparison - Q2 2011 vs. Q2 2010
    ------------------------------------------
    >>

Canadian Personal and Commercial Banking net income for the quarter was $847 million, an increase of $86 million, or 11%, compared with the second quarter last year. The annualized return on invested capital for the quarter was 37.5%, compared with 33.7% in the second quarter last year.

Canadian Personal and Commercial Banking revenue is derived from personal banking, business banking, and insurance. Revenue for the quarter was $2,576 million, an increase of $58 million, or 2% (4% excluding segment transfers), compared with the second quarter last year, primarily due to solid volume growth in personal and business deposits, business lending, real estate secured lending, and indirect lending. This was partially offset by a lower margin on average earning assets. Compared with the second quarter last year, real estate secured lending volume, including securitized assets, increased $14.9 billion, or 8%, indirect lending increased $2.4 billion, or 24%, while business loans and acceptances volume increased $3.5 billion, or 11%. Personal deposit volume increased $5.7 billion, or 5%, while business deposit volume increased $6.7 billion, or 12%. In addition, gross originated insurance premiums increased $31 million, or 4%, compared with the same period last year. Insurance revenue in the second quarter was significantly impacted by severe weather related claims compared to the same period last year. Margin on average earning assets decreased 14 bps to 2.78% of which 8 bps was due to segment transfers and the remainder largely due to increased pricing competition.

PCL for the quarter was $191 million, a decrease of $65 million, or 25% (20% excluding segment transfers), compared with the second quarter last year. Personal banking PCL was $188 million, a decrease of $42 million, or 18%, mainly due to an improved economic environment. Business banking PCL was $2.5 million, a decrease of $20 million due to increased client recoveries. Annualized PCL as a percentage of credit volume was 0.15%, a decrease of 6 bps, compared with the second quarter last year. Net impaired loans were $574 million, an increase of $60 million, or 12%, over the second quarter last year. Net impaired loans as a percentage of total loans were 0.22%, compared with 0.21% as at April 30, 2010.

Non-interest expenses for the quarter were $1,229 million, an increase of $42 million, or 4% (4% excluding segment transfers), compared with the second quarter last year, primarily due to higher employee compensation and the impact and timing of project-related costs.

The average full-time equivalent (FTE) staffing levels increased by 555 or 2%, compared with the second quarter last year, reflecting continued investment in our businesses. The efficiency ratio for the quarter was 47.7%, compared with 47.1% in the second quarter last year.

    <<
    Quarterly comparison - Q2 2011 vs. Q1 2011
    ------------------------------------------
    >>

Canadian Personal and Commercial Banking net income for the quarter decreased $58 million, or 6%, compared with the prior quarter. The annualized return on invested capital for the quarter was 37.5%, compared with 39.1% in the prior quarter.

Revenue for the quarter decreased $88 million, compared with the prior quarter primarily due to fewer calendar days in the quarter. Margin on average earning assets decreased 4 bps to 2.78%, largely due to increased pricing competition. Compared with the prior quarter, real estate secured lending volume, including securitized assets, increased $2.5 billion, or 1%, business loans and acceptances increased $1.5 billion, or 5%, personal deposit volume decreased $0.3 billion, while business deposit volume increased $1.7 billion, or 3%. Gross originated insurance premiums increased $99 million, or 14%. Compared to the prior quarter, insurance revenue was negatively impacted by severe weather related claims.

PCL for the quarter decreased $22 million, or 10%, reflective of the improving economy. Personal banking PCL decreased $19 million, or 9%, and business banking PCL decreased $3 million due to increased client recoveries. Net impaired loans were flat compared with the prior quarter. Net impaired loans as a percentage of total loans were 0.22%, in line with January 31, 2011.

Non-interest expenses for the quarter increased $17 million, or 1%, compared with the prior quarter, primarily due to higher employee compensation expenses and marketing initiatives, partially offset by fewer calendar days and higher project initiatives in the prior quarter. Average FTE staffing levels decreased by 33 due largely to the timing of project related initiatives. The efficiency ratio for the current quarter worsened to 47.7%, compared with 45.5% in the prior quarter.

    <<
    Year-to-date comparison - Q2 2011 vs. Q2 2010
    ---------------------------------------------
    >>

Canadian Personal and Commercial Banking net income for the six months ended April 30, 2011 was $1,752 million, an increase of $271 million, or 18%, compared with the same period last year. On a year-to-date basis, the annualized return on invested capital was 38.3%, compared with 32.5% for the same period last year.

Revenue on a year-to-date basis was $5,240 million, an increase of $183 million, or 4%, compared with the same period last year (6% excluding segment transfers). This increase was driven predominately by solid broad-based volume growth. Real estate secured lending volume, including securitizations, increased $15.1 billion, or 8%, indirect lending volume increased $2.4 billion, while business loans and acceptances volume increased $3 billion, or 10%. Personal deposit volume increased $6.4 billion, or 5% and business deposit volume increased $6.1 billion, or 12%. Gross originated insurance premiums increased $84 million, or 6%. The year-to-date margin on average earning assets decreased by 13 bps to 2.80%, compared with the same period last year, of which 7 bps was due to segment transfers and the remainder due largely to increased pricing competition.

PCL on a year-to-date basis was $404 million, a decrease of $167 million, or 29%, compared with the same period last year (24% excluding segment transfers), reflective of the improving economy. Personal banking PCL was $394 million, a decrease of $113 million, and business banking PCL was $9 million, a decrease of $55 million.

On a year-to-date basis, non-interest expenses were $2,441 million, an increase of $60 million, or 3% (3% excluding segment transfers), compared with the same period last year, primarily due to higher employee compensation partially offset by lower marketing and non-credit loss expenses.

The average FTE staffing levels on a year-to-date basis increased by 800, or 2%, compared with the same period last year, reflecting continued investment in our businesses. The efficiency ratio on a year-to-date basis improved to 46.6%, compared with 47.1% for the same period last year.

    <<
    Business Outlook
    ----------------
    >>

While we continue to benefit from our leadership position in branch hours and the ongoing investment in our network, earnings growth is expected to moderate in the third quarter. Strong underlying business growth in insurance and business banking is expected to be partially offset by slower volume growth and continued margin pressure in personal banking. While we expect credit losses to remain stable for the remainder of 2011, expense growth in the next quarter is anticipated to be higher relative to last year as we focus on ongoing investments in strategic initiatives to support future growth. As a result, operating leverage will remain under pressure next quarter but is expected to rebound strongly in the fourth quarter. On a full-year basis we expect operating leverage to be positive.

    <<
    -------------------------------------------------------------------------
    TABLE 8: WEALTH MANAGEMENT
    -------------------------------------------------------------------------
    (millions of Canadian                                        For the six
     dollars, except          For the three months ended        months ended
     as noted)             --------------------------------------------------
                             Apr. 30   Jan. 31   Apr. 30   Apr. 30   Apr. 30
                                2011      2011      2010      2011      2010
    -------------------------------------------------------------------------
    Global Wealth
    Net interest income     $    105  $    104  $     80  $    209  $    146
    Non-interest income          601       583       532     1,184     1,056
    -------------------------------------------------------------------------
    Total revenue                706       687       612     1,393     1,202
    Non-interest expenses        496       501       452       997       898
    Net Income
    Global Wealth                150       133       111       283       212
    TD Ameritrade                 57        48        56       105        99
    -------------------------------------------------------------------------
    Total Wealth Management $    207  $    181  $    167  $    388  $    311
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Selected volumes and
     ratios - Global Wealth
    Assets under
     administration
     (billions of Canadian
     dollars)               $    248  $    242  $    214  $    248  $    214
    Assets under management
     (billions of Canadian
     dollars)                    190       186       175       190       175
    Return on invested
     capital (Total Wealth
     Management)               20.1%     16.3%     15.5%     18.2%     14.1%
    Efficiency ratio           70.3%     72.9%     73.9%     71.6%     74.7%
    Average number of full-
     time equivalent staff     7,340     7,235     7,112     7,287     7,072
    -------------------------------------------------------------------------

    Quarterly comparison - Q2 2011 vs. Q2 2010
    ------------------------------------------
    >>

Wealth Management net income for the quarter was $207 million, an increase of $40 million, or 24%, compared with the second quarter last year. Global Wealth net income, which excludes TD Ameritrade, was $150 million, an increase of $39 million, or 35%. The Bank's reported investment in TD Ameritrade generated net income for the quarter of $57 million, an increase of $1 million, or 2%, compared with the second quarter last year. For its second quarter ended March 31, 2011, TD Ameritrade reported net income of US$172 million, an increase of US$9 million, or 6%, compared with the second quarter last year. Wealth Management's annualized return on invested capital for the quarter was 20.1%, compared with 15.5% in the second quarter last year.

Wealth Management revenue is derived from online brokerage, advice-based businesses, and asset management services. Global Wealth revenue for the quarter was $706 million, an increase of $94 million, or 15%, compared to the second quarter last year. The increase was primarily due to higher assets under administration and higher assets under management which drove fee-based revenue growth, increased client deposit balances and margin loans combined with increased net interest margin, and stronger trading volumes in our online brokerage businesses.

Non-interest expenses for the quarter were $496 million, an increase of $44 million, or 10%, compared with the second quarter last year. This increase was primarily due to higher variable costs driven by increased revenue from a rise in asset values in the advice-based and asset management businesses, and increased infrastructure investment to support business growth.

The average FTE staffing levels increased by 228, or 3%, compared with the second quarter last year, primarily due to an increase in support FTE for infrastructure and business growth and higher client-facing FTE staff. The efficiency ratio for the current quarter improved to 70.3%, compared with 73.9% in the second quarter last year.

Assets under administration of $248 billion as at April 30, 2011, increased by $34 billion, or 16%, from April 30, 2010. Assets under management of $190 billion as at April 30, 2011 increased by $15 billion, or 9%, from April 30, 2010. These increases were driven by market appreciation and net new client assets.

    <<
    Quarterly comparison - Q2 2011 vs. Q1 2011
    ------------------------------------------
    >>

Wealth Management net income for the quarter increased by $26 million, or 14%, compared with the prior quarter. Global Wealth net income increased by $17 million, or 13%. The Bank's reported investment in TD Ameritrade reflected an increase in net income of $9 million, or 19%, compared with the prior quarter due to increased earnings at TD Ameritrade. For its second quarter ended March 31, 2011, TD Ameritrade reported net income increased US$27 million, or 19%, compared with the prior quarter driven by strong trading activity in the quarter, as well as continued strong asset gathering. Wealth Management's annualized return on invested capital for the quarter was 20.1%, compared with 16.3% in the prior quarter.

Revenue for the quarter increased $19 million, or 3% compared with the prior quarter, primarily due to increased fee-based revenue from higher client assets in the mutual fund and advice-based businesses and increased transactional revenue mainly due to new issues. These increases were partially offset by declining commissions per trade in the Canadian online brokerage business.

Non-interest expenses decreased $5 million compared to the prior quarter, primarily due to non-recurring project expenses in the first quarter. The decrease was partially offset by higher variable costs driven by increased revenue.

The average FTE staffing levels increased by 105, or 1%, compared with the prior quarter, primarily resulting from an increase in support FTE for infrastructure and higher volumes due to business growth. The efficiency ratio for the current quarter was 70.3%, compared with 72.9% in the prior quarter.

Assets under administration of $248 billion as at April 30, 2011 increased $6 billion, or 2%, from January 31, 2011. Assets under management of $190 billion as at April 30, 2011 increased $4 billion, or 2%, from January 31, 2011. These increases were driven by market appreciation and net new client assets.

    <<
    Year-to-date comparison - Q2 2011 vs. Q2 2010
    ---------------------------------------------
    >>

Wealth Management net income for the six months ended April 30, 2011 was $388 million, an increase of $77 million, or 25%, compared with the same period last year. Global Wealth net income was $283 million, an increase of $71 million, or 33%, compared with the same period last year, mainly due to higher fees from increased average client assets, increased net interest income from higher net interest margin and higher client deposits and margin loans, and stronger trading volumes. The Bank's reported investment in TD Ameritrade generated $105 million of net income, an increase of $6 million, or 6%, compared with the same period last year. The increase was driven by higher base earnings on higher trading and asset gathering at TD Ameritrade. For its six months ended March 31, 2011, TD Ameritrade reported net income of US$317 million, an increase of US$18 million, or 6%, compared with the same period last year. On a year-to-date basis, Wealth Management's annualized return on invested capital was 18.2%, compared with 14.1% in the same period last year.

Revenue on a year-to-date basis was $1,393 million, an increase of $191 million, or 16%, compared with the same period last year. The increase was primarily due to increased fee-based revenue from higher average client assets in the asset management and advice-based businesses, higher net interest income from increased margins in the Canadian businesses, and higher client deposits and margin loans, and increased trading volumes. This increase was partially offset by declining commissions per trade in the Canadian online brokerage business. On a year-to-date basis, non-interest expenses were $997 million, an increase of $99 million, or 11%, compared with the same period last year. This increase was the result of higher variable costs driven by increased revenue from higher asset values in the advice-based and asset management businesses, higher infrastructure investment to support business growth, increased compensation costs associated with increased FTE staffing levels, and non-recurring project expenses.

The average FTE staffing levels on a year-to-date basis increased by 215, or 3%, compared with the same period last year, primarily due to growth in support FTE for infrastructure and business growth and higher client-facing FTE staff. The efficiency ratio on a year-to-date basis improved to 71.6%, compared with 74.7% in the same period last year.

    <<
    Business Outlook
    ----------------
    >>

Equity and commodity markets experienced strong growth in the first half of the 2011 fiscal year. While earnings momentum is likely to slow somewhat in the second half of the year full year 2011 earnings are expected to remain strong. We will continue to invest in our infrastructure, products, and growing our sales force.

    <<
    -------------------------------------------------------------------------
    TABLE 9: U.S. PERSONAL AND COMMERCIAL BANKING
    -------------------------------------------------------------------------
    (millions of                                  For the three months ended
     dollars,     -----------------------------------------------------------
     except                   Canadian dollars                  U.S. dollars
     as noted)    -----------------------------------------------------------
                   Apr. 30   Jan. 31   Apr. 30   Apr. 30   Jan. 31   Apr. 30
                      2011      2011      2010      2011      2011      2010
    -------------------------------------------------------------------------
    Net interest
     income        $ 1,048   $ 1,077   $   879   $ 1,077   $ 1,073   $   856
    Non-interest
     income            322       314       294       335       314       289
    -------------------------------------------------------------------------
    Total revenue    1,370     1,391     1,173     1,412     1,387     1,145
    Provision for
     credit losses
     - loans           168       136       159       173       136       154
    Provision for
     credit losses -
     debt securities
     classified as
     loans               3        66         9         3        66         8
    -------------------------------------------------------------------------
    Provision for
     credit losses -
     total             171       202       168       176       202       162
    Non-interest
     expenses -
     reported          820       809       677       843       805       659
    Non-interest
     expenses -
     adjusted          794       788       677       816       784       659
    Net income -
     reported          303       320       245       315       319       241
    -------------------------------------------------------------------------
    Adjustments for
     items of
     note:(1)
    Integration and
     restructuring
     charges relating
     to U.S. Personal
     and Commercial
     Banking
     acquisitions       16        13         -        16        13         -
    -------------------------------------------------------------------------
    Net income -
     adjusted      $   319   $   333   $   245   $   331   $   332   $   241
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Selected volumes
     and ratios
    Return on
     invested
     capital          7.4%      7.4%      5.6%      7.4%      7.4%      5.6%
    Margin on
     average
     earnings
     assets
     (TEB)(2)        3.68%     3.76%     3.59%     3.68%     3.76%     3.59%
    Efficiency
     ratio -
     reported        59.9%     58.2%     57.7%     59.9%     58.2%     57.7%
    Efficiency
     ratio -
     adjusted        58.0%     56.6%     57.7%     58.0%     56.6%     57.7%
    Number of U.S.
     retail stores   1,285     1,280     1,114     1,285     1,280     1,114
    Average number
     of full-time
     equivalent
     staff          23,447    22,882    19,387    23,447    22,882    19,387
    -------------------------------------------------------------------------
                                                    For the six months ended
                                      ---------------------------------------
                                        Canadian dollars        U.S. dollars
                                      ---------------------------------------
                                       Apr. 30   Apr. 30   Apr. 30   Apr. 30
                                          2011      2010      2011      2010
    -------------------------------------------------------------------------
    Net interest income                $ 2,125   $ 1,708   $ 2,150   $ 1,644
    Non-interest income                    636       609       649       588
    -------------------------------------------------------------------------
    Total revenue                        2,761     2,317     2,799     2,232
    Provision for credit losses -
     loans                                 304       351       309       336
    Provision for credit losses -
     debt securities classified
     as loans                               69        18        69        17
    -------------------------------------------------------------------------
    Provision for credit losses -
     total                                 373       369       378       353
    Non-interest expenses - reported     1,629     1,423     1,648     1,368
    Non-interest expenses - adjusted     1,582     1,351     1,600     1,300
    Net income - reported                  623       426       634       413
    -------------------------------------------------------------------------
    Adjustments for items of note:(1)
    Integration and restructuring
     charges relating to U.S.
     Personal and Commercial
     Banking acquisitions                   29        46        29        44
    -------------------------------------------------------------------------
    Net income - adjusted              $   652   $   472   $   663   $   457
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Selected volumes and ratios
    Return on invested capital            7.4%      5.3%      7.4%      5.3%
    Margin on average earnings
     assets (TEB)(2)                     3.72%     3.50%     3.72%     3.50%
    Efficiency ratio - reported          59.0%     61.4%     59.0%     61.3%
    Efficiency ratio - adjusted          57.3%     58.3%     57.3%     58.2%
    Number of U.S. retail stores         1,285     1,114     1,285     1,114
    Average number of full-time
     equivalent staff                   23,160    19,250    23,160    19,250
    -------------------------------------------------------------------------
    (1) For explanations of items of note, see the "Non-GAAP Financial
        Measures - Reconciliation of Adjusted to Reported Net Income" table
        in the "How We Performed" section of this document.
    (2) Average deposits and margin on average earning assets exclude the
        impact related to the TD Ameritrade insured deposit accounts (IDA).


    Quarterly comparison - Q2 2011 vs. Q2 2010
    ------------------------------------------
    >>

U.S. Personal and Commercial Banking net income, in Canadian dollar terms, for the quarter was $303 million on a reported basis, an increase of $58 million, or 24%, and $319 million on an adjusted basis, an increase of $74 million, or 30%, compared with the second quarter last year. In U.S. dollar terms, net income for the quarter was US$315 million on a reported basis, an increase of US$74 million, or 31%, and US$331 million on an adjusted basis, an increase of US$90 million, or 37%, compared with the second quarter last year. The increase was primarily due to strong organic volume growth, acquisitions, improving asset quality, and recovery of a previously reserved tax item.

In U.S. dollar terms, revenue for the quarter was US$1,412 million, an increase of US$267 million, or 23%, compared with the second quarter last year. The increase was primarily due to strong loan and deposit growth, with an increase of 31% in average loans and an increase of 19% in average deposits including acquisitions, partially offset by lower overdraft fees under Regulation E. Excluding acquisitions, organic growth was strong. Average loans increased by 12% and average deposits increased by 11%, both exceeding our U.S. peers. Margin on average earning assets increased by 9 bps to 3.68%, compared with the second quarter last year, primarily due to a change in the timing of expected cash flows on acquired loans, partially offset by lower margins on new origination due to increased competition.

Total PCL for the quarter was US$176 million, an increase of US$14 million, or 9%. While the performance of recently Acquired Loans (which includes the loans from the South Financial and the FDIC-assisted acquisitions as well as acquired impaired loans from Chrysler Financial) remains stable overall, PCL on these loans increased by US$37 million for the quarter, partially offset by better-than-expected cash flows on some recently Acquired Loans. Such offset results in higher net interest income, while credit deterioration on some of these loans resulted in higher PCL. PCL on loans excluding recently Acquired Loans and segment transfers decreased by US$36 million, or 22%, due to improved credit quality. Annualized PCL for loans excluding debt securities classified as loans as a percentage of credit volume was 1.0%, a decrease of 16 bps, compared with the second quarter last year. Excluding segment transfers and recently Acquired Loans, the annualized PCL for loans excluding debt securities classified as loans as a percentage of credit volume would have been 0.77%, or decreased by 40 bps, compared with the second quarter last year. Net impaired loans, excluding recently Acquired Loans and debt securities classified as loans, were US$1,127 million, an increase of US$126 million, or 13%, compared with the second quarter last year due to new impairment formations in the commercial real estate market in the U.S., resulting from the slower U.S. economic recovery, and segment transfers. Net impaired loans, excluding recently Acquired Loans and debt securities classified as loans, as a percentage of total loans were 1.9%, compared with 1.9% as at April 30, 2010. Net impaired recently Acquired Loans and debt securities classified as loans were US$106 million and US$1,518 million respectively, as at April 30, 2011, an increase of US$106 million and US$816 million respectively compared to April 30, 2010.

Reported non-interest expenses for the quarter were US$843 million, an increase of US$184 million, or 28%, compared with the second quarter last quarter. On an adjusted basis, non-interest expenses were US$816 million, an increase of US$157 million, or 24%, compared with the second quarter last year. The increase was primarily due to acquisitions, investments in the core franchise including new store expenses, and segment transfers.

The average FTE staffing levels increased by 4,060, or 21%, compared with the second quarter last year. This increase resulted from acquisitions, segment transfers, and 30 new store openings since the second quarter last year. The reported efficiency ratio for the quarter was 59.9%, compared with 57.7% in the second quarter last year, primarily due to higher integration costs. The adjusted efficiency ratio for the quarter was 58.0%, compared with 57.7%, consistent with the second quarter last year.

    <<
    Quarterly comparison - Q2 2011 vs. Q1 2011
    ------------------------------------------
    >>

U.S. Personal and Commercial Banking net income, in Canadian dollar terms, for the quarter decreased $17 million, or 5%, on a reported basis, and $14 million, or 4%, on an adjusted basis, compared with the prior quarter. In US dollar terms, net income decreased US$4 million, or 1%, on a reported basis, US$1 million on an adjusted basis. The decreases were primarily due to a stronger Canadian dollar. The annualized return on invested capital for the quarter was 7.4%, flat compared with the prior quarter.

In U.S. dollar terms, revenue for the quarter increased US$25 million, or 2%, compared with the prior quarter. Margin on average earning assets decreased 8 bps to 3.68% compared with the prior quarter, primarily due to tighter deposit spreads. Average loans increased US$4.0 billion, or 6%, compared with the prior quarter. Excluding the Chrysler Financial acquisition, average loans increased US$1.7 billion, or 3%, with an increase of 5% in average personal loans and an increase of 2% in average business loans. Average deposits increased US$5.0 billion, or 4%, compared with the prior quarter, including a US$1.8 billion increase in average deposits of TD Ameritrade. Average deposit volume, excluding the impact of the TD Ameritrade IDAs, increased US$3.2 billion, or 3%, with 4% growth in business deposit volume (excluding government), and 5% growth in personal deposit volume.

Total PCL for the quarter decreased US$26 million, or 13%, compared with the prior quarter, primarily due to PCL for debt securities classified as loans. Annualized PCL for loans excluding debt securities classified as loans as a percentage of credit volume was 1.0%, an increase of 20 bps, compared with the prior quarter, due entirely to recently Acquired Loans. Excluding segment transfers and recently Acquired Loans, the annualized PCL for loans excluding debt securities classified as loans as a percentage of credit volume would have been 0.77%, or decreased by 3 bps, compared with the prior quarter. Net impaired loans, excluding recently Acquired Loans and debt securities classified as loans, were US$1,127 million, a decrease of US$15 million, or 1%, compared with the prior quarter. Net impaired loans, excluding recently Acquired Loans and debt securities classified as loans, as a percentage of total loans were 1.9%, compared with 2.0% as at January 31, 2011. The net impaired recently Acquired Loans as at April 30, 2011 were US$106 million, an increase of US$74 million compared with prior quarter. Net impaired debt securities classified as loans were US$1,518 million, a decrease of US$49 million, or 3%, compared with the prior quarter. In the current quarter, no new securities classified as loans were determined to be impaired; in addition, credit performance of these securities as a whole remains stable in comparison to prior quarter.

Reported non-interest expenses for the quarter increased US$38 million, or 5%, compared with the prior quarter. On an adjusted basis, non-interest expenses increased US$32 million, or 4%, compared with the prior quarter. The increase was primarily due to the Chrysler Financial acquisition, new stores, and investments in the core franchise, partially offset by fewer calendar days in the quarter.

The average FTE staffing levels increased by 565, or 2%, compared with the prior quarter, primarily driven by new stores and higher staffing levels in the existing store network. The efficiency ratio for the quarter worsened to 59.9%, compared with 58.2% in the prior quarter and the adjusted efficiency ratio for the quarter worsened to 58.0%, compared with 56.6% in the prior quarter, as a result of the Chrysler Financial acquisition.

    <<
    Year-to-date comparison - Q2 2011 vs. Q2 2010
    ---------------------------------------------
    >>

U.S. Personal and Commercial Banking reported net income, in Canadian dollar terms, for the six months ended April 30, 2011 was $623 million, an increase of $197 million, or 46%, compared with the same period last year. Adjusted net income for the six months ended April 30, 2011 was $652 million, an increase of $180 million, or 38%. In US dollar terms, net income increased US$221 million, or 54%, on a reported basis, and US$206 million, or 45% on an adjusted basis. On a year-to-date basis, the annualized return on invested capital was 7.4%, compared with 5.3% for the same period last year.

In U.S. dollar terms, revenue on a year-to-date basis was US$2,799 million, an increase of US$567 million, or 25%, compared with the same period last year, due to both acquisition and organic growth. The margin on average earning assets on a year-to-date basis increased by 22 bps to 3.72%, compared with the same period last year, driven by higher loan spreads, including a change in the timing of expected cash flows on acquired loans and segment transfers, partially offset by deposit spread compression.

Total PCL on a year-to-date basis was US$378 million, an increase of US$25 million, or 7%, compared with the same period last year. Accounting for recently Acquired Loans, including debt securities classified as loans, resulted in an increase in PCL and an increase in net interest income this year. Excluding these impacts on PCL and segment transfers, PCL on the remaining loans decreased US$82 million, or 23% despite strong loan growth due to improved asset quality in the portfolio of loans. Annualized PCL for loans excluding debt securities classified as loans as a percentage of credit volume was 0.9%, a decrease of 35 bps, compared with the same period last year. Excluding segment transfers and recently Acquired Loans, the annualized PCL for loans excluding debt securities classified as loans as a percentage of credit volume would have been 0.80% or decreased by 46 bps, compared with the same period last year.

On a year-to-date basis, non-interest expenses were US$1,648 million, an increase of US$280 million, or 20%, on a reported basis, and US$1,600 million, an increase of US$300 million, or 23%, on an adjusted basis, compared with the same period last year, due to acquisitions, segment transfers, new store expenses, and investments in the core franchise.

The average FTE staffing levels on a year-to-date basis increased by 3,910, or 20%, compared with the same period last year. This increase was due to acquisitions, segment transfers, and 30 new store openings since the second quarter last year. The reported efficiency ratio on a year-to-date basis improved to 59.0%, compared with 61.4% in the same period last year. The adjusted efficiency ratio improved to 57.3%, compared with 58.3% for the same period last year.

    <<
    Business Outlook
    ----------------
    >>

Loan growth was within expectations for the quarter and strong volume growth is expected to continue through fiscal 2011 driven by residential mortgages and commercial lending. Organic deposit growth momentum is expected to continue due to maturing stores. Continued improvement in PCL on the originated book is expected through 2011 due to the improved overall asset quality of the portfolio. Expense growth will be managed closely, while investing in resources and infrastructure to support growth. While Regulation E was fully phased into earnings effective last quarter, the "Durbin Amendment", a provision in the Dodd-Frank Act, could put further pressure on earnings. The Dodd-Frank Act mandates the Federal Reserve to set interchange fees which are "reasonable and proportional" to the costs of processing such transactions. The proposed limits to be placed on debit interchange fees are expected to significantly reduce debit card interchange revenues. The draft regulations have been issued for public comments, and the financial impact cannot be determined at this time. However, mitigation strategies are being designed with the intent to reduce the potential adverse revenue impact resulting from the implementation of the new regulation.

    <<
    -------------------------------------------------------------------------
    TABLE 10: WHOLESALE BANKING
    -------------------------------------------------------------------------
    (millions of Canadian                                        For the six
     dollars, except          For the three months ended        months ended
     as noted)             --------------------------------------------------
                             Apr. 30   Jan. 31   Apr. 30   Apr. 30   Apr. 30
                                2011      2011      2010      2011      2010
    -------------------------------------------------------------------------
    Net interest income
     (TEB)                  $    384  $    375  $    456  $    759  $    969
    Non-interest income          201       352       252       553       652
    -------------------------------------------------------------------------
    Total revenue                585       727       708     1,312     1,621
    Provision for credit
     losses                        7         6        10        13        18
    Non-interest expenses        357       391       372       748       748
    Net income                   180       237       220       417       592
    -------------------------------------------------------------------------
    Selected volumes and
     ratios
    Risk-weighted assets
     (billions of
     Canadian dollars)            31        31        32        31        32
    Return on invested
     capital                   22.7%     29.4%     29.0%     26.1%     37.4%
    Efficiency ratio -
     reported                  61.0%     53.8%     52.5%     57.0%     46.1%
    Average number of full-
     time equivalent staff     3,438     3,388     3,110     3,413     3,100
    -------------------------------------------------------------------------

    Quarterly comparison - Q2 2011 vs. Q2 2010
    ------------------------------------------
    >>

Wholesale Banking net income for the quarter was $180 million, a decrease of $40 million, or 18%, compared with the second quarter last year. The decrease reflects lower revenue in equity derivatives, fixed income, and reduced investment portfolio gains, partially offset by recovery of a previously reserved tax item. The annualized return on invested capital for the quarter was 22.7%, compared with 29.0% in the second quarter last year.

Wholesale Banking revenue is derived primarily from capital markets and corporate lending. The capital markets businesses generate revenue from advisory, underwriting, trading, facilitation, and trade execution services. Revenue for the quarter was $585 million, a decrease of $123 million, or 17%, compared with the second quarter last year. This was primarily due to a decline in trading results in certain businesses. Equity derivatives revenue declined as a result of lower client volumes, and fixed income and credit trading declined due to continued economic uncertainty and lower credit spread volatility. In addition, segment transfers also contributed to the decline in trading revenue. Partially offsetting these decreases were improved currencies trading from robust client flow, strong cash equities and equity underwriting as global equity markets remained strong, and the positive impact of credit spread tightening on derivative exposures. Securities gains in the investment portfolio were minimal in the current quarter, as compared to higher gains in the same quarter last year.

PCL is composed of accrual costs for credit protection and specific provisions for credit losses net of any recoveries of previously recorded provisions. The net PCL for the quarter was $7 million, a decrease of $3 million, or 30%, lower than the second quarter last year. PCL in both periods is limited to the accrual cost of credit protection. Net impaired loans were $35 million, a decrease of $100 million, or 74%, over the second quarter last year.

Non-interest expenses for the quarter were $357 million, a decrease of $15 million, or 4%, compared with the second quarter last year, primarily due to lower variable compensation commensurate with reduced revenue, partially offset by higher costs related to risk and control infrastructure.

    <<
    Quarterly comparison - Q2 2011 vs. Q1 2011
    ------------------------------------------
    >>

Wholesale Banking net income for the quarter decreased by $57 million, or 24%, compared with the prior quarter. The decrease in net income was primarily due to lower equity trading and investment banking fees, and reduced gains in the investment portfolio, partially offset by reduced expenses and recovery of a previously reserved tax item. The annualized return on invested capital for the quarter was 22.7%, compared with 29.4% in the prior quarter.

Revenue for the quarter decreased $142 million, or 20%, compared with the prior quarter, primarily due to lower investment banking fees, and equity and fixed income trading as well as reduced gains in the investment portfolio. Investment banking fees decreased from strong levels in the prior quarter primarily due to lower M&A and credit origination. Equity derivatives revenue decreased due to lower client transactions compared to the prior quarter. International and U.S. fixed income decreased as the current quarter was affected by macroeconomic events in Asia, the Middle East, and Europe. Partially offsetting these decreases were improved currency trading as client volumes were strong, driven by the strengthening of the Canadian dollar and increased volatility, and the impact of tightening credit spreads on derivative exposures. Cash equities revenue increased due to higher commissions as global equity prices continued to rise and volumes increased.

PCL and net impaired loans were in line with the prior quarter.

Non-interest expenses for the quarter decreased $34 million, or 9%, compared with the prior quarter, primarily due to lower variable compensation.

    <<
    Year-to-date comparison - Q2 2011 vs. Q2 2010
    ---------------------------------------------
    >>

Wholesale Banking net income for the six months ended April 30, 2011 was $417 million, a decrease of $175 million, or 30%, compared with the same period last year. The decrease is primarily related to normalized market conditions in the current year, primarily reflected in reduced fixed income and credit trading. Partially offsetting this decrease were realized gains in the investment portfolio in the first quarter and improved equity underwriting. On a year-to-date basis, the annualized return on invested capital was 26.1%, more indicative of a normalized return as compared with 37.4% for the same period last year.

Revenue on a year-to-date basis was $1,312 million, a decrease of $309 million, or 19%, compared with the prior year, primarily due to unusually favourable market conditions in 2010, characterized by tightening credit spreads, wider bid-offer spreads, and elevated client activity which resulted in strong broad-based performance. Equity derivatives revenue decreased due to lower client transactions in the current period. Net interest income decreased in the current period due to segment transfers. Partially offsetting these decreases were improved underwriting fees as issuers sought to take advantage of higher equity market values. Debt underwriting remained solid due to high levels of issuance driven by the continued low interest rate environment. In addition, investment gains increased in the current year as the investment portfolio continues to unwind.

PCL on a year-to-date basis was $13 million, a decrease of $5 million, or 28%, compared with the same period last year. PCL in both the current and prior period is mainly composed of the accrual cost of CDS protection. In the same period last year, minor specific provisions were offset by a recovery.

On a year-to-date basis, non-interest expenses were $748 million, in line with the same period last year, primarily due to lower variable compensation offset by higher operating costs from investment in risk and control infrastructure.

    <<
    Business Outlook
    ----------------
    >>

As anticipated, year-to-date earnings for 2011 have decreased from the prior year and we expect that the full year results will also be lower. The prolonged low-rate environment and competitive pricing in the markets will continue to impede revenue growth; however, we expect increased contributions from new business initiatives and solid origination and advisory revenue as government and corporate clients reinforce balance sheets and the economy continues to recover.

    <<
    -------------------------------------------------------------------------
    TABLE 11: CORPORATE
    -------------------------------------------------------------------------
    (millions of Canadian                                        For the six
     dollars)                 For the three months ended        months ended
                           --------------------------------------------------
                             Apr. 30   Jan. 31   Apr. 30   Apr. 30   Apr. 30
                                2011      2011      2010      2011      2010
    -------------------------------------------------------------------------
    Net loss - reported     $   (205) $   (102) $   (217) $   (307) $   (337)
    -------------------------------------------------------------------------
    Adjustments for items
     of note:(1)
    Amortization of
     intangibles(2)              108       112       123       220       235
    Fair value of derivatives
     hedging the reclassified
     available-for-sale
     securities portfolio         (6)      (81)      (23)      (87)      (27)
    Fair value of credit
     default swaps hedging
     the corporate loan book,
     net of provision for
     credit losses                (2)        3         2         1         9
    Recovery of income
     taxes due to changes
     in statutory income
     tax rates                     -         -         -         -       (11)
    General allowance in
     Canadian Personal and
     Commercial Banking
     and Wholesale Banking         -         -       (44)        -       (44)
    Release of insurance
     claims                        -         -         -         -       (17)
    Integration charges
     relating to the
     Chrysler Financial
     acquisition                   3         -         -         3         -
    -------------------------------------------------------------------------
    Total adjustments for
     items of note               103        34        58       137       145
    -------------------------------------------------------------------------
    Net loss - adjusted     $   (102) $    (68) $   (159) $   (170) $   (192)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Decomposition of items
     included in net loss
     - adjusted
    Net securitization      $    (23) $    (21) $      2  $    (44) $     (3)
    Net corporate expenses      (119)     (113)      (98)     (232)     (160)
    Other                         40        66       (63)      106       (29)
    -------------------------------------------------------------------------
    Net loss - adjusted     $   (102) $    (68) $   (159) $   (170) $   (192)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) For explanations of items of note, see the "Non-GAAP Financial
        Measures - Reconciliation of Adjusted to Reported Net Income" table
        in the "How We Performed" section of this document.
    (2) Effective first quarter 2011, amortization of software is included in
        amortization of intangibles. For the purpose of the items of note
        only, software amortization is excluded from the amortization of
        intangibles.


    Quarterly comparison - Q2 2011 vs. Q2 2010
    ------------------------------------------
    >>

Corporate segment's reported net loss for the quarter was $205 million, compared with a reported net loss of $217 million in the second quarter last year. Adjusted net loss for the quarter was $102 million, compared with an adjusted net loss of $159 million. Compared with the same quarter last year, the lower adjusted net loss was primarily due to the change in allocation methodology implemented in the current year and more favourable results from treasury related activities. These favourable items were partially offset by lower gains from securitizations and an increase in net corporate expenses.

    <<
    Quarterly comparison - Q2 2011 vs. Q1 2011
    ------------------------------------------
    >>

Corporate segment's reported net loss for the quarter was $205 million, compared with a reported net loss of $102 million in the prior quarter. Adjusted net loss for the quarter was $102 million, compared with an adjusted net loss of $68 million. The higher adjusted net loss was mainly due to the impact of timing of treasury related net revenue.

    <<
    Year-to-date comparison - Q2 2011 vs. Q2 2010
    ---------------------------------------------
    >>

Corporate segment's reported net loss for the six months ended April 30, 2011 was $307 million, compared with a reported net loss of $337 million in the same period last year. Adjusted net loss for the six months ended April 30, 2011 was $170 million, compared with an adjusted net loss of $192 million. The lower adjusted net loss was primarily attributable to the change in allocation methodology implemented in Q1 2011 and higher earnings on unallocated capital. These favourable items were partially offset by higher net corporate expenses.

    <<
    Outlook
    -------
    >>

Changes in the Bank's charge-out and inter-segment transfer pricing methodologies implemented in the current fiscal year will reduce losses in the Corporate segment. While Corporate segment results are inherently difficult to predict by their nature and can contain some volatility, our estimated range for the remainder of fiscal 2011 is a net loss of $80 million to $120 million per quarter which is expected to result in a lower net loss than fiscal 2010 on an annual basis, primarily due to the abovementioned changes.

Segment Transfers

Effective the first quarter of 2011, operating results and associated loans for the U.S. credit cards business were transferred from Canadian Personal and Commercial Banking to U.S. Personal and Commercial Banking for segment reporting purposes. In addition, the Bank implemented a change in its allocation methodologies whereby certain items previously reported in the Corporate segment are now being allocated to other segments. These changes have no impact on the Bank's Interim Consolidated Financial Statements. Prior period results were not reclassified. The following table summarizes the segment transfers for the three and six months ended April 30, 2011.

    <<
    -------------------------------------------------------------------------
    TABLE 12: IMPACTS OF SEGMENT TRANSFERS
    -------------------------------------------------------------------------
    (millions of
     Canadian
     dollars)                                     For the three months ended
               --------------------------------------------------------------
                                                               Apr. 30, 2011
    -------------------------------------------------------------------------
                Canadian                   U.S.
                Personal               Personal
                     and                    and
              Commercial     Wealth  Commercial  Wholesale
                 Banking  Management    Banking    Banking  Corporate  Total
    -------------------------------------------------------------------------
    Increase/
     (decrease)
     to revenue     $(55)         $-        $35       $(18)       $38     $-
    Increase/
     (decrease)
     to expenses      (9)          2         17          3        (13)     -
    Increase/
     (decrease)
     to PCL          (13)          -         13          -          -      -
    Increase/
     (decrease)
     to net income   (23)         (1)         3        (15)        36      -
    -------------------------------------------------------------------------

                                                    For the six months ended
               --------------------------------------------------------------
                                                               Apr. 30, 2011
    -------------------------------------------------------------------------
    Increase/
     (decrease)
     to revenue    $(114)         $-        $71       $(36)       $79     $-
    Increase/
     (decrease)
     to expenses     (18)          4         34          6        (26)     -
    Increase/
     (decrease)
     to PCL          (28)          -         28          -          -      -
    Increase/
     (decrease)
     to net income   (49)         (2)         4        (30)        77      -
    -------------------------------------------------------------------------


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For all other shareholder inquiries, please contact TD Shareholder Relations at 416-944-6367 or 1-866-756-8936 or email tdshinfo@td.com. Please note that by leaving us an e-mail or voicemail message you are providing your consent for us to forward your inquiry to the appropriate party for response.

    <<
    General Information
    -------------------
    Contact Corporate & Public Affairs:
    416-982-8578

    Products and services: Contact TD Canada Trust, 24 hours a day, seven
    days a week:
    1-866-567-8888
    French: 1-866-233-2323
    Cantonese/Mandarin: 1-800-328-3698
    Telephone device for the hearing impaired (TTY): 1-800-361-1180

    Internet website: http://www.td.com
    Internet e-mail: customer.service@td.com


    Access to Quarterly Results Materials
    -------------------------------------
    >>

Interested investors, the media and others may view this second quarter earnings news release, results slides, supplementary financial information, and the Report to Shareholders on the TD website at http://www.td.com/investor/qr_2011.jsp.

    <<
    Quarterly Earnings Conference Call
    ----------------------------------
    >>

TD Bank Group will host an earnings conference call in Toronto, Ontario on May 26, 2011. The call will be webcast live via TD's website at 3 p.m. ET. The call and webcast will feature presentations by TD executives on the Bank's financial results for the second quarter, followed by a question-and-answer period with analysts. The presentation material referenced during the call will be available on the TD website at http://www.td.com/investor/qr_2011.jsp on May 26, 2011, by approximately 12 p.m. ET. A listen-only telephone line is available at 416-644-3414 or 1-800-814-4859 (toll free).

The webcast and presentations will be archived at http://www.td.com/investor/qr_2011.jsp. Replay of the teleconference will be available from 6 p.m. ET on May 26, 2011, until June 27, 2011, by calling 416-640-1917 or 1-877-289-8525 (toll free). The passcode is 4433527, followed by the pound key.

About TD Bank Group

The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group (TD). TD is the sixth largest bank in North America by branches and serves more than 19 million customers in four key businesses operating in a number of locations in key financial centres around the globe: Canadian Personal and Commercial Banking, including TD Canada Trust and TD Insurance; Wealth Management, including TD Waterhouse and an investment in TD Ameritrade; U.S. Personal and Commercial Banking, including TD Bank, America's Most Convenient Bank; and Wholesale Banking, including TD Securities. TD also ranks among the world's leading online financial services firms, with approximately 7 million online customers. TD had CDN$630 billion in assets on April 30, 2011. The Toronto-Dominion Bank trades under the symbol "TD" on the Toronto and New York Stock Exchanges.

SOURCE TD Bank Group

For further information: Rudy Sankovic, Senior Vice President, Investor Relations, 416-308-9030; Wojtek Dabrowski, Manager, Media Relations, 416-307-8149


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