08:18 AM EDT, 05/22/2025 (MT Newswires) -- (Adding Q2 adjustments in the fourth to seventh paragraphs inclusive)

Toronto Dominion Bank ( MLWIQXX ) (TD.TO, TD), putting behind it a difficult 2024 in which it was investigated for flawed anti-money laundering practice in the U.S., on Thursday kicked off the second-quarter results season for Canada's big banks with a drop in adjusted profit that beat expectations.

For the three months to April 30, the bank reported adjusted net income of $3,626 million, compared with $3,789 million a year earlier. Adjusted diluted earnings per share fell to $1.97 from $2.04 a year earlier. National Bank analysts had forecast cash earnings per share of $1.81. The FactSet consensus forecast was $1.77.

Reported net income was $11,129 million, compared with $2,564 million, reflecting the bank's sale of its remaining stake in The Charles Schwab Corporation. Reported diluted earnings per share were $6.27, compared with $1.35.

TD said the second quarter reported earnings figures included: amortization of acquired intangibles of $43 million ($35 million after tax or $0.02 per share), versus $72 million ($62 million after tax or $0.04 per share) in the second quarter last year; and acquisition and integration charges related to the Cowen acquisition of $34 million ($26 million after tax or $0.02 per share), compared with $102 million ($80 million after tax or $0.04 per share).

It also included: impact from the terminated First Horizon Corporation (FHN) acquisition-related capital hedging strategy of $47 million ($35 million after tax or $0.02 per share), compared with $64 million ($48 million after tax or $0.03 per share); U.S. balance sheet restructuring of $1,129 million ($847 million after tax or $0.49 cents per share); and restructuring charges of $163 million ( $122 million after tax or $0.07 per share), compared with $165 million ($122 million after tax or $0.07 per share) under a previous program in the second quarter last year.

It also included a gain on sale of Schwab shares of $8,975 million ($8,568 million after tax or $4.92 per share).

On 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.

Among units, Canadian Personal and Commercial Banking had net income of $1,668 million, a decrease of 4% compared with the second quarter of last year, reflecting higher provisions for credit losses and non-interest expenses, partially offset by higher revenue. Revenue increased 3%, primarily on loan and deposit growth.

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 sale of the Schwab stake.

TD said it will pay a divided of $1.05 per common share for the quarter ending July 31 that is payable to shareholders of record at the close of business on July 10. The dividend is unchanged from February 2025.

"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 President and Chief Executive Raymond Chun. "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."

TD on Wednesday eased 0.3% to $89.90 on the TSX, leaving it shy of 52 week highs.