The Toronto-Dominion Bank
) reported its fiscal third quarter 2012 (ended July 31, 2012)
adjusted earnings per share of C$1.91, which compares favorably
with the prior quarter earnings of C$1.82 as well as the year-ago
earnings of C$1.75. Adjusted net income came in at C$1.82 billion
($1.79 billion) up 4.8% from the previous quarter and 11.3% year
Better-than-expected results were driven by enhanced net interest
revenue and non-interest income. The total assets and profitability
ratio also remained strong in the quarter. However, elevated
operating expenses were the primary headwinds.
On GAAP basis, net income came in at C$1.70 billion ($1.67
billion), up 0.6 sequentially and 14.3% on a year-over-year basis.
Behind the Headlines
Toronto-Dominion reported adjusted revenue of C$5.84 billion ($5.74
billion), up 1.0% from the prior quarter and 8.3% year over year.
Operating revenue came in at C$5.84 billion ($5.74 billion), up
1.6% from the last quarter and 8.5% year over year.
For the reported quarter, adjusted net interest income grew 3.1%
sequentially and 8.6% year over year to C$3.82 billion ($3.75
billion). Adjusted non-interest revenue came in at C$2.02 billion
($1.99 billion), declining 2.7% from the previous quarter but up
7.6% year over year.
Adjusted non-interest expenses were C$3.23 billion ($3.18 billion),
falling 1.4% from the prior quarter but surging 7.4% year over
year. Adjusted efficiency ratio stood at 55.4% as against 56.8% as
of April 30, 2012 and 55.8% as of July 31, 2011.
Total provision for credit losses were C$479.0 million ($471.05
million), up 2.4% from the last quarter and 26.0% from the
comparable quarter last year.
Total assets came in at C$806.28 billion ($792.62 billion) as of
July 31, 2012, jumping 4.3% from C$773.19 billion ($760.36) as of
April 30, 2012 and 13.0% from C$713.64 billion as of July 31,
2011. Return on common equity, as adjusted, was 16.4% in the
reported quarter as against 16.6% in the prior quarter and 17.7% in
the year-ago period.
Concurrent with the earnings release, Toronto-Dominion declared
fourth-quarter dividend of C$0.77 per share. This represents a 6.9%
hike from the third quarter dividend.
Bank of Montreal
) reported its third-quarter 2012 adjusted earnings per share of
C$1.49, which compares favorably with the previous-quarter earnings
of C$1.44 and the year-ago earnings of C$1.34. The improvement in
results came on the back of enhanced net interest revenue and
The total assets and capital ratios also remained strong in the
quarter. However, increased operating expenses were the primary
We expect Toronto-Dominion's acquisition activities to
positively impact its financials in the long run. Further,
investors' confidence is expected to be boosted since the company
has announced a dividend hike. However, a persistent low interest
rate environment, weak economic recovery and stringent regulatory
requirements will remain a drag on its financials.
Toronto-Dominion currently retains a Zacks #2 Rank, which
translates into a short-term Buy rating.
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