10:33 AM EDT, 08/23/2024 (MT Newswires) -- Toronto-Dominion Bank ( MLWIQXX ) is expected to see additional insurance service expenses of 300 million Canadian dollars (US$221.5 million) in fiscal Q4 after its fiscal Q3 earnings were impacted by weather-related claims, RBC Capital Markets said in a note emailed Friday.

The bank's fiscal Q3 adjusted earnings was CA$2.05 per share, below the RBC estimate of CA$2.25, primarily due to weather-related insurance claims impacting earnings. Otherwise, the company's earnings power is seen closer to CA$2.16 per share, the investment firm said.

For fiscal Q4, the company anticipates additional weather-related impact from the Calgary

hailstorms and the Montreal floods in August, according to the note.

An additional US$1 billion anti-money laundering, or AML, provision is expected in fiscal Q4, adding to the US$3.05 billion already provisioned, with a final resolution on AML issues anticipated by year-end, RBC noted.

The company's growth in the US is expected to be restrained by potential monitorship and cease and desist orders, though a "hard" asset cap is considered unlikely, RBC said.

Toronto-Dominion's sale of 40.5 million Charles Schwab ( SCHW ) shares is viewed positively by RBC, expecting it to offset the capital impact from AML provisions while retaining a stake in Schwab, the firm said.

"We believe valuations reflect too much pessimism on earnings power and capital," RBC said.

RBC maintained an outperform rating for Toronto-Dominion while decreasing the price target to CA$88 from CA$89.

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