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Yahoo
04-06-2025
- Business
- Yahoo
VERSABANK SECOND QUARTER RESULTS CONTINUE TO DEMONSTRATE STRENGTH OF BUSINESS MODEL AS US RPP PORTFOLIO EXPERIENCES STRONG GROWTH
All amounts are unaudited and in Canadian dollars and are based on financial statements prepared in compliance with International Accounting Standard 34 Interim Financial Reporting, unless otherwise noted. Our second quarter 2025 ("Q2 2025") unaudited Interim Consolidated Financial Statements for the period ended April 30, 2025 and Management's Discussion and Analysis ("MD&A"), are available online at SEDAR at and EDGAR at Supplementary Financial Information will also be available on our website at LONDON, ON, June 4, 2025 /CNW/ - VersaBank (or the "Bank") (TSX: VBNK) (NASDAQ: VBNK), a North American leader in business-to-business digital banking, as well as technology solutions for cybersecurity, today reported its results for the second quarter ended April 30, 2025. All figures are in Canadian dollars unless otherwise stated. CONSOLIDATED FINANCIAL SUMMARY (unaudited) As at or for the three months endedAs at or for the six months endedApril 30 January 31April 30 April 30 April 30(thousands of Canadian dollars, except per share amounts) 2025 2025 Change 2024 Change2025 2024 Change Financial resultsTotal revenue$ 30,139 $ 27,827 8 % $ 28,501 6 %$ 57,966 $ 57,352 1 %Cost of funds*3.52 % 3.84 % (8 %) 4.21 % (16 %)3.69 % 4.11 % (10 %)Net interest margin* 2.29 % 2.08 % 10 % 2.45 % (7 %)2.19 % 2.47 % (11 %)Net interest margin on credit assets* 2.59 % 2.36 % 10 % 2.52 % 3 %2.44 % 2.61 % (7 %)Return on average common equity* 6.67 % 7.02 % (5 %) 12.36 % (46 %)7.25 % 12.89 % (44 %)Net income 8,529 8,143 5 % 11,828 (28 %)16,672 24,527 (32 %)Net income per common share basic and diluted 0.26 0.28 (7 %) 0.45 (42 %)0.54 0.93 (42 %) Balance sheet and capital ratios** Total assets$ 5,047,133 $ 4,971,732 2 % $ 4,388,320 15 %$ 5,047,133 $ 4,388,320 15 %Book value per common share* 16.25 16.03 1 % 14.88 9 %16.25 14.88 9 %Common Equity Tier 1 (CET1) capital ratio 14.28 % 14.61 % (2 %) 11.63 % 23 %14.28 % 11.63 % 23 %Total capital ratio 17.34 % 17.91 % (3 %) 15.33 % 13 %17.34 % 15.33 % 13 %Leverage ratio9.61 % 9.67 % (1 %) 8.55 % 12 %9.61 % 8.55 % 12 % * See definitions under 'Non-GAAP and Other Financial Measures' in the Q2 2025 Management's Discussion and Analysis. ** Capital management and leverage measures are in accordance with OSFI's Capital Adequacy Requirements and Basel III Accord. SEGMENTED FINANCIAL SUMMARY (thousands of Canadian dollars)for the three months ended April 30, 2025 Digital Banking Digital Banking Digital Meteor DRTC Eliminations/ Consolidated Canada USA AdjustmentsNet interest income $ 25,525 $ 2,507 $ - $ - $ - $ 28,032 Non-interest income 122 (18) 569 1,789 (355) 2,107 Total revenue25,647 2,489 569 1,789 (355) 30,139 Provision for (recovery of) credit losses 954 (65) - - - 889 24,693 2,554 569 1,789 (355) 29,250 Non-interest expenses:Salaries and benefits 5,836 1,464 253 1,602 - 9,155General and administrative 5,267 800 343 665 (355) 6,720Premises and equipment 947 104 123 467 - 1,641 12,050 2,368 719 2,734 (355) 17,516 Income (loss) before income taxes 12,643 186 (150) (945) - 11,734 Income tax provision 3,443 53 2 (293) - 3,205 Net income (loss) $ 9,200 $ 133 $ (152) $ (652) $ - $ 8,529 Total assets$ 4,761,444 $ 281,153 $ 11,086 $ 25,224 $ (31,774) $ 5,047,133 Total liabilities$ 4,386,758 $ 144,517 $ 9,029 $ 19,708 $ (41,185) $ 4,518,827 for the three months ended January 31, 2025 Digital Banking Digital Banking Digital Meteor DRTC Eliminations/ Consolidated Canada USA AdjustmentsNet interest income $ 23,685 $ 2,039 $ - $ - $ - $ 25,724 Non-interest income 125 1 342 1,989 (354) 2,103 Total revenue23,810 2,040 342 1,989 (354) 27,827 Provision for (recovery of) credit losses 1,033 (9) - - - 1,024 22,777 2,049 342 1,989 (354) 26,803 Non-interest expenses:Salaries and benefits 5,289 1,164 217 1,944 - 8,614General and administrative 4,716 597 44 486 (354) 5,489Premises and equipment 903 109 48 536 - 1,596 10,908 1,870 309 2,966 (354) 15,699 Income (loss) before income taxes 11,869 179 33 (977) - 11,104 Income tax provision 3,105 76 - (220) - 2,961 Net income (loss) $ 8,764 $ 103 $ 33 $ (757) $ - $ 8,143 Total assets$ 4,707,062 $ 256,627 $ 11,236 $ 25,340 $ (28,533) $ 4,971,732 Total liabilities$ 4,350,601 $ 115,351 $ 8,922 $ 21,548 $ (45,985) $ 4,450,437 for the three months ended April 30, 2024 Digital Banking Digital Banking Digital Meteor DRTC Eliminations/ Consolidated Canada USA AdjustmentsNet interest income $ 26,242 $ - $ - $ - $ - $ 26,242 Non-interest income 262 - 82 2,254 (339) 2,259 Total revenue26,504 - 82 2,254 (339) 28,501 Provision for (recovery of) credit losses 16 - - - - 16 26,488 - 82 2,254 (339) 28,485 Non-interest expenses:Salaries and benefits 5,724 - 101 1,584 - 7,409General and administrative 3,445 - 72 379 (339) 3,557Premises and equipment 845 - 23 351 - 1,219 10,014 - 196 2,314 (339) 12,185 Income (loss) before income taxes 16,474 - (114) (60) - 16,300 Income tax provision 4,484 - 33 (45) - 4,472 Net income (loss) $ 11,990 $ - $ (147) $ (15) $ - $ 11,828 Total assets$ 4,378,863 $ - $ 3,022 $ 24,848 $ (18,413) $ 4,388,320 Total liabilities$ 3,982,924 $ - $ 1,010 $ 28,059 $ (23,776) $ 3,988,217 MANAGEMENT COMMENTARY "The second quarter of fiscal 2025 was highlighted by the initial contribution and steady ramp up of our Receivable Purchase Program in the United States post acquisition, alongside continued growth in Canada, which drove credit assets and total assets to new records, and which, along with the expected strong sequential expansion in net interest margin, drove revenue to a new all-time high," said David Taylor, President and Chief Executive Officer, VersaBank. "The fundamentals of our cloud-based, business-to-business model, with its significant operating leverage while increasingly mitigating risk, remain solidly in place. As we look out to the second half of fiscal 2025, we expect continued steady growth in our US Receivable Purchase Program, with a target of at least US$290 million by fiscal year end." "We also expect continuation of several favourable trends related to net interest margin that will support levels that are consistent with the higher levels we saw in the second quarter. In our CMHC residential construction loan program in Canada, we remain on pace to meet our target of $1 billion of authorized commitments by fiscal year end, and expect a steadily increasing contribution of this program as the commitments are drawn down." "In addition, we are aggressively pursuing the renewed opportunity for our proprietary Digital Deposit Receipts, as the US Administration's significantly more favorable stance on digital assets is precipitating public discussions around stablecoin strategies by the mainstream banking industry. We believe our Digital Deposit Receipts are not just the ultimate stablecoin but take the concept of the stablecoin to an entirely new level. Our Digital Deposit Receipts are a market ready solution – created by a bank for banks – that seamlessly integrate with existing bank software systems while addressing the major concerns of regulators." "As announced last week, with the objective to realize additional shareholder value, we have initiated a plan, subject to shareholder, regulatory and other approvals, to align our corporate structure with the standard bank framework with which the US and international investment communities are most familiar, with the proposed new holding company parent to be domiciled in the United States. We expect the proposed structural realignment to enable eligibility for inclusion in certain stock indices, including the Russell 2000, simplify our regulatory structure and reduce costs." HIGHLIGHTS FOR THE SECOND QUARTER OF FISCAL 2025 Consolidated (Canadian and U.S. Digital Banking Operations, Digital Meteor and DRTC) Total assets increased 15% year-over-year and 2% sequentially to a record $5.0 billion, with the increase driven primarily by growth of the Digital Banking operations' credit portfolios, in particular, the Receivable Purchase Program ("RPP") portfolio, in both the US and Canada; Consolidated total revenue increased 6% year-over-year and increased 8% sequentially to a record $30.1 million, with the year-over-year increase primarily due to the continued growth in credit assets, and the sequential growth additionally being driven by expansion of net interest margin in the Digital Banking operations; Consolidated net income was $8.5 million compared with $8.1 million for the first quarter of 2025 and $11.8 million for the second quarter of last year. Consolidated net income for the second quarter of fiscal 2025 included $0.9 million (before tax) of non-interest expenses related to preliminary costs associated the Bank's plan to realign its corporate structure to that of a standard US bank framework (the "Structural Realignment") which, remains subject to shareholder, regulatory, and other approvals and an atypically high unrealized (non-cash) foreign exchange translation loss (included in non-interest expense) resulting from depreciation of the US dollar during the second quarter of fiscal 2025. The decrease from the second quarter of 2024 was primarily due to higher non-interest expense for the US Digital Banking operations ahead of the launch and ramp up of the US RPP; Excluding the preliminary costs associated the Structural Realignment and the impact of unrealized (non-cash) foreign exchange translation, consolidated net income was $9.2 million; Consolidated earnings per share was $0.26 compared with $0.28 for the first quarter of 2025 and $0.45 for the second quarter of last year. In addition to the rationale described above, the decrease compared to the second quarter of fiscal 2024 was due to the 25% higher number of shares outstanding due to the treasury common share offering in December 2024; Excluding preliminary costs associated the Structural Realignment and the impact of unrealized (non-cash) foreign exchange translation, consolidated earnings per share was $0.28; On April 30, 2025, the Bank implemented a Normal Course Issuer Bid (NCIB), under which the Bank may purchase for cancellation up to 2,000,000 of its common shares representing approximately 8.99% of its public float (as of April 28, 2025; Subsequent to quarter end, the Bank announced its intention, subject to shareholder, regulatory and other approvals, to realign its corporate structure with the standard framework of a US bank, pursuant to which existing shares of the Bank (the current parent) would be exchanged for shares of VersaHoldings US Corp. (the new parent), the existing US-domiciled entity, which currently holds the Bank's US subsidiaries. The proposed Structural Realignment is intended to realize additional shareholder value, further mitigate risk and reducing corporate costs. Digital Banking Operations (Combined Canada and U.S.) Total Digital Banking operations (combined Canada and U.S.) credit assets increased 13% year-over-year and 4% sequentially to a record $4.52 billion, driven primarily by continued growth in the Bank's RPP portfolio, which increased 14% year-over-year and 4% sequentially; Total Digital Banking operations total revenue increased 6% year-over-year and increased 9% sequentially to a record $28.1 million, with the year-over-year increase primarily due to the continued growth in credit assets and the sequential growth being driven additionally by expansion of the net interest margin in the Digital Banking operations; Total Digital Banking operations net interest margin on credit assets increased 7 bps, or 3%, year-over-year and increased 23 bps, or 10%, sequentially to 2.59%, with the increases primarily due to the lower cost of funds, attributable to the renewal of maturing deposits at lower interest rates and the diminished impact of the atypically inverted yield curve that existed throughout fiscal 2024 and which is no longer inverted; Total Digital Banking operations overall net interest margin decreased 16 bps, or 7%, year-over-year and increased 21 bps, or 10%, sequentially to 2.29%, due to higher than typical liquidity. The Bank's net interest margin remained among the highest of the publicly traded Canadian Schedule I (federally licensed) banks; Total Digital Banking operations provision for credit losses as a percentage of average credit assets remained negligible at 0.08%, compared with a 12-quarter average of 0.02%, which remains among the lowest of the publicly traded Canadian Schedule I (federally licensed) banks; Total Digital Banking operations net income was $8.5 million compared with $8.1 million for the first quarter of 2025 and $11.8 million for the second quarter of last year. Net income for the second quarter of fiscal 2025 included $0.9 million (before tax) of non-interest expenses related to preliminary costs associated the Bank's proposed Structural Realignment and the atypically high unrealized (non-cash) foreign exchange translation during the second quarter of fiscal 2025. The decrease from the second quarter of 2024 was primarily due to higher non-interest expense for the US Digital Banking operations ahead of launch and ramp of the US RPP; Excluding the preliminary costs associated the Structural Realignment and the impact of unrealized (non-cash) foreign exchange translation, total Digital Banking operations net income was $9.2 million; Total Digital Banking operations earnings per share was $0.26 compared with $0.28 for the first quarter of 2025 and $0.45 for the second quarter of last year. In addition to the rationale described above, the decrease compared to the second quarter of fiscal 2024 was due to the 25% higher number of shares outstanding equity offering; Excluding the preliminary costs associated with the Structural Realignment and the impact of unrealized (non-cash) foreign exchange translation, Total Digital Banking operations earnings per share was $0.31. Digital Banking Operations Canada Canadian Digital Banking operations net income was $9.2 million compared with $8.8 million for the first quarter of 2025 and $12.0 million for the second quarter of last year; Excluding the preliminary costs associated the Structural Realignment and the impact of unrealized (non-cash) foreign exchange translation, Canadian Digital Banking operations net income was $9.9 million; Canadian Digital Banking operations earnings per share was $0.28 compared with $0.30 for the first quarter of 2025 and $0.46 for the second quarter of last year; Excluding preliminary costs associated the Structural Realignment and the impact of unrealized (non-cash) foreign exchange translation, Canadian Digital Banking operations earnings per share was $0.30; Canadian Digital Banking operations efficiency ratio, excluding preliminary costs associated the Structural Realignment and the impact of unrealized (non-cash) foreign exchange translation, was 44% compared with 47% for the first quarter of 2025 and 38% for the second quarter of last year; and, Canadian Digital Banking operations return on common equity (excluding DRTC), excluding preliminary costs associated the Structural Realignment and the impact of unrealized (non-cash) foreign exchange translation, was 7.16% compared with 7.56% for the first quarter of 2025 and 12.53% for the second quarter of last year. The year over year decrease is predominantly due to the treasury common share offering in December 2024, ahead of the deployment of that capital for revenue generation. Digital Banking Operations US US Digital Banking operations net income was $133,000 compared with $103,000 for the first quarter of 2025. There are no second quarter 2024 comparable figures for the US Digital Banking operations as that segment did not exist until the third quarter of 2024. US Digital Banking operations include expenses that are being incurred ahead of asset growth and revenue generated by the ramp up of the RPP in the U.S.; Entered into an agreement with its second US RPP partner (post US-bank acquisition) under which the partner will leverage VersaBank's innovative RPP to fund a portion of its loan and lease originations; and, As of April 30, 2025, the US RPP portfolio surpassed US$70 million (approximately CAD$98 million) in assets in only 75 days since adding its first partner US RPP partner on January 30, 2025. The Bank is on target to achieve US$290 million in US RPP in fiscal 2025. Digital Meteor Inc. Digital Meteor's net loss was $152,000 compared with a net loss of $33,000 for the first quarter of 2025 and a net loss of $147,000 for the second quarter of last year. DRTC's Cybersecurity Services Operations DRTC's net loss was $652,000 compared with net loss of $757,000 for the first quarter of 2025 and a net loss of $15,000 for the second quarter of last year. FINANCIAL SUMMARY (unaudited) for the three months endedfor the six months endedApril 30 April 30April 30 April 30 (thousands of Canadian dollars, except per share amounts) 2025 20242025 2024 Results of operations Interest income $ 70,976 $ 71,243$ 144,222 $ 140,535Net interest income 28,032 26,24253,756 52,810Non-interest income 2,107 2,2594,210 4,542Total revenue 30,139 28,50157,966 57,352Provision for (recovery of) credit losses 889 161,913 (111)Non-interest expenses 17,516 12,18533,215 24,209 Digital Banking 14,418 10,01427,196 20,429 DRTC 2,734 2,3145,700 4,023 Digital Meteor 719 1961,028 433Net income 8,529 11,82816,672 24,527Income per common share: Basic $ 0.26 $ 0.45$ 0.54 $ 0.93 Diluted$ 0.26 $ 0.45$ 0.54 $ 0.93Dividends paid on preferred shares $ - $ 247$ - $ 494Dividends paid on common shares $ 813 $ 650$ 1,626 $ 1,300Yield* 5.81 % 6.66 %5.88 % 6.58 %Cost of funds* 3.52 % 4.21 %3.69 % 4.11 %Net interest margin* 2.29 % 2.45 %2.19 % 2.47 %Net interest margin on credit assets* 2.59 % 2.52 %2.44 % 2.61 %Return on average common equity* 6.67 % 12.36 %7.25 % 12.89 %Book value per common share* $ 16.25 $ 14.88$ 16.25 $ 14.88Efficiency ratio* 58 % 43 %57 % 42 %Efficiency ratio - Digital Banking* 52 % 38 %51 % 39 %Return on average total assets* 0.70 % 1.08 %0.68 % 1.13 %Provision (recovery) for credit losses as a % of average credit assets* 0.08 % 0.00 %0.09 % (0.01 %)as at Balance Sheet Summary Cash $ 340,186 $ 198,808$ 340,186 $ 198,808Securities104,807 103,769104,807 103,769Credit assets, net of allowance for credit losses 4,523,812 4,018,4584,523,812 4,018,458Average credit assets 4,435,280 4,001,3704,379,964 3,934,431Total assets5,047,133 4,388,3205,047,133 4,388,320Deposits4,205,185 3,693,4954,205,185 3,693,495Subordinated notes payable 101,844 101,108101,844 101,108Shareholders' equity 528,306 400,103528,306 400,103 Capital ratios** Risk-weighted assets $ 3,551,398 $ 3,224,822$ 3,551,398 $ 3,224,822Common Equity Tier 1 capital 507,222 375,153507,222 375,153Total regulatory capital 615,770 494,297615,770 494,297Common Equity Tier 1 (CET1) ratio 14.28 % 11.63 %14.28 % 11.63 %Tier 1 capital ratio 14.28 % 12.06 %14.28 % 12.06 %Total capital ratio 17.34 % 15.33 %17.34 % 15.33 %Leverage ratio 9.61 % 8.55 %9.61 % 8.55 % * See definitions under 'Non-GAAP and Other Financial Measures' in the Q2 2025 Management's Discussion and Analysis. ** Capital management and leverage measures are in accordance with OSFI's Capital Adequacy Requirements and Basel III Accord. This news release is intended to be read in conjunction with the Bank's Consolidated Financial Statements and Management's Discussion & Analysis (MD&A) for the three & six months ended April 30, 2025, which are available on VersaBank's website at SEDAR+ at and EDGAR at About VersaBank VersaBank is a North American bank with a difference. Federally chartered in both Canada and the US, VersaBank has a branchless, digital, business-to-business model based on its proprietary state-of-the-art technology that enables it to profitably address underserved segments of the banking industry in a significantly risk mitigated manner. Because VersaBank obtains substantially all of its deposits and undertakes the majority of its funding electronically through financial intermediary partners, it benefits from significant operating leverage that drives efficiency and return on common equity. In August 2024, VersaBank launched its unique Receivable Purchase Program funding solution for point-of-sale finance companies, which has been highly successful in Canada for nearly 15 years, to the underserved multi-trillion-dollar US market. VersaBank also owns Washington, DC-based DRT Cyber Inc., a North America leader in the provision of cyber security services to address the rapidly growing volume of cyber threats challenging financial institutions, multi-national corporations and government entities. Through its wholly owned subsidiary, Digital Meteor, Inc. ("Digital Meteor"), VersaBank owns proprietary intellectual property and technology to enable the next generation of digital assets for the banking and financial community, including the Bank's revolutionary Digital Deposit Receipts (DDRs). VersaBank's Common Shares trade on the Toronto Stock Exchange and NASDAQ under the symbol VBNK. Forward-Looking Statements This press release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws ("forward-looking statements") including statements regarding the ability to obtain shareholder, regulatory and other approvals of the structural alignment; the expected realization of additional shareholder value, the simplification of the regulatory structure and the reduction of costs as a result of the proposed structural alignment; the key elements of the proposed structural alignment; the ability to obtain inclusion on stock indices, including the Russell 2000; the ability to continue to grow the US Receive Purchase Program; the ability to expand our net interest margin; and the ability to continue to grow the CMHC residential construction loan program. Forward-looking statements of this type are included in this document and may be included in other filings and with Canadian securities regulators or the US Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the "safe harbor" provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. The statements in this press release that relate to the future are forward-looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, many of which are out of VersaBank's control. Risks exist that predictions, forecasts, projections and other forward-looking statements will not be achieved. Readers are cautioned not to place undue reliance on these forward-looking statements as a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, the strength of the Canadian and US economies in general and the strength of the local economies within Canada and the US in which VersaBank conducts operations; the effects of changes in monetary and fiscal policy, including changes in interest rate policies of the Bank of Canada and the US Federal Reserve; global commodity prices; the effects of competition in the markets in which VersaBank operates; changes in trade laws and tariffs; inflation; capital market fluctuations; the timely development and introduction of new products in receptive markets; the impact of changes in the laws and regulations pertaining to financial services; changes in tax laws; technological changes; unexpected judicial or regulatory proceedings; unexpected changes in consumer spending and savings habits; the impact of wars or conflicts and the impact of both on global supply chains and markets; the impact of outbreaks of disease or illness that affect local, national or international economies; the possible effects on our business of terrorist activities; natural disasters and disruptions to public infrastructure, such as transportation, communications, power or water supply; and VersaBank's anticipation of and success in managing the risks implicated by the foregoing. Completion of VersaBank's plan to realign its corporate structure to a standard US bank framework is subject to numerous factors, many of which are beyond the Bank's control, including but not limited to, the failure to obtain required shareholder, regulatory and other approvals, and other important factors disclosed previously and from time to time in the Bank's filings with the SEC and the securities commissions or similar securities regulatory authorities in each of the provinces or territories of Canada. The foregoing list of important factors is not exhaustive. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The forward-looking information contained in the management's discussion and analysis is presented to assist VersaBank shareholders and others in understanding VersaBank's financial position and may not be appropriate for any other purposes. For a detailed discussion of certain key factors that may affect VersaBank's future results, please see VersaBank's annual MD&A for the year ended October 31, 2024. Except as required by securities law, VersaBank does not undertake to update any forward-looking statement that is contained in this press release or made from time to time by VersaBank or on its behalf. Conference Call VersaBank will be hosting a conference call and webcast today, Wednesday, June 4, 2025, at 9:00 a.m. (ET) to discuss its first quarter results, featuring a presentation by David Taylor, President & CEO and John Asma, CFO, followed by a question-and-answer period. To join the conference call by telephone without operator assistance, you may register and enter your phone number in advance at: to receive an instant automated call back. Alternatively, you may also dial direct and be entered into the call by an Operator at: 1-416-945-7677 or 1-888-699-1199 (toll free). For those preferring to listen to the presentation via the Internet, a live webcast will be available at or on the Bank's web site at: The slide presentation management will use during the conference call/webcast will be available on the Bank's web site at: The archived webcast presentation will be available for 90 days following the live event at and on the Bank's web site at: Replay of the teleconference will be available until July 4, 2025 by calling 289-819-1450 or 1-888-660-6345 (toll free) and the passcode is: 07223# Visit our website at: Follow VersaBank on Facebook, Instagram, LinkedIn and X. View original content to download multimedia: SOURCE VersaBank View original content to download multimedia:
Cision Canada
04-06-2025
- Business
- Cision Canada
VERSABANK SECOND QUARTER RESULTS CONTINUE TO DEMONSTRATE STRENGTH OF BUSINESS MODEL AS US RPP PORTFOLIO EXPERIENCES STRONG GROWTH
All amounts are unaudited and in Canadian dollars and are based on financial statements prepared in compliance with International Accounting Standard 34 Interim Financial Reporting, unless otherwise noted. Our second quarter 2025 ("Q2 2025") unaudited Interim Consolidated Financial Statements for the period ended April 30, 2025 and Management's Discussion and Analysis ("MD&A"), are available online at SEDAR at and EDGAR at Supplementary Financial Information will also be available on our website at LONDON, ON, June 4, 2025 /CNW/ - VersaBank (or the "Bank") (TSX: VBNK) (NASDAQ: VBNK), a North American leader in business-to-business digital banking, as well as technology solutions for cybersecurity, today reported its results for the second quarter ended April 30, 2025. All figures are in Canadian dollars unless otherwise stated. (unaudited) As at or for the three months ended As at or for the six months ended April 30 January 31 April 30 April 30 April 30 (thousands of Canadian dollars, except per share amounts) 2025 2025 Change 2024 Change 2025 2024 Change Financial results Total revenue $ 30,139 $ 27,827 8 % $ 28,501 6 % $ 57,966 $ 57,352 1 % Cost of funds* 3.52 % 3.84 % (8 %) 4.21 % (16 %) 3.69 % 4.11 % (10 %) Net interest margin* 2.29 % 2.08 % 10 % 2.45 % (7 %) 2.19 % 2.47 % (11 %) Net interest margin on credit assets* 2.59 % 2.36 % 10 % 2.52 % 3 % 2.44 % 2.61 % (7 %) Return on average common equity* 6.67 % 7.02 % (5 %) 12.36 % (46 %) 7.25 % 12.89 % (44 %) Net income 8,529 8,143 5 % 11,828 (28 %) 16,672 24,527 (32 %) Net income per common share basic and diluted 0.26 0.28 (7 %) 0.45 (42 %) 0.54 0.93 (42 %) Balance sheet and capital ratios** Total assets $ 5,047,133 $ 4,971,732 2 % $ 4,388,320 15 % $ 5,047,133 $ 4,388,320 15 % Book value per common share* 16.25 16.03 1 % 14.88 9 % 16.25 14.88 9 % Common Equity Tier 1 (CET1) capital ratio 14.28 % 14.61 % (2 %) 11.63 % 23 % 14.28 % 11.63 % 23 % Total capital ratio 17.34 % 17.91 % (3 %) 15.33 % 13 % 17.34 % 15.33 % 13 % Leverage ratio 9.61 % 9.67 % (1 %) 8.55 % 12 % 9.61 % 8.55 % 12 % * See definitions under 'Non-GAAP and Other Financial Measures' in the Q2 2025 Management's Discussion and Analysis. ** Capital management and leverage measures are in accordance with OSFI's Capital Adequacy Requirements and Basel III Accord. SEGMENTED FINANCIAL SUMMARY (thousands of Canadian dollars) for the three months ended April 30, 2025 Digital Banking Digital Banking Digital Meteor DRTC Eliminations/ Consolidated Canada USA Adjustments Net interest income $ 25,525 $ 2,507 $ - $ - $ - $ 28,032 Non-interest income 122 (18) 569 1,789 (355) 2,107 Total revenue 25,647 2,489 569 1,789 (355) 30,139 Provision for (recovery of) credit losses 954 (65) - - - 889 24,693 2,554 569 1,789 (355) 29,250 Non-interest expenses: Salaries and benefits 5,836 1,464 253 1,602 - 9,155 General and administrative 5,267 800 343 665 (355) 6,720 Premises and equipment 947 104 123 467 - 1,641 12,050 2,368 719 2,734 (355) 17,516 Income (loss) before income taxes 12,643 186 (150) (945) - 11,734 Income tax provision 3,443 53 2 (293) - 3,205 Net income (loss) $ 9,200 $ 133 $ (152) $ (652) $ - $ 8,529 Total assets $ 4,761,444 $ 281,153 $ 11,086 $ 25,224 $ (31,774) $ 5,047,133 Total liabilities $ 4,386,758 $ 144,517 $ 9,029 $ 19,708 $ (41,185) $ 4,518,827 for the three months ended January 31, 2025 Digital Banking Digital Banking Digital Meteor DRTC Eliminations/ Consolidated Canada USA Adjustments Net interest income $ 23,685 $ 2,039 $ - $ - $ - $ 25,724 Non-interest income 125 1 342 1,989 (354) 2,103 Total revenue 23,810 2,040 342 1,989 (354) 27,827 Provision for (recovery of) credit losses 1,033 (9) - - - 1,024 22,777 2,049 342 1,989 (354) 26,803 Non-interest expenses: Salaries and benefits 5,289 1,164 217 1,944 - 8,614 General and administrative 4,716 597 44 486 (354) 5,489 Premises and equipment 903 109 48 536 - 1,596 10,908 1,870 309 2,966 (354) 15,699 Income (loss) before income taxes 11,869 179 33 (977) - 11,104 Income tax provision 3,105 76 - (220) - 2,961 Net income (loss) $ 8,764 $ 103 $ 33 $ (757) $ - $ 8,143 Total assets $ 4,707,062 $ 256,627 $ 11,236 $ 25,340 $ (28,533) $ 4,971,732 Total liabilities $ 4,350,601 $ 115,351 $ 8,922 $ 21,548 $ (45,985) $ 4,450,437 for the three months ended April 30, 2024 Digital Banking Digital Banking Digital Meteor DRTC Eliminations/ Consolidated Canada USA Adjustments Net interest income $ 26,242 $ - $ - $ - $ - $ 26,242 Non-interest income 262 - 82 2,254 (339) 2,259 Total revenue 26,504 - 82 2,254 (339) 28,501 Provision for (recovery of) credit losses 16 - - - - 16 26,488 - 82 2,254 (339) 28,485 Non-interest expenses: Salaries and benefits 5,724 - 101 1,584 - 7,409 General and administrative 3,445 - 72 379 (339) 3,557 Premises and equipment 845 - 23 351 - 1,219 10,014 - 196 2,314 (339) 12,185 Income (loss) before income taxes 16,474 - (114) (60) - 16,300 Income tax provision 4,484 - 33 (45) - 4,472 Net income (loss) $ 11,990 $ - $ (147) $ (15) $ - $ 11,828 Total assets $ 4,378,863 $ - $ 3,022 $ 24,848 $ (18,413) $ 4,388,320 Total liabilities $ 3,982,924 $ - $ 1,010 $ 28,059 $ (23,776) $ 3,988,217 MANAGEMENT COMMENTARY "The second quarter of fiscal 2025 was highlighted by the initial contribution and steady ramp up of our Receivable Purchase Program in the United States post acquisition, alongside continued growth in Canada, which drove credit assets and total assets to new records, and which, along with the expected strong sequential expansion in net interest margin, drove revenue to a new all-time high," said David Taylor, President and Chief Executive Officer, VersaBank. "The fundamentals of our cloud-based, business-to-business model, with its significant operating leverage while increasingly mitigating risk, remain solidly in place. As we look out to the second half of fiscal 2025, we expect continued steady growth in our US Receivable Purchase Program, with a target of at least US$290 million by fiscal year end." "We also expect continuation of several favourable trends related to net interest margin that will support levels that are consistent with the higher levels we saw in the second quarter. In our CMHC residential construction loan program in Canada, we remain on pace to meet our target of $1 billion of authorized commitments by fiscal year end, and expect a steadily increasing contribution of this program as the commitments are drawn down." "In addition, we are aggressively pursuing the renewed opportunity for our proprietary Digital Deposit Receipts, as the US Administration's significantly more favorable stance on digital assets is precipitating public discussions around stablecoin strategies by the mainstream banking industry. We believe our Digital Deposit Receipts are not just the ultimate stablecoin but take the concept of the stablecoin to an entirely new level. Our Digital Deposit Receipts are a market ready solution – created by a bank for banks – that seamlessly integrate with existing bank software systems while addressing the major concerns of regulators." "As announced last week, with the objective to realize additional shareholder value, we have initiated a plan, subject to shareholder, regulatory and other approvals, to align our corporate structure with the standard bank framework with which the US and international investment communities are most familiar, with the proposed new holding company parent to be domiciled in the United States. We expect the proposed structural realignment to enable eligibility for inclusion in certain stock indices, including the Russell 2000, simplify our regulatory structure and reduce costs." HIGHLIGHTS FOR THE SECOND QUARTER OF FISCAL 2025 Consolidated (Canadian and U.S. Digital Banking Operations, Digital Meteor and DRTC) Total assets increased 15% year-over-year and 2% sequentially to a record $5.0 billion, with the increase driven primarily by growth of the Digital Banking operations' credit portfolios, in particular, the Receivable Purchase Program ("RPP") portfolio, in both the US and Canada; Consolidated total revenue increased 6% year-over-year and increased 8% sequentially to a record $30.1 million, with the year-over-year increase primarily due to the continued growth in credit assets, and the sequential growth additionally being driven by expansion of net interest margin in the Digital Banking operations; Consolidated net income was $8.5 million compared with $8.1 million for the first quarter of 2025 and $11.8 million for the second quarter of last year. Consolidated net income for the second quarter of fiscal 2025 included $0.9 million (before tax) of non-interest expenses related to preliminary costs associated the Bank's plan to realign its corporate structure to that of a standard US bank framework (the "Structural Realignment") which, remains subject to shareholder, regulatory, and other approvals and an atypically high unrealized (non-cash) foreign exchange translation loss (included in non-interest expense) resulting from depreciation of the US dollar during the second quarter of fiscal 2025. The decrease from the second quarter of 2024 was primarily due to higher non-interest expense for the US Digital Banking operations ahead of the launch and ramp up of the US RPP; Excluding the preliminary costs associated the Structural Realignment and the impact of unrealized (non-cash) foreign exchange translation, consolidated net income was $9.2 million; Consolidated earnings per share was $0.26 compared with $0.28 for the first quarter of 2025 and $0.45 for the second quarter of last year. In addition to the rationale described above, the decrease compared to the second quarter of fiscal 2024 was due to the 25% higher number of shares outstanding due to the treasury common share offering in December 2024; Excluding preliminary costs associated the Structural Realignment and the impact of unrealized (non-cash) foreign exchange translation, consolidated earnings per share was $0.28; On April 30, 2025, the Bank implemented a Normal Course Issuer Bid (NCIB), under which the Bank may purchase for cancellation up to 2,000,000 of its common shares representing approximately 8.99% of its public float (as of April 28, 2025; Subsequent to quarter end, the Bank announced its intention, subject to shareholder, regulatory and other approvals, to realign its corporate structure with the standard framework of a US bank, pursuant to which existing shares of the Bank (the current parent) would be exchanged for shares of VersaHoldings US Corp. (the new parent), the existing US-domiciled entity, which currently holds the Bank's US subsidiaries. The proposed Structural Realignment is intended to realize additional shareholder value, further mitigate risk and reducing corporate costs. Digital Banking Operations (Combined Canada and U.S.) Total Digital Banking operations (combined Canada and U.S.) credit assets increased 13% year-over-year and 4% sequentially to a record $4.52 billion, driven primarily by continued growth in the Bank's RPP portfolio, which increased 14% year-over-year and 4% sequentially; Total Digital Banking operations total revenue increased 6% year-over-year and increased 9% sequentially to a record $28.1 million, with the year-over-year increase primarily due to the continued growth in credit assets and the sequential growth being driven additionally by expansion of the net interest margin in the Digital Banking operations; Total Digital Banking operations net interest margin on credit assets increased 7 bps, or 3%, year-over-year and increased 23 bps, or 10%, sequentially to 2.59%, with the increases primarily due to the lower cost of funds, attributable to the renewal of maturing deposits at lower interest rates and the diminished impact of the atypically inverted yield curve that existed throughout fiscal 2024 and which is no longer inverted; Total Digital Banking operations overall net interest margin decreased 16 bps, or 7%, year-over-year and increased 21 bps, or 10%, sequentially to 2.29%, due to higher than typical liquidity. The Bank's net interest margin remained among the highest of the publicly traded Canadian Schedule I (federally licensed) banks; Total Digital Banking operations provision for credit losses as a percentage of average credit assets remained negligible at 0.08%, compared with a 12-quarter average of 0.02%, which remains among the lowest of the publicly traded Canadian Schedule I (federally licensed) banks; Total Digital Banking operations net income was $8.5 million compared with $8.1 million for the first quarter of 2025 and $11.8 million for the second quarter of last year. Net income for the second quarter of fiscal 2025 included $0.9 million (before tax) of non-interest expenses related to preliminary costs associated the Bank's proposed Structural Realignment and the atypically high unrealized (non-cash) foreign exchange translation during the second quarter of fiscal 2025. The decrease from the second quarter of 2024 was primarily due to higher non-interest expense for the US Digital Banking operations ahead of launch and ramp of the US RPP; Excluding the preliminary costs associated the Structural Realignment and the impact of unrealized (non-cash) foreign exchange translation, total Digital Banking operations net income was $9.2 million; Total Digital Banking operations earnings per share was $0.26 compared with $0.28 for the first quarter of 2025 and $0.45 for the second quarter of last year. In addition to the rationale described above, the decrease compared to the second quarter of fiscal 2024 was due to the 25% higher number of shares outstanding equity offering; Excluding the preliminary costs associated with the Structural Realignment and the impact of unrealized (non-cash) foreign exchange translation, Total Digital Banking operations earnings per share was $0.31. Digital Banking Operations Canada Canadian Digital Banking operations net income was $9.2 million compared with $8.8 million for the first quarter of 2025 and $12.0 million for the second quarter of last year; Excluding the preliminary costs associated the Structural Realignment and the impact of unrealized (non-cash) foreign exchange translation, Canadian Digital Banking operations net income was $9.9 million; Canadian Digital Banking operations earnings per share was $0.28 compared with $0.30 for the first quarter of 2025 and $0.46 for the second quarter of last year; Excluding preliminary costs associated the Structural Realignment and the impact of unrealized (non-cash) foreign exchange translation, Canadian Digital Banking operations earnings per share was $0.30; Canadian Digital Banking operations efficiency ratio, excluding preliminary costs associated the Structural Realignment and the impact of unrealized (non-cash) foreign exchange translation, was 44% compared with 47% for the first quarter of 2025 and 38% for the second quarter of last year; and, Canadian Digital Banking operations return on common equity (excluding DRTC), excluding preliminary costs associated the Structural Realignment and the impact of unrealized (non-cash) foreign exchange translation, was 7.16% compared with 7.56% for the first quarter of 2025 and 12.53% for the second quarter of last year. The year over year decrease is predominantly due to the treasury common share offering in December 2024, ahead of the deployment of that capital for revenue generation. Digital Banking Operations US US Digital Banking operations net income was $133,000 compared with $103,000 for the first quarter of 2025. There are no second quarter 2024 comparable figures for the US Digital Banking operations as that segment did not exist until the third quarter of 2024. US Digital Banking operations include expenses that are being incurred ahead of asset growth and revenue generated by the ramp up of the RPP in the U.S.; Entered into an agreement with its second US RPP partner (post US-bank acquisition) under which the partner will leverage VersaBank's innovative RPP to fund a portion of its loan and lease originations; and, As of April 30, 2025, the US RPP portfolio surpassed US$70 million (approximately CAD$98 million) in assets in only 75 days since adding its first partner US RPP partner on January 30, 2025. The Bank is on target to achieve US$290 million in US RPP in fiscal 2025. DRTC's net loss was $652,000 compared with net loss of $757,000 for the first quarter of 2025 and a net loss of $15,000 for the second quarter of last year. FINANCIAL SUMMARY (unaudited) for the three months ended for the six months ended April 30 April 30 April 30 April 30 (thousands of Canadian dollars, except per share amounts) 2025 2024 2025 2024 Results of operations Interest income $ 70,976 $ 71,243 $ 144,222 $ 140,535 Net interest income 28,032 26,242 53,756 52,810 Non-interest income 2,107 2,259 4,210 4,542 Total revenue 30,139 28,501 57,966 57,352 Provision for (recovery of) credit losses 889 16 1,913 (111) Non-interest expenses 17,516 12,185 33,215 24,209 Digital Banking 14,418 10,014 27,196 20,429 DRTC 2,734 2,314 5,700 4,023 Digital Meteor 719 196 1,028 433 Net income 8,529 11,828 16,672 24,527 Income per common share: Basic $ 0.26 $ 0.45 $ 0.54 $ 0.93 Diluted $ 0.26 $ 0.45 $ 0.54 $ 0.93 Dividends paid on preferred shares $ - $ 247 $ - $ 494 Dividends paid on common shares $ 813 $ 650 $ 1,626 $ 1,300 Yield* 5.81 % 6.66 % 5.88 % 6.58 % Cost of funds* 3.52 % 4.21 % 3.69 % 4.11 % Net interest margin* 2.29 % 2.45 % 2.19 % 2.47 % Net interest margin on credit assets* 2.59 % 2.52 % 2.44 % 2.61 % Return on average common equity* 6.67 % 12.36 % 7.25 % 12.89 % Book value per common share* $ 16.25 $ 14.88 $ 16.25 $ 14.88 Efficiency ratio* 58 % 43 % 57 % 42 % Efficiency ratio - Digital Banking* 52 % 38 % 51 % 39 % Return on average total assets* 0.70 % 1.08 % 0.68 % 1.13 % Provision (recovery) for credit losses as a % of average credit assets* 0.08 % 0.00 % 0.09 % (0.01 %) as at Balance Sheet Summary Cash $ 340,186 $ 198,808 $ 340,186 $ 198,808 Securities 104,807 103,769 104,807 103,769 Credit assets, net of allowance for credit losses 4,523,812 4,018,458 4,523,812 4,018,458 Average credit assets 4,435,280 4,001,370 4,379,964 3,934,431 Total assets 5,047,133 4,388,320 5,047,133 4,388,320 Deposits 4,205,185 3,693,495 4,205,185 3,693,495 Subordinated notes payable 101,844 101,108 101,844 101,108 Shareholders' equity 528,306 400,103 528,306 400,103 Capital ratios** Risk-weighted assets $ 3,551,398 $ 3,224,822 $ 3,551,398 $ 3,224,822 Common Equity Tier 1 capital 507,222 375,153 507,222 375,153 Total regulatory capital 615,770 494,297 615,770 494,297 Common Equity Tier 1 (CET1) ratio 14.28 % 11.63 % 14.28 % 11.63 % Tier 1 capital ratio 14.28 % 12.06 % 14.28 % 12.06 % Total capital ratio 17.34 % 15.33 % 17.34 % 15.33 % Leverage ratio 9.61 % 8.55 % 9.61 % 8.55 % * See definitions under 'Non-GAAP and Other Financial Measures' in the Q2 2025 Management's Discussion and Analysis. ** Capital management and leverage measures are in accordance with OSFI's Capital Adequacy Requirements and Basel III Accord. This news release is intended to be read in conjunction with the Bank's Consolidated Financial Statements and Management's Discussion & Analysis (MD&A) for the three & six months ended April 30, 2025, which are available on VersaBank's website at SEDAR+ at and EDGAR at About VersaBank VersaBank is a North American bank with a difference. Federally chartered in both Canada and the US, VersaBank has a branchless, digital, business-to-business model based on its proprietary state-of-the-art technology that enables it to profitably address underserved segments of the banking industry in a significantly risk mitigated manner. Because VersaBank obtains substantially all of its deposits and undertakes the majority of its funding electronically through financial intermediary partners, it benefits from significant operating leverage that drives efficiency and return on common equity. In August 2024, VersaBank launched its unique Receivable Purchase Program funding solution for point-of-sale finance companies, which has been highly successful in Canada for nearly 15 years, to the underserved multi-trillion-dollar US market. VersaBank also owns Washington, DC-based DRT Cyber Inc., a North America leader in the provision of cyber security services to address the rapidly growing volume of cyber threats challenging financial institutions, multi-national corporations and government entities. Through its wholly owned subsidiary, Digital Meteor, Inc. ("Digital Meteor"), VersaBank owns proprietary intellectual property and technology to enable the next generation of digital assets for the banking and financial community, including the Bank's revolutionary Digital Deposit Receipts (DDRs). VersaBank's Common Shares trade on the Toronto Stock Exchange and NASDAQ under the symbol VBNK. Forward-Looking Statements This press release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws ("forward-looking statements") including statements regarding the ability to obtain shareholder, regulatory and other approvals of the structural alignment; the expected realization of additional shareholder value, the simplification of the regulatory structure and the reduction of costs as a result of the proposed structural alignment; the key elements of the proposed structural alignment; the ability to obtain inclusion on stock indices, including the Russell 2000; the ability to continue to grow the US Receive Purchase Program; the ability to expand our net interest margin; and the ability to continue to grow the CMHC residential construction loan program. Forward-looking statements of this type are included in this document and may be included in other filings and with Canadian securities regulators or the US Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the "safe harbor" provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. The statements in this press release that relate to the future are forward-looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, many of which are out of VersaBank's control. Risks exist that predictions, forecasts, projections and other forward-looking statements will not be achieved. Readers are cautioned not to place undue reliance on these forward-looking statements as a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, the strength of the Canadian and US economies in general and the strength of the local economies within Canada and the US in which VersaBank conducts operations; the effects of changes in monetary and fiscal policy, including changes in interest rate policies of the Bank of Canada and the US Federal Reserve; global commodity prices; the effects of competition in the markets in which VersaBank operates; changes in trade laws and tariffs; inflation; capital market fluctuations; the timely development and introduction of new products in receptive markets; the impact of changes in the laws and regulations pertaining to financial services; changes in tax laws; technological changes; unexpected judicial or regulatory proceedings; unexpected changes in consumer spending and savings habits; the impact of wars or conflicts and the impact of both on global supply chains and markets; the impact of outbreaks of disease or illness that affect local, national or international economies; the possible effects on our business of terrorist activities; natural disasters and disruptions to public infrastructure, such as transportation, communications, power or water supply; and VersaBank's anticipation of and success in managing the risks implicated by the foregoing. Completion of VersaBank's plan to realign its corporate structure to a standard US bank framework is subject to numerous factors, many of which are beyond the Bank's control, including but not limited to, the failure to obtain required shareholder, regulatory and other approvals, and other important factors disclosed previously and from time to time in the Bank's filings with the SEC and the securities commissions or similar securities regulatory authorities in each of the provinces or territories of Canada. The foregoing list of important factors is not exhaustive. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The forward-looking information contained in the management's discussion and analysis is presented to assist VersaBank shareholders and others in understanding VersaBank's financial position and may not be appropriate for any other purposes. For a detailed discussion of certain key factors that may affect VersaBank's future results, please see VersaBank's annual MD&A for the year ended October 31, 2024. Except as required by securities law, VersaBank does not undertake to update any forward-looking statement that is contained in this press release or made from time to time by VersaBank or on its behalf. Conference Call VersaBank will be hosting a conference call and webcast today, Wednesday, June 4, 2025, at 9:00 a.m. (ET) to discuss its first quarter results, featuring a presentation by David Taylor, President & CEO and John Asma, CFO, followed by a question-and-answer period. To join the conference call by telephone without operator assistance, you may register and enter your phone number in advance at: to receive an instant automated call back. Alternatively, you may also dial direct and be entered into the call by an Operator at: 1-416-945-7677 or 1-888-699-1199 (toll free). For those preferring to listen to the presentation via the Internet, a live webcast will be available at or on the Bank's web site at: The slide presentation management will use during the conference call/webcast will be available on the Bank's web site at: The archived webcast presentation will be available for 90 days following the live event at and on the Bank's web site at: Replay of the teleconference will be available until July 4, 2025 by calling 289-819-1450 or 1-888-660-6345 (toll free) and the passcode is: 07223#
Cision Canada
22-05-2025
- Business
- Cision Canada
TD Bank Group Reports Second Quarter 2025 Results Français
• Three and six months ended April 30, 2025 This quarterly Earnings News Release (ENR) should be read in conjunction with the Bank's unaudited second quarter 2025 Report to Shareholders for the three and six months ended April 30, 2025, prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), which is available on our website at This ENR is dated May 21, 2025. 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 IFRS. Certain comparative amounts have been revised to conform with the presentation adopted in the current period. Additional information relating to the Bank is available on the Bank's website at as well as on SEDAR+ at and on the U.S. Securities and Exchange Commission's (SEC) website at (EDGAR filers section). Reported results conform with generally accepted accounting principles (GAAP), in accordance with IFRS. Adjusted results are non-GAAP financial measures. For additional information about the Bank's use of non-GAAP financial measures, refer to "Significant Events", "Non-GAAP and Other Financial Measures" in the "How We Performed", or "How Our Businesses Performed" sections of this document. SECOND QUARTER FINANCIAL HIGHLIGHTS, compared with the second quarter last year: YEAR-TO-DATE FINANCIAL HIGHLIGHTS, six months ended April 30, 2025, compared with the corresponding period last year: SECOND QUARTER ADJUSTMENTS (ITEMS OF NOTE) The second quarter reported earnings figures included the following items of note: Amortization of acquired intangibles of $43 million ($35 million after tax or 2 cents per share), compared with $72 million ($62 million after tax or 4 cents per share) in the second quarter last year. Acquisition and integration charges related to the Cowen acquisition of $34 million ($26 million after tax or 2 cents per share), compared with $102 million ($80 million after tax or 4 cents per share) in the second quarter last year. Impact from the terminated First Horizon Corporation (FHN) acquisition-related capital hedging strategy of $47 million ($35 million after tax or 2 cents per share), compared with $64 million ($48 million after tax or 3 cents per share) in the second quarter last year. U.S. balance sheet restructuring of $1,129 million ($847 million after tax or 49 cents per share). Restructuring charges of $163 million ($122 million after tax or 7 cents per share), compared with $165 million ($122 million after tax or 7 cents per share) under a previous program in the second quarter last year. Gain on sale of Schwab shares of $8,975 million ($8,568 million after tax or $4.92 per share). TORONTO, May 22, 2025 /CNW/ - TD Bank Group ("TD" or the "Bank") today announced its financial results for the second quarter ended April 30, 2025. Reported earnings were $11.1 billion, up 334% compared with the second quarter last year, reflecting the Bank's sale of its remaining equity investment in The Charles Schwab Corporation ("Schwab"), and adjusted earnings were $3.6 billion, down 4%. "TD delivered strong results this quarter, with robust trading and fee income in our markets-driven businesses as well as deposit and loan growth in Canadian Personal and Commercial Banking," said Raymond Chun, Group President and CEO, TD Bank Group. "Our U.S. balance sheet restructuring is on track, and we are making consistent progress on AML remediation. We are well positioned as we enter the second half of the year, and we continue to strengthen our Bank by investing in the client experience, enhancing our digital capabilities, and simplifying how we operate to achieve greater speed and execution excellence." Canadian Personal and Commercial Banking results driven by continued volume growth in loans and deposits Canadian Personal and Commercial Banking net income was $1,668 million, a decrease of 4% compared with the second quarter last year, reflecting higher provisions for credit losses (PCL) and non-interest expenses, partially offset by higher revenue. Revenue increased 3%, primarily reflecting loan and deposit growth. The Canadian Personal Bank reported another quarter of solid acquisition growth, including a record in digital day-to-day sales. The Canadian Personal Bank also delivered a strong quarter of credit card growth and referral volumes to Wealth and Business Banking. This quarter, Business Banking reported strong commercial loan growth, record second-quarter retail originations in TD Auto Finance (TDAF), and robust customer acquisition in Small Business Banking. In addition, TDAF scored highest in two segments of the J.D. Power 2025 Canada Dealer Financing Satisfaction Study, ranking #1 for Dealer Satisfaction among Non-Prime and Prime Credit Non-Captive Automotive Financing Lenders 1. The U.S. Retail Bank delivered continued momentum and progress on balance sheet restructuring U.S. Retail reported net income for the quarter was $120 million (US$89 million), down 76% (77% in U.S. dollars), compared with the second quarter last year. On an adjusted basis, net income was $967 million (US$680 million), down 19% (23% in U.S. dollars). Reported net income for the quarter from the Bank's prior investment in Schwab was $78 million (US$54 million), a decrease of 57% (60% in U.S. dollars), compared with the second quarter last year reflecting the Bank's sale of its remaining equity investment in Schwab this quarter. The U.S. Retail Bank, which excludes the Bank's prior investment in Schwab, reported net income was $42 million (US$35 million), down 87% (86% in U.S. dollars), compared with the second quarter last year, primarily reflecting the impact of balance sheet restructuring activities, higher governance and control investments, including costs for U.S. BSA/AML remediation, and higher PCL, partially offset by the impact of charges for the global resolution of the investigations into the Bank's U.S. BSA/AML program and FDIC special assessment charge in the second quarter last year. On an adjusted basis, net income was $889 million (US$626 million), down 13% (16% in U.S. dollars) compared with the second quarter last year, reflecting higher governance and control investments, including costs for U.S. BSA/AML remediation, and higher PCL, partially offset by higher revenue. This quarter, the U.S. Retail Bank demonstrated resilience and delivered continued momentum, with its sixth quarter of consumer deposit growth and double-digit growth in U.S. Wealth assets year over year. This quarter, TD Bank, America's Most Convenient Bank ®, ranked #1 in Florida for retail banking customer satisfaction in the J.D. Power 2025 U.S. Retail Banking Satisfaction Study 2. Wealth Management and Insurance delivered strong results across diversified businesses Wealth Management and Insurance net income was $707 million, an increase of 14% compared with the second quarter last year, with strong revenue growth in both businesses. This quarter's revenue growth of 12% reflected higher insurance premiums, higher fee-based revenue, and transaction revenue. This quarter, Wealth Management and Insurance continued to invest in client-centric innovation and deliver growth. TD Asset Management (TDAM) launched the TD Greystone Infrastructure iCapital Canada Access Fund, expanding access to direct private infrastructure to retail investors. TDAM also added more than $5 billion in net institutional assets, demonstrating its strength as the #1 institutional asset manager in Canada among the Big 5 banks. The TD Private Wealth Management and TD Financial Planning businesses delivered strong net asset growth this quarter. Additionally, TD Insurance continued to deliver double-digit premium growth and further increased its market share 3. Wholesale Banking delivered record revenue including fees earned from TD ' s sale of its remaining equity investment in Schwab Wholesale Banking reported net income for the quarter was $419 million, an increase of 16% compared with the second quarter last year, primarily reflecting higher revenue, partially offset by higher PCL and non-interest expenses. On an adjusted basis, net income was $445 million, an increase of 1% compared with the second quarter last year. Revenue for the quarter was a record $2,129 million, an increase of 10% compared with the second quarter last year, primarily reflecting higher trading-related revenue, and underwriting fees, including those associated with the Bank's sale of its remaining equity investment in Schwab. This quarter, Wholesale Banking executed the largest sole-managed convertible offering in the U.S. since 2020, demonstrating the strength of its capabilities and market influence. Wholesale Banking was voted Overall Commodities Dealer in the Energy Risk Commodity Rankings 2025, run by reflecting its global leadership, reliability, and client trust. Capital TD's Common Equity Tier 1 Capital ratio was 14.9%. Conclusion "We are operating in a fluid macroeconomic environment. As we navigate this period of uncertainty, TD is very well-capitalized, prepared for a broad range of economic scenarios, and remains focused on the needs and goals of our clients," added Chun. "I want to thank our colleagues for their continued efforts as we further strengthen our Bank and build for the future." The foregoing contains forward-looking statements. Please refer to the "Caution Regarding Forward-Looking Statements" on page 3. _________________________________ 1 TD Auto Finance received the highest score in the retail non-captive non-prime segment and the retail non-captive prime segment in the J.D. Power 2024-2025 Canada Dealer Financing Satisfaction Studies, which measure Canadian auto dealers' satisfaction with their auto finance providers. Visit for more details. 2 TD Bank received the highest score in a tie in Florida in the J.D. Power 2025 U.S. Retail Banking Satisfaction Study, which measures customers' satisfaction with their primary bank. Visit for more details. 3 Rankings based on data provided by OSFI, Insurers and the Insurance Bureau of Canada for the year ended December 31, 2024. Excludes public insurance regimes (ICBC, MPI and SAF). Caution Regarding Forward-Looking Statements From time to time, the Bank (as defined in this document) makes written and/or oral forward-looking statements, including in this document, in other filings with Canadian regulators or the United States (U.S.) Securities and Exchange Commission (SEC), 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 document, the Management's Discussion and Analysis ("2024 MD&A") in the Bank's 2024 Annual Report under the heading "Economic Summary and Outlook", under the headings "Key Priorities for 2025" and "Operating Environment and Outlook" for the Canadian Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance, and Wholesale Banking segments, and under the heading "2024 Accomplishments and Focus for 2025" for the Corporate segment, and in other statements regarding the Bank's objectives and priorities for 2025 and beyond and strategies to achieve them, the regulatory environment in which the Bank operates, and the Bank's anticipated financial performance. Forward-looking statements are typically identified by words such as "will", "would", "should", "believe", "expect", "anticipate", "intend", "estimate", "forecast", "outlook", "plan", "goal", "target", "possible", "potential", "predict", "project", "may", and "could" and similar expressions or variations thereof, or the negative thereof, but these terms are not the exclusive means of identifying such statements. By their very nature, these forward-looking 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 physical, financial, economic, political, 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, individually or in the aggregate, such differences include: strategic, credit, market (including equity, commodity, foreign exchange, interest rate, and credit spreads), operational (including technology, cyber security, process, systems, data, third-party, fraud, infrastructure, insider and conduct), model, insurance, liquidity, capital adequacy, compliance and legal, financial crime, reputational, environmental and social, and other risks. Examples of such risk factors include general business and economic conditions in the regions in which the Bank operates; geopolitical risk (including policy, trade and tax-related risks and the potential impact of any new or elevated tariffs or any retaliatory tariffs); inflation, interest rates and recession uncertainty; regulatory oversight and compliance risk; risks associated with the Bank's ability to satisfy the terms of the global resolution of the investigations into the Bank's U.S. Bank Secrecy Act (BSA)/anti-money laundering (AML) program; the impact of the global resolution of the investigations into the Bank's U.S. BSA/AML program on the Bank's businesses, operations, financial condition, and reputation; the ability of the Bank to execute on long-term strategies, shorter-term key strategic priorities, including the successful completion of acquisitions and dispositions and integration of acquisitions, the ability of the Bank to achieve its financial or strategic objectives with respect to its investments, business retention plans, and other strategic plans; technology and cyber security risk (including cyber-attacks, data security breaches or technology failures) on the Bank's technologies, systems and networks, those of the Bank's customers (including their own devices), and third parties providing services to the Bank; data risk; model risk; fraud activity; insider risk; conduct risk; the failure of third parties to comply with their obligations to the Bank or its affiliates, including relating to the care and control of information, and other risks arising from the Bank's use of third-parties; the impact of new and changes to, or application of, current laws, rules and regulations, including without limitation consumer protection laws and regulations, tax laws, capital guidelines and liquidity regulatory guidance; increased competition from incumbents and new entrants (including Fintechs and big technology competitors); shifts in consumer attitudes and disruptive technology; environmental and social risk (including climate-related risk); exposure related to litigation and regulatory matters; ability of the Bank to attract, develop, and retain key talent; changes in foreign exchange rates, interest rates, credit spreads and equity prices; downgrade, suspension or withdrawal of ratings assigned by any rating agency, the value and market price of the Bank's common shares and other securities may be impacted by market conditions and other factors; the interconnectivity of financial institutions including existing and potential international debt crises; increased funding costs and market volatility due to market illiquidity and competition for funding; critical accounting estimates and changes to accounting standards, policies, and methods used by the Bank; and the occurrence of natural and unnatural catastrophic events and claims resulting from such events. The Bank cautions 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 refer to the "Risk Factors and Management" section of the 2024 MD&A, as may be updated in subsequently filed quarterly reports to shareholders and news releases (as applicable) related to any events or transactions discussed under the headings "Significant Events", "Significant and Subsequent Events" or "Update on U.S. Bank Secrecy Act (BSA)/Anti-Money Laundering (AML) Program Remediation and Enterprise AML Program Improvement Activities" in the relevant MD&A, which applicable releases may be found on All such factors, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements, should be considered carefully when making decisions with respect to the Bank. The Bank cautions 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 2024 MD&A under the headings "Economic Summary and Outlook" and "Significant Events", under the headings "Key Priorities for 2025" and "Operating Environment and Outlook" for the Canadian Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance, and Wholesale Banking segments, and under the heading "2024 Accomplishments and Focus for 2025" for the Corporate segment, each as may be updated in subsequently filed quarterly reports to shareholders and news releases (as applicable). Any forward-looking statements contained in this document represent the views of management only as of the date hereof and are presented for the purpose of assisting the Bank's shareholders and analysts in understanding the Bank's financial position, objectives and priorities and anticipated financial performance as at and for the periods ended on the dates presented, and may not be appropriate for other purposes. The Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf, except as required under applicable securities legislation. 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. TABLE 1: FINANCIAL HIGHLIGHTS (millions of Canadian dollars, except as noted) For the three months ended For the six months ended April 30 January 31 April 30 April 30 April 30 2025 2025 2024 2025 2024 Results of operations Total revenue – reported $ 22,937 $ 14,049 $ 13,819 $ 36,986 $ 27,533 Total revenue – adjusted 1 15,138 15,030 13,883 30,168 27,654 Provision for (recovery of) credit losses 1,341 1,212 1,071 2,553 2,072 Insurance service expenses (ISE) 1,417 1,507 1,248 2,924 2,614 Non-interest expenses – reported 8,139 8,070 8,401 16,209 16,431 Non-interest expenses – adjusted 1 7,908 7,983 7,084 15,891 14,209 Net income – reported 11,129 2,793 2,564 13,922 5,388 Net income – adjusted 1 3,626 3,623 3,789 7,249 7,426 Financial position (billions of Canadian dollars) Total loans net of allowance for loan losses $ 936.4 $ 965.3 $ 928.1 $ 936.4 $ 928.1 Total assets 2,064.3 2,093.6 1,966.7 2,064.3 1,966.7 Total deposits 1,267.7 1,290.5 1,203.8 1,267.7 1,203.8 Total equity 126.1 119.0 112.0 126.1 112.0 Total risk-weighted assets 2 624.6 649.0 602.8 624.6 602.8 Financial ratios Return on common equity (ROE) – reported 3 39.1 % 10.1 % 9.5 % 24.8 % 10.2 % Return on common equity – adjusted 1 12.3 13.2 14.5 12.7 14.3 Return on tangible common equity (ROTCE) 1,3 48.0 13.4 13.0 31.3 13.9 Return on tangible common equity – adjusted 1 15.0 17.2 19.2 15.9 18.9 Efficiency ratio – reported 3 35.5 57.4 60.8 43.8 59.7 Efficiency ratio – adjusted, net of ISE 1,3,4 57.6 59.0 56.1 58.3 56.7 Provision for (recovery of) credit losses as a % of net average loans and acceptances 0.58 0.50 0.47 0.54 0.45 Common share information – reported (Canadian dollars) Per share earnings Basic $ 6.28 $ 1.55 $ 1.35 $ 7.81 $ 2.90 Diluted 6.27 1.55 1.35 7.81 2.89 Dividends per share 1.05 1.05 1.02 2.10 2.04 Book value per share 3 66.75 61.61 57.69 66.75 57.69 Closing share price (TSX) 5 88.09 82.91 81.67 88.09 81.67 Shares outstanding (millions) Average basic 1,740.5 1,749.9 1,762.8 1,745.3 1,769.8 Average diluted 1,741.7 1,750.7 1,764.1 1,746.3 1,771.2 End of period 1,722.5 1,751.7 1,759.3 1,722.5 1,759.3 Market capitalization (billions of Canadian dollars) $ 151.7 $ 145.2 $ 143.7 $ 151.7 $ 143.7 Dividend yield 3 5.0 % 5.4 % 5.1 % 5.2 % 5.0 % Dividend payout ratio 3 16.6 67.8 75.6 26.8 70.3 Price-earnings ratio 3 9.1 17.5 13.8 9.1 13.8 Total shareholder return (1 year) 3 13.6 6.9 4.5 13.6 4.5 Common share information – adjusted (Canadian dollars) Per share earnings Basic $ 1.97 $ 2.02 $ 2.04 $ 3.99 $ 4.05 Diluted 1.97 2.02 2.04 3.99 4.04 Dividend payout ratio 53.0 % 51.9 % 49.9 % 52.4 % 50.3 % Price-earnings ratio 11.4 10.6 10.5 11.4 10.5 Capital ratios 3 Common Equity Tier 1 Capital ratio 14.9 % 13.1 % 13.4 % 14.9 % 13.4 % Tier 1 Capital ratio 16.6 14.7 15.1 16.6 15.1 Total Capital ratio 18.5 17.0 17.1 18.5 17.1 Leverage ratio 4.7 4.2 4.3 4.7 4.3 TLAC ratio 31.0 29.5 30.6 31.0 30.6 TLAC Leverage ratio 8.7 8.5 8.7 8.7 8.7 1 The Toronto-Dominion Bank ("TD" or the "Bank") prepares its Interim Consolidated Financial Statements in accordance with IFRS, the current GAAP, and refers to results prepared in accordance with IFRS as the "reported" results. The Bank also utilizes non-GAAP financial measures such as "adjusted" results and non-GAAP ratios to assess each of its businesses and to measure overall Bank performance. To arrive at adjusted results, the Bank adjusts reported results for "items of note". Refer to "Significant Events", "How We Performed" or "How Our Businesses Performed" sections of this document for further explanation, a list of the items of note, and a reconciliation of adjusted to reported results. Non-GAAP financial measures and ratios used in this document are not defined terms under IFRS and, therefore, may not be comparable to similar terms used by other issuers. 2 These measures have been included in this document in accordance with the Office of the Superintendent of Financial Institutions Canada's (OSFI's) Capital Adequacy Requirements, Leverage Requirements, and Total Loss Absorbing Capacity (TLAC) guidelines. Refer to the "Capital Position" section in the second quarter of 2025 Management's Discussion and Analysis (MD&A) for further details. 3 For additional information about these metrics, refer to the Glossary in the second quarter of 2025 MD&A, which is incorporated by reference. 4 Efficiency ratio – adjusted, net of ISE is calculated by dividing adjusted non‑interest expenses by adjusted total revenue, net of ISE. Adjusted total revenue, net of ISE – Q2 2025: $13,721 million, Q1 2025: $13,523 million, Q2 2024: $12,635 million, 2025 YTD: $27,244 million, 2024 YTD: $25,040 million. 5 Toronto Stock Exchange closing market price. SIGNIFICANT EVENTS a) S ale of Schwab Shares On February 12, 2025, the Bank sold its entire remaining equity investment in the Charles Schwab Corporation ("Schwab") through a registered offering and share repurchase by Schwab. Immediately prior to the sale, TD held 184.7 million shares of Schwab's common stock, representing 10.1% economic ownership. The sale of the shares resulted in proceeds of approximately $21.0 billion (US$14.6 billion) and the Bank recognized a net gain on sale of approximately $8.6 billion (US$5.8 billion). This gain is net of the release of related cumulative foreign currency translation from AOCI, the release of AOCI on designated net investment hedging items, direct transaction costs, and taxes. The Bank also recognized $184 million of underwriting fees in its Wholesale segment as a result of TD Securities acting as a lead bookrunner on the transaction. The transaction increased Common Equity Tier 1 (CET1) capital by approximately 238 basis points (bps). The Bank discontinued recording its share of earnings available to common shareholders from its investment in Schwab following the sale. The Bank continues to have a business relationship with Schwab through the IDA Agreement. b) Restructuring Charges The Bank initiated a new restructuring program in the second quarter of 2025 to reduce its cost base and achieve greater efficiency. In connection with this program, the Bank incurred $163 million pre-tax of restructuring charges in the second quarter of 2025 which primarily relate to real estate optimization, employee severance and other personnel-related costs, and asset impairment and other rationalization, including certain business wind-downs. The Bank expects to incur total restructuring charges of $600 million to $700 million pre-tax over the next several quarters, to generate savings of approximately $100 million pre-tax in fiscal 2025 and fully realized annual savings of $550 million to $650 million pre-tax, including savings from an approximate 2% workforce reduction 4. UPDATE ON U.S. BANK SECRECY ACT (BSA)/ANTI-MONEY LAUNDERING (AML) PROGRAM REMEDIATION AND ENTERPRISE AML PROGRAM IMPROVEMENT ACTIVITIES As previously disclosed in the Bank's 2024 MD&A, on October 10, 2024, the Bank announced that, following active cooperation and engagement with authorities and regulators, it reached a resolution of previously disclosed investigations related to its U.S. BSA/AML compliance programs (the "Global Resolution"). The Bank and certain of its U.S. subsidiaries consented to orders with the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board, and the Financial Crimes Enforcement Network (FinCEN) and entered into plea agreements with the Department of Justice (DOJ), Criminal Division, Money Laundering and Asset Recovery Section and the United States Attorney's Office for the District of New Jersey. The Bank is focused on meeting the terms of the consent orders and plea agreements, including meeting its requirements to remediate the Bank's U.S. BSA/AML programs. In addition, the Bank is also undertaking several improvements to the Bank's enterprise-wide AML/Anti-Terrorist Financing and Sanctions Programs ("Enterprise AML Program"). For additional information on the Global Resolution, the Bank's U.S. BSA/AML program remediation activities, the Bank's Enterprise AML Program improvement activities, and the risks associated with the foregoing, see the "Significant Events – Global Resolution of the Investigations into the Bankְ's U.S. BSA/AML Program" and "Risk Factors That May Affect Future Results – Global Resolution of the Investigations into the Bank's U.S. BSA/AML Program" sections of the Bank's 2024 MD&A. Remediation of the U.S. BSA/AML Program The Bank remains focused on remediating its U.S. BSA/AML program to meet the requirements of the Global Resolution. As noted in the Bank's first quarter 2025 MD&A, the Bank continues to expect to have the majority of its management remediation actions implemented in calendar 2025 with remaining management implementations planned for calendar 2026 and into calendar 2027. Sustainability and testing activities are planned for calendar 2026 and calendar 2027 following management implementations, and the Bank is targeting to have the Suspicious Activity Report lookback completed in calendar 2027 per the OCC consent order. For fiscal 2025, the Bank continues to expect U.S. BSA/AML remediation and related governance and control investments of approximately US$500 million pre-tax and expects similar investments in fiscal 2026 5. As noted in the Bank's 2024 MD&A, all management remediation actions will be subject to validation by the Bank's internal audit function, followed by the review and acceptance by the appointed monitor, demonstrated sustainability, and, ultimately, the review and approval of the Bank's U.S. banking regulators and the DOJ. Following such independent reviews, testing, and validation, there could be additional remediation related implementations required from the Bank that would take place after calendar 2027. In addition, as the Bank undertakes the lookback reviews, the Bank may be required to further expand the scope of the review, either in terms of the subjects being addressed and/or the time period reviewed. The following graph illustrates the Bank's expected remediation plan and progress on a calendar year basis, based on its work to date: As noted in the Bank's 2024 MD&A including in the "Risk Factors That May Affect Future Results – Global Resolution of the Investigations into the Bank's U.S. BSA/AML Program" section thereof, the Bank's remediation timeline is based on the Bank's current plans, as well as assumptions related to the duration of planning activities, including the completion of external benchmarking and lookback reviews. The Bank's ability to meet its planned remediation milestones assumes that the Bank will be able to successfully execute against its U.S. BSA/AML remediation program plan, which is subject to inherent risks and uncertainties including the Bank's ability to attract and retain key employees, the ability of third parties to deliver on their contractual obligations, and the successful development and implementation of required technology solutions. Furthermore, the execution of the U.S. BSA/AML remediation plan, including these planned milestones, will not be entirely within the Bank's control because of various factors such as (i) the requirement to obtain regulatory approval or non-objection before proceeding with various steps, and (ii) the requirement for the various deliverables to be acceptable to the regulators and/or the monitor. As of the date hereof, the Bank believes that it and its applicable U.S. subsidiaries have taken such actions as are required of them to date under the terms of the consent orders and plea agreements and is not aware of them being in breach of the same. _________________________ 4 The Bank's expectations regarding the restructuring program are subject to inherent uncertainties and are based on the Bank's assumptions regarding certain factors, including rate of natural attrition, talent re-deployment opportunities, years-of-service, execution timing of actions, decisions to expand on or reduce the restructuring actions (e.g., scope of real estate optimization, additional rationalizations), and foreign exchange translation impacts. Refer to the "Risk Factors That May Affect Future Results" section of this document for additional information about risks and uncertainties that may impact the Bank's estimates. 5 The total amount expected to be spent on remediation and governance and control investments is subject to inherent uncertainties and may vary based on the scope of work in the U.S. BSA/AML remediation plan which could change as a result of additional findings that are identified as work progresses as well as the Bank's ability to successfully execute against the U.S. BSA/AML remediation program in accordance with the U.S. Retail segment's fiscal 2025 and medium term plan. While substantial work remains, in addition to the work that has been completed and previously outlined in the Bank's 2024 MD&A and first quarter 2025 MD&A, the Bank continued to make progress on remediating and strengthening its U.S. BSA/AML program during the second fiscal quarter of 2025, including: 1) incremental improvements to transaction monitoring capabilities with the implementation of the final round of planned scenarios into the Bank's U.S. transaction monitoring system as set out in our U.S. BSA/AML program remediation plan; 2) the continued implementation of enhanced, streamlined investigation practices including the introduction of updated procedures for analyzing customer activity; 3) progress with data staging in relation to lookback reviews; 4) the implementation of further enhancements to cash deposit requirements at store locations; 5) updated policies, including those with respect to Know Your Customer activities, and revised escalation standards across all of U.S. Financial Crime Risk Management; and 6) further hiring of U.S. investigative analysts, as planned, to help manage higher case volumes resulting from the additional monitoring capabilities that have been implemented. For the remainder of fiscal 2025, the Bank's focus will be on implementing incremental enhancements to its transaction monitoring and reporting controls, including: 1) continued improvements to transaction monitoring standards, procedures and training; 2) the implementation of additional reporting and controls for cash management activities; 3) further progress with data staging and analysis in relation to lookback reviews; and 4) the deployment of machine learning analysis capabilities beginning in the third fiscal quarter of 2025. As noted in the Bank's 2024 MD&A, to help ensure that the Bank can continue to support its customers' financial needs in the U.S. while not exceeding the limitation on the combined total assets of the U.S. Bank, the Bank is focused on executing multiple U.S. balance sheet restructuring actions in fiscal 2025. Refer to the "Update on U.S. Balance Sheet Restructuring" section of the U.S. Retail segment section for additional information on these actions. For additional information about expenses associated with the Bank's U.S. BSA/AML program remediation activities, refer to the U.S. Retail segment section. Assessment and Strengthening of the Bank's Enterprise AML Program The Bank is continuing to implement improvements to the Enterprise AML Program and continues to target implementation of the majority of its Enterprise AML Program remediation and enhancement actions by the end of calendar 2025. As noted in the Bank's first quarter 2025 MD&A, once implemented, those remediation and enhancement actions will then be subject to internal review, challenge and validation of the activities. Following the end of the first fiscal quarter, the Financial Transactions and Reports Analysis Centre of Canada ("FINTRAC") commenced a review of certain remediation steps that the Bank has taken to date to address the FINTRAC violations. This review is ongoing, and subject to the outcome, may result in additional regulatory actions. As noted in the "Risk Factors That May Affect Future Results – Global Resolution of the Investigations into the Bank's U.S. BSA/AML Program" section of the Bank's 2024 MD&A, the remediation and enhancement of the Enterprise AML program is exposed to similar risks as noted in respect of the remediation of the Bank's U.S. BSA/AML program. In particular, as the Bank continues its remediation and improvement activities of the Enterprise AML Program, it expects an increase in identification of reportable transactions and/or events, which will add to the operational backlog in the Bank's Financial Crime Risk Management (FCRM) investigations processing that the Bank currently faces, but is working towards remediating, across the enterprise. In addition, it continues to assess (i) whether issues that have been, and continue to be, identified in the U.S. BSA/AML program exist in the Enterprise AML Program in Canada, Europe or Asia, and (ii) the impact of such issues. The results of these assessments may also broaden the scope of the remediation and improvements required for the Enterprise AML Program. Furthermore, the Bank's regulators or law enforcement agencies may identify other issues with the Bank's Enterprise AML Program, which may result in additional regulatory actions. While substantial work remains, the Bank has made progress on the improvements to the Enterprise AML Program over the second fiscal quarter of 2025, including: 1) new reporting on workloads, which has improved our ability to forecast resource needs and expanded our FCRM program reporting to the Bank's Boards and senior management; 2) launching technology initiatives to consolidate electronic document and data availability, to improve quality and timeliness of monitoring and oversight of escalated AML issues; 3) continued improvements in the Bank's process and procedural guidance, reinforced with targeted training across FCRM and individual business lines; and 4) hiring of additional investigative analysts, to help improve management of case volumes, with further expansion planned over the rest of the fiscal year. For the remainder of fiscal 2025, the Bank's focus will be on the following improvements to the Enterprise AML Program: 1) the Enterprise-wide adoption of a new centralized case management tool that is already in production in the U.S., with the goal of strengthening oversight and investigations of identified FCRM risks; and 2) the ongoing rollout of an enhanced risk assessment methodology and tools to strengthen identification and measurement of FCRM risks across clients, products, and transactions, supported by improved data capabilities. HOW WE PERFORMED ECONOMIC SUMMARY AND OUTLOOK The global economic outlook has weakened in the wake of the historically elevated import tariffs levied by the United States on its trading partners around the world. The future path of tariff policy is highly uncertain and financial market volatility has risen. At the same time, inflation expectations have increased as the U.S. tariffs – and retaliatory measures – are expected to raise prices and complicate global supply chains. This puts global central banks in the challenging position of gauging whether any resulting inflationary pressures are one-time or prove persistent. TD Economics still expects future interest rate reductions, but uncertainty on the outlook has increased. After growing at a healthy 2.8% annualized pace in calendar 2024, the U.S. economy recorded a small contraction in the first quarter of calendar 2025. Economic growth was held back by a surge in goods imports, as businesses rushed to stockpile ahead of tariffs. American households and businesses rushed to buy big-ticket items such as cars and equipment before tariffs either lead to increased prices or made certain goods more difficult to obtain. This boosted growth in the domestic economy to a 3% annualized pace in the first quarter of calendar 2025. These trends are likely to reverse in the second calendar quarter, putting the U.S. economy on track to record a modest improvement in economic growth even as momentum in the domestic economy slows. TD Economics expects that U.S. tariffs will be partially rolled back over the second half of 2025 as trade deals are reached between the U.S. and many other countries. As a result of heightened uncertainty and tariffs, TD Economics has substantially downgraded its forecast for U.S. economic growth in calendar 2025, followed by only a modest recovery next calendar year. Based on April 2025 data, the U.S. job market has remained resilient so far this year. The unemployment rate has held largely steady at around 4.2%. The U.S. economy had been on track for a "soft landing" only a few months ago, where inflation pressures were expected to gradually drift lower. The rise in tariffs has raised uncertainty on whether a soft landing is still likely, and the Federal Reserve has kept interest rates unchanged as it assesses the impact of the tariffs on the economy. TD Economics expects that by July 2025, the U.S. central bank will have sufficient clarity around the economic outlook to resume monetary easing, with the federal funds rate expected to be lowered to 3.50-3.75% by the end of calendar 2025 – a level still on the restrictive side. Canada's economic outlook for 2025 has softened due to the impact of U.S. tariffs. Canada's economy had expanded at a solid pace in calendar 2024, boosted by strong population gains and lower interest rates. U.S tariffs on Canada have not been as severe as initially threatened, however, the effect of elevated uncertainty about tariff policy has resulted in a deterioration in business confidence about the future, which is expected to dampen business investment and weigh on Canada's economy for some time. TD Economics expects Canada's economy to slip into a shallow recession beginning in the second quarter of calendar 2025, before likely gaining some modest traction by year end. This soft backdrop is expected to lift the unemployment rate from 6.9% in April to 7.2% by (calendar) year end. TD Economics also expects population growth to slow sharply over the next few years as immigration policy changes restrict inflows. The Canadian central bank lowered its overnight rate further to 2.75% in March 2025, before pausing to assess the impact of U.S. tariffs on the economic outlook. TD Economics expects the Bank of Canada to continue trimming interest rates, reaching 2.25% by the third quarter of calendar 2025. Concerns about the U.S. economic outlook and larger U.S. government deficits have weakened the U.S. dollar, lifting the Canadian dollar. TD Economics expects the Canadian dollar will trade in the 72 to 73 U.S. cent range over the next few quarters, although that is likely to be influenced by the path of U.S. trade policy. H OW THE BANK REPORTS The Bank prepares its Interim Consolidated Financial Statements in accordance with IFRS, the current GAAP, and refers to results prepared in accordance with IFRS as "reported" results. Non-GAAP and Other Financial Measures In addition to reported results, the Bank also presents certain financial measures, including non-GAAP financial measures that are historical, non-GAAP ratios, supplementary financial measures and capital management measures, to assess its results. Non-GAAP financial measures, such as "adjusted" results, are utilized to assess the Bank's businesses and to measure the Bank's overall performance. To arrive at adjusted results, the Bank adjusts for "items of note" from reported results. Items of note are items which management does not believe are indicative of underlying business performance and are disclosed in Table 3. Non-GAAP ratios include a non-GAAP financial measure as one or more of its components. Examples of non-GAAP ratios include adjusted net interest margin, adjusted basic and diluted earnings per share (EPS), adjusted dividend payout ratio, adjusted efficiency ratio, net of ISE, and adjusted effective income tax rate. The Bank believes that non-GAAP financial measures and non-GAAP ratios provide the reader with a better understanding of how management views the Bank's performance. Non-GAAP financial measures and non-GAAP ratios used in this document are not defined terms under IFRS and, therefore, may not be comparable to similar terms used by other issuers. Supplementary financial measures depict the Bank's financial performance and position, and capital management measures depict the Bank's capital position, and both are explained in this document where they first appear. U.S. Strategic Cards The Bank's U.S. strategic cards portfolio is comprised of agreements with certain U.S. retailers pursuant to which TD is the U.S. issuer of private label and co-branded consumer credit cards to their U.S. customers. Under the terms of the individual agreements, the Bank and the retailers share in the profits generated by the relevant portfolios after credit losses. Under IFRS, TD is required to present the gross amount of revenue and PCL related to these portfolios in the Bank's Interim Consolidated Statement of Income. At the segment level, the retailer program partners' share of revenues and credit losses is presented in the Corporate segment, with an offsetting amount (representing the partners' net share) recorded in Non-interest expenses, resulting in no impact to Corporate's reported net income (loss). The net income included in the U.S. Retail segment includes only the portion of revenue and credit losses attributable to TD under the agreements. Investment in The Charles Schwab Corporation and IDA Agreement On February 12, 2025, the Bank sold its entire remaining equity investment in Schwab through a registered offering and share repurchase by Schwab. For further details, refer to the "Significant Events" section of this document. The Bank discontinued recording its share of earnings available to common shareholders from its investment in Schwab following the sale. Prior to the sale, the Bank accounted for its investment in Schwab using the equity method. The U.S. Retail segment reflected the Bank's share of net income from its investment in Schwab. The Corporate segment net income (loss) included amounts for amortization of acquired intangibles, the acquisition and integration charges related to the Schwab transaction, and the Bank's share of restructuring and other charges incurred by Schwab. The Bank's share of Schwab's earnings available to common shareholders was reported with a one-month lag. For further details, refer to Note 12 of the Bank's 2024 Annual Consolidated Financial Statements. On November 25, 2019, the Bank and Schwab signed an insured deposit account agreement (the "2019 Schwab IDA Agreement"), with an initial expiration date of July 1, 2031. Under the 2019 Schwab IDA Agreement, starting July 1, 2021, Schwab had the option to reduce the deposits by up to US$10 billion per year (subject to certain limitations and adjustments), with a floor of US$50 billion. In addition, Schwab requested some further operational flexibility to allow for the sweep deposit balances to fluctuate over time, under certain conditions and subject to certain limitations. On May 4, 2023, the Bank and Schwab entered into an amended insured deposit account agreement (the "2023 Schwab IDA Agreement" or the "Schwab IDA Agreement"), which replaced the 2019 Schwab IDA Agreement. Pursuant to the 2023 Schwab IDA Agreement, the Bank continues to make sweep deposit accounts available to clients of Schwab. Schwab designates a portion of the deposits with the Bank as fixed-rate obligation amounts (FROA). Remaining deposits are designated as floating-rate obligations. In comparison to the 2019 Schwab IDA Agreement, the 2023 Schwab IDA Agreement extends the initial expiration date by three years to July 1, 2034 and provides for lower deposit balances in its first six years, followed by higher balances in the later years. Specifically, until September 2025, the aggregate FROA will serve as the floor. Thereafter, the floor will be set at US$60 billion. In addition, Schwab had the option to buy down up to $6.8 billion (US$5 billion) of FROA by paying the Bank certain fees in accordance with the 2023 Schwab IDA Agreement, subject to certain limits. During the first quarter of fiscal 2024, Schwab exercised its option to buy down the remaining $0.7 billion (US$0.5 billion) of the US$5 billion FROA buydown allowance and paid $32 million (US$23 million) in termination fees to the Bank in accordance with the 2023 Schwab IDA Agreement. By the end of the first quarter of fiscal 2024, Schwab had completed its buydown of the full US$5 billion FROA buydown allowance and had paid a total of $337 million (US$250 million) in termination fees to the Bank. The fees were intended to compensate the Bank for losses incurred from discontinuing certain hedging relationships and for lost revenues. The net impact was recorded in net interest income. Subsequent to the sale of the Bank's entire remaining equity investment in Schwab, the Bank continues to have a business relationship with Schwab through the IDA Agreement. Refer to Note 27 of the Bank's 2024 Annual Consolidated Financial Statements for further details on the Schwab IDA Agreement. S trategic Review Update The Bank is conducting a strategic review. The strategic review is organized across four pillars: 1) Adjust business mix and capital allocation – re-allocate capital and disproportionately invest in targeted segments; 2) Simplify the portfolio and drive ROE focus – simplify, optimize, and reposition portfolios to drive returns; 3) Evolve the Bank and accelerate capabilities – simplify operating model and strengthen capabilities to deliver exceptional client experiences; and 4) Innovate to drive efficiency and operational excellence – redesign operations and processes. The Bank will provide an update on its strategic review, and on the Bank's medium-term financial targets, in the second half of 2025. For additional information on current initiatives that are part of the strategic review, refer to "Significant Events – Sale of Schwab Shares", "How Our Businesses Performed – U.S. Retail – Update on U.S. Balance Sheet Restructuring Activities", and "Significant Events – Restructuring Charges" in this document. The following table provides the operating results on a reported basis for the Bank. TABLE 2: OPERATING RESULTS – Reported (millions of Canadian dollars) For the three months ended For the six months ended April 30 January 31 April 30 April 30 April 30 2025 2025 2024 2025 2024 Net interest income $ 8,125 $ 7,866 $ 7,465 $ 15,991 $ 14,953 Non-interest income 14,812 6,183 6,354 20,995 12,580 Total revenue 22,937 14,049 13,819 36,986 27,533 Provision for (recovery of) credit losses 1,341 1,212 1,071 2,553 2,072 Insurance service expenses 1,417 1,507 1,248 2,924 2,614 Non-interest expenses 8,139 8,070 8,401 16,209 16,431 Income before income taxes and share of net income from investment in Schwab 12,040 3,260 3,099 15,300 6,416 Provision for (recovery of) income taxes 985 698 729 1,683 1,363 Share of net income from investment in Schwab 74 231 194 305 335 Net income – reported 11,129 2,793 2,564 13,922 5,388 Preferred dividends and distributions on other equity instruments 200 86 190 286 264 Net income attributable to common shareholders $ 10,929 $ 2,707 $ 2,374 $ 13,636 $ 5,124 The following table provides a reconciliation between the Bank's adjusted and reported results. For further details refer to the "Significant Events", "How We Performed", or "How Our Businesses Performed" sections. TABLE 3: NON-GAAP FINANCIAL MEASURES – Reconciliation of Adjusted to Reported Net Income (millions of Canadian dollars) For the three months ended For the six months ended April 30 January 31 April 30 April 30 April 30 2025 2025 2024 2025 2024 Operating results – adjusted Net interest income 1,2 $ 8,208 $ 7,920 $ 7,529 $ 16,128 $ 15,074 Non-interest income 3 6,930 7,110 6,354 14,040 12,580 Total revenue 15,138 15,030 13,883 30,168 27,654 Provision for (recovery of) credit losses 1,341 1,212 1,071 2,553 2,072 Insurance service expenses 1,417 1,507 1,248 2,924 2,614 Non-interest expenses 4 7,908 7,983 7,084 15,891 14,209 Income before income taxes and share of net income from investment in Schwab 4,472 4,328 4,480 8,800 8,759 Provision for (recovery of) income taxes 929 962 920 1,891 1,792 Share of net income from investment in Schwab 5 83 257 229 340 459 Net income – adjusted 3,626 3,623 3,789 7,249 7,426 Preferred dividends and distributions on other equity instruments 200 86 190 286 264 Net income available to common shareholders – adjusted 3,426 3,537 3,599 6,963 7,162 Pre-tax adjustments for items of note Amortization of acquired intangibles 6 (43) (61) (72) (104) (166) Acquisition and integration charges related to the Schwab transaction 4,5 – – (21) – (53) Share of restructuring and other charges from investment in Schwab 5 – – – – (49) Restructuring charges 4 (163) – (165) (163) (456) Acquisition and integration-related charges 4 (34) (52) (102) (86) (219) Impact from the terminated FHN acquisition-related capital hedging strategy 1 (47) (54) (64) (101) (121) Gain on sale of Schwab shares 3 8,975 – – 8,975 – U.S. balance sheet restructuring 2,3 (1,129) (927) – (2,056) – Civil matter provision 4 – – (274) – (274) FDIC special assessment 4 – – (103) – (514) Global resolution of the investigations into the Bank's U.S. BSA/AML program 4 – – (615) – (615) Less: Impact of income taxes Amortization of acquired intangibles (8) (9) (10) (17) (25) Acquisition and integration charges related to the Schwab transaction – – (5) – (11) Restructuring charges (41) – (43) (41) (121) Acquisition and integration-related charges (8) (11) (22) (19) (46) Impact from the terminated FHN acquisition-related capital hedging strategy (12) (13) (16) (25) (30) Gain on sale of Schwab shares 407 – – 407 – U.S. balance sheet restructuring (282) (231) – (513) – Civil matter provision – – (69) – (69) FDIC special assessment – – (26) – (127) Total adjustments for items of note 7,503 (830) (1,225) 6,673 (2,038) Net income available to common shareholders – reported $ 10,929 $ 2,707 $ 2,374 $ 13,636 $ 5,124 1 After the termination of the merger agreement between the Bank and FHN on May 4, 2023, the residual impact of the strategy is reversed through net interest income – Q2 2025: ($47) million, Q1 2025: ($54) million, 2025 YTD: ($101) million, Q2 2024: ($64) million, 2024 YTD: ($121) million, reported in the Corporate segment. 2 Adjusted net interest income excludes the following item of note: i. U.S. balance sheet restructuring – Q2 2025: $36 million, 2025 YTD: $36 million, reported in the U.S. Retail segment. 3 Adjusted non-interest income excludes the following items of note: i. The Bank sold common shares of Schwab and recognized a gain on the sale – Q2 2025: $8,975 million, 2025 YTD: $8,975 million, reported in the Corporate segment; and ii. U.S. balance sheet restructuring – Q2 2025: $1,093 million, Q1 2025: $927 million, 2025 YTD: $2,020 million, reported in the U.S. Retail segment. 4 Adjusted non-interest expenses exclude the following items of note: i. Amortization of acquired intangibles – Q2 2025: $34 million, Q1 2025: $35 million, 2025 YTD: $69 million, Q2 2024: $42 million, 2024 YTD: $105 million, reported in the Corporate segment; ii. The Bank's own acquisition and integration charges related to the Schwab transaction – Q2 2024: $16 million, 2024 YTD: $39 million, reported in the Corporate segment; iii. Restructuring charges – Q2 2025: $163 million, 2025 YTD: $163 million, compared with Q2 2024: $165 million, 2024 YTD: $456 million under a previous program, reported in the Corporate segment; iv. Acquisition and integration-related charges – Q2 2025: $34 million, Q1 2025: $52 million, 2025 YTD: $86 million, Q2 2024: $102 million, 2024 YTD: $219 million, reported in the Wholesale Banking segment; v. Civil matter provision – Q2 2024: $274 million, 2024 YTD: $274 million, reported in the Corporate segment; vi. FDIC special assessment – Q2 2024: $103 million, 2024 YTD: $514 million, reported in the U.S. Retail segment; and vii. Charges for the global resolution of the investigations into the Bank's U.S. BSA/AML program – Q2 2024: $615 million, 2024 YTD: $615 million, reported in the U.S. Retail segment. 5 Adjusted share of net income from investment in Schwab excludes the following items of note on an after-tax basis. The earnings impact of these items is reported in the Corporate segment: i. Amortization of Schwab-related acquired intangibles – Q2 2025: $9 million, Q1 2025: $26 million, 2025 YTD: $35 million, Q2 2024: $30 million, 2024 YTD: $61 million; ii. The Bank's share of acquisition and integration charges associated with Schwab's acquisition of TD Ameritrade – Q2 2024: $5 million, 2024 YTD: $14 million; iii. The Bank's share of restructuring charges incurred by Schwab – 2024 YTD: $27 million; and iv. The Bank's share of the FDIC special assessment charge incurred by Schwab – 2024 YTD: $22 million. 6 Amortization of acquired intangibles relates to intangibles acquired as a result of asset acquisitions and business combinations, including the after-tax amounts for amortization of acquired intangibles relating to the share of net income from investment in Schwab, reported in the Corporate segment. Refer to footnotes 4 and 5 for amounts. TABLE 4: RECONCILIATION OF REPORTED TO ADJUSTED EARNINGS PER SHARE 1 (Canadian dollars) For the three months ended For the six months ended April 30 January 31 April 30 April 30 April 30 2025 2025 2024 2025 2024 Basic earnings (loss) per share – reported $ 6.28 $ 1.55 $ 1.35 $ 7.81 $ 2.90 Adjustments for items of note (4.31) 0.47 0.69 (3.82) 1.15 Basic earnings per share – adjusted $ 1.97 $ 2.02 $ 2.04 $ 3.99 $ 4.05 Diluted earnings (loss) per share – reported $ 6.27 $ 1.55 $ 1.35 $ 7.81 $ 2.89 Adjustments for items of note (4.30) 0.47 0.69 (3.82) 1.15 Diluted earnings per share – adjusted $ 1.97 $ 2.02 $ 2.04 $ 3.99 $ 4.04 1 EPS is computed by dividing net income available to common shareholders by the weighted-average number of shares outstanding during the period. Numbers may not add due to rounding. Return on Common Equity The consolidated Bank ROE is calculated as reported net income available to common shareholders as a percentage of average common equity. The consolidated Bank adjusted ROE is calculated as adjusted net income available to common shareholders as a percentage of average common equity. Adjusted ROE is a non-GAAP financial ratio and can be utilized in assessing the Bank's use of equity. ROE for the business segments is calculated as the segment net income attributable to common shareholders as a percentage of average allocated capital. The Bank's methodology for allocating capital to its business segments is largely aligned with the common equity capital requirements under Basel III. Capital allocated to the business segments was 11.5% CET1 Capital effective fiscal 2024. Return on Tangible Common Equity Tangible common equity (TCE) is calculated as common shareholders' equity less goodwill, imputed goodwill and intangibles on the investments in Schwab and other acquired intangible assets, net of related deferred tax liabilities. ROTCE is calculated as reported net income available to common shareholders after adjusting for the after‑tax amortization of acquired intangibles, which are treated as an item of note, as a percentage of average TCE. Adjusted ROTCE is calculated using reported net income available to common shareholders, adjusted for all items of note, as a percentage of average TCE. TCE, ROTCE, and adjusted ROTCE can be utilized in assessing the Bank's use of equity. TCE is a non-GAAP financial measure, and ROTCE and adjusted ROTCE are non-GAAP ratios. TABLE 6: RETURN ON TANGIBLE COMMON EQUITY (millions of Canadian dollars, except as noted) For the three months ended For the six months ended April 30 January 31 April 30 April 30 April 30 2025 2025 2024 2025 2024 Average common equity $ 114,585 $ 106,133 $ 101,137 $ 110,708 $ 100,573 Average goodwill 19,302 19,205 18,380 19,207 18,322 Average imputed goodwill and intangibles on investments in Schwab 1,304 5,116 6,051 2,924 6,062 Average other acquired intangibles 1 450 482 574 456 595 Average related deferred tax liabilities (236) (237) (228) (236) (230) Average tangible common equity 93,765 81,567 76,360 88,357 75,824 Net income attributable to common shareholders – reported 10,929 2,707 2,374 13,636 5,124 Amortization of acquired intangibles, net of income taxes 35 52 62 87 141 Net income attributable to common shareholders adjusted for amortization of acquired intangibles, net of income taxes 10,964 2,759 2,436 13,723 5,265 Other items of note, net of income taxes (7,538) 778 1,163 (6,760) 1,897 Net income available to common shareholders – adjusted $ 3,426 $ 3,537 $ 3,599 $ 6,963 $ 7,162 Return on tangible common equity 48.0 % 13.4 % 13.0 % 31.3 % 13.9 % Return on tangible common equity – adjusted 15.0 17.2 19.2 15.9 18.9 1 Excludes intangibles relating to software and asset servicing rights. HOW OUR BUSINESSES PERFORMED For management reporting purposes, the Bank's business operations and activities are organized around the following four key business segments: Canadian Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance, and Wholesale Banking. The Bank's other activities are grouped into the Corporate segment. Results of each business segment reflect revenue, expenses, assets, and liabilities generated by the businesses in that segment. Where applicable, the Bank measures and evaluates the performance of each segment based on adjusted results and ROE, and for those segments, the Bank indicates that the measure is adjusted. For further details, refer to the "How We Performed" section of this document, the "Business Focus" section in the Bank's 2024 MD&A, and Note 28 of the Bank's Annual Consolidated Financial Statements for the year ended October 31, 2024. Effective the first quarter of 2025, certain U.S. governance and control investments, including costs for U.S. BSA/AML remediation, previously reported in the Corporate segment are now reported in the U.S. Retail segment. Comparative amounts have been reclassified to conform with the presentation adopted in the current period. PCL related to performing (Stage 1 and Stage 2) and impaired (Stage 3) financial assets, loan commitments, and financial guarantees is recorded within the respective segment. 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 certain dividends, is adjusted to its equivalent pre-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 $13 million, compared with $15 million in the prior quarter and $4 million in the second quarter last year. On February 12, 2025, the Bank sold its entire remaining equity investment in Schwab. Prior to the sale, the Bank accounted for its investment in Schwab using the equity method and the share of net income from investment in Schwab was reported in the U.S. Retail segment. Amounts for amortization of acquired intangibles, the acquisition and integration charges related to the Schwab transaction, and the Bank's share of restructuring and other charges incurred by Schwab are recorded in the Corporate segment. Refer to "Significant Events" for further details. TABLE 7: CANADIAN PERSONAL AND COMMERCIAL BANKING (millions of Canadian dollars, except as noted) For the three months ended For the six months ended April 30 January 31 April 30 April 30 April 30 2025 2025 2024 2025 2024 Net interest income $ 4,023 $ 4,135 $ 3,812 $ 8,158 $ 7,645 Non-interest income 968 1,014 1,027 1,982 2,078 Total revenue 4,991 5,149 4,839 10,140 9,723 Provision for (recovery of) credit losses – impaired 428 459 397 887 761 Provision for (recovery of) credit losses – performing 194 62 70 256 129 Total provision for (recovery of) credit losses 622 521 467 1,143 890 Non-interest expenses 2,052 2,086 1,957 4,138 3,941 Provision for (recovery of) income taxes 649 711 676 1,360 1,368 Net income $ 1,668 $ 1,831 $ 1,739 $ 3,499 $ 3,524 Selected volumes and ratios Return on common equity 1 28.9 % 31.4 % 32.9 % 30.2 % 33.8 % Net interest margin (including on securitized assets) 2 2.82 2.81 2.84 2.82 2.84 Efficiency ratio 41.1 40.5 40.4 40.8 40.5 Number of Canadian retail branches 1,059 1,063 1,062 1,059 1,062 Average number of full-time equivalent staff 27,371 27,422 29,053 27,397 29,163 1 2 Net interest margin is calculated by dividing net interest income by average interest-earning assets. Average interest-earning assets used in the calculation of net interest margin is a non-GAAP financial measure. Refer to "Non-GAAP and Other Financial Measures" in the "How We Performed" section of this document and the Glossary in the Bank's second quarter 2025 MD&A for additional information about these metrics. Quarterly comparison – Q2 2025 vs. Q2 2024 Canadian Personal and Commercial Banking net income for the quarter was $1,668 million, a decrease of $71 million, or 4%, compared with the second quarter last year, primarily reflecting higher PCL and non-interest expenses, partially offset by higher revenue. The annualized ROE for the quarter was 28.9%, compared with 32.9%, in the second quarter last year. Revenue for the quarter was $4,991 million, an increase of $152 million, or 3%, compared with the second quarter last year. Net interest income was $4,023 million, an increase of $211 million, or 6%, primarily reflecting volume growth. Average loan volumes increased $21 billion, or 4%, reflecting 3% growth in personal loans and 6% growth in business loans. Average deposit volumes increased $25 billion, or 5%, reflecting 4% growth in personal deposits and 8% growth in business deposits. Net interest margin was 2.82%, a decrease of 2 bps, primarily due to changes to balance sheet mix reflecting the transition of Bankers' Acceptances (BAs) to Canadian Overnight Repo Rate Average (CORRA)-based loans. Non-interest income was $968 million, a decrease of $59 million, or 6%, compared with the second quarter last year, primarily reflecting lower fees due to the transition of BAs to CORRA-based loans in the prior year, the impact of which is offset in net interest income. PCL for the quarter was $622 million, an increase of $155 million compared with the second quarter last year. PCL – impaired was $428 million, an increase of $31 million, or 8%, largely reflecting credit migration in the consumer lending portfolios. PCL – performing was $194 million, an increase of $124 million compared to the prior year. The performing provisions this quarter largely reflect credit impacts from policy and trade uncertainty, including overlays and an update to our macroeconomic forecasts. Total PCL as an annualized percentage of credit volume was 0.44%, an increase of 10 bps compared with the second quarter last year. Non-interest expenses for the quarter were $2,052 million, an increase of $95 million, or 5%, compared with the second quarter last year, primarily reflecting higher technology spend and other operating expenses. The efficiency ratio for the quarter was 41.1%, compared with 40.4% in the second quarter last year. Quarterly comparison – Q2 2025 vs. Q1 2025 Canadian Personal and Commercial Banking net income for the quarter was $1,668 million, a decrease of $163 million, or 9%, compared with the prior quarter, primarily reflecting lower revenue and higher PCL, partially offset by lower non-interest expenses. The annualized ROE for the quarter was 28.9%, compared with 31.4% in the prior quarter. Revenue decreased $158 million, or 3%, compared with the prior quarter. Net interest income decreased $112 million, or 3%, reflecting fewer days in the second quarter, partially offset by volume growth. Average loan volumes increased $2 billion, relatively flat compared with the prior quarter. Average deposit volumes increased $1 billion, relatively flat compared with the prior quarter. Net interest margin was 2.82%, an increase of 1 basis point, primarily due to higher margins on loans. As we look forward to the third quarter, while many factors can impact margins, we again expect net interest margin to be relatively stable[6]. Non-interest income decreased $46 million, or 5% compared with the prior quarter, reflecting lower fee revenue. PCL for the quarter was $622 million, an increase of $101 million compared with the prior quarter. PCL – impaired was $428 million, a decrease of $31 million, or 7%, recorded across the consumer and commercial lending portfolios. PCL – performing was $194 million, an increase of $132 million. The performing provisions this quarter largely reflect credit impacts from policy and trade uncertainty, including overlays and an update to our macroeconomic forecasts. Total PCL as an annualized percentage of credit volume was 0.44%, an increase of 9 bps compared with the prior quarter. Non-interest expenses decreased $34 million, or 2% compared with the prior quarter, primarily reflecting fewer days in the second quarter, the impact of TD Share Compensation Initiative from the prior quarter, and lower other operating expenses. The efficiency ratio was 41.1%, compared with 40.5% in the prior quarter. Year-to-date comparison – Q2 2025 vs. Q2 2024 Canadian Personal and Commercial Banking net income for the six months ended April 30, 2025, was $3,499 million, a decrease of $25 million, or 1%, compared with the same period last year, reflecting higher PCL and non-interest expenses, partially offset by higher revenue. The annualized ROE for the period was 30.2%, compared with 33.8%, in the same period last year. Revenue for the period was $10,140 million, an increase of $417 million, or 4%, compared with the same period last year. Net interest income was $8,158 million, an increase of $513 million, or 7%, compared with the same period last year, primarily reflecting volume growth. Average loan volumes increased $23 billion, or 4%, reflecting 4% growth in personal loans and 6% growth in business loans. Average deposit volumes increased $25 billion, or 5%, reflecting 4% growth in personal deposits and 8% growth in business deposits. Net interest margin was 2.82%, a decrease of 2 bps, primarily due to changes to balance sheet mix reflecting the transition of BAs to CORRA-based loans. Non-interest income was $1,982 million, a decrease of $96 million, or 5%, reflecting lower fees due to the transition of BAs to CORRA-based loans in the prior year, the impact of which is offset in net interest income, partially offset by higher fee revenue. PCL was $1,143 million, an increase of $253 million compared with the same period last year. PCL – impaired was $887 million, an increase of $126 million, or 17%, largely reflecting credit migration in the consumer lending portfolios. PCL – performing was $256 million, an increase of $127 million compared with the same period last year. The current year performing provisions largely reflect credit impacts from policy and trade uncertainty, including overlays and an update to our macroeconomic forecasts, and volume growth. Total PCL as an annualized percentage of credit volume was 0.39%, an increase of 7 bps compared with the same period last year. Non-interest expenses were $4,138 million, an increase of $197 million, or 5%, compared with the same period last year, reflecting higher technology spend and other operating expenses. The efficiency ratio was 40.8%, compared with 40.5%, for the same period last year. U.S. Retail Update on U.S. Balance Sheet Restructuring Activities The Bank continued to focus on executing the balance sheet restructuring activities disclosed in the 2024 MD&A to help ensure the Bank can continue to support customers' financial needs in the U.S. while not exceeding the limitation on the combined total assets of TD Bank, N.A. and TD Bank USA, N.A. (the "U.S. Bank"). As previously disclosed, the Bank expects to reposition its U.S. investment portfolio by selling up to US$50 billion of lower yielding investment securities and reinvesting the proceeds into a similar composition of assets but yielding higher rates. During the second quarter of fiscal 2025, the Bank sold approximately US$3.1 billion of bonds which resulted in a loss of US$199 million pre-tax. In the aggregate, since the announcement of the U.S. balance sheet restructuring activities on October 10, 2024, through April 30, 2025, the Bank sold approximately US$19 billion of bonds from its U.S. investment portfolio for an aggregate loss of US$1.1 billion pre-tax. Between May 1, 2025, through May 21, 2025, the Bank sold an additional US$4.3 billion of bonds, resulting in a loss of US$178 million pre-tax. The Bank expects to complete its investment portfolio repositioning no later than the first half of calendar 2025 and expects the net interest income benefit from these sales to be at the upper end of the previously disclosed range of US$300 million to US$500 million pre-tax in fiscal 2025[7]. In addition, the Bank continues to target reducing the U.S. Bank's assets by approximately 10% from the asset level as of September 30, 2024, largely by selling or winding down certain non-scalable or non-core U.S. loan portfolios that do not align with the U.S. Retail segment's focused strategy or have lower returns on investment such as the correspondent lending, residential jumbo mortgage, export and import lending, and commercial auto dealer portfolios. This reduction in assets combined with natural balance sheet run-off, is expected to be largely complete by the end of fiscal 2025 and reduce net interest income in the U.S. Retail segment by approximately US$200 million to US$225 million pre-tax in fiscal 2025[8]. This quarter, the Bank completed the sale of US$8.6 billion of certain U.S. residential mortgage loans (the "correspondent loans"), which resulted in the recognition of a pre-tax loss including transaction costs of US$564 million; net interest income was US$25 million lower as a result of the related hedge rebalance before close. In addition to the correspondent loan sale, loans were further reduced by US$2 billion, reflecting run-off and sales in the non-core U.S. loan portfolios. The Bank used proceeds from the sale of the loans, investment maturities, and cash on hand, to pay down US$4 billion of short-term borrowings. Accordingly, as of April 30, 2025, the combined total assets of the U.S. Bank were US$399 billion. Between May 1, 2025, through May 21, 2025, the Bank paid down an additional US$7 billion of bank borrowings from loan sales, investment maturities and normalized cash levels. As of March 31, 2025, the combined total assets of the U.S. Bank, as measured in accordance with the OCC Consent Order which utilizes the average of spot balances of December 31, 2024, and March 31, 2025, was US$405 billion. In the aggregate, total losses associated with the Bank's U.S. balance sheet restructuring activities from October 10, 2024, through April 30, 2025, are US$1,666 million pre-tax and US$1,250 million after-tax. In total, the Bank's collective balance sheet restructuring actions are expected to result in a loss up to US$1.5 billion after-tax, and impact capital as executed 7, 8. _________________________ In addition to the asset reductions identified on October 10, 2024, the Bank made the strategic decision to gradually wind-down the approximately US$3 billion point of sale financing business which services third-party retailers, as part of the Bank's efforts to reduce non-scalable and niche portfolios that do not fit the Bank's focused strategy. TABLE 8: U.S. RETAIL (millions of dollars, except as noted) For the three months ended For the six months ended April 30 January 31 April 30 April 30 April 30 Canadian Dollars 2025 2025 2024 2025 2024 Net interest income – reported $ 3,038 $ 3,064 $ 2,841 $ 6,102 $ 5,740 Net interest income – adjusted 1,2 3,074 3,064 2,841 6,138 5,740 Non-interest income (loss) – reported (445) (282) 606 (727) 1,210 Non-interest income – adjusted 1,3 648 645 606 1,293 1,210 Total revenue – reported 2,593 2,782 3,447 5,375 6,950 Total revenue – adjusted 1,2,3 3,722 3,709 3,447 7,431 6,950 Provision for (recovery of) credit losses – impaired 309 529 311 838 688 Provision for (recovery of) credit losses – performing 133 (78) 69 55 77 Total provision for (recovery of) credit losses 442 451 380 893 765 Non-interest expenses – reported 2,338 2,380 2,694 4,718 5,153 Non-interest expenses – adjusted 1,4 2,338 2,380 1,976 4,718 4,024 Provision for (recovery of) income taxes – reported (229) (192) 49 (421) 32 Provision for (recovery of) income taxes – adjusted 1 53 39 75 92 159 U.S. Retail Bank net income – reported 42 143 324 185 1,000 U.S. Retail Bank net income – adjusted 1 889 839 1,016 1,728 2,002 Share of net income from investment in Schwab 5,6 78 199 183 277 377 Net income – reported $ 120 $ 342 $ 507 $ 462 $ 1,377 Net income – adjusted 1 967 1,038 1,199 2,005 2,379 U.S. Dollars Net interest income – reported $ 2,136 $ 2,160 $ 2,094 $ 4,296 $ 4,235 Net interest income – adjusted 1,2 2,161 2,160 2,094 4,321 4,235 Non-interest income (loss) – reported (306) (198) 446 (504) 892 Non-interest income – adjusted 1,3 457 454 446 911 892 Total revenue – reported 1,830 1,962 2,540 3,792 5,127 Total revenue – adjusted 1,2,3 2,618 2,614 2,540 5,232 5,127 Provision for (recovery of) credit losses – impaired 216 371 229 587 508 Provision for (recovery of) credit losses – performing 95 (53) 51 42 57 Total provision for (recovery of) credit losses 311 318 280 629 565 Non-interest expenses – reported 1,644 1,675 1,980 3,319 3,795 Non-interest expenses – adjusted 1,4 1,644 1,675 1,455 3,319 2,970 Provision for (recovery of) income taxes – reported (160) (136) 37 (296) 25 Provision for (recovery of) income taxes – adjusted 1 37 27 56 64 118 U.S. Retail Bank net income – reported 35 105 243 140 742 U.S. Retail Bank net income – adjusted 1 626 594 749 1,220 1,474 Share of net income from investment in Schwab 5,6 54 142 136 196 280 Net income – reported $ 89 $ 247 $ 379 $ 336 $ 1,022 Net income – adjusted 1 680 736 885 1,416 1,754 Selected volumes and ratios Return on common equity – reported 7 1.1 % 2.9 % 4.7 % 2.1 % 6.4 % Return on common equity – adjusted 1,7 8.8 8.6 11.0 8.7 11.0 Net interest margin – reported 1,8 3.00 2.86 2.99 2.93 3.01 Net interest margin – adjusted 1,8 3.04 2.86 2.99 2.95 3.01 Efficiency ratio – reported 89.8 85.4 78.0 87.5 74.0 Efficiency ratio – adjusted 1 62.8 64.1 57.3 63.4 57.9 Assets under administration (billions of U.S. dollars) 9 $ 45 $ 43 $ 40 $ 45 $ 40 Assets under management (billions of U.S. dollars) 9 9 9 7 9 7 Number of U.S. retail stores 1,137 1,134 1,167 1,137 1,167 Average number of full-time equivalent staff 28,604 28,276 27,957 28,437 27,971 1 For additional information about the Bank's use of non-GAAP financial measures, refer to "Non-GAAP and Other Financial Measures" in the "How We Performed" section of this document. 2 Adjusted net interest income excludes the following item of note: i. U.S. balance sheet restructuring (impact of loan hedge rebalancing before the close of the correspondent loan sale) – Q2 2025: $36 million or US$25 million ($26 million or US$19 million after-tax), 2025 YTD: $36 million or US$25 million ($26 million or US$19 million after-tax). 3 Adjusted non-interest income excludes the following item of note: i. U.S. balance sheet restructuring – Q2 2025: $1,093 million or US$763 million ($821 million or US$572 million after-tax), Q1 2025: $927 million or US$652 million ($696 million or US$489 million after-tax), 2025 YTD: $2,020 million or US$1,415 million ($1,517 million or US$1,061 million after-tax). 4 Adjusted non-interest expenses exclude the following items of note: i. FDIC special assessment – Q2 2024: $103 million or US$75 million ($77 million or US$56 million after-tax), 2024 YTD: $514 million or US$375 million ($387 million or US$282 million after-tax); and ii. Charges for the global resolution of the investigations into the Bank's U.S. BSA/AML program – Q2 2024: $615 million or US$450 million (before and after-tax), 2024 YTD: $615 million or US$450 million (before and after-tax). 5 The Bank's share of Schwab's earnings is reported with a one-month lag. Refer to Note 7 of the Bank's second quarter 2025 Interim Consolidated Financial Statements for further details. 6 The after-tax amounts for amortization of acquired intangibles, the Bank's share of acquisition and integration charges associated with Schwab's acquisition of TD Ameritrade, the Bank's share of Schwab's restructuring charges, and the Bank's share of Schwab's FDIC special assessment charge are recorded in the Corporate segment. 7 Capital allocated to the business segment was 11.5% CET1 Capital. 8 Net interest margin is calculated by dividing U.S. Retail segment's net interest income by average interest-earning assets excluding the impact related to sweep deposits arrangements and the impact of intercompany deposits and cash collateral, which management believes better reflects segment performance. In addition, the value of tax-exempt interest income is adjusted to its equivalent before-tax value. For investment securities, the adjustment to fair value is included in the calculation of average interest-earning assets. Net interest income and average interest-earning assets used in the calculation are non-GAAP financial measures. Management believes this calculation better reflects segment performance. 9 For additional information about this metric, refer to the Glossary in the Bank's second quarter 2025 MD&A. Quarterly comparison – Q2 2025 vs. Q2 2024 U.S. Retail reported net income for the quarter was $120 million (US$89 million), a decrease of $387 million (US$290 million), or 76% (77% in U.S. dollars), compared with the second quarter last year. On an adjusted basis, net income for the quarter was $967 million (US$680 million), a decrease of $232 million (US$205 million), or 19% (23% in U.S. dollars). The reported and adjusted annualized ROE for the quarter were 1.1% and 8.8%, respectively, compared with 4.7% and 11.0%, respectively, in the second quarter last year. U.S. Retail net income includes contributions from the U.S. Retail Bank and the Bank's investment in Schwab. Reported net income for the quarter from the Bank's investment in Schwab was $78 million (US$54 million), a decrease of $105 million (US$82 million), or 57% (60% in U.S. dollars), compared with the second quarter last year. U.S. Retail Bank reported net income was $42 million (US$35 million), a decrease of $282 million (US$208 million), or 87% (86% in U.S. dollars), compared with the second quarter last year, primarily reflecting the impact of U.S. balance sheet restructuring activities, higher governance and control investments, including costs for U.S. BSA/AML remediation, and higher PCL, partially offset by the impact of the charges for the global resolution of the investigations into the Bank's U.S. BSA/AML program, and FDIC special assessment charge, in the second quarter last year. U.S. Retail Bank adjusted net income was $889 million (US$626 million), a decrease of $127 million (US$123 million), or 13% (16% in U.S. dollars), compared with the second quarter last year, reflecting higher governance and control investments, including costs for U.S. BSA/AML remediation, and higher PCL, partially offset by higher revenue. Reported revenue for the quarter was US$1,830 million, a decrease of US$710 million, or 28%, compared with the second quarter last year. On an adjusted basis, revenue for the quarter was US$2,618 million, an increase of US$78 million, or 3%. Reported net interest income of US$2,136 million, increased US$42 million, or 2%, and adjusted net interest income of US$2,161 million, increased US$67 million, or 3%, driven by the impact of U.S. balance sheet restructuring activities and higher deposit margins, partially offset by the adjustment related to certain deferred product acquisition costs (the "deferred cost adjustment"). Reported net interest margin of 3.00% increased 1 basis point, and adjusted net interest margin of 3.04% increased 5 bps, due to the impact of U.S. balance sheet restructuring activities and higher deposit margins, partially offset by maintaining elevated liquidity levels (which negatively impacted net interest margin by 8 bps) and the deferred cost adjustment. Reported non-interest loss was US$306 million, a decrease of US$752 million, compared with the second quarter last year, reflecting the impact of U.S. balance sheet restructuring activities, partially offset by higher fee income. On an adjusted basis, non-interest income of US$457 million increased US$11 million, or 2%, compared with the second quarter last year, reflecting higher fee income. _________________________ [9] Loan portfolios identified for sale or run-off include the point of sale finance business which services third party retailers, correspondent lending, residential jumbo mortgage, export and import lending, commercial auto dealer portfolio, and other non-core portfolios. Q2 2025 average loan volumes: US$187 billion (Q1 2025: US$193 billion; 2025 YTD: US$190 billion; Q2 2024: US$193 billion; 2024 YTD: US$192 billion). Q2 2025 average loan volumes of loan portfolios identified for sale or run-off: US$31 billion (Q1 2025: US$37 billion; 2025 YTD: US$34 billion; Q2 2024: US$40 billion; 2024 YTD: US$40 billion). Q2 2025 average loan volumes excluding loan portfolios identified for sale or run-off: US$156 billion (Q1 2025: US$156 billion; 2025 YTD: US$156 billion; Q2 2024: US$153 billion; 2024 YTD: US$152 billion). [10] For additional information about the Bank's use of non-GAAP financial measures, refer to "Non-GAAP and Other Financial Measures" in the "How We Performed" section of this document. Average loan volumes decreased US$6 billion, or 3%, compared with the second quarter last year. Personal loans decreased 2% and business loans decreased 4%, reflecting U.S. balance sheet restructuring activities. Excluding the impact of the loan portfolios identified for sale or run-off under our U.S. balance sheet restructuring program, average loan volumes increased US$3 billion, or 2%[9],[10]. Average deposit volumes decreased US$7 billion, or 2%, reflecting a 7% decrease in sweep deposits and a 4% decrease in business deposits, partially offset by a 3% increase in personal deposits. Assets under administration (AUA) were US$45 billion as of April 30, 2025, an increase of US$5 billion, or 13%, compared with the second quarter last year, reflecting net asset growth. Assets under management (AUM) were US$9 billion as of April 30, 2025, an increase of US$2 billion, or 29%, compared with the second quarter last year. PCL for the quarter was US$311 million, an increase of US$31 million compared with the second quarter last year. PCL – impaired was US$216 million, a decrease of US$13 million, or 6%, largely recorded in the consumer lending portfolios. PCL – performing was US$95 million, an increase of US$44 million compared to the prior year. The performing provisions this quarter largely reflect credit impacts from policy and trade uncertainty, including overlays and an update to our macroeconomic forecasts, partially offset by lower volume. U.S. Retail PCL including only the Bank's share of PCL in the U.S. strategic cards portfolio, as an annualized percentage of credit volume was 0.70%, an increase of 10 bps compared with the second quarter last year. Effective the first quarter of 2025, U.S. Retail segment non-interest expenses include certain U.S. governance and control investments, including costs for U.S. BSA/AML remediation which were previously reported in the Corporate segment. Comparative amounts have been reclassified to conform with the presentation adopted in the current period. Reported non-interest expenses for the quarter were US$1,644 million, a decrease of US$336 million, or 17%, compared to the second quarter last year, reflecting the impact of charges for the global resolution of the investigations into the Bank's U.S. BSA/AML program, and the FDIC special assessment charge, in the second quarter last year, partially offset by higher governance and control investments including costs of US$110 million for U.S. BSA/AML remediation, and higher employee-related expenses, in the current quarter. Our governance and control investments in this quarter were higher compared to the second quarter last year as remediation efforts progressed over this period. On an adjusted basis, non-interest expenses increased US$189 million, or 13%, reflecting higher governance and control investments, including costs for U.S. BSA/AML remediation, and higher employee-related expenses. The reported and adjusted efficiency ratios for the quarter were 89.8% and 62.8%, respectively, compared with 78.0% and 57.3%, respectively, in the second quarter last year. Quarterly comparison – Q2 2025 vs. Q1 2025 U.S. Retail reported net income was $120 million (US$89 million), a decrease of $222 million (US$158 million), or 65% (64% in U.S. dollars), compared with the prior quarter. On an adjusted basis, net income for the quarter was $967 million (US$680 million), a decrease of $71 million (US$56 million), or 7% (8% in U.S. dollars). The reported and adjusted annualized ROE for the quarter were 1.1% and 8.8%, respectively, compared with 2.9% and 8.6%, respectively, in the prior quarter. The contribution from Schwab of $78 million (US$54 million) decreased $121 million (US$88 million), or 61% (62% in U.S. dollars), compared with the prior quarter. U.S. Retail Bank reported net income was $42 million (US$35 million), a decrease of $101 million (US$70 million), or 71% (67% in U.S. dollars) compared with the prior quarter, primarily reflecting the impact of U.S. balance sheet restructuring activities and higher PCL, partially offset by the impact of fewer days in the current quarter. U.S. Retail Bank adjusted net income was $889 million (US$626 million), an increase of $50 million (US$32 million), or 6% (5% in U.S. dollars), compared to the prior quarter, primarily reflecting lower expenses, lower PCL, and higher non-interest income. Reported revenue was US$1,830 million, a decrease of US$132 million, or 7%, compared with the prior quarter. On an adjusted basis, revenue was US$2,618 million, an increase of US$4 million, relatively flat, compared with the prior quarter. Reported net interest income of US$2,136 million decreased US$24 million, or 1%, driven by the deferred cost adjustment, and fewer days in the quarter, partially offset by the impact of U.S. balance sheet restructuring activities. On an adjusted basis, net interest income was US$2,161 million, relatively flat compared with the prior quarter, as the impact of U.S. balance sheet restructuring activities was offset by the deferred cost adjustment, and fewer days in the quarter. Reported net interest margin of 3.00% increased 14 bps, and adjusted net interest margin of 3.04% increased 18 bps, compared with the prior quarter, due to impact of U.S. balance sheet restructuring activities, normalization of elevated liquidity levels (which positively impacted net interest margin by 11 bps), and higher deposit margins, partially offset by the deferred cost adjustment. Net interest margin in the third quarter is expected to deliver substantial expansion, reflecting the benefits from ongoing U.S. balance sheet restructuring activities and further normalization of elevated liquidity levels[11]. Reported non-interest loss was US$306 million, compared with reported non-interest loss of US$198 million in the prior quarter, reflecting the impact of U.S. balance sheet restructuring activities, partially offset by higher fee revenue. On an adjusted basis, non-interest income of US$457 million increased US$3 million, or 1%, compared with the prior quarter, reflecting higher fee revenue. Average loan volumes decreased US$6 billion, or 3%, compared with the prior quarter, reflecting a 5% decrease in personal loans and a 2% decrease in business loans. Excluding the impact of the loan portfolios identified for sale or run-off under our U.S. balance sheet restructuring program, average loan volumes were flat 9, 10. Average deposit volumes were relatively flat compared with the prior quarter, reflecting a 2% decrease in business deposits and a 1% decrease in sweep deposits, partially offset by a 1% increase in personal deposits. AUA were US$45 billion as of April 30, 2025, an increase of US$2 billion, or 5%, compared with the prior quarter. AUM were US$9 billion, flat compared with the prior quarter. PCL for the quarter was US$311 million, a decrease of US$7 million compared with the prior quarter. PCL – impaired was US$216 million, a decrease of US$155 million, or 42%, recorded across the consumer and commercial lending portfolios, including seasonal trends in the credit card and auto portfolios, and a prior quarter adoption impact of a model update in the credit card portfolio. PCL – performing was a build of US$95 million, compared with a recovery of US$53 million in the prior quarter. The performing provisions this quarter largely reflect credit impacts from policy and trade uncertainty, including overlays and an update to our macroeconomic forecasts, partially offset by lower volume. U.S. Retail PCL including only the Bank's share of PCL in the U.S. strategic cards portfolio, as an annualized percentage of credit volume was 0.70%, an increase of 3 bps compared with the prior quarter. Non-interest expenses for the quarter were US$1,644 million, a decrease of US$31 million, or 2%, compared with the prior quarter, reflecting fewer days in the quarter and lower operating expenses, partially offset by higher governance and control investments, including costs for U.S. BSA/AML remediation. The reported and adjusted efficiency ratios for the quarter were 89.8% and 62.8%, respectively, compared with 85.4% and 64.1%, respectively, in the prior quarter. Year-to-date comparison – Q2 2025 vs. Q2 2024 U.S. Retail reported net income for the six months ended April 30, 2025, was $462 million (US$336 million), a decrease of $915 million (US$686 million), or 66% (67% in U.S. dollars), compared with the same period last year. On an adjusted basis, net income for the period was $2,005 million (US$1,416 million), a decrease of $374 million (US$338 million), or 16% (19% in U.S. dollars). The reported and adjusted annualized ROE for the period were 2.1% and 8.7%, respectively, compared with 6.4% and 11.0%, respectively, in the same period last year. The contribution from Schwab of $277 million (US$196 million), decreased $100 million (US$84 million), or 27% (30% in U.S. dollars). U.S. Retail Bank reported net income for the period was $185 million (US$140 million), a decrease of $815 million (US$602 million), or 82% (81% in U.S. dollars), compared with the same period last year, reflecting the impact of U.S. balance sheet restructuring activities, higher PCL, and higher non-interest expenses, partially offset by the impact of the charges for the global resolution of the investigations into the Bank's U.S. BSA/AML program, and FDIC special assessment charge, in the same period last year, and higher revenue. U.S. Retail Bank adjusted net income was $1,728 million (US$1,220 million), a decrease of $274 million (US$254 million), or 14% (17% in U.S. dollars), primarily reflecting higher non-interest expenses and higher PCL, partially offset by higher revenue. Reported revenue for the period was US$3,792 million, a decrease of US$1,335 million, or 26%, compared with the same period last year. On an adjusted basis, revenue for the period was US$5,232 million, an increase of US$105 million, or 2%, compared with the same period last year. Reported net interest income of US$4,296 million increased US$61 million, or 1%, and adjusted net interest income of US$4,321 million increased US$86 million, or 2%, reflecting the impact of U.S. balance sheet restructuring activities and higher deposit margins, partially offset by the deferred cost adjustment. Reported net interest margin of 2.93%, decreased 8 bps, and adjusted net interest margin of 2.95% decreased 6 bps, due to maintaining elevated liquidity levels (which negatively impacted net interest margin by 13 bps) and the deferred cost adjustment, partially offset by the impact of U.S. balance sheet restructuring activities, and higher deposit margins. Reported non-interest loss of US$504 million decreased US$1,396 million, primarily reflecting the impact of U.S. balance sheet restructuring activities, partially offset by higher fee revenue. On an adjusted basis, non-interest income of US$911 million increased US$19 million, or 2%, primarily reflecting higher fee income. Average loan volumes for the period decreased $2 billion, or 1%, compared with the same period last year, reflecting a 3% decrease in business loans, partially offset by a 1% increase in personal loans. Excluding the impact of the loan portfolios identified for sale or run-off under our U.S. balance sheet restructuring program, average loan volumes for the period increased US$4 billion, or 3%, compared with the same period last year 9, 10. Average deposit volumes decreased US$8 billion, or 3%, reflecting a 9% decrease in sweep deposits and a 4% decrease in business deposits, partially offset by a 3% increase in personal deposits compared with the same period last year. PCL was US$629 million, an increase of US$64 million compared with the same period last year. PCL – impaired was US$587 million, an increase of US$79 million, or 16%, largely reflecting credit migration in the commercial lending portfolio and the adoption impact of a model update in the credit card portfolio. PCL – performing was US$42 million, a decrease of US$15 million compared with the same period last year. The current year performing provisions largely reflect credit impacts from policy and trade uncertainty, including overlays and an update to our macroeconomic forecasts, partially offset by lower volume and the adoption impact of a model update in the credit card portfolio. U.S. Retail PCL including only the Bank's share of PCL in the U.S. strategic cards portfolio, as an annualized percentage of credit volume was 0.68%, an increase of 8 bps, compared with the same period last year. Reported non-interest expenses for the period were US$3,319 million, a decrease of US$476 million, or 13%, compared with the same period last year, reflecting the impact of the charges for the global resolution of the investigations into the Bank's U.S. BSA/AML program, and FDIC special assessment charge, in the same period last year, partially offset by higher governance and control investments, including costs for U.S. BSA/AML remediation, and higher employee-related expenses. On an adjusted basis, non-interest expenses increased US$349 million, or 12%, reflecting costs related to the Bank's governance and control investments, including costs for U.S. BSA/AML remediation, and higher employee-related expenses. The reported and adjusted efficiency ratios for the period were 87.5% and 63.4%, respectively, compared with 74.0% and 57.9%, respectively, for the same period last year. _________________________ (millions of Canadian dollars, except as noted) For the three months ended For the six months ended April 30 January 31 April 30 April 30 April 30 2025 2025 2024 2025 2024 Net interest income $ 362 $ 369 $ 304 $ 731 $ 589 Non-interest income 3,141 3,229 2,810 6,370 5,660 Total revenue 3,503 3,598 3,114 7,101 6,249 Insurance service expenses 1 1,417 1,507 1,248 2,924 2,614 Non-interest expenses 1,131 1,173 1,027 2,304 2,074 Provision for (recovery of) income taxes 248 238 218 486 385 Net income $ 707 $ 680 $ 621 $ 1,387 $ 1,176 Selected volumes and ratios Return on common equity 46.8 % 42.7 % 40.8 % 44.7 % 39.2 % Return on common equity – Wealth Management 2 57.8 61.9 54.4 59.9 49.4 Return on common equity – Insurance 33.5 21.9 26.9 27.3 28.0 Efficiency ratio 32.3 32.6 33.0 32.4 33.2 Efficiency ratio, net of ISE 3 54.2 56.1 55.0 55.2 57.1 Assets under administration (billions of Canadian dollars) 4 $ 654 $ 687 $ 596 $ 654 $ 596 Assets under management (billions of Canadian dollars) 542 556 489 542 489 Average number of full-time equivalent staff 15,077 15,059 15,163 15,068 15,276 1 Includes estimated losses related to catastrophe claims – Q2 2025: $50 million, Q1 2025: nil, Q2 2024: $7 million, YTD 2025: $50 million, YTD 2024: $17 million. 2 Capital allocated to the business was 11.5% CET1 Capital. 3 Efficiency ratio, net of ISE is calculated by dividing non-interest expenses by total revenue, net of ISE. Total revenue, net of ISE – Q2 2025: $2,086 million, Q1 2025: $2,091 million, Q2 2024: $1,866 million, YTD 2025: $4,177 million, YTD 2024: $3,635 million. Total revenue, net of ISE is a non-GAAP financial measure. Refer to "Non-GAAP and Other Financial Measures" in the "How We Performed" section and the Glossary in the Bank's second quarter 2025 MD&A for additional information about this metric. 4 Includes AUA administered by TD Investment Services Inc. which is part of the Canadian Personal and Commercial Banking segment. Quarterly comparison – Q2 2025 vs. Q2 2024 Wealth Management and Insurance net income for the quarter was $707 million, an increase of $86 million, or 14%, compared with the second quarter last year, reflecting Wealth Management net income of $480 million, an increase of $62 million, or 15%, compared with the second quarter last year, and Insurance net income of $227 million, an increase of $24 million, or 12%, compared with the second quarter last year. The annualized ROE for the quarter was 46.8%, compared with 40.8% in the second quarter last year. Wealth Management annualized ROE for the quarter was 57.8%, compared with 54.4% in the second quarter last year, and Insurance annualized ROE for the quarter was 33.5% compared with 26.9% in the second quarter last year. Revenue for the quarter was $3,503 million, an increase of $389 million, or 12%, compared with the second quarter last year. Non-interest income was $3,141 million, an increase of $331 million, or 12%, reflecting higher insurance premiums, fee-based revenue, and transaction revenue. Net interest income was $362 million, an increase of $58 million, or 19%, compared with the second quarter last year, reflecting higher deposit volumes and margins. AUA were $654 billion as at April 30, 2025, an increase of $58 billion, or 10%, and AUM were $542 billion as at April 30, 2025, an increase of $53 billion, or 11%, compared with the second quarter last year, both reflecting market appreciation and net asset growth. Insurance service expenses for the quarter were $1,417 million, an increase of $169 million, or 14%, compared with the second quarter last year, primarily reflecting increased claims severity. Non-interest expenses for the quarter were $1,131 million, an increase of $104 million, or 10%, compared with the second quarter last year, reflecting higher variable compensation, higher spend supporting business growth initiatives from technology spend and employee-related expenses. The efficiency ratio for the quarter was 32.3%, compared with 33.0% in the second quarter last year. The efficiency ratio, net of ISE for the quarter was 54.2%, compared with 55.0% in the second quarter last year. Quarterly comparison – Q2 2025 vs. Q1 2025 Wealth Management and Insurance net income for the quarter was $707 million, an increase of $27 million, or 4%, compared with the prior quarter, reflecting Wealth Management net income of $480 million, a decrease of $32 million, or 6%, compared with the prior quarter, and Insurance net income of $227 million, an increase of $59 million, or 35%, compared with the prior quarter. The annualized ROE for the quarter was 46.8%, compared with 42.7% in the prior quarter. Wealth Management annualized ROE for the quarter was 57.8%, compared with 61.9% in the prior quarter, and Insurance annualized ROE for the quarter was 33.5% compared with 21.9% in the prior quarter. Revenue decreased $95 million, or 3%, compared with the prior quarter. Non-interest income decreased $88 million, or 3%, reflecting lower fee-based revenue and transaction revenue. Net interest income decreased $7 million, or 2%, reflecting the effect of fewer days in the second quarter. AUA decreased $33 billion, or 5%, and AUM decreased $14 billion, or 3%, compared with the prior quarter, both reflecting market depreciation and lower net asset growth. Insurance service expenses for the quarter decreased $90 million, or 6%, compared with the prior quarter, primarily driven by seasonally lower claims. Non-interest expenses decreased $42 million, or 4%, compared with the prior quarter, primarily reflecting lower employee-related expenses and lower variable compensation. The efficiency ratio for the quarter was 32.3%, compared with 32.6% in the prior quarter. The efficiency ratio, net of ISE for the quarter was 54.2%, compared with 56.1% in the prior quarter. Year-to-date comparison – Q2 2025 vs. Q2 2024 Wealth Management and Insurance net income for the six months ended April 30, 2025, was $1,387 million, an increase of $211 million, or 18%, compared with the same period last year, reflecting Wealth Management net income of $992 million, an increase of $219 million, or 28%, compared with the same period last year, and Insurance net income of $395 million, a decrease of $8 million, or 2%, compared with the same period last year. The annualized ROE for the period was 44.7%, compared with 39.2%, in the same period last year. Wealth Management annualized ROE for the period was 59.9%, compared with 49.4% in the same period last year, and Insurance annualized ROE for the period was 27.3% compared with 28.0% in the same period last year. Revenue for the period was $7,101 million, an increase of $852 million, or 14%, compared with same period last year. Non-interest income increased $710 million, or 13%, reflecting higher insurance premiums, fee-based revenue commensurate with market growth, and transaction revenue. Net interest income increased $142 million, or 24%, reflecting higher deposit volumes and margins. Insurance service expenses were $2,924 million, an increase of $310 million, or 12%, compared with the same period last year, reflecting business growth, increased claims severity and higher occurrences of catastrophe claims. Non-interest expenses were $2,304 million, an increase of $230 million, or 11%, compared with the same period last year, reflecting higher variable compensation commensurate with higher revenues, and increased technology spend to support strategic initiatives. The efficiency ratio for the period was 32.4%, compared with 33.2% for the same period last year. The efficiency ratio, net of ISE for the period was 55.2%, compared with 57.1% in the same period last year. TABLE 10: WHOLESALE BANKING 1 (millions of Canadian dollars, except as noted) For the three months ended For the six months ended April 30 January 31 April 30 April 30 April 30 2025 2025 2024 2025 2024 Net interest income (loss) (TEB) $ 45 $ (107) $ 189 $ (62) $ 387 Non-interest income 2,084 2,107 1,751 4,191 3,333 Total revenue 2,129 2,000 1,940 4,129 3,720 Provision for (recovery of) credit losses – impaired 61 33 (1) 94 4 Provision for (recovery of) credit losses – performing 62 39 56 101 61 Total provision for (recovery of) credit losses 123 72 55 195 65 Non-interest expenses – reported 1,461 1,535 1,430 2,996 2,930 Non-interest expenses – adjusted 1,2 1,427 1,483 1,328 2,910 2,711 Provision for (recovery of) income taxes (TEB) – reported 126 94 94 220 159 Provision for (recovery of) income taxes (TEB) – adjusted 1 134 105 116 239 205 Net income – reported $ 419 $ 299 $ 361 $ 718 $ 566 Net income – adjusted 1 445 340 441 785 739 Selected volumes and ratios Trading-related revenue (TEB) 3 $ 856 $ 904 $ 693 $ 1,760 $ 1,423 Average gross lending portfolio (billions of Canadian dollars) 4 103.1 100.9 96.3 102.0 96.3 Return on common equity – reported 5 10.2 % 7.3 % 9.2 % 8.8 % 7.3 % Return on common equity – adjusted 1,5 10.9 8.3 11.3 9.6 9.5 Efficiency ratio – reported 68.6 76.8 73.7 72.6 78.8 Efficiency ratio – adjusted 1 67.0 74.2 68.5 70.5 72.9 Average number of full-time equivalent staff 6,970 6,919 7,077 6,944 7,089 1 For additional information about the Bank's use of non-GAAP financial measures, refer to "Non-GAAP and Other Financial Measures" in the "How We Performed" section of this document. 2 Adjusted non-interest expenses exclude the acquisition and integration-related charges for the Cowen acquisition – Q2 2025: $34 million ($26 million after tax), Q1 2025: $52 million ($41 million after tax), 2025 YTD: $86 million ($67 million after tax), Q2 2024: $102 million ($80 million after tax), 2024 YTD: $219 million ($173 million after tax). 3 Includes net interest income (loss) TEB of ($272) million, (Q1 2025: ($404) million, 2025 YTD: ($676) million, Q2 2024: ($118) million, 2024 YTD: ($172) million), and trading income (loss) of $1,128 million (Q1 2025: $1,308 million, 2025 YTD: $2,436 million, Q2 2024: $811 million, 2024 YTD: $1,595 million). Trading-related revenue (TEB) is a non-GAAP financial measure. Refer to "Non-GAAP and Other Financial Measures" in the "How We Performed" section and the Glossary in the Bank's second quarter 2025 MD&A for additional information about this metric. 4 Includes gross loans and bankers' acceptances relating to Wholesale Banking, excluding letters of credit, cash collateral, credit default swaps, and allowance for credit losses. 5 Capital allocated to the business segment was 11.5% CET1 Capital. Quarterly comparison – Q2 2025 vs. Q2 2024 Wholesale Banking reported net income for the quarter was $419 million, an increase of $58 million, or 16%, compared with the second quarter last year, primarily reflecting higher revenues, partially offset by higher PCL, income taxes and non-interest expenses. On an adjusted basis, net income was $445 million, an increase of $4 million, or 1%, compared with the second quarter last year. Revenue for the quarter was $2,129 million, an increase of $189 million, or 10%, compared with the second quarter last year. Higher revenue primarily reflects higher trading-related revenue, and underwriting fees, including those associated with the sale of Schwab shares, partially offset by the net change in fair value of loan underwriting commitments and the equity investment portfolio, and lower advisory fees. PCL for the quarter was $123 million, an increase of $68 million compared with the second quarter last year. PCL – impaired was $61 million, an increase of $62 million compared with the prior year, primarily reflecting a small number of impairments across various industries. PCL – performing was $62 million, an increase of $6 million compared with the prior year. The performing build this quarter reflects credit impacts from policy and trade uncertainty, including overlays and an update to our macroeconomic forecasts. Reported non-interest expenses for the quarter were $1,461 million, an increase of $31 million, or 2%, compared with the second quarter last year, primarily reflecting higher technology and front office costs, and the impact of foreign exchange translation, partially offset by lower acquisition and integration-related costs and variable compensation. On an adjusted basis, non-interest expenses were $1,427 million, an increase of $99 million, or 7%. Quarterly comparison – Q2 2025 vs. Q1 2025 Wholesale Banking reported net income for the quarter was $419 million, an increase of $120 million, or 40%, compared with the prior quarter, primarily reflecting higher revenues and lower non-interest expenses, partially offset by higher PCL. On an adjusted basis, net income was $445 million, an increase of $105 million, or 31%. Revenue for the quarter increased $129 million, or 6%, compared with the prior quarter. Higher revenue primarily reflects higher underwriting fees, including those associated with the sale of Schwab shares, partially offset by lower trading-related revenue. PCL for the quarter was $123 million, an increase of $51 million compared with the prior quarter. PCL – impaired was $61 million, an increase of $28 million, primarily reflecting a small number of impairments across various industries. PCL – performing was $62 million, an increase of $23 million. The performing build this quarter reflects credit impacts from policy and trade uncertainty, including overlays and an update to our macroeconomic forecasts. Reported non-interest expenses for the quarter decreased $74 million, or 5%, compared with the prior quarter, primarily reflecting lower variable compensation and acquisition and integration-related costs. On an adjusted basis, non-interest expenses decreased $56 million, or 4%. Year-to-date comparison – Q2 2025 vs. Q2 2024 Wholesale Banking reported net income for the six months ended April 30, 2025 was $718 million, an increase of $152 million, or 27%, compared with the same period last year, reflecting higher revenues, partially offset by higher PCL, non-interest expenses and income taxes. On an adjusted basis, net income was $785 million, an increase of $46 million, or 6%. Revenue was $4,129 million, an increase of $409 million, or 11%, compared with the same period last year. Higher revenue primarily reflects higher trading-related revenue, and underwriting fees, including those associated with the sale of Schwab shares, partially offset by the net change in fair value of loan underwriting commitments and the equity investment portfolio, and lower advisory fees. PCL was $195 million, an increase of $130 million compared with the same period last year. PCL – impaired was $94 million, an increase of $90 million, primarily reflecting a small number of impairments across various industries. PCL – performing was $101 million, an increase of $40 million. The current year performing provisions reflect credit impacts from policy and trade uncertainty, including overlays and an update to our macroeconomic forecasts. Reported non-interest expenses were $2,996 million, an increase of $66 million, or 2%, compared with the same period last year, reflecting higher technology and front office costs, and the impact of foreign exchange translation, partially offset by lower acquisition and integration-related costs, and the impact of a provision related to the U.S. record keeping and trading regulatory matters recorded in the same period last year. On an adjusted basis, non-interest expenses were $2,910 million, an increase of $199 million, or 7%. TABLE 11: CORPORATE (millions of Canadian dollars) For the three months ended For the six months ended April 30 January 31 April 30 April 30 April 30 2025 2025 2024 2025 2024 Net income (loss) – reported $ 8,215 $ (359) $ (664) $ 7,856 $ (1,255) Adjustments for items of note Amortization of acquired intangibles 43 61 72 104 166 Acquisition and integration charges related to the Schwab transaction – – 21 – 53 Share of restructuring and other charges from investment in Schwab – – – – 49 Restructuring charges 163 – 165 163 456 Impact from the terminated FHN acquisition-related capital hedging strategy 47 54 64 101 121 Gain on sale of Schwab shares (8,975) – – (8,975) – Civil matter provision – – 274 – 274 Less: impact of income taxes (346) 22 143 (324) 256 Net income (loss) – adjusted 1 $ (161) $ (266) $ (211) $ (427) $ (392) Decomposition of items included in net income (loss) – adjusted Net corporate expenses 2 $ (431) $ (370) $ (338) $ (801) $ (555) Other 270 104 127 374 163 Net income (loss) – adjusted 1 $ (161) $ (266) $ (211) $ (427) $ (392) Selected volumes Average number of full-time equivalent staff 23,250 22,748 23,270 22,995 23,354 1 For additional information about the Bank's use of non-GAAP financial measures, refer to "Non-GAAP and Other Financial Measures" in the "How We Performed" section of this document. 2 For additional information about this metric, refer to the Glossary in the second quarter of 2025 MD&A, which is incorporated by reference. Quarterly comparison – Q2 2025 vs. Q2 2024 Corporate segment's reported net income for the quarter was $8,215 million, compared with a reported net loss of $664 million in the second quarter last year. The higher net income primarily reflects the gain on the Schwab sale transaction, the prior year impact of a civil matter provision and higher revenue from treasury and balance sheet activities in the current quarter. Net corporate expenses increased $93 million compared to the second quarter last year, primarily reflecting higher governance and control costs. The adjusted net loss for the quarter was $161 million, compared with an adjusted net loss of $211 million in the second quarter last year. Quarterly comparison – Q2 2025 vs. Q1 2025 Corporate segment's reported net income for the quarter was $8,215 million, compared with a reported net loss of $359 million in the prior quarter. The higher net income primarily reflects the gain on the Schwab sale transaction and higher revenue from treasury and balance sheet activities, partially offset by restructuring charges. Net corporate expenses increased $61 million compared to the prior quarter. The adjusted net loss for the quarter was $161 million, compared with an adjusted net loss of $266 million in the prior quarter. Year-to-date comparison – Q2 2025 vs. Q2 2024 Corporate segment's reported net income for the six months ended April 30, 2025 was $7,856 million, compared with a reported net loss of $1,255 million in the same period last year. The higher net income primarily reflects the gain on the Schwab sale transaction, higher revenue from treasury and balance sheet activities and lower restructuring charges compared to the previous program in the same period last year. Net corporate expenses increased $246 million compared to the same period last year, primarily reflecting higher governance and control costs. The adjusted net loss for the six months ended April 30, 2025 was $427 million, compared with an adjusted net loss of $392 million in the same period last year. SHAREHOLDER AND INVESTOR INFORMATION Shareholder Services If you: And your inquiry relates to: Please contact: Are a registered shareholder (your name appears on your TD share certificate) Missing dividends, lost share certificates, estate questions, address changes to the share register, dividend bank account changes, the dividend reinvestment plan, eliminating duplicate mailings of shareholder materials or stopping (or resuming) receiving annual and quarterly reports Transfer Agent: TSX Trust Company 301-100 Adelaide Street West Toronto, ON M5H 4H1 1-800-387-0825 (Canada and U.S. only) or 416-682-3860 Facsimile: 1-888-249-6189 [email protected] or Hold your TD shares through the Direct Registration System in the United States Missing dividends, lost share certificates, estate questions, address changes to the share register, eliminating duplicate mailings of shareholder materials or stopping (or resuming) receiving annual and quarterly reports Co-Transfer Agent and Registrar: Computershare Trust Company, N.A. 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Access to Quarterly Results Materials Interested investors, the media and others may view the second quarter earnings news release, results slides, supplementary financial information, and the Report to Shareholders on the TD Investor Relations website at Quarterly Earnings Conference Call TD Bank Group will host an earnings conference call in Toronto, Ontario on May 22, 2025. The call will be audio webcast live through TD's website at 8:00 a.m. ET. The call will feature presentations by TD executives on the Bank's financial results for the second quarter and discussions of related disclosures, followed by a question-and-answer period with analysts. The presentation material referenced during the call will be available on the TD website at on May 22, 2025, in advance of the call. A listen-only telephone line is available at 416‑340-2217 or 1-800-806-5484 (toll free) and the passcode is 2829533#. The audio webcast and presentations will be archived at Replay of the teleconference will be available from 5:00 p.m. ET on May 22, 2025, until 11:59 p.m. ET on June 6, 2025, by calling 905-694-9451 or 1-800-408-3053 (toll free). The passcode is 8753393#. About TD Bank Group The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group ("TD" or the "Bank"). TD is the sixth largest bank in North America by assets and serves over 27.9 million customers in four key businesses operating in a number of locations in financial centres around the globe: Canadian Personal and Commercial Banking, including TD Canada Trust and TD Auto Finance Canada; U.S. Retail, including TD Bank, America's Most Convenient Bank®, TD Auto Finance U.S., and TD Wealth (U.S.); Wealth Management and Insurance, including TD Wealth (Canada), TD Direct Investing, and TD Insurance; and Wholesale Banking, including TD Securities and TD Cowen. TD also ranks among the world's leading online financial services firms, with more than 18 million active online and mobile customers. TD had $2.1 trillion in assets on April 30, 2025. The Toronto-Dominion Bank trades under the symbol "TD" on the Toronto Stock Exchange and New York Stock Exchange. SOURCE TD Bank Group For further information contact: Brooke Hales, Senior Vice President, Investor Relations, 416-307-8647, [email protected], OR Elizabeth Goldenshtein, Senior Manager, Corporate Communications, 416-994-4124, [email protected]
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14-05-2025
- Business
- Yahoo
Lotus Creek Exploration Inc. Announces First Quarter 2025 Operating Results
Calgary, Alberta--(Newsfile Corp. - May 14, 2025) - Lotus Creek Exploration Inc. ("Lotus Creek" or the "Company") (TSXV: LTC) is pleased to provide the following first quarter operating results to shareholders. Lotus Creek's Interim Consolidated Financial Statements and related Management's Discussion and Analysis ("MD&A") for the period ended March 31, 2025 are available for review on Lotus Creek's website at and on QUARTERLY HIGHLIGHTS On February 5, 2025, Lotus Creek, Gear Energy Ltd. ("Gear") and an unrelated third-party (the "Third-Party") closed the previously announced plan of arrangement (the "Arrangement"). Under the Arrangement, Gear's producing oil and gas properties in Central Alberta and Southeast Saskatchewan and its evaluation and exploration properties in Tucker Lake, Alberta were acquired by Lotus Creek plus the Company received $21.5 million of working capital surplus. For the first quarter, the commercial operations of Lotus Creek are between February 5, 2025 and March 31, 2025 (the "Operating Period"). Lotus Creek invested a total of $9.6 million of capital during the first quarter. The Company maintains a strong balance sheet with a working capital surplus of $12.2 million at the end of the first quarter and access to ample liquidity through its undrawn $35.0 million Credit Facility. The Company drilled and completed its inaugural heavy oil well in its exploratory acreage at Tucker Lake, Alberta and completed two heavy oil wells in Tucker Lake that were acquired as per the Arrangement. These wells were operated temporarily to recover load fluid and were shut in after the fact. Lotus Creek is awaiting approval from the Alberta Energy Regulator for the facility license and anticipates approval during the second quarter of 2025. During the first quarter, the Company completed a 44 square mile 3D seismic program in Central Alberta and the data evaluation is currently ongoing. Lotus Creek plans to execute a Belly River drilling program in Central Alberta during the second half of 2025 with new volumes expected to come on-stream in the fourth quarter of 2025. Production for the first quarter of 2025 was 1,632 boe per day which includes 945 bbl per day of light oil, 252 bbl per day of NGLs and 2,609 mcf per day of natural gas and relate to the Operating Period. During the first quarter, Lotus Creek partially restarted a natural gas field in the Medicine Hat area. The field is currently producing 966 mcf per day. Adjusted funds from operations ("Adjusted FFO") for the first quarter of 2025 was $1.6 million. Adjusted FFO reflects that the Operating Period was only 55 days and not a full quarter. Commodity prices decreased in the first quarter driven by a lower WTI benchmark oil price due to trade and demand concerns and widened differentials. Lotus Creek will continue to monitor commodity prices and overall market conditions. See "Non-GAAP and Other Financial Measures" in this press release. LOTUS CREEK HIGHLIGHTS Lotus Creek is a Canadian exploration and production company with oil production in Central Alberta and Southeast Saskatchewan and exploration assets in Tucker Lake and Central Alberta. On February 5, 2025, Lotus Creek, Gear and the Third-Party closed the previously announced transformative Arrangement. Under the Arrangement, Gear's producing oil and gas properties in Central Alberta and Southeast Saskatchewan and its evaluation and exploration properties in Tucker Lake, Alberta were acquired by Lotus Creek plus the Company received $21.5 million of working capital to fund its exploration and development activities. In exchange, Lotus Creek issued 40.0 million common shares at $2.00 per share as consideration. Lotus Creek commenced commercial operations on close of the Arrangement. Business ModelLotus Creek is an oil weighted organic growth company. The objective is to be the fastest growing, fully funded, public junior oil and gas company in Canada. We will measure shareholder value creation by profitable growth in cashflow, production and producing reserves per debt adjusted share. Key Attributes High-quality, light sweet oil production base with long life reserves Proved Developed Producing ("PDP") reserves NPV-10 value $76 million after-tax Material upside in Wilson Creek and Tucker Lake assets with strong economics and capital efficiencies Multiple stacked oil reservoir zones, with open hole, multi-lateral and multi-stage fractured horizontal locations Well capitalized business model positioned to substantially grow in the coming years Working capital surplus of $12.2 million as at March 31, 2025 and a $35 million available credit facility The following table summarizes selected highlights for the three months ended March 31, 2025, and December 31, 2024. Three months ended(Cdn$ thousands, except per share, share and per boe amounts)Mar 31, 2025(2) Dec 31, 2024(3)FINANCIAL Adjusted funds from operations (1)1,619 (13 ) Per boe18.04 -Per weighted average basic share0.07 -Cash flows used in operating activities(443 )-Per boe(4.94 )-Per weighted average basic share(0.02 )-Net loss(489 )(13 ) Per weighted average basic share(0.02 )-Exploration and evaluation expenditures9,292 746Property, plant and equipment expenditures294 -Acquisitions80,147 -Net surplus (debt) (1)12,192 (759 ) Weighted average shares, basic (thousands)24,444 -Shares outstanding, end of period (thousands)40,000 - OPERATING Production Light oil (bbl/d)945 -Natural gas liquids (bbl/d)252 -Natural gas (mcf/d)2,609 - Total (boe/d)1,632 - Average realized prices Light oil ($/bbl)89.82 -Natural gas liquids ($/bbl)43.21 -Natural gas ($/mcf)2.23 - Netback ($/boe) Petroleum and natural gas sales62.27 -Royalties(9.07 )-Operating expenses(23.92 )-Transportation expenses(1.87 )- Operating netback (1)27.41 -General and administrative(9.24 )-Interest income0.78 -Interest and financing charges(0.91 )- (1) Adjusted funds from operations (including per boe and per weighted average basic share), net surplus (debt) and operating netback do not have any standardized meanings under Canadian generally accepted accounting principles ("GAAP") and therefore may not be comparable to similar measures presented by other entities. For additional information related to these measures, including a reconciliation to the nearest GAAP measures, where applicable, see "Non-GAAP and Other Financial Measures" in this press release.(2) The commercial operations of Lotus Creek for the first quarter of 2025 are between February 5, 2025 and March 31, 2025.(3) As Lotus Creek was incorporated on August 21, 2024, there is no comparative for the three months ended March 31, 2024. As such, the only comparative period is the three months ended December 31, 2024; however, no material commercial operations were conducted by Lotus Creek in the three months ended December 31, 2024. Forward-Looking Information and Statements This press release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "strategy" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this press release contains forward-looking information and statements pertaining to the following: Lotus Creek's operational strategy, plans, priorities and focus; Lotus Creek's objective to be the fastest growing, fully funded, public junior oil and gas company in Canada; the intent to deliver superior total shareholder returns and its anticipated means of achieving such objective; the expectation that the Company has ample liquidity; the expectation of receiving approval from the Alberta Energy Regulator for the facility license in Tucker Lake during the second quarter of 2025; Lotus Creek's plans to execute a Belly River drilling program in Central Alberta during the second half of 2025 with new volumes expected to come on-stream in the fourth quarter of 2025; the intent of Lotus Creek to continue to monitor commodity prices and overall market conditions and to determine whether to make adjustments to its 2025 capital expenditure budget and guidance; the expectation that there are 6 prospective oil targets in each growth area, with open hole, multi-lateral development potential; and statements with respect to reserves and the associated value thereof. The forward-looking information and statements contained in this press release reflect several material factors and expectations and assumptions of Lotus Creek including, without limitation: that Lotus Creek will continue to conduct its operations in a manner consistent with past operations; the general continuance of current industry conditions; the duration and impact of tariffs that are currently in effect on goods exported from or imported into Canada, and that other than the tariffs that are currently in effect, neither the U.S. nor Canada (i) increases the rate or scope of such tariffs, reenacts tariffs that are currently suspended, or imposes new tariffs, on the import of goods from one country to the other, including on oil and natural gas, and/or (ii) imposes any other form of tax, restriction or prohibition on the import or export of products from one country to the other, including on oil and natural gas; the ability of the Company to receive all necessary regulatory approvals without significant adverse conditions; the continuance of existing (and in certain circumstances, the implementation of proposed) tax, royalty and regulatory regimes; the accuracy of the estimates of Lotus Creek's reserves and resource volumes; certain commodity price and other cost assumptions; and the continued availability of adequate debt and equity financing and funds from operations to fund its planned expenditures. Lotus Creek believes the material factors, expectations and assumptions reflected in the forward-looking information and statements are reasonable but no assurance can be given that these factors, expectations and assumptions will prove to be correct. To the extent that any forward-looking information contained herein may be considered a financial outlook, such information has been included to provide readers with an understanding of management's assumptions used for budgeting and developing future plans and readers are cautioned that the information may not be appropriate for other purposes. The forward-looking information and statements included in this press release are not guarantees of future performance and should not be unduly relied upon. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements including, without limitation: the risk that (i) the tariffs that are currently in effect on goods exported from or imported into Canada continue in effect for an extended period of time, the tariffs that have been threatened are implemented, that tariffs that are currently suspended are reactivated, the rate or scope of tariffs are increased, or new tariffs are imposed, including on oil and natural gas, (ii) the U.S. and/or Canada imposes any other form of tax, restriction or prohibition on the import or export of products from one country to the other, including on oil and natural gas, and (iii) the tariffs imposed or threatened to be imposed by the U.S. on other countries and retaliatory tariffs imposed or threatened to be imposed by other countries on the U.S., will trigger a broader global trade war which could have a material adverse effect on the Canadian, U.S. and global economies, and by extension the Canadian oil and natural gas industry and the Company, including by decreasing demand for oil and natural gas, disrupting supply chains, increasing costs, causing volatility in global financial markets, and limiting access to financing; the failure to receive any regulatory approvals required for the Company's operations as contemplated or the imposition of the impact of the Russian-Ukraine war and the Israel-Palestine war on the global economy and commodity prices; the impacts of inflation and supply chain issues; pandemics, political events, natural disasters and terrorism; changes in commodity prices; the impact of actions taken by OPEC+ on global supply and demand of oil and gas; changes in the demand for or supply of Lotus Creek's products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of Lotus Creek or by third party operators of Lotus Creek's properties, increased debt levels or debt service requirements; inability to obtain debt or equity financing as necessary to fund operations, capital expenditures and any potential acquisitions; any ability for Lotus Creek to repay any of its indebtedness when due; inaccurate estimation of Lotus Creek's oil and gas reserve and resource volumes; limited, unfavorable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time to time in Lotus Creek's public documents including risk factors set out in Lotus Creek's Listing Application dated February 5, 2025 on TSXV Form 2B, which is available on SEDAR+ at The forward-looking information and statements contained in this press release speak only as of the date of this press release, and Lotus Creek does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws. Non-GAAP and Other Financial MeasuresThis press release includes references to non-GAAP and other financial measures that Lotus Creek uses to analyze financial performance. These specified financial measures include non-GAAP financial measures, non-GAAP ratios, capital management measures and supplementary financial measures, and are not defined by IFRS Accounting Standards and are therefore referred to as non-GAAP and other financial measures. Management believes that the non-GAAP and other financial measures used by the Company are key performance measures for Lotus Creek and provide investors with information that is commonly used by other oil and gas companies. These key performance indicators and benchmarks as presented do not have any standardized meaning prescribed by IFRS Accounting Standards and therefore may not be comparable with the calculation of similar measures for other entities. These non-GAAP and other financial measures should not be considered an alternative to or more meaningful than their most directly comparable financial measure presented in the financial statements, as an indication of the Company's performance. Descriptions of the non-GAAP and other financial measures used by the Company as well as reconciliations to the most directly comparable GAAP measure for the quarter ended March 31, 2025 and the period from incorporation on August 21, 2024 to December 31, 2024, where applicable, is provided below. Adjusted Funds from OperationsAdjusted funds from operations is a non-GAAP financial measure defined as cash flows (used in) from operating activities before changes in non-cash operating working capital and decommissioning liabilities settled and adding back transaction costs, if any. Transaction costs, which primarily include legal fees and other related acquisition costs, are excluded to provide a measure representing cash flows generated by the Company's routine business operations. Lotus Creek evaluates its financial performance primarily on adjusted funds from operations and considers it a key measure for management and investors as it demonstrates the Company's ability to generate the adjusted funds from operations necessary to fund its capital program, settle decommissioning liabilities and repay debt. Reconciliation of cash flows from operating activities to adjusted funds from operations: Three months ended ($ thousands)Mar 31, 2025 Dec 31, 2024Cash flows used in operating activities(443 )-Change in non-cash operating working capital1,415 (13 ) Add back: transaction costs647 - Adjusted funds from operations1,619 (13 ) Adjusted Funds from Operations per BOEAdjusted funds from operations per boe is a non-GAAP ratio calculated as adjusted funds from operations, as defined and reconciled to cash flows (used in) from operating activities above, divided by sales production for the period. Lotus Creek considers this a useful non-GAAP ratio for management and investors as it evaluates financial performance on a per boe level, which enables better comparison to other oil and gas companies in demonstrating its ability to generate the adjusted funds from operations necessary to fund its capital program, settle decommissioning liabilities and repay debt. Adjusted Funds from Operations per Weighted Average Basic ShareAdjusted funds from operations per weighted average basic share is a non-GAAP ratio calculated as adjusted funds from operations, as defined and reconciled to cash flows (used in) from operating activities above, divided by the weighted average basic share amount. Lotus Creek considers this non-GAAP ratio a useful measure for management and investors as it demonstrates its ability to generate the adjusted funds from operations, on a per weighted average basic share basis, necessary to fund its capital program, settle decommissioning liabilities and repay debt. Net Surplus (Debt)Net surplus (debt) is a capital management measure defined as debt less current working capital items (excluding debt, risk management contracts, if any, and decommissioning liabilities). Lotus Creek believes net surplus (debt) provides management and investors with a measure that is a key indicator of its leverage and strength of its balance sheet. Changes in net surplus (debt) are primarily a result of adjusted funds from operations, capital and abandonment expenditures and equity issuances. Reconciliation of debt to net surplus (debt): Capital Structure and Liquidity($ thousands)Mar 31, 2025 Dec 31, 2024 Debt- -Working capital surplus (1)12,192 (759 ) Net surplus (debt)12,192 (759 ) (1) Current assets less current liabilities, excluding decommissioning liabilities. Net Debt to Quarterly Annualized Adjusted Funds from OperationsNet debt to quarterly annualized adjusted funds from operations is a non-GAAP ratio and is defined as net debt, as defined and reconciled to debt above, divided by the annualized adjusted funds from operations, as defined and reconciled to cash flows from operating activities above, for the most recently completed quarter. Lotus Creek uses net debt to quarterly annualized adjusted funds from operations to analyze financial and operating performance. Lotus Creek considers this a key measure for management and investors as it demonstrates the Company's ability to pay off its debt and take on new debt, if necessary, using the most recent quarter's results. When the Company is in a net surplus position, the Company's net debt to annualized adjusted funds from operations is not applicable. Operating NetbackOperating netbacks are non-GAAP ratios calculated based on the amount of revenues received on a per unit of production basis after royalties and operating costs. Management considers operating netback to be a key measure of operating performance and profitability on a per unit basis of production. Management believes that operating netback provides investors with information that is commonly used by other oil and gas companies. The measurement on a per boe basis assists management and investors with evaluating operating performance on a comparable basis. Per BOE FiguresThis press release represents various results on a per boe basis, including adjusted funds from operations, cash flows (used in) from operating activities, petroleum and natural gas sales, royalties, operating costs, transportation costs, general and administrative, interest income and interest and financing charges. These supplementary financial measures are determined by dividing the applicable financial figure as prescribed under IFRS by the Company's total sales volumes for the respective period. Barrels of Oil EquivalentDisclosure provided herein in respect of BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of six Mcf to one Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Additionally, given that the value ratio based on the current price of crude oil, as compared to natural gas, is significantly different from the energy equivalency of 6:1; utilizing a conversion ratio of 6:1 may be misleading as an indication of value. Reserves InformationEstimates of reserves and associated values presented herein have been derived from an evaluation of the assets acquired by Lotus Creek pursuant to the Arrangement prepared by Sproule Associates Limited, the Company's independent qualified reserves evaluator (the "Sproule Report"). The Sproule Report was prepared using forecast prices in accordance with the standards and the reserve definitions contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. The effective date of the Sproule Report is November 30, 2024 and the preparation date of the Sproule Report is December 18, 2024. Additional details from the Sproule Report are set out in Lotus Creek's Listing Application dated February 5, 2025 on TSXV Form 2B, which is available on SEDAR+ at Oil & Gas Matters References to heavy oil, light and medium oil, natural gas liquids and natural gas in this press release refer to the heavy crude oil, light crude oil and medium crude oil, natural gas liquids and conventional natural gas, respectively, product types as defined in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. FOR FURTHER INFORMATION, PLEASE CONTACT: Kevin Johnson Mitchell Harris President & CEO Interim CFO 403-538-8463 403-444-1465 Email: info@ Website: To view the source version of this press release, please visit Sign in to access your portfolio
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08-05-2025
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Sun Life Reports First Quarter 2025 Results
Sun Life Financial Inc. ("SLF Inc."), its subsidiaries and, where applicable, its joint ventures and associates are collectively referred to as "the Company", "Sun Life", "we", "our", and "us". We manage our operations and report our financial results in five business segments: Asset Management, Canada, United States ("U.S."), Asia, and Corporate. The information in this document is based on the unaudited interim financial results of SLF Inc. for the period ended March 31, 2025 and should be read in conjunction with the interim management's discussion and analysis ("MD&A") and our unaudited interim consolidated financial statements and accompanying notes ("Interim Consolidated Financial Statements") for the period ended March 31, 2025, prepared in accordance with International Financial Reporting Standards ("IFRS"). We report certain financial information using non-IFRS financial measures. For more details, refer to the Non-IFRS Financial Measures section in this document. Additional information relating to SLF Inc. is available on under Investors – Financial results and reports, on the SEDAR+ website at and on the U.S. Securities and Exchange Commission's website at Reported net income (loss) refers to Common shareholders' net income (loss) determined in accordance with IFRS. Unless otherwise noted, all amounts are in Canadian dollars. Amounts in this document may be impacted by rounding. TORONTO, May 8, 2025 /PRNewswire/ - Sun Life Financial Inc. (TSX: SLF) (NYSE: SLF) announced its results for the first quarter ended March 31, 2025. Underlying net income(1) of $1,045 million increased $170 million or 19% from Q1'24; underlying return on equity ("ROE")(1) was 17.7%. Asset management & wealth(2) underlying net income(1): $487 million, up $79 million or 19%. Group - Health & Protection underlying net income(1): $330 million, up $50 million or 18%. Individual - Protection underlying net income(1)(3): $325 million, up $55 million or 20%. Corporate expenses & other(1)(3): $(97) million net loss, increase in net loss of $(14) million or 17%. Reported net income of $928 million increased $110 million or 13% from Q1'24; reported ROE(1) was 15.7%. Assets under management ("AUM")(1) of $1,551 billion increased $81 billion or 6% from Q1'24. Increase to common share dividend from $0.84 to $0.88 per share. "This quarter, we achieved strong top and bottom-line growth across all of our businesses, reflecting the trust and confidence our Clients continue to place in Sun Life for their health and financial needs," said Kevin Strain, President and CEO of Sun Life. "In an increasingly complex business environment, we continue to advance on our Client Impact Strategy and strategic imperatives, underscored by new digital tools and capabilities, robust capital raising at SLC Management and strong sales and distribution in Asia." "We're pleased with our overall results this quarter, which were supported by our strong fundamentals, while continuing to progress towards our Medium-Term Objectives," said Tim Deacon, Executive Vice-President and Chief Financial Officer for Sun Life. "Our capital position remains strong with a LICAT ratio of 149%, providing resilience and financial flexibility. This quarter we also announced a five percent increase to our common share dividend and are seeking to renew our normal course issuer bid to enable continued share buybacks." Financial and Operational Highlights Quarterly results Profitability Q1'25 Q1'24 Underlying net income ($ millions)(1) 1,045 875Reported net income - Common shareholders ($ millions) 928 818Underlying EPS ($)(1)(4) 1.82 1.50Reported EPS ($)(4) 1.62 1.40Underlying ROE(1) 17.7 % 16.0 %Reported ROE(1) 15.7 % 15.0 % Growth Q1'25 Q1'24 Asset management gross flows & wealth sales ($ millions)(1) 62,221 46,898Group - Health & Protection sales ($ millions)(1) 580 528Individual - Protection sales ($ millions)(1) 874 757Assets under management ("AUM") ($ billions)(1) 1,551 1,470New business Contractual Service Margin ("CSM") ($ millions)(1) 406 347 Financial Strength Q1'25 Q1'24LICAT ratios (at period end)(5)Sun Life Financial Inc. 149 % 148 %Sun Life Assurance(6) 141 % 142 %Financial leverage ratio (at period end)(1)(7) 20.1 % 21.1 % _________________ (1) Represents a non-IFRS financial measure. For more details, see the Non-IFRS Financial Measures section in this document and in Q1'25 MD&A. (2) Effective Q1'25, the Wealth & asset management business type was renamed to Asset management & wealth. (3) Effective Q1'25, Regional Office in Asia was moved from the Corporate expenses & other business type to the Individual - Protection business type, reflecting a reporting refinement. Prior period amounts reflect current presentation. (4) All earnings per share ("EPS") measures refer to fully diluted EPS, unless otherwise stated. (5) Life Insurance Capital Adequacy Test ("LICAT") ratio. Our LICAT ratios are calculated in accordance with the OSFI-mandated guideline, Life Insurance Capital Adequacy Test. (6) Sun Life Assurance Company of Canada ("Sun Life Assurance") is SLF Inc.'s principal operating life insurance subsidiary. (7) The calculation for the financial leverage ratio includes the CSM balance (net of taxes) in the denominator. The CSM (net of taxes) was $10.5 billion as at March 31, 2025 (March 31, 2024 - $9.9 billion). Financial and Operational Highlights - Quarterly Comparison (Q1'25 vs. Q1'24) ($ millions) Q1'25 Underlying net income by business type(1)(2): Sun Life Asset Management Canada U.S. Asia Corporate Asset management & wealth 487 351 112 — 24 — Group - Health & Protection 330 — 145 185 — — Individual - Protection(3) 325 — 119 33 173 — Corporate expenses & other(3) (97) — — — — (97) Underlying net income(1) 1,045 351 376 218 197 (97) Reported net income (loss) - Common shareholders 928 326 351 186 166 (101) Change in underlying net income (% year-over-year) 19 % 24 % 21 % 15 % 11 % nm(4) Change in reported net income (% year-over-year) 13 % 15 % 21 % 92 % (29) % nm(4) Asset management gross flows & wealth sales(1) 62,221 52,521 6,527 — 3,173 — Group - Health & Protection sales(1) 580 — 375 176 29 — Individual - Protection sales(1) 874 — 139 — 735 — Change in asset management gross flows & wealth sales (% year-over-year) 33 % 29 % 60 % — 51 % — Change in group sales (% year-over-year) 10 % — 21 % (8) % 12 % — Change in individual sales (% year-over-year) 15 % — 7 % — 17 % — (1) Represents a non-IFRS financial measure. For more details, see the Non-IFRS Financial Measures section in this document and in the Q1'25 MD&A. (2) For more information about the business types in Sun Life's business groups, see section A - How We Report Our Results in the Q1'25 MD&A. (3) Effective Q1'25, Regional Office in Asia was moved from the Corporate expenses & other business type to the Individual - Protection business type, reflecting a reporting refinement. Prior period amounts reflect current presentation. (4) Not meaningful. Underlying net income(1) of $1,045 million increased $170 million or 19% from prior year, driven by: Asset management & wealth(1) up $79 million: Higher fee-related earnings from catch-up fees and strong performance of net seed investment income in SLC Management, and higher fee income in Canada and Asia. Group - Health & Protection(1) up $50 million: Business growth and favourable protection experience in Canada primarily from morbidity and mortality experience, and higher U.S. Dental results, partially offset by moderately unfavourable morbidity experience in U.S. medical stop-loss. Individual - Protection(1)(2) up $55 million: Business growth and higher contributions from joint ventures in Asia, and improved protection experience in Canada largely from mortality experience. Corporate expenses & other(1)(2) $(14) million increase in net loss primarily reflecting lower investment income from surplus assets. Reported net income of $928 million increased $110 million or 13% from prior year, driven by: The increase in underlying net income; Market-related impacts primarily reflecting improved real estate experience(3) and favourable interest rate impacts partially offset by unfavourable equity market impacts; and Fair value changes in MFS(4) shares owned by management; partially offset by Prior year gains on partial sale of ABSLAMC(5) and the early termination of a distribution agreement in Asset Management. Underlying ROE was 17.7% and reported ROE was 15.7% (Q1'24 - 16.0% and 15.0%, respectively). SLF Inc. ended the quarter with a LICAT ratio of 149%. _______________ (1) Refer to section C - Profitability in the Q1'25 MD&A for more information on notable items attributable to reported and underlying net income items and the Non-IFRS Financial Measures in this document for a reconciliation between reported net income and underlying net income. For more information about the business types in Sun Life's operating segments/business groups, see section A - How We Report Our Results in the Q1'25 MD&A. (2) Effective Q1'25, Regional Office in Asia was moved from the Corporate expenses & other business type to the Individual - Protection business type, reflecting a reporting refinement. Prior period amounts reflect current presentation. (3) Real estate experience reflects the difference between the actual value of real estate investments compared to management's longer-term expected returns supporting insurance contract liabilities ("real estate experience"). (4) MFS Investment Management ("MFS"). (5) To meet regulatory obligations, on March 21, 2024, we completed the sale of 6.3% of our ownership interest in Aditya Birla Sun Life AMC Limited ("partial sale of ABSLAMC"), generating a gain of $84 million. As a result of the transaction, our ownership interest in ABSLAMC was reduced from 36.5% to 30.2% for gross proceeds of $136 million. Subsequently, on May 31, 2024, we sold an additional 0.2% of our ownership interest. Business Group Highlights Asset Management: A global leader in both public and alternative asset classes through MFS and SLC Management Asset Management underlying net income of $351 million increased $69 million or 24% from prior year, driven by: MFS up $12 million (down $3 million on a U.S. dollar basis): Driven by favourable foreign exchange translation. Higher fee income from higher average net assets ("ANA") and lower expenses were offset by a decrease in net investment income and the effect of one less calendar day in the quarter. The MFS pre-tax net operating profit margin(1) was 35.4% for Q1'25, compared to 37.2% in the prior year. SLC Management up $57 million: Higher fee-related earnings and strong performance of net seed investment income primarily from BentallGreenOak ("BGO"), largely attributed to market gains reflecting appreciation due to completion of construction and strong leasing fundamentals. Fee-related earnings(1) increased 43% driven by higher catch-up fees, reflecting strong capital raising, partially offset by higher expenses. Fee-related earnings margin(1) was 24.3% for Q1'25, compared to 23.9% in the prior year. Reported net income of $326 million increased $42 million or 15% from prior year, driven by the increase in underlying net income and fair value changes in MFS shares owned by management, partially offset by the prior year gain on the early termination of a distribution agreement. Foreign exchange translation led to an increase of $16 million in underlying net income and an increase of $20 million in reported net income. Asset Management ended Q1'25 with $1,124 billion of AUM(1), consisting of $869 billion (US$604 billion) in MFS and $255 billion in SLC Management. Total Asset Management net outflows of $8.7 billion in Q1'25 reflected MFS net outflows of $11.6 billion (US$8.1 billion) primarily reflecting retail net outflows driven by uncertainty in equity markets, partially offset by SLC Management net inflows of $2.9 billion reflecting strong capital raising. MFS is focused on meeting Client needs by providing a diverse range of investment products. MFS won the 2025 Lipper Award(2) for Fixed Income as the top large fixed income manager in the U.S. over a three-year period, demonstrating consistent returns across a deep product line during a period of high inflation followed by a sharp rise in interest rates. The award points to the strength of the fixed income platform that MFS has built, which continues to be well-positioned for growth globally. MFS continued to experience solid fixed income flows and saw positive momentum with the Q4'24 launch of active exchange traded funds ("ETFs"), generating approximately US$1 billion and US$200 million in net inflows, respectively, for these asset classes in the first quarter. BGO raised an additional US$1.6 billion in the quarter, bringing total capital raised to US$4.6 billion for a fund within the Asia Value Add Series. The capital raised surpasses initial targets and demonstrates robust demand for BGO's strong investment capabilities as well as continued growth opportunities in Asia. BGO also partnered with Northtree Investment Management ("Northtree") to create an urban logistics portfolio in the UK of over £100 million. The joint venture is part of BGO's Strategic Capital Partners platform, which focuses on secondary investments and co-investment opportunities. The partnership leverages BGO's global investment expertise and Northtree's market knowledge to deliver high-quality logistics assets, addressing the rising demand in the sector. In addition, BGO's Strategic Capital Partners platform also partnered with Orka Investments to expand its presence in the UK student housing market with a new £100 million platform. This investment strategy positions the portfolio for sustained rental growth and operational improvements amongst growing demand for student housing, and aligns with BGO's broader focus on partnering with mid-cap managers to deliver innovative capital solutions and expand portfolios. Canada: A leader in health, wealth, and insurance Canada underlying net income of $376 million increased $66 million or 21% from prior year, reflecting: Asset management & wealth up $3 million: Higher fee income driven by higher AUM reflecting market movements and strong net inflows. Group - Health & Protection up $31 million: Business growth and favourable protection experience primarily driven by favourable morbidity reflecting shorter claims durations, and favourable mortality reflecting lower claims severity. Individual - Protection up $32 million: Improved protection experience largely driven by favourable mortality reflecting lower claims severity. Reported net income of $351 million increased $61 million or 21% from prior year, driven by the increase in underlying net income. The market-related impacts were in line with prior year as improved real estate experience and favourable interest rate impacts were offset by unfavourable equity market impacts. Canada's sales(3): Asset management gross flows & wealth sales of $7 billion were up 60%, driven by higher defined contribution sales in Group Retirement Services ("GRS") from higher large case sales, and higher mutual fund sales in Individual Wealth. Group - Health & Protection sales of $375 million were up 21%, driven by higher large case sales. Individual - Protection sales of $139 million were up 7%, driven by higher SLFD(4) and third-party sales. _________________ (1) Represents a non-IFRS financial measure. For more details, see the Non-IFRS Financial Measures section in this document and in the Q1'25 MD&A. (2) The LSEG Lipper Fund Awards, granted annually, highlight funds and fund companies that have excelled in delivering consistently strong risk-adjusted performance relative to their peers. (3) Compared to the prior year. (4) Sun Life Financial Distribution ("SLFD") is our proprietary career advisory network. Our Purpose is at the heart of what we do, and this extends to supporting Clients and their loved ones. During the first quarter, we partnered with Empathy, a bereavement support platform, to provide support to beneficiaries and their families as part of the group life insurance claims process, helping them navigate the challenges of loss and grief. Sun Life is one of the first insurers in Canada to use Empathy as part of its claims services. We also continue to introduce new, more flexible ways to help plan members achieve financial security. During the first quarter, we launched Sun Life Choices Flex, an option for plan members to add additional savings streams to their workplace plan and manage them in one convenient place. U.S.: A leader in health and benefits U.S. underlying net income of US$151 million increased US$10 million or 7% ($218 million increased $29 million or 15%) from prior year, driven by: Group - Health & Protection up US$5 million: Higher Dental results primarily reflecting improved claims experience driven by the impact of Medicaid repricing and the prior year impacts following the end of the Public Health Emergency, partially offset by moderately unfavourable morbidity experience in medical stop-loss reflecting less favourable loss ratios. Individual - Protection up US$5 million: Higher net investment results primarily driven by improved credit experience. Reported net income of US$129 million increased US$58 million or 82% ($186 million increased $89 million or 92%) from prior year, driven by market-related impacts and the increase in underlying net income. The market-related impacts were primarily from improved real estate experience and favourable interest rate impacts, partially offset by unfavourable equity market impacts. Foreign exchange translation led to an increase of $13 million in underlying net income and an increase of $11 million in reported net income. U.S. group sales of US$123 million were down 13% ($176 million, down 8%), reflecting lower Medicaid sales in Dental and lower employee benefits sales in Group Benefits. We continue to help our members access the health care and coverage they need while helping employers simplify benefits through digital capabilities and automation. Sun Life U.S. Employee Benefits is one of the first strategic Workday Wellness partners, utilizing Workday's AI platform to show a real-time view of the benefits and wellness programs that employers are offering. The partnership will simplify benefits management, streamline enrollment, enhance leave administration, and reduce administrative burdens. We also expanded our Family Leave Insurance ("FLI") offering to Georgia, Louisiana, Mississippi and South Carolina. FLI makes it easier for small and mid-size employers to help employees meet their family's health needs. Designed to attract and retain employees, our simple solution is built on our extensive knowledge and is fuelled by our advocacy to expand access to paid family leave to more people. Including our state programs with statutory paid family leave, we now offer family leave services in 17 states representing more than 40% of the U.S. population. Asia: A regional leader focused on fast-growing markets Asia underlying net income of $197 million increased $20 million or 11% from prior year, driven by: Asset management & wealth up $7 million: Higher fee income primarily driven by higher AUM. Individual - Protection(1) up $13 million: Good sales momentum and in-force business growth, and higher contributions from joint ventures, partially offset by lower earnings on surplus and unfavourable mortality experience in International. Reported net income of $166 million decreased $69 million or 29% from prior year, reflecting a prior year gain on partial sale of ABSLAMC partially offset by the increase in underlying net income. Market-related impacts were in line with prior year as improved real estate experience was offset by unfavourable interest rate and equity market impacts. Foreign exchange translation led to an increase of $10 million in underlying net income and an increase of $8 million in reported net income. Asia's sales(2): Individual sales of $735 million were up 17%, driven by higher sales in: India from bancassurance and direct-to-consumer channels; Hong Kong from agency and bancassurance channels; and China from the bancassurance channel. Asset management gross flows & wealth sales of $3 billion were up 51%, driven by higher fixed income fund sales in India. New business CSM of $273 million in Q1'25 was up from $230 million in the prior year, primarily driven by strong profit margins in Hong Kong. We continue to focus on expanding our distribution in fast-growth markets. During the first quarter, we launched an expanded 15-year partnership with CIMB Niaga, the second largest private bank in Indonesia, contributing to Sun Life Indonesia's Q1'25 sales growth of approximately 54% compared to prior year. Together, our digital capabilities and strong product offerings will better serve a broader Indonesian customer base. We deliver on Client experiences by providing products that meet their life goals. In Hong Kong, we launched a new constituent fund(3) which provides Clients with stable income and capital appreciation over the medium-to-long-term to help them save for a comfortable retirement. ________________ (1) Effective Q1'25, Regional office expenses & other was moved to the Individual - Protection business type, reflecting a reporting refinement. Prior period amounts reflect current presentation. (2) Compared to the prior year. (3) Sun Life MPF Income Fund. Corporate Underlying net loss was $97 million compared to underlying net loss of $83 million in the prior year, reflecting lower investment income from surplus assets. Reported net loss was $101 million compared to reported net loss of $88 million in the prior year, reflecting the decline in underlying net income. Earnings Conference Call The Company's Q1'25 financial results will be reviewed at a conference call on Friday, May 9, 2025, at 10:00 a.m. ET. Visit 10 minutes prior to the start of the event to access the call through either the webcast or conference call options. Individuals participating in the call in a listen-only mode are encouraged to connect via our webcast. Following the call, the webcast and presentation will be archived and made available on the Company's website, until the Q1'26 period end. Media Relations: Investor Relations: investor_relations@ Non-IFRS Financial Measures We report certain financial information using non-IFRS financial measures, as we believe that these measures provide information that is useful to investors in understanding our performance and facilitate a comparison of our quarterly and full year results from period to period. These non-IFRS financial measures do not have any standardized meaning and may not be comparable with similar measures used by other companies. For certain non-IFRS financial measures, there are no directly comparable amounts under IFRS. These non-IFRS financial measures should not be viewed in isolation from or as alternatives to measures of financial performance determined in accordance with IFRS. Additional information concerning non-IFRS financial measures and, if applicable, reconciliations to the closest IFRS measures are available in the Q1'25 MD&A under the heading N - Non-IFRS Financial Measures and the Supplementary Financial Information packages that are available on under Investors – Financial results and reports. 1. Underlying Net Income and Underlying EPSUnderlying net income is a non-IFRS financial measure that assists in understanding Sun Life's business performance by making certain adjustments to IFRS income. Underlying net income, along with common shareholders' net income (Reported net income), is used as a basis for management planning, and is also a key measure in our employee incentive compensation programs. This measure reflects management's view of the underlying business performance of the company and long-term earnings potential. For example, due to the longer term nature of our individual protection businesses, market movements related to interest rates, equity markets and investment properties can have a significant impact on reported net income in the reporting period. However, these impacts are not necessarily realized, and may never be realized, if markets move in the opposite direction in subsequent periods or in the case of interest rates, the fixed income investment is held to maturity. Underlying net income removes the impact of the following items from reported net income: Market-related impacts reflecting the after-tax difference in actual versus expected market movements; Assumptions changes and management actions; Other adjustments: i) MFS shares owned by management;ii) Acquisition, integration, and restructuring;iii) Intangible asset amortization;iv) Other items that are unusual or exceptional in nature. For additional information about the adjustments removed from reported net income to arrive at underlying net income, refer to section N - Non-IFRS Financial Measures - 2 - Underlying Net Income and Underlying EPS in the Q1'25 MD&A. The following table sets out the post-tax amounts that were excluded from our underlying net income (loss) and underlying EPS and provides a reconciliation to our reported net income and EPS based on IFRS. Reconciliations of Select Net Income Measures Quarterly results ($ millions, after-tax) Q1'25 Q1'24 Underlying net income 1,045 875 Market-related impactsEquity market impacts (48) 12Interest rate impacts(1) 57 40Impacts of changes in the fair value of investment properties (real estate experience) (31) (122) Add: Market-related impacts (22) (70) Add: Assumption changes and management actions (4) (7)Other adjustments MFS shares owned by management 5 (12) Acquisition, integration and restructuring(2)(3)(4) (54) 22 Intangible asset amortization (39) (36) Other(5) (3) 46 Add: Total of other adjustments (91) 20 Reported net income - Common shareholders 928 818 Underlying EPS (diluted) ($) 1.82 1.50 Add: Market-related impacts ($) (0.04) (0.13)Assumption changes and management actions ($) (0.01) (0.01)MFS shares owned by management ($) 0.01 (0.02)Acquisition, integration and restructuring ($) (0.09) 0.04Intangible asset amortization ($) (0.07) (0.06)Other ($) (0.01) 0.08Impact of convertible securities on diluted EPS ($) 0.01 — Reported EPS (diluted) ($) 1.62 1.40 (1) Our results are sensitive to long term interest rates given the nature of our business and to non-parallel yield curve movements (for example flattening, inversion, steepening, etc.). (2) Amounts relate to acquisition costs for our SLC Management affiliates, BentallGreenOak, InfraRed Capital Partners, Crescent Capital Group LP and Advisors Asset Management, Inc, which include the unwinding of the discount for Other financial liabilities of $14 million in Q1'25 (Q1'24 - $22 million). (3) Includes acquisition, integration and restructuring costs associated with DentaQuest, acquired on June 1, 2022. (4) To meet regulatory obligations, in Q1'24, we sold 6.3% of our ownership interest in Aditya Birla Sun Life AMC Limited ("partial sale of ABSLAMC"), generating a gain of $84 million. As a result of the transaction, our ownership interest in ABSLAMC was reduced from 36.5% to 30.2% for gross proceeds of $136 million. Subsequently, in Q2'24, we sold an additional 0.2% of our ownership interest. (5) Includes the early termination of a distribution agreement in Asset Management in Q1'24. The following table shows the pre-tax amount of underlying net income adjustments:Quarterly results ($ millions) Q1'25 Q1'24 Underlying net income (after-tax) 1,045 875 Underlying net income adjustments (pre-tax): Add: Market-related impacts (28) (26)Assumption changes and management actions ("ACMA")(1) (5) (8)Other adjustments (113) 41Total underlying net income adjustments (pre-tax) (146) 7 Add: Taxes related to underlying net income adjustments 29 (64) Reported net income - Common shareholders (after-tax) 928 818 (1) In this document, the reported net income impact of ACMA excludes amounts attributable to participating policyholders and includes non-liability impacts. In contrast, the net income impacts of method and assumption changes in the Interim Consolidated Financial Statements for the period ended March 31, 2025 shows the pre-tax net income impacts of method and assumption changes, and CSM Impacts include amounts attributable to participating policyholders. Taxes related to underlying net income adjustments may vary from the expected effective tax rate range reflecting the mix of business based on the Company's international operations and other tax-related adjustments. 2. Additional Non-IFRS Financial MeasuresManagement also uses the following non-IFRS financial measures, and a full listing is available in section N - Non-IFRS Financial Measures in the Q1'25 MD&A. Assets under management. AUM is a non-IFRS financial measure that indicates the size of our Company's assets across asset management, wealth, and insurance. There is no standardized financial measure under IFRS. In addition to the most directly comparable IFRS measures, which are the balance of General funds and Segregated funds on our Statements of Financial Position, AUM also includes Third-party AUM and Consolidation adjustments. "Consolidation adjustments" is presented separately as consolidation adjustments apply to all components of total AUM. For additional information about Third-party AUM, refer to sections D - Growth - 2 - Assets Under Management and N - Non-IFRS Financial Measures in the Q1'25 MD& results ($ millions) Q1'25 Q1'24 Assets under management General fund assets 223,310 204,986 Segregated funds 149,650 135,541 Third-party AUM(1) 1,224,770 1,170,093 Consolidation adjustments(1) (46,847) (40,540) Total assets under management 1,550,883 1,470,080 (1) Represents a non-IFRS financial measure. For more details, see section N - Non-IFRS Financial Measures in the Q1'25 MD&A. Cash and other liquid assets. This measure is comprised of cash, cash equivalents, short-term investments, and publicly traded securities, net of loans related to acquisitions and short-term loans that are held at SLF Inc. (the ultimate parent company), and its wholly owned holding companies. This measure is a key consideration of available funds for capital re-deployment to support business growth. ($ millions) As at March 31, 2025 As at December 31, 2024 Cash and other liquid assets (held at SLF Inc. and its wholly owned holding companies): Cash, cash equivalents & short-term securities 617 479 Debt securities(1) 722 780 Equity securities(2) — 112 Sub-total 1,339 1,371 Less: Loans related to acquisitions and short-term loans(3) (held at SLF Inc. and its wholly owned holding companies) — (17) Cash and other liquid assets (held at SLF Inc. and its wholly owned holding companies) 1,339 1,354 (1) Includes publicly traded bonds. (2) Includes ETF Investments. (3) Includes drawdowns from credit facilities to manage timing of cash flows. 3. Reconciliations of Select Non-IFRS Financial MeasuresUnderlying Net Income to Reported Net Income Reconciliation - Pre-tax by Business GroupQ1'25 ($ millions) Asset Management Canada U.S. Asia Corporate Total Underlying net income (loss) 351 376 218 197 (97) 1,045 Add: Market-related impacts (pre-tax) (11) (9) 15 (19) (4) (28)ACMA (pre-tax) — (2) — (3) — (5)Other adjustments (pre-tax) (20) (23) (60) (10) — (113)Tax expense (benefit) 6 9 13 1 — 29 Reported net income (loss) - Common shareholders 326 351 186 166 (101) 928Q1'24 Underlying net income (loss) 282 310 189 177 (83) 875 Add: Market-related impacts (pre-tax) 2 45 (53) (16) (4) (26)ACMA (pre-tax) — (7) 2 (3) — (8)Other adjustments (pre-tax) 26 (8) (67) 90 — 41Tax expense (benefit) (26) (50) 26 (13) (1) (64) Reported net income (loss) - Common shareholders 284 290 97 235 (88) 818 Forward-looking Statements From time to time, the Company makes written or oral forward-looking statements within the meaning of certain securities laws, including the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements contained in this document include statements (i) relating to our strategies, plans, targets, goals and priorities; (ii) relating to our growth initiatives and other business objectives; (iii) relating to the renewal of our normal course issuer bid to enable continued share buybacks; (iv) that are predictive in nature or that depend upon or refer to future events or conditions; and (v) that include words such as "achieve", "aim", "ambition", "anticipate", "aspiration", "assumption", "believe", "could", "estimate", "expect", "goal", "initiatives", "intend", "may", "objective", "outlook", "plan", "project", "seek", "should", "strategy", "strive", "target", "will", and similar expressions. Forward-looking statements include the information concerning our possible or assumed future results of operations. These statements represent our current expectations, estimates, and projections regarding future events and are not historical facts, and remain subject to change. Forward-looking statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. Future results and shareholder value may differ materially from those expressed in these forward-looking statements due to, among other factors, the matters set out in the Q1'25 MD&A under the headings C - Profitability - 5 - Income taxes, F - Financial Strength and I - Risk Management and in SLF Inc.'s 2024 AIF under the heading Risk Factors, and the factors detailed in SLF Inc.'s other filings with Canadian and U.S. securities regulators, which are available for review at and respectively. Important risk factors that could cause our assumptions and estimates, and expectations and projections to be inaccurate and our actual results or events to differ materially from those expressed in or implied by the forward-looking statements contained in this document, are set out below. The realization of our forward-looking statements essentially depends on our business performance which, in turn, is subject to many risks. Factors that could cause actual results to differ materially from expectations include, but are not limited to: market risks - related to the performance of equity markets; changes or volatility in interest rates or credit spreads or swap spreads; real estate investments; fluctuations in foreign currency exchange rates; and inflation; insurance risks - related to mortality experience, morbidity experience and longevity; policyholder behaviour; product design and pricing; the impact of higher-than-expected future expenses; and the availability, cost and effectiveness of reinsurance; credit risks - related to issuers of securities held in our investment portfolio, debtors, structured securities, reinsurers, counterparties, other financial institutions and other entities; business and strategic risks - related to global economic and geopolitical conditions; the design and implementation of business strategies; changes in distribution channels or Client behaviour including risks relating to market conduct by intermediaries and agents; the impact of competition; the performance of our investments and investment portfolios managed for Clients such as segregated and mutual funds; shifts in investing trends and Client preference towards products that differ from our investment products and strategies; changes in the legal or regulatory environment, including capital requirements and tax laws; environmental and social issues and their related laws and regulations; operational risks - related to breaches or failure of information system security and privacy, including cyber-attacks; our ability to attract and retain employees; legal, regulatory compliance and market conduct, including the impact of regulatory inquiries and investigations; the execution and integration of mergers, acquisitions, strategic investments and divestitures; our information technology infrastructure; a failure of information systems and Internet-enabled technology; dependence on third-party relationships, including outsourcing arrangements; business continuity; model errors; information management; liquidity risks - the possibility that we will not be able to fund all cash outflow commitments as they fall due; and other risks - changes to accounting standards in the jurisdictions in which we operate; risks associated with our international operations, including our joint ventures; market conditions that affect our capital position or ability to raise capital; downgrades in financial strength or credit ratings; and tax matters, including estimates and judgements used in calculating taxes. The Company does not undertake any obligation to update or revise its forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events, except as required by law. About Sun Life Sun Life is a leading international financial services organization providing asset management, wealth, insurance and health solutions to individual and institutional Clients. Sun Life has operations in a number of markets worldwide, including Canada, the U.S., the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia and Bermuda. As of March 31, 2025, Sun Life had total assets under management of $1.55 trillion. For more information, please visit Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF. View original content to download multimedia: SOURCE Sun Life Financial Inc. 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