Exhibit 99.1

TD Bank Group Reports Second Quarter 2017 Results
Report to Shareholders • Three and Six months ended April 30, 2017

The financial information in this document is reported in Canadian dollars, and is based on the Bank's unaudited Interim Consolidated Financial Statements and related Notes prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), unless otherwise noted.

Reported results conform to generally accepted accounting principles (GAAP), in accordance with IFRS. Adjusted measures are non-GAAP measures. Refer to the "How the Bank Reports" section of the Management's Discussion and Analysis (MD&A) for an explanation of reported and adjusted results 

SECOND QUARTER FINANCIAL HIGHLIGHTS, compared with the second quarter last year:

• Reported diluted earnings per share were $1.31, compared with $1.07.

• Adjusted diluted earnings per share were $1.34, compared with $1.20.

• Reported net income was $2,503 million, compared with $2,052 million.

• Adjusted net income was $2,561 million, compared with $2,282 million.

YEAR-TO-DATE FINANCIAL HIGHLIGHTS, six months ended April 30, 2017, compared with the corresponding period last year:

• Reported diluted earnings per share were $2.63, compared with $2.24.

• Adjusted diluted earnings per share were $2.67, compared with $2.38.

• Reported net income was $5,036 million, compared with $4,275 million.

• Adjusted net income was $5,119 million, compared with $4,529 million.

SECOND QUARTER ADJUSTMENTS (ITEMS OF NOTE)

The second quarter reported earnings figures included the following items of note:

• Amortization of intangibles of $78 million ($58 million after tax or 3 cents per share), compared with $86 million ($63 million after tax or 4 cents per share) in the second quarter last year.

TORONTO, May 25, 2017 – TD Bank Group ("TD" or the "Bank") today announced its financial results for the second quarter ended April 30, 2017. Second quarter reported earnings were $2.5 billion, up 22% compared with the same quarter last year.

"All of our business segments performed well in the second quarter reflecting strong revenue growth and reduced credit losses," said Bharat Masrani, Group President and Chief Executive Officer. "Our relentless focus on improving TD's legendary customer experience continues to deliver increased volumes and new customer acquisitions."

Canadian Retail

Canadian Retail net income was $1,570 million, an increase of 7% from the same quarter last year reflecting strong volume growth led by record average balances and accounts in core chequing, strong growth across commercial loans and deposits and market share gains in wealth assets, along with reduced loan losses. Increased non-interest expenses this quarter relate to ongoing investments in digitizing the customer experience and enhancing product offerings.

TD also commented on the status of its review of sales practices in Canadian personal banking. "At TD, we share a commitment to continually improve for our customers and our colleagues, and we welcomed this review as an opportunity to help make us better. We have largely completed this review and we continue to believe that we do not have a widespread problem with people acting unethically in order to achieve sales goals. As we have indicated, we will act on the opportunities we found to improve our business," said Masrani. This topic will also be considered by industry regulators and TD is committed to engaging cooperatively.

U.S. Retail

U.S. Retail net income was $845 million (US$636 million) this quarter compared with $719 million (US$537 million) for the second quarter last year, an increase of 18%.

The U.S. Retail Bank, which excludes the Bank's investment in TD Ameritrade, generated net income of $737 million (US$554 million), an increase of 21% compared with the second quarter last year. The U.S. Retail Bank's focus on deepening relationships with existing customers and on new customer acquisition delivered higher volumes and contributed to strong revenue growth. The earnings also reflect a more favourable interest rate environment, continuing good credit performance and expense management.

TD Ameritrade contributed $108 million (US$82 million) in earnings to the segment, same as the second quarter last year (an increase of 5% in U.S. dollars).

Wholesale Banking

Wholesale Banking net income was $248 million, an increase of 13% compared with the second quarter last year reflecting strong revenue growth from higher corporate lending fees, increased client activity in equity trading and lower credit losses. Higher non-interest expenses include continued investments to grow our U.S. businesses.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 1

Capital

TD's Common Equity Tier 1 Capital ratio on a Basel III fully phased-in basis was 10.8%, compared with 10.9% last quarter, reflecting strong organic capital generation and the normal course issuer bid completed this quarter.

Conclusion

"At the half-year mark, we continue to execute against our strategy and I am very pleased with our earnings growth and the performance of our retail and wholesale franchises," said Masrani. "We remain focused on investing for future growth and seamlessly delivering personalized experiences, proactive advice and timely interactions to our customers and clients across multiple channels, anywhere and anytime."

The foregoing contains forward-looking statements. Please refer to the "Caution Regarding Forward-Looking Statements" on page 4.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 2

Enhanced Disclosure Task Force

The Enhanced Disclosure Task Force (EDTF) was established by the Financial Stability Board in May 2012 to identify fundamental disclosure principles, recommendations and leading practices to enhance risk disclosures of banks. On October 29, 2012, the EDTF published its report, "Enhancing the Risk Disclosures of Banks", which sets forth 7 fundamental disclosure principles and 32 recommendations around improving risk disclosures.

Below is an index that includes the recommendations (as published by the EDTF) and lists the location of the related EDTF disclosures presented in the Second Quarter 2017 Report to Shareholders (RTS) or the Second Quarter 2017 Supplemental Financial Information (SFI). Information on TD's website or any SFI is not and should not be considered incorporated herein by reference into the Second Quarter 2017 RTS, Management's Discussion and Analysis, or the Interim Consolidated Financial Statements. Certain disclosure references have been made to the 2016 Annual Report.

Type of Risk	Topic	EDTF Disclosure	Page
			RTS Second Quarter 2017	SFI Second Quarter 2017	Annual Report 2016
General	1	Present all related risk information together in any particular report.	Refer to below for location of disclosures
	2	The bank's risk terminology and risk measures and present key parameter values used.			72-77, 82, 88-91, 102-103
	3	Describe and discuss top and emerging risks.			68-71
	4	Outline plans to meet each new key regulatory ratio once applicable rules are finalized.	28, 41		63-64, 70, 95-96, 98
Risk Governance and Risk Management and Business Model	5	Summarize the bank's risk management organization, processes, and key functions.			73-76
	6	Description of the bank's risk culture and procedures applied to support the culture.			72-73
	7	Description of key risks that arise from the bank's business models and activities.			62, 72, 77-104
	8	Description of stress testing within the bank's risk governance and capital frameworks.	32		60, 76, 84,102
Capital Adequacy and Risk Weighted Assets	9	Pillar 1 capital requirements and the impact for global systemically important banks.	27-28, 75	79-80, 83	58-59
	10	Composition of capital and reconciliation of accounting balance sheet to the regulatory balance sheet.		79-81	58
	11	Flow statement of the movements in regulatory capital.		82
	12	Discussion of capital planning within a more general discussion of management's strategic planning.			59-60, 102
	13	Analysis of how RWA relate to business activities and related risks.		5-8	60,62
	14	Analysis of capital requirements for each methods used for calculating RWA.	32	78	78-84, 196-197
	15	Tabulate credit risk in the banking book for Basel asset classes and major portfolios.		53-73
	16	Flow statement reconciling the movements of RWA by risk type.	29-30		61
	17	Discussion of Basel III back-testing requirements.		75-76	80, 84, 89-90
Liquidity	18	The bank's management of liquidity needs and liquidity reserves.	34-36, 38-39		91-93
Funding	19	Encumbered and unencumbered assets in a table by balance sheet category.	37		94,188
	20	Tabulate consolidated total assets, liabilities and off-balance sheet commitments by remaining contractual maturity at the balance sheet date.	41-43		99-101
	21	Discussion of the bank's funding sources and the bank's funding strategy.	37-38, 40-41		97-98
Market Risk	22	Linkage of market risk measures for trading and non-trading portfolio and balance sheet.	31		82
	23	Breakdown of significant trading and non-trading market risk factors.	31-34		82, 84-85, 87
	24	Significant market risk measurement model limitations and validation procedures.	32		83-85, 87, 89-90
	25	Primary risk management techniques beyond reported risk measures and parameters.	32		83-87
Credit Risk	26	Provide information that facilitates users’ understanding of the bank’s credit risk profile, including any significant credit risk concentrations.	21-27, 64-67	21-39, 43-76	42-57, 77-82, 152-155, 164-166, 194-197
	27	Description of the bank's policies for identifying impaired or non-performing loans.	64		50-51, 126-127, 152
	28	Reconciliation of the opening and closing balances of non-performing or impaired loans in the period and the allowance for loan losses.	21, 65-66	25, 29	47, 153-154
	29	Analysis of the bank's counterparty credit risks that arises from derivative transactions.		43-46	80, 137, 160-161, 164-166
	30	Discussion of credit risk mitigation, including collateral held for all sources of credit risk.	67		80-81,130-131, 137
Other Risks	31	Description of 'other risk' types based on management's classifications and discuss how each one is identified, governed, measured and managed.			88-90, 102-104
	32	Discuss publicly known risk events related to other risks.			89

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 3

TABLE OF CONTENTS

	MANAGEMENT'S DISCUSSION AND ANALYSIS	47	Changes in Internal Control over Financial Reporting
5	Financial Highlights
6	How We Performed
8	Financial Results Overview		INTERIM CONSOLIDATED FINANCIAL STATEMENTS
13	How Our Businesses Performed	48	Interim Consolidated Balance Sheet
19	Quarterly Results	49	Interim Consolidated Statement of Income
20	Balance Sheet Review	50	Interim Consolidated Statement of Comprehensive Income
21	Credit Portfolio Quality	51	Interim Consolidated Statement of Changes in Equity
27	Capital Position	52	Interim Consolidated Statement of Cash Flows
30	Managing Risk	53	Notes to Interim Consolidated Financial Statements
44	Securitization and Off-Balance Sheet Arrangements
44	Accounting Policies and Estimates	76	SHAREHOLDER AND INVESTOR INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATING PERFORMANCE

This MD&A is presented to enable readers to assess material changes in the financial condition and operating results of TD Bank Group ("TD" or the "Bank") for the three and six months ended April 30, 2017, compared with the corresponding periods shown. This MD&A should be read in conjunction with the Bank's unaudited Interim Consolidated Financial Statements and related Notes included in this Report to Shareholders and with the 2016 Consolidated Financial Statements and related Notes and 2016 MD&A. This MD&A is dated May 24, 2017. Unless otherwise indicated, all amounts are expressed in Canadian dollars and have been primarily derived from the Bank's 2016 Consolidated Financial Statements and related Notes or Interim Consolidated Financial Statements and related Notes, prepared in accordance with IFRS as issued by the IASB. Note that certain comparative amounts have been restated/reclassified to conform with the presentation adopted in the current period. Additional information relating to the Bank, including the Bank's 2016 Annual Information Form, is available on the Bank's website at http://www.td.com, as well as on SEDAR at http://www.sedar.com and on the SEC's website at http://www.sec.gov (EDGAR filers section).

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 ("2016 MD&A") in the Bank's 2016 Annual Report under the heading "Economic Summary and Outlook", for each business segment under headings "Business Outlook and Focus for 2017", and in other statements regarding the Bank's objectives and priorities for 2017 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", "should", "believe", "expect", "anticipate", "intend", "estimate", "plan", "may", and "could".

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: credit, market (including equity, commodity, foreign exchange, and interest rate), liquidity, operational (including technology and infrastructure), reputational, insurance, strategic, regulatory, legal, environmental, capital adequacy, and other risks. Examples of such risk factors include the general business and economic conditions in the regions in which the Bank operates; the ability of the Bank to execute on key priorities, including the successful completion of acquisitions and dispositions, business retention plans, and strategic plans and to attract, develop and retain key executives; disruptions in or attacks (including cyber-attacks) on the Bank's information technology, internet, network access or other voice or data communications systems or services; the evolution of various types of fraud or other criminal behaviour to which the Bank is exposed; 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; the impact of new and changes to, or application of, current laws and regulations, including without limitation tax laws, risk-based capital guidelines and liquidity regulatory guidance; exposure related to significant litigation and regulatory matters; increased competition, including through internet and mobile banking and non-traditional competitors; changes to the Bank's credit ratings; changes in currency and interest rates (including the possibility of negative interest rates); 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; existing and potential international debt crises; 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 2016 MD&A, as may be updated in subsequently filed quarterly reports to shareholders and news releases (as applicable) related to any transactions or events discussed under the heading "Significant Events" in the relevant MD&A, which applicable releases may be found on www.td.com. All such factors should be considered carefully, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements, when making decisions with respect to the Bank and 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 2016 MD&A under the headings "Economic Summary and Outlook", and for each business segment, "Business Outlook and Focus for 2017", each as may be updated in subsequently filed quarterly reports to shareholders.

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.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 4

TABLE 1: FINANCIAL HIGHLIGHTS
(millions of Canadian dollars, except as noted)		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
		2017			2017			2016			2017			2016
Results of operations
Total revenue		$	8,473		$	9,120		$	8,259		$	17,593		$	16,869
Provision for credit losses			500			633			584			1,133			1,226
Insurance claims and related expenses			538			574			530			1,112			1,185
Non-interest expenses			4,786			4,897			4,736			9,683			9,389
Net income – reported			2,503			2,533			2,052			5,036			4,275
Net income – adjusted1			2,561			2,558			2,282			5,119			4,529
Financial position (billions of Canadian dollars)
Total loans net of allowance for loan losses		$	598.5		$	584.7		$	553.3		$	598.5		$	553.3
Total assets			1,251.9			1,186.9			1,124.8			1,251.9			1,124.8
Total deposits			807.1			774.5			714.5			807.1			714.5
Total equity			76.2			73.3			67.8			76.2			67.8
Total Common Equity Tier 1 Capital risk-weighted assets2			420.1			402.2			383.6			420.1			383.6
Financial ratios
Return on common equity – reported			14.4	%		14.4	%		12.5	%		14.4	%		13.0	%
Return on common equity – adjusted3			14.8			14.5			14.0			14.6			13.8
Efficiency ratio – reported			56.5			53.7			57.3			55.0			55.6
Efficiency ratio – adjusted1			55.8			53.2			54.8			54.4			54.1
Provision for credit losses as a % of net average loans
	and acceptances4		0.35			0.42			0.42			0.39			0.44
Common share information – reported (dollars)
Per share earnings
	Basic	$	1.31		$	1.32		$	1.07		$	2.63		$	2.24
	Diluted		1.31			1.32			1.07			2.63			2.24
Dividends per share			0.60			0.55			0.55			1.15			1.06
Book value per share			38.08			36.25			33.89			38.08			33.89
Closing share price5			64.23			67.41			55.85			64.23			55.85
Shares outstanding (millions)
	Average basic		1,854.4			1,855.8			1,850.9			1,855.1			1,852.5
	Average diluted		1,858.7			1,860.3			1,853.9			1,859.5			1,855.8
	End of period		1,843.4			1,856.4			1,853.5			1,843.4			1,853.5
Market capitalization (billions of Canadian dollars)		$	118.4		$	125.1		$	103.5		$	118.4		$	103.5
Dividend yield			3.3	%		3.4	%		4.0	%		3.4	%		4.0	%
Dividend payout ratio			45.9			41.6			51.2			43.7			47.2
Price-earnings ratio			12.7			14.0			12.7			12.7			12.7
Total shareholder return (1 year)6			19.3			31.7			4.3			19.3			4.3
Common share information – adjusted (dollars)1
Per share earnings
	Basic	$	1.34		$	1.34		$	1.20		$	2.68		$	2.38
	Diluted		1.34			1.33			1.20			2.67			2.38
Dividend payout ratio			44.8	%		41.2	%		45.9	%		43.0	%		44.5	%
Price-earnings ratio			12.4			13.4			11.8			12.4			11.8
Capital ratios
Common Equity Tier 1 Capital ratio2			10.8	%		10.9	%		10.1	%		10.8	%		10.1	%
Tier 1 Capital ratio2			12.5			12.6			11.7			12.5			11.7
Total Capital ratio2			14.9			15.1			14.4			14.9			14.4
Leverage ratio			3.9			4.0			3.8			3.9			3.8

1 Adjusted measures are non-GAAP measures. Refer to the "How the Bank Reports" section of this document for an explanation of reported and adjusted results.

2 Each capital ratio has its own risk-weighted assets (RWA) measure due to the Office of the Superintendent of Financial Institutions Canada (OSFI) prescribed scalar for inclusion of the Credit Valuation Adjustment (CVA). For fiscal 2016, the scalars for inclusion of CVA for Common Equity Tier 1 (CET1), Tier 1, and Total Capital RWA were 64%, 71%, and 77%, respectively. For fiscal 2017, the scalars are 72%, 77%, and 81%.

3 Adjusted return on common equity is a non-GAAP financial measure. Refer to the "Return on Common Equity" section of this document for an explanation.

4 Excludes acquired credit-impaired (ACI) loans and debt securities classified as loans. For additional information on ACI loans, refer to the "Credit Portfolio Quality" section of the MD&A and Note 5 of the Interim Consolidated Financial Statements. For additional information on debt securities classified as loans, refer to the "Exposure to Non-Agency Collateralized Mortgage Obligations" discussion and tables in the "Credit Portfolio Quality" section of the MD&A and Note 5 of the Interim Consolidated Financial Statements.

5 Toronto Stock Exchange (TSX) closing market price.

6 Total shareholder return (TSR) is calculated based on share price movement and dividends reinvested over a trailing one year period.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 5

HOW WE PERFORMED

Corporate Overview

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 branches and serves 25 million customers in three key businesses operating in a number of locations in financial centres around the globe: Canadian Retail, including TD Canada Trust, TD Auto Finance Canada, TD Wealth (Canada), TD Direct Investing, and TD Insurance; U.S. Retail, including TD Bank, America's Most Convenient Bank^®, TD Auto Finance U.S., TD Wealth (U.S.), and an investment in TD Ameritrade; and Wholesale Banking, including TD Securities. TD also ranks among the world's leading online financial services firms, with 11.5 million active online and mobile customers. TD had $1.3 trillion in assets on April 30, 2017. The Toronto-Dominion Bank trades under the symbol "TD" on the Toronto and New York Stock Exchanges.

How 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. The Bank also utilizes non-GAAP financial measures referred to as "adjusted" results to assess each of its businesses and to measure the Bank's overall performance. To arrive at adjusted results, the Bank removes "items of note", from reported results. The items of note relate to items which management does not believe are indicative of underlying business performance. The Bank believes that adjusted results provide the reader with a better understanding of how management views the Bank's performance. The items of note are disclosed in Table 3. As explained, adjusted results differ from reported results determined in accordance with IFRS. Adjusted results, items of note, and related terms used in this document are not defined terms under IFRS and, therefore, may not be comparable to similar terms used by other issuers.

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
		2017		2017		2016		2017		2016
Net interest income		$	5,109	$	5,141	$	4,880	$	10,250	$	9,927
Non-interest income			3,364		3,979		3,379		7,343		6,942
Total revenue			8,473		9,120		8,259		17,593		16,869
Provision for credit losses			500		633		584		1,133		1,226
Insurance claims and related expenses			538		574		530		1,112		1,185
Non-interest expenses			4,786		4,897		4,736		9,683		9,389
Income before income taxes and equity in net income of an
	investment in TD Ameritrade		2,649		3,016		2,409		5,665		5,069
Provision for income taxes			257		596		466		853		1,012
Equity in net income of an investment in TD Ameritrade			111		113		109		224		218
Net income – reported			2,503		2,533		2,052		5,036		4,275
Preferred dividends			48		48		37		96		62
Net income available to common shareholders and non-controlling
	interests in subsidiaries	$	2,455	$	2,485	$	2,015	$	4,940	$	4,213
Attributable to:
Common shareholders		$	2,427	$	2,456	$	1,987	$	4,883	$	4,156
Non-controlling interests			28		29		28		57		57

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 6

The following table provides a reconciliation between the Bank's adjusted and reported results.

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
		2017		2017		2016		2017		2016
Operating results – adjusted
Net interest income		$	5,109	$	5,141	$	4,880	$	10,250	$	9,927
Non-interest income1			3,364		3,938		3,437		7,302		6,954
Total revenue			8,473		9,079		8,317		17,552		16,881
Provision for credit losses			500		633		584		1,133		1,226
Insurance claims and related expenses			538		574		530		1,112		1,185
Non-interest expenses2			4,723		4,833		4,556		9,556		9,135
Income before income taxes and equity in net income of an
	investment in TD Ameritrade		2,712		3,039		2,647		5,751		5,335
Provision for income taxes			277		610		491		887		1,057
Equity in net income of an investment in TD Ameritrade3			126		129		126		255		251
Net income – adjusted			2,561		2,558		2,282		5,119		4,529
Preferred dividends			48		48		37		96		62
Net income available to common shareholders and non-controlling
	interests in subsidiaries – adjusted		2,513		2,510		2,245		5,023		4,467
Attributable to:
Non-controlling interests in subsidiaries, net of income taxes			28		29		28		57		57
Net income available to common shareholders – adjusted			2,485		2,481		2,217		4,966		4,410
Pre-tax adjustments of items of note
Amortization of intangibles4			(78)		(80)		(86)		(158)		(176)
Fair value of derivatives hedging the reclassified available-for-sale
	securities portfolio5		–		41		(58)		41		(12)
Impairment of goodwill, non-financial assets, and other charges6			–		–		(111)		–		(111)
Provision for (recovery of) income taxes for items of note
Amortization of intangibles			(20)		(21)		(23)		(41)		(48)
Fair value of derivatives hedging the reclassified available-for-sale
	securities portfolio		–		7		(7)		7		(2)
Impairment of goodwill, non-financial assets, and other charges			–		–		5		–		5
Total adjustments for items of note			(58)		(25)		(230)		(83)		(254)
Net income available to common shareholders – reported		$	2,427	$	2,456	$	1,987	$	4,883	$	4,156

1 Adjusted non-interest income excludes the following items of note: second quarter 2017 – nil due to change in fair value of derivatives hedging the reclassified available-for-sale (AFS) securities portfolio, as explained in footnote 5; first quarter 2017 – $41 million gain due to change in fair value of derivatives hedging the reclassified AFS securities portfolio; second quarter 2016 – $58 million loss due to change in fair value of derivatives hedging the reclassified AFS securities portfolio. These amounts were reported in the Corporate segment.

2 Adjusted non-interest expenses excludes the following items of note: second quarter 2017 – $63 million amortization of intangibles, as explained in footnote 4; first quarter 2017 – $64 million amortization of intangibles; second quarter 2016 – $69 million amortization of intangibles. These amounts were reported in the Corporate segment.

3 Adjusted equity in net income of an investment in TD Ameritrade excludes the following items of note: second quarter 2017 – $15 million amortization of intangibles, as explained in footnote 4; first quarter 2017 – $16 million amortization of intangibles; second quarter 2016 – $17 million amortization of intangibles. These amounts were reported in the Corporate segment.

4 Amortization of intangibles relates to intangibles acquired as a result of asset acquisitions and business combinations, including the after tax amounts for amortization of intangibles relating to the equity in net income of the investment in TD Ameritrade. Although the amortization of software and asset servicing rights are recorded in amortization of intangibles, they are not included for purposes of the items of note.

5 The Bank changed its trading strategy with respect to certain trading debt securities and reclassified these securities from trading to the available-for-sale category effective August 1, 2008. These debt securities are economically hedged, primarily with credit default swap and interest rate swap contracts which are recorded on a fair value basis with changes in fair value recorded in the period's earnings. As a result the derivatives were accounted for on an accrual basis in Wholesale Banking and the gains and losses related to the derivatives in excess of the accrued amounts were reported in the Corporate segment. Adjusted results of the Bank in prior periods exclude the gains and losses of the derivatives in excess of the accrued amount. Effective February 1, 2017, the total gains and losses as a result of changes in fair value of these derivatives are recorded in Wholesale Banking.

6 In the second quarter of 2016, the Bank recorded impairment losses on goodwill, certain intangibles, other non-financial assets and deferred tax assets, as well as other charges relating to the Direct Investing business in Europe that has been experiencing continued losses. These amounts are reported in the Corporate segment.

TABLE 4: RECONCILIATION OF REPORTED TO ADJUSTED EARNINGS PER SHARE (EPS)1
(Canadian dollars)			For the three months ended				For the six months ended
	April 30		January 31		April 30		April 30		April 30
	2017		2017		2016		2017		2016
Basic earnings per share – reported	$	1.31	$	1.32	$	1.07	$	2.63	$	2.24
Adjustments for items of note2		0.03		0.02		0.13		0.05		0.14
Basic earnings per share – adjusted	$	1.34	$	1.34	$	1.20	$	2.68	$	2.38
Diluted earnings per share – reported	$	1.31	$	1.32	$	1.07	$	2.63	$	2.24
Adjustments for items of note2		0.03		0.01		0.13		0.04		0.14
Diluted earnings per share – adjusted	$	1.34	$	1.33	$	1.20	$	2.67	$	2.38

1 EPS is computed by dividing net income available to common shareholders by the weighted-average number of shares outstanding during the period.

2 For explanations of items of note, refer to the "Non-GAAP Financial Measures – Reconciliation of Adjusted to Reported Net Income" table in the "How We Performed" section of this document.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 7

TABLE 5: AMORTIZATION OF INTANGIBLES, NET OF INCOME TAXES1
(millions of Canadian dollars)	For the three months ended							For the six months ended
	April 30		January 31		April 30		April 30		April 30
	2017		2017		2016		2017		2016
TD Bank, National Association (TD Bank, N.A.)	$	24	$	25	$	28	$	49	$	58
TD Ameritrade Holding Corporation (TD Ameritrade)2		15		16		17		31		33
MBNA Canada		9		9		9		18		18
Aeroplan		4		5		5		9		9
Other		6		4		4		10		10
		58		59		63		117		128
Software and asset servicing rights		85		82		77		167		157
Amortization of intangibles, net of income taxes	$	143	$	141	$	140	$	284	$	285

1 Amortization of intangibles, with the exception of software and asset servicing rights, are included as items of note. For explanations of items of note, refer to the "Non-GAAP Financial Measures – Reconciliation of Adjusted to Reported Net Income" table in the "How We Performed" section of this document.

2 Included in equity in net income of an investment in TD Ameritrade.

Return on Common Equity

The Bank's methodology for allocating capital to its business segments is aligned with the common equity capital requirements under Basel III. The capital allocated to the business segments is based on 9% CET1 Capital.

Adjusted return on common equity (ROE) is adjusted net income available to common shareholders as a percentage of average common equity.

Adjusted ROE is a non-GAAP financial measure as it is not a defined term under IFRS. Readers are cautioned that earnings and other measures adjusted to a basis other than IFRS do not have standardized meanings under IFRS and, therefore, may not be comparable to similar terms used by other issuers.

TABLE 6: RETURN ON 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
	2017			2017			2016			2017			2016
Average common equity	$	68,956		$	67,697		$	64,536		$	68,475		$	64,302
Net income available to common shareholders – reported		2,427			2,456			1,987			4,883			4,156
Items of note, net of income taxes1		58			25			230			83			254
Net income available to common shareholders – adjusted		2,485			2,481			2,217			4,966			4,410
Return on common equity – reported		14.4	%		14.4	%		12.5	%		14.4	%		13.0	%
Return on common equity – adjusted		14.8			14.5			14.0			14.6			13.8

1 For explanations of items of note, refer to the "Non-GAAP Financial Measures – Reconciliation of Adjusted to Reported Net Income" table in the "How We Performed" section of this document.

FINANCIAL RESULTS OVERVIEW

Performance Summary

Outlined below is an overview of the Bank's performance on an adjusted basis for the second quarter of 2017. Shareholder performance indicators help guide and benchmark the Bank's accomplishments. For the purposes of this analysis, the Bank utilizes adjusted earnings, which excludes items of note from the reported results that are prepared in accordance with IFRS. Reported and adjusted results and items of note are explained in the "How the Bank Reports" section of this document.

• Adjusted diluted earnings per share for the six months ended April 30, 2017, increased 12% from the same period last year reflecting higher earnings across all segments. The Bank's goal is to achieve 7 to 10% adjusted earnings per share growth over the medium term.

• Adjusted return on common equity for the six months ended April 30, 2017, was 14.6%.

• For the twelve months ended April 30, 2017, the total shareholder return was 19.3% compared to the Canadian peer¹ average of 20.4%.

Net Income

Quarterly comparison – Q2 2017 vs. Q2 2016

Reported net income for the quarter was $2,503 million, an increase of $451 million, or 22%, compared with the second quarter last year. The increase reflects loan and deposit volume growth in the Canadian and U.S. Retail segments, higher fee-based revenue, a more favourable interest rate environment in the U.S. and lower provision for credit losses (PCL). The increase in earnings was partially offset by higher employee-related costs including variable compensation, higher spend on strategic initiatives and the effect of one less day in the current quarter. Other items increasing the year-over-year growth include the impairment of goodwill, non-financial assets, and other charges relating to the Direct Investing business in Europe in the second quarter last year and a lower effective tax rate in the current quarter. Adjusted net income for the quarter was $2,561 million, an increase of $279 million, or 12%.

By segment, the increase in reported net income was due to an increase in U.S. Retail of $126 million, or 18%, an increase in Canadian Retail of $106 million, or 7%, an increase in Wholesale Banking² of $29 million, or 13% and a lower net loss in the Corporate segment of $190 million, or 54%.

Quarterly comparison – Q2 2017 vs. Q1 2017

Reported net income for the quarter decreased $30 million, or 1%, compared with the prior quarter. The decrease reflects lower trading-related revenue, lower insurance premiums, higher spending on business initiatives, the effect of fewer days in the current quarter and lower revenues from treasury and balance sheet management activities in the quarter. These items were partially offset by lower PCL, lower non-interest expenses, and a more favourable interest rate environment in the U.S. Adjusted net income for the quarter increased $3 million.

By segment, the decrease in reported net income was due to a decrease in Wholesale Banking of $19 million, or 7%, and a higher net loss in the Corporate segment of $60 million, or 60%, partially offset by an increase in U.S. Retail of $45 million, or 6%, and an increase in Canadian Retail of $4 million.

1 Canadian peers include Bank of Montreal, Canadian Imperial Bank of Commerce, Royal Bank of Canada, and The Bank of Nova Scotia.

2 Net interest income within Wholesale Banking is calculated on a tax equivalent basis (TEB). Refer to the "How Our Businesses Performed" section in this document for additional details.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 8

Year-to-date comparison – Q2 2017 vs. Q2 2016

Reported net income of $5,036 million increased $761 million, or 18%, compared with the same period last year. The increase reflects loan and deposit growth in the Canadian and U.S. Retail segments, higher fee-based income, higher trading-related income, lower PCL and lower claims and related expenses. Offsetting the increase was higher non-interest expenses, lower insurance premiums and the effect of one less day in the current period. Other items increasing the year-over-year growth include the impairment of goodwill, non-financial assets, and other charges relating to the Direct Investing business in Europe in the same period last year and a lower effective tax rate in the current period. Adjusted net income increased $590 million, or 13%, compared with the same period last year.

By segment, the increase in reported net income was due to an increase in U.S. Retail of $175 million, or 12%, an increase in Canadian Retail of $159 million, or 5%, and an increase in Wholesale Banking of $135 million, or 36% and a lower net loss in the Corporate segment of $292 million, or 53%.

Net Interest Income

Quarterly comparison – Q2 2017 vs. Q2 2016

Net interest income for the quarter was $5,109 million, an increase of $229 million, or 5%, compared with the second quarter last year. The increase reflects loan and deposit growth in the Canadian and U.S. Retail segments and a more favourable interest rate environment in the U.S., partially offset by the effect of one less day in the current quarter.

By segment, the increase in net interest income was due to an increase in Wholesale Banking of $365 million, or 83%, Canadian Retail of $115 million, or 5%, and in U.S. Retail of $114 million, or 7%, partially offset by a decrease in the Corporate segment of $365 million. The increase in net interest income in Wholesale Banking reflects a change in business mix related to higher TEB which is offset in the Corporate segment.

Quarterly comparison – Q2 2017 vs. Q1 2017

Net interest income for the quarter decreased $32 million, or 1%, compared with the prior quarter primarily due to the effect of fewer days in the current quarter, partially offset by a more favourable interest rate environment in the U.S.

By segment, the decrease in net interest income was due to a decrease in Canadian Retail of $80 million, or 3%, and in the Corporate segment of $376 million, partially offset by an increase in Wholesale Banking of $412 million, and in U.S. Retail of $12 million, or 1%. The increase in net interest income in Wholesale Banking reflects a change in business mix related to higher TEB which is offset in the Corporate segment.

Year-to-date comparison – Q2 2017 vs. Q2 2016

Net interest income was $10,250 million, an increase of $323 million, or 3%, compared with the same period last year. The increase was due to loan and deposit growth in the Canadian and U.S. Retail segments and a more favourable interest rate environment in the U.S., partially offset by lower margins in the Canadian Retail segment and the effect of one less day in the current period.

By segment, the increase in net interest income was due to an increase in Wholesale Banking of $299 million, or 33%, Canadian Retail of $237 million, or 5%, and in U.S. Retail of $184 million, or 5%, partially offset by a decrease in the Corporate segment of $397 million, or 65%. The increase in net interest income in Wholesale Banking reflects a change in business mix related to higher TEB which is offset in the Corporate segment.

Non-Interest Income

Quarterly comparison – Q2 2017 vs. Q2 2016

Reported non-interest income for the quarter was $3,364 million, a decrease of $15 million, compared with the second quarter last year. The decrease reflects lower fixed income trading, partially offset by higher fee-based income related to wealth asset growth and corporate lending, and changes in the fair value of investments supporting claims liabilities which resulted in a similar increase to insurance claims. Adjusted non-interest income for the quarter was $3,364 million, a decrease of $74 million, or 2%.

By segment, the decrease in reported non-interest income was due to a decrease in Wholesale Banking of $313 million, or 96%, partially offset by an increase in Canadian Retail of $130 million, or 5%, U.S. Retail of $111 million, or 20%, and in the Corporate segment of $57 million. The decrease in Wholesale Banking is primarily due to business mix, offset in net interest income (TEB).

Quarterly comparison – Q2 2017 vs. Q1 2017

Reported non-interest income for the quarter decreased $615 million, or 15%, compared with the prior quarter. The decrease reflects lower fixed income trading, lower fee-based income and revenues from treasury and balance sheet management activities, partially offset by changes in the fair value of investments supporting claims liabilities which resulted in a similar increase to insurance claims. Adjusted non-interest income for the quarter decreased $574 million, or 15%.

By segment, the decrease in reported non-interest income was due to a decrease in Wholesale Banking of $451 million, or 97%, a decrease in U.S. Retail of $23 million, or 3%, and in Corporate of $150 million, or 63%, partially offset by an increase in Canadian Retail of $9 million. The decrease in Wholesale Banking is primarily due to business mix, offset in net interest income (TEB).

Year-to-date comparison – Q2 2017 vs. Q2 2016

Reported non-interest income was $7,343 million, an increase of $401 million, or 6%, compared with the same period last year. The increase primarily reflects higher fee-based income and higher revenue from treasury and balance sheet management activities. The growth was partially offset by lower trading income, lower insurance premiums and changes in the fair value of investments supporting claims liabilities which resulted in a similar reduction to insurance claims and related expenses.

By segment, the increase in reported non-interest income was due to an increase in Canadian Retail of $180 million, or 4%, U.S. Retail of $168 million, or 14%, and in Corporate of $107 million, or 49%, partially offset by a decrease in Wholesale Banking of $54 million, or 10%. The decrease in Wholesale Banking is primarily due to business mix, offset in net interest income (TEB).

Provision for Credit Losses

Quarterly comparison – Q2 2017 vs. Q2 2016

PCL for the quarter was $500 million, a decrease of $84 million, or 14%, compared with the second quarter last year. The decrease primarily reflects higher provisions in the prior year for credit losses on exposures impacted by low oil and gas prices, a higher increase in commercial allowance in U.S. Retail in the prior year, and lower provisions in the current year in the Canadian Retail auto lending, credit cards, and personal lending portfolio. The decrease is partially offset by higher provisions in U.S. credit cards and auto lending in the current quarter.

By segment, the decrease in PCL was due to a decrease in Wholesale Banking of $54 million, in Canadian Retail of $27 million, or 10%, and in U.S. Retail of $10 million, or 6%, partially offset by an increase in the Corporate segment of $7 million, or 6%.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 9

Quarterly comparison – Q2 2017 vs. Q1 2017

PCL for the quarter decreased $133 million, or 21%, compared with the prior quarter. The decrease was primarily due to lower provisions in the U.S. Retail segment reflecting seasonality in the credit cards and auto lending portfolio, lower provisions in U.S. commercial loans, and lower provisions in the Canadian Retail auto lending portfolio, partially offset by a lower recovery related to specific provisions in the oil and gas sector.

By segment, the decrease in PCL was due to a decrease in U.S. Retail of $105 million, or 41%, in Canadian Retail of $34 million, or 13%, and in the Corporate segment of $14 million, or 11%, partially offset by an increase in Wholesale Banking of $20 million, or 83%.

Year-to-date comparison – Q2 2017 vs. Q2 2016

PCL of $1,133 million decreased $93 million, or 8%, compared with the same period last year. The decrease primarily reflects higher provisions in the prior year for credit losses on exposures impacted by low oil and gas prices, a higher increase in commercial allowance in U.S. Retail in the prior year, and the recovery of specific provisions in the oil and gas sector in the current year. The decrease is partially offset by higher provisions for auto loans and credit cards in the U.S. Retail segment.

By segment, the decrease in PCL was due to a decrease in Wholesale Banking of $90 million, and in Corporate of $43 million, or 15%, partially offset by an increase in U.S. Retail of $26 million, or 7%, and in Canadian Retail of $14 million, or 3%.

TABLE 7: PROVISION FOR CREDIT LOSSES
(millions of Canadian dollars)		For the three months ended							For the six months ended
		April 30		January 31		April 30		April 30		April 30
		2017		2017		2016		2017		2016
Provision for credit losses – counterparty-specific and individually
	insignificant
Provision for credit losses – counterparty-specific		$	2	$	(10)	$	75	$	(8)	$	95
Provision for credit losses – individually insignificant			596		676		555		1,272		1,168
Recoveries			(165)		(164)		(154)		(329)		(323)
Total provision for credit losses for counterparty-specific and individually
	insignificant		433		502		476		935		940
Provision for credit losses – incurred but not identified
Canadian Retail and Wholesale Banking1			–		–		60		–		125
U.S. Retail			34		102		50		136		135
Corporate2			33		29		(2)		62		26
Total provision for credit losses – incurred but not identified			67		131		108		198		286
Provision for credit losses – reported		$	500	$	633	$	584	$	1,133	$	1,226

1 The incurred but not identified PCL is included in the Corporate segment results for management reporting.

2 The retailer program partners' share of the U.S. strategic cards portfolio.

Insurance claims and related expenses

Quarterly comparison – Q2 2017 vs. Q2 2016

Insurance claims and related expenses for the quarter were $538 million, an increase of $8 million, or 2%, compared with the second quarter last year, reflecting changes in the fair value of investments supporting claims liabilities which resulted in a similar increase to non-interest income and more severe weather conditions, partially offset by more favourable prior years' claims development.

Quarterly comparison – Q2 2017 vs. Q1 2017

Insurance claims and related expenses for the quarter decreased $36 million, or 6%, compared with the prior quarter, reflecting seasonality of claims and more favourable prior years' claims development, partially offset by changes in the fair value of investments supporting claims liabilities which resulted in a similar increase to non-interest income and more severe weather conditions.

Year-to-date comparison – Q2 2017 vs. Q2 2016

Insurance claims and related expenses were $1,112 million, a decrease of $73 million, or 6%, compared with same period last year, reflecting favourable prior years' claims development, changes in the fair value of investments supporting claims liabilities which resulted in a similar reduction to non-interest income, lower current year claims, partially offset by more severe weather conditions.

Non-Interest Expenses and Efficiency Ratio

Quarterly comparison – Q2 2017 vs. Q2 2016

Reported non-interest expenses were $4,786 million, an increase of $50 million, or 1%, compared with the second quarter last year primarily reflecting investments in technology and business initiatives and higher employee-related expenses including variable compensation, partially offset by the impairment of goodwill, non-financial assets, and other charges relating to the Direct Investing business in Europe in the prior year, and savings from productivity initiatives. Adjusted non-interest expenses were $4,723 million, an increase of $167 million, or 4%.

By segment, the increase in reported non-interest expenses was due to an increase in Canadian Retail of $123 million, or 6%, in Wholesale Banking of $40 million, or 9%, and in U.S. Retail of $33 million, or 2%, partially offset by a decrease in Corporate segment of $146 million, or 19%.

The Bank's reported efficiency ratio was 56.5%, compared with 57.3% in the second quarter last year. The Bank's adjusted efficiency ratio was 55.8%, compared with 54.8% in the second quarter last year.

Quarterly comparison – Q2 2017 vs. Q1 2017

Reported non-interest expenses for the quarter decreased $111 million, or 2%, compared with the prior quarter primarily reflecting lower net corporate expenses due to timing of regulatory fees and seasonality, lower variable compensation, and the effect of fewer days in the current quarter, partially offset by higher investments in technology and business initiatives. Adjusted non-interest expenses decreased $109 million, or 2%.

By segment, the decrease in reported non-interest expenses was due to a decrease in Wholesale Banking of $43 million, or 8%, in Canadian Retail of $7 million, and in the Corporate segment of $76 million, or 11%, partially offset by an increase in U.S. Retail of $15 million, or 1%.

The Bank's reported efficiency ratio was 56.5%, compared with 53.7% in the prior quarter. The Bank's adjusted efficiency ratio was 55.8%, compared with 53.2% in the prior quarter.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 10

Year-to-date comparison – Q2 2017 vs. Q2 2016

Reported non-interest expenses of $9,683 million increased $294 million, or 3%, compared with the same period last year, primarily reflecting higher employee-related expenses including variable compensation and strategic technology initiatives, partially offset by productivity savings and the prior year impairment of goodwill, non-financial assets, and other charges relating to the Direct Investing business in Europe.

By segment, the increase in reported non-interest expenses was due to an increase in Canadian Retail of $269 million, or 6%, in Wholesale Banking of $135 million, or 16%, and in U.S. Retail of $61 million, or 2%, partially offset by a decrease in the Corporate segment of $171 million, or 11%.

The Bank’s reported efficiency ratio was 55.0%, compared with 55.6% in the same period last year. The Bank’s adjusted efficiency ratio was 54.4%, compared with 54.1% in the same period last year.

Income Taxes

As discussed in the "How the Bank Reports" section of this document, the Bank adjusts its reported results to assess each of its businesses and to measure overall Bank performance. As such, the provision for income taxes is stated on a reported and an adjusted basis.

The Bank's effective income tax rate on a reported basis was 9.7% for the second quarter, compared with 19.3% in the second quarter last year and 19.8% in the prior quarter. The year-over-year and quarter-over-quarter decreases were largely due to higher than usual client activity in equity trading.

TABLE 8: INCOME TAXES
(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
		2017				2017				2016				2017				2016
Income taxes at Canadian statutory income tax rate		$	702	26.5	%	$	798	26.5	%	$	638	26.5	%	$	1,500	26.5	%	$	1,342	26.5	%
Increase (decrease) resulting from:
Dividends received			(341)	(12.9)			(87)	(2.9)			(61)	(2.5)			(428)	(7.6)			(116)	(2.3)
Rate differentials on international operations			(99)	(3.7)			(129)	(4.3)			(86)	(3.6)			(228)	(4.0)			(201)	(4.0)
Other			(5)	(0.2)			14	0.5			(25)	(1.1)			9	0.2			(13)	(0.2)
Provision for income taxes and effective
	income tax rate – reported	$	257	9.7	%	$	596	19.8	%	$	466	19.3	%	$	853	15.1	%	$	1,012	20.0	%
Total adjustments for items of note1			20				14				25				34				45
Provision for income taxes and effective
	income tax rate – adjusted2,3	$	277	10.2	%	$	610	20.1	%	$	491	18.5	%	$	887	15.4	%	$	1,057	19.8	%

1 For explanations of items of note, refer to the "Non-GAAP Financial Measures – Reconciliation of Adjusted to Reported Net Income" table in the "How We Performed" section of this document.

2 The tax effect for each item of note is calculated using the statutory income tax rate of the applicable legal entity.

3 Adjusted effective income tax rate is the adjusted provision for income taxes before other taxes as a percentage of adjusted net income before taxes.

The Bank's adjusted effective tax rate was 10.2% for the quarter, lower than 18.5% in the second quarter last year and 20.1% in the prior quarter. The year-over-year and quarter-over-quarter decreases were largely due to higher than usual client activity in equity trading.

Impact of Foreign Exchange Rate on U.S. Retail Segment Translated Earnings

U.S. Retail segment earnings, including the contribution from the Bank's investment in TD Ameritrade, reflect fluctuations in the U.S. dollar to Canadian dollar exchange rate compared with the same period last year. The changes in the value of the Canadian dollar had an unfavourable impact on U.S. Retail segment earnings for the three and six months ended April 30, 2017, compared with the same period last year, as shown in the following table.

TABLE 9: IMPACT OF FOREIGN EXCHANGE RATE ON U.S. RETAIL SEGMENT TRANSLATED EARNINGS
(millions of Canadian dollars, except as noted)	For the three months ended				For the six months ended
		April 30, 2017 vs.			April 30, 2017 vs.
		April 30, 2016			April 30, 2016
U.S. Retail Bank
Increased (Decreased) total revenue			$	6		$	(73)
Increased (Decreased) non-interest expenses				4			(41)
Increased (Decreased) net income – after tax				2			(20)
Increased (Decreased) equity in net income on an investment in TD Ameritrade				(4)			(5)
U.S. Retail segment decreased net income – after tax				(2)			(24)
Earnings per share (dollars)
Increase (Decrease) in basic			$	(0.00)		$	(0.01)
Increase (Decrease) in diluted				(0.00)			(0.01)

On a trailing twelve month basis, a one cent appreciation/depreciation in the U.S. dollar to Canadian dollar average exchange rate will increase/decrease U.S. Retail segment net income by approximately $40 million.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 11

Economic Summary and Outlook

After recording virtually no growth during the first half of calendar 2016, Canada's economy has since exceeded expectations. Real economic growth ran at a brisk rate of approximately 3% annualized in the second half of last year, and all indications are that an even stronger rate of 3.4% was recorded in the January to March period of 2017. While a rebound in oil production and exports in the aftermath of last spring's wildfires in northern Alberta has been driving part of the improvement, unanticipated strength in consumer spending and housing activity has been at the core.

Gains in the household sector are likely to moderate in the coming months, but real GDP growth is projected to average approximately 2% over the balance of calendar 2017 – still sufficient to absorb economic slack. In this environment, Canada's unemployment rate is likely to drift slightly higher from its current level of 6.5% as the growth of workers returning to labour markets outpaces job gains. Increased federal infrastructure spending is expected to take up some of the slack owing to the more tempered consumer spending gains. At the same time, near-term Canadian export prospects generally remain favourable reflecting a constructive demand outlook in the U.S. and global economies.

In the United States, a disappointing economic performance in the first calendar quarter of 2017 appears to be temporary, with more timely, forward-looking indicators pointing to a healthy rebound in growth beginning in the second quarter. A continuation of a relatively low unemployment rate and broad-based income increases are expected to underpin a steady pace of household spending and housing demand in the coming quarters, despite recent increases in borrowing costs. Meanwhile, business spending fundamentals among U.S. corporations have been improving recently, as evidenced by a strong expansion of business investment in the January to March 2017 period. In this environment, the U.S. Federal Reserve is likely to follow through with further gradual reductions in monetary accommodation over the next few years. Globally, recent improvements in sentiment indicators point to an improving pace of growth, although major central banks such as the European Central Bank and Bank of Japan are expected to maintain accommodative stances for some time to come.

Potential policy moves in Washington represent a key source of uncertainty to the U.S. economic outlook. The U.S. administration and U.S. Congress continue to contemplate major reforms to taxes and deregulation, as well as other key policy changes that could be growth-enhancing. Other potential policies, such as those that could reduce flows of trade and immigration to the U.S. could be growth inhibiting. At this stage, both the measures to be adopted and their timing remain highly speculative, injecting both upside and downside risks to the economic outlook.

For the Canadian economy, upcoming North American Free Trade Agreement (NAFTA) renegotiations and concerns surrounding increased U.S. trade protectionism (as evidenced by the recent U.S. announcement of countervailing duties on Canadian softwood lumber imports) could derail the needed rebalancing in the sources of economic growth away from the overstretched household sector. Although an orderly renegotiation of NAFTA appears most likely, a further heightening of uncertainty may delay or discourage investment intentions among Canadian firms.

Within the real estate sector, impressive strength observed recently in the Ontario's Greater Golden Horseshoe (GGH), Canada's largest urban market, is expected to ease in the coming quarters. The cooling is poised to be driven by the combination of the tighter federal mortgage rules, higher market funding costs faced by financial institutions, over-stretched valuations, and recent measures to cool the market implemented in Ontario's 2017 budget. Despite the projected adjustment to both sales and home prices in the GGH – which is likely to follow in a similar path to the modest correction witnessed in Vancouver's housing market since mid-2016 – concerns about elevated home prices and household debt levels are likely to persist in both regions.

The mix of a tapering off in housing market conditions and an ongoing pickup in resource activity is likely to lead to some convergence in regional economic growth rates this year. Partially reversing economic declines recorded since 2015, Alberta is expected to record the fastest provincial growth rate in 2017 of close to 3%, while the pace of expansion in British Columbia and Ontario diminishes somewhat, to roughly 2.5%. Elsewhere, economic growth should remain modest but steady.

Inflation is expected to pick up only gradually through 2017, but as economic slack diminishes, inflationary pressures are likely to mount. These pressures are forecast to spur the Bank of Canada to begin a gradual monetary policy tightening cycle in April 2018. This is consistent with the Bank of Canada's most recent published forecast, which foresees economic slack being absorbed by early 2018. A rising U.S.-Canada short-term interest spread is expected to hold the Canadian dollar to an average of US73 - US75 cents this year, in line with recently observed levels.

In addition to risks surrounding the U.S. government policy landscape, there are other uncertainties that could weigh on economic activity in Canada. A number of geo-political risks, including heightened tensions surrounding North Korea and negotiations over the United Kingdom's exit from the European Union, may result in increased global uncertainty and volatility. Domestically, the key risk is that a disorderly correction occurs in Canada's housing market, potentially setting the stage for a significant deleveraging cycle.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 12

HOW OUR BUSINESSES PERFORMED

For management reporting purposes, the Bank reports its results under three key business segments: Canadian Retail, which includes the results of the Canadian personal and commercial banking, wealth, and insurance businesses; U.S. Retail, which includes the results of the U.S. personal and business banking operations, wealth management services, and the Bank's investment in TD Ameritrade; 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 the Bank Reports" section of this document, the "Business Focus" section in the 2016 MD&A, and Note 30 of the Bank's Consolidated Financial Statements for the year ended October 31, 2016. For information concerning the Bank's measure of ROE, which is a non-GAAP financial measure, refer to the "How We Performed" section of this document.

Net interest income within Wholesale Banking is calculated on a taxable equivalent basis (TEB), which means that the value of non-taxable or tax-exempt income, including dividends, is adjusted to its equivalent before-tax value. Using TEB allows the Bank to measure income from all securities and loans consistently and makes for a more meaningful comparison of net interest income with similar institutions. The TEB increase to net interest income and provision for income taxes reflected in Wholesale Banking's results are reversed in the Corporate segment. The TEB adjustment for the quarter was $457 million, compared with $82 million in the second quarter last year, and $112 million in the prior quarter. The TEB adjustment for the six months ended April 30, 2017, was $569 million, compared with $147 million the same period last year.

TABLE 10: CANADIAN RETAIL
(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
	2017			2017			2016			2017			2016
Net interest income	$	2,533		$	2,613		$	2,418		$	5,146		$	4,909
Non-interest income		2,599			2,590			2,469			5,189			5,009
Total revenue		5,132			5,203			4,887			10,335			9,918
Provision for credit losses		235			269			262			504			490
Insurance claims and related expenses		538			574			530			1,112			1,185
Non-interest expenses		2,218			2,225			2,095			4,443			4,174
Net income	$	1,570		$	1,566		$	1,464		$	3,136		$	2,977
Selected volumes and ratios
Return on common equity		45.0	%		43.2	%		41.7	%		44.0	%		42.1	%
Margin on average earning assets (including securitized assets)		2.81			2.82			2.77			2.81			2.79
Efficiency ratio		43.2			42.8			42.9			43.0			42.1
Assets under administration (billions of Canadian dollars)1	$	404		$	390		$	355		$	404		$	355
Assets under management (billions of Canadian dollars)1		279			266			256			279			256
Number of Canadian retail branches		1,153			1,154			1,152			1,153			1,152
Average number of full-time equivalent staff		39,227			39,347			37,987			39,288			38,145

1 Effective the first quarter of 2017, the Bank changed the framework for classifying assets under administration (AUA) and assets under management (AUM). The primary change is to recognize mutual funds sold through the branch network as part of AUA. In addition, AUA has been updated to reflect a change in the measurement of certain business activities within Canadian Retail. Comparative amounts have been recast to conform with the revised presentation.

Quarterly comparison – Q2 2017 vs. Q2 2016

Canadian Retail net income for the quarter was $1,570 million, an increase of $106 million, or 7%, compared with the second quarter last year. The increase in earnings reflects revenue growth and lower PCL, partially offset by higher non-interest expenses and the effect of one less day in the current quarter. The annualized ROE for the quarter was 45.0%, compared with 41.7% in the second quarter last year.

Canadian Retail revenue is derived from Canadian personal and commercial banking, wealth, and insurance businesses. Revenue for the quarter was $5,132 million, an increase of $245 million, or 5%, compared with the second quarter last year. Net interest income increased $115 million, or 5%, reflecting loan and deposit volume growth, partially offset by the effect of one less day this quarter. Non-interest income increased $130 million, or 5%, reflecting wealth asset growth, higher fee-based revenue in the banking businesses, and changes in the fair value of investments supporting claims liabilities which resulted in a similar increase to insurance claims. Margin on average earning assets was 2.81%, an increase of 4 basis points (bps), reflecting favourable balance sheet mix, partially offset by the low interest rate environment and competitive pricing.

Average loan volumes increased $15 billion, or 4%, compared with the second quarter last year, reflecting 3% growth in personal loan volumes and 8% growth in business loan volumes. Average deposit volumes increased $31 billion, or 11%, compared with the second quarter last year, reflecting 8% growth in personal deposit volumes, 17% growth in business deposit volumes and 20% growth in wealth deposit volumes.

AUA were $404 billion as at April 30, 2017, an increase of $49 billion, or 14%, compared with the second quarter last year, reflecting new asset growth and increases in market value. AUM were $279 billion as at April 30, 2017, an increase of $23 billion, or 9%, compared with the second quarter last year, reflecting increases in market value and new asset growth.

PCL for the quarter was $235 million, a decrease of $27 million, or 10%, compared with the second quarter last year. Personal banking PCL was $227 million, a decrease of $25 million, or 10%. The decrease reflects lower provisions in the auto lending portfolio, credit cards, and personal lending in the current quarter. Business banking PCL was $8 million, a decrease of $2 million. Annualized PCL as a percentage of credit volume was 0.26%, or a decrease of 4 bps. Net impaired loans were $661 million, a decrease of $96 million, or 13%. Net impaired loans as a percentage of total loans was 0.18%, compared with 0.21% as at April 30, 2016.

Insurance claims and related expenses for the quarter were $538 million, an increase of $8 million, or 2%, compared with the second quarter last year, reflecting changes in the fair value of investments supporting claims liabilities which resulted in a similar increase to non-interest income and more severe weather conditions, partially offset by more favourable prior years' claims development.

Non-interest expenses for the quarter were $2,218 million, an increase of $123 million, or 6%, compared with the second quarter last year. The increase reflects higher employee-related expenses including revenue-based variable expenses in the wealth business, higher investment in strategic technology initiatives including digitizing the customer experience and enhancing our product suite and business growth, partially offset by productivity savings.

The efficiency ratio for the quarter was 43.2%, compared with 42.9% in the second quarter last year.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 13

Quarterly comparison – Q2 2017 vs. Q1 2017

Canadian Retail net income for the quarter increased $4 million, compared with the prior quarter. The increase in earnings reflects lower insurance claims and lower PCL, partially offset by lower revenue due to the effects of fewer days in the second quarter. The annualized ROE for the quarter was 45.0%, compared with 43.2% in the prior quarter.

Revenue decreased $71 million, or 1%, compared with the prior quarter. Net interest income decreased $80 million, or 3%, reflecting the effects of fewer days in the second quarter. Non-interest income increased $9 million, reflecting changes in the fair value of investments supporting claims liabilities which resulted in a similar increase to insurance claims and related expenses and the impact of investment activities, partially offset by lower insurance premiums and lower personal and business banking fee-based revenue. Margin on average earning assets was 2.81%, or a decrease of 1 basis point, reflecting competitive pricing and a low interest rate environment.

Average loan volumes increased $2 billion, or 1%, compared with the prior quarter, primarily in business loan volumes. Average deposit volumes increased $2 billion, or 1%, compared with the prior quarter, reflecting 1% growth in personal deposit volumes, relatively flat business deposit volumes and 1% growth in wealth deposit volumes.

AUA increased $14 billion, or 4%, compared with the prior quarter, reflecting new asset growth and increases in market value. AUM increased $13 billion, or 5%, compared with the prior quarter, reflecting increases in market value.

PCL for the quarter decreased $34 million, or 13%, compared with the prior quarter. Personal banking PCL for the quarter decreased $31 million, or 12%, reflecting lower provisions in the auto lending portfolio in the current quarter. Business banking PCL decreased $3 million. Annualized PCL as a percentage of credit volume was 0.26%, or a decrease of 3 bps. Net impaired loans decreased $54 million, or 8%. Net impaired loans as a percentage of total loans was 0.18%, compared with 0.19% as at January 31, 2017.

Insurance claims and related expenses for the quarter decreased $36 million, or 6%, compared with the prior quarter, reflecting seasonality of claims and more favourable prior years' claims development, partially offset by changes in the fair value of investments supporting claims liabilities which resulted in a similar increase to non-interest income and more severe weather conditions.

Non-interest expenses decreased $7 million, reflecting the effects of fewer days in the second quarter, partially offset by business growth.

The efficiency ratio for the quarter was 43.2%, compared with 42.8% in the prior quarter.

Year-to-date comparison – Q2 2017 vs. Q2 2016

Canadian Retail net income for the six months ended April 30, 2017, was $3,136 million, an increase of $159 million, or 5%, compared with same period last year. The increase in earnings reflects revenue growth and lower insurance claims, partially offset by higher non-interest expenses, higher PCL and the effect of one less day. The annualized ROE for the period was 44.0%, compared with 42.1% last year.

Revenue for the period was $10,335 million, an increase of $417 million, or 4%, compared with same period last year. Net interest income increased $237 million, or 5%, reflecting loan and deposit volume growth, partially offset by lower margins and the effect of one less day in the current period. Non-interest income increased $180 million, or 4%, reflecting wealth asset growth and higher personal and business banking fee-based revenue, partially offset by lower insurance premiums and changes in the fair value of investments supporting claims liabilities which resulted in a similar reduction to insurance claims and related expenses. Margin on average earning assets was 2.81%, a 2 bps increase, reflecting favourable balance sheet mix, partially offset by the low interest rate environment and competitive pricing.

Average loan volumes increased $15 billion, or 4%, compared with last year, reflecting 3% growth in personal loan volumes and 9% growth in business loan volumes. Average deposit volumes increased $31 billion, or 11%, compared with the same period last year, reflecting 8% growth in personal deposit volumes, 16% growth in business deposit volumes and 23% growth in wealth deposit volumes.

PCL was $504 million, an increase of $14 million, or 3% compared with same period last year. Personal banking PCL was $485 million, an increase of $8 million, or 2%. Business banking PCL was $19 million, an increase of $6 million. Annualized PCL as a percentage of credit volume was 0.27%, or relatively flat, compared with same period last year.

Insurance claims and related expenses were $1,112 million, a decrease of $73 million, or 6%, compared with same period last year, reflecting favourable prior years' claims development, changes in the fair value of investments supporting claims liabilities which resulted in a similar reduction to non-interest income, lower current year claims, partially offset by more severe weather conditions.

Non-interest expenses were $4,443 million, an increase of $269 million, or 6%, compared with the same period last year. The increase reflects higher employee-related expenses including revenue-based variable expenses in the wealth business, higher investment in strategic technology initiatives including digitizing the customer experience and enhancing our product suite and business growth, partially offset by productivity savings.

The efficiency ratio was 43.0%, compared with 42.1% for the same period last year.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 14

TABLE 11: 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		2017			2017			2016			2017			2016
Net interest income	$	1,851		$	1,839		$	1,737		$	3,690		$	3,506
Non-interest income		664			687			553			1,351			1,183
Total revenue1		2,515			2,526			2,290			5,041			4,689
Provision for credit losses		152			257			162			409			383
Non-interest expenses		1,449			1,434			1,416			2,883			2,822
U.S. Retail Bank net income		737			689			611			1,426			1,253
Equity in net income of an investment in TD Ameritrade		108			111			108			219			217
Net income	$	845		$	800		$	719		$	1,645		$	1,470
U.S. Dollars
Net interest income	$	1,391		$	1,381		$	1,308		$	2,772		$	2,596
Non-interest income		498			517			417			1,015			876
Total revenue1		1,889			1,898			1,725			3,787			3,472
Provision for credit losses		114			193			123			307			283
Non-interest expenses		1,088			1,077			1,067			2,165			2,089
U.S. Retail Bank net income		554			518			459			1,072			929
Equity in net income of an investment in TD Ameritrade		82			83			78			165			160
Net income	$	636		$	601		$	537		$	1,237		$	1,089
Selected volumes and ratios
Return on common equity		10.0	%		9.1	%		8.7	%		9.6	%		8.7	%
Margin on average earning assets1,2		3.05			3.03			3.11			3.04			3.11
Efficiency ratio		57.6			56.7			61.8			57.2			60.2
Assets under administration (billions of dollars)3	$	18		$	18		$	17		$	18		$	17
Assets under management (billions of dollars)3		60			60			74			60			74
Number of U.S. retail stores		1,260			1,257			1,265			1,260			1,265
Average number of full-time equivalent staff		25,745			26,037			25,599			25,893			25,410

1 Effective the first quarter of 2017, the impact from certain treasury and balance sheet management activities relating to the U.S. Retail segment is recorded in the Corporate segment.

2 The margin on average earning assets excludes the impact related to the TD Ameritrade insured deposit accounts (IDA) and the impact of intercompany deposits and cash collateral. In addition, the value of tax-exempt interest income is adjusted to its equivalent before-tax value.

3 Effective the first quarter of 2017, the Bank changed the framework for classifying assets under administration (AUA) and assets under management (AUM). The primary change is to include a portion of the AUM balance administered by the Bank in AUA. Comparative amounts have been recast to conform with the revised presentation.

Quarterly comparison – Q2 2017 vs. Q2 2016

U.S. Retail net income for the quarter was $845 million (US$636 million), which included net income of $737 million (US$554 million) from the U.S. Retail Bank and $108 million (US$82 million) from the Bank's investment in TD Ameritrade. U.S. Retail earnings increased US$99 million, or 18%, compared with the second quarter last year. U.S. Retail Canadian dollar earnings were up $126 million, or 18%. The annualized ROE for the quarter was 10.0%, compared with 8.7% in the second quarter last year.

The contribution from TD Ameritrade of US$82 million was up US$4 million, or 5% compared with the second quarter last year.

U.S. Retail Bank net income for the quarter increased US$95 million, or 21%, compared with the same quarter last year, due to higher loan and deposit volumes, higher deposit margins, and fee income growth, partially offset by higher expenses.

U.S. Retail Bank revenue is derived from personal and business banking, wealth management services, and investments. Revenue for the quarter was US$1,889 million, an increase of US$164 million, or 10%, compared with the same quarter last year. Net interest income increased US$83 million, or 6%, primarily due to a more favourable interest rate environment and continuing growth in loan and deposit volumes, partially offset by the effect of one less day in the quarter and the prior year accounting impact from balance sheet management activities, which was largely offset in Non-interest income. Margin on average earning assets was 3.05%, a 6 bps decrease due to the same accounting impact. Excluding this impact, margin was up 5 bps, primarily reflecting higher deposit margins, partially offset by balance sheet mix and accretion. Non-interest income increased US$81 million, or 19%, reflecting fee income growth in personal banking and wealth management, and a favourable accounting impact from balance sheet management activities.

Average loan volumes increased US$9 billion, or 6%, compared with the same quarter last year, due to growth in personal loans of 3% and business loans of 9%. Average deposit volumes increased US$21 billion, or 9%, reflecting 6% growth in business deposit volumes, 9% growth in personal deposit volumes, and a 13% increase in sweep deposit volume from TD Ameritrade.

AUA were US$18 billion as at April 30, 2017, an increase of 8%, compared with the same quarter last year, primarily due to higher private banking balances. AUM were US$60 billion as at April 30, 2017, a decrease of 19%, compared with the same quarter last year primarily due to the previously disclosed outflow from an institutional account.

PCL for the quarter was US$114 million, a decrease of US$9 million, or 7%, compared with the same quarter last year. Personal banking PCL was US$105 million, an increase of US$19 million, or 22%, primarily due to higher provisions related to mix in auto lending and credit cards. Business banking PCL was US$13 million, a US$23 million decrease, primarily due to higher increase in commercial allowance in the prior year. PCL associated with debt securities classified as loans was US$(4) million, a decrease of US$5 million, due to a recovery in the current quarter. Net impaired loans, excluding ACI loans and debt securities classified as loans, were US$1.4 billion, a decrease of US$218 million, or 13%. The decrease was mainly related to certain legacy home equity loans returning to performing status after demonstrating a sustained ability to pay. Net impaired loans, excluding ACI loans and debt securities classified as loans, as a percentage of total loans were 1.0% as at April 30, 2017, a decrease of 21 bps compared with the same quarter last year.

Non-interest expenses for the quarter were US$1,088 million, an increase of US$21 million, or 2%, compared with the same quarter last year, reflecting volume growth, higher employee costs, and additional charges by the Federal Deposit Insurance Corporation (FDIC), partially offset by productivity savings.

The efficiency ratio for the quarter was 57.6%, compared with 61.8% in the same quarter last year.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 15

Quarterly comparison – Q2 2017 vs. Q1 2017

U.S. Retail earnings increased US$35 million, or 6%, compared with the prior quarter. U.S. Retail Canadian dollar earnings increased $45 million, or 6%. The annualized ROE for the quarter was 10.0%, compared to 9.1% in the prior quarter.

The contribution from TD Ameritrade decreased US$1 million, or 1%, compared with the prior quarter.

U.S. Retail Bank net income for the quarter increased US$36 million, or 7%, compared with the prior quarter, primarily due to good credit performance, partially offset by the effect of fewer days.

Revenue for the quarter decreased US$9 million, relatively flat compared with the prior quarter. Net interest income increased US$10 million, or 1%, primarily due to a more favourable interest rate environment, partially offset by the effect of fewer days in the quarter. Margin on average earning assets was 3.05%, a 2 bps increase, primarily due to higher deposit margins, partially offset by balance sheet mix and accretion. Non-interest income decreased US$19 million, or 4%, primarily reflecting a seasonal decline in personal banking fees.

Average loan volumes were flat compared with the prior quarter. Average deposit volumes increased US$3 billion, or 1%, primarily due to growth in personal deposit volumes.

AUA and AUM were US$18 billion and US$60 billion, respectively, as at April 30, 2017, both relatively flat compared with the prior quarter.

PCL for the quarter decreased US$79 million, or 41%, compared with the prior quarter. Personal banking PCL was US$105 million, a decrease of US$45 million, or 30%, reflecting seasonality in the credit card and auto lending portfolios. Business banking PCL was US$13 million, a decrease of US$30 million, primarily due to higher increase in commercial allowance in the prior quarter. PCL associated with debt securities classified as loans was US$(4) million, a decrease of US$4 million, due to a recovery in the current quarter. Net impaired loans, excluding ACI loans and debt securities classified as loans, were US$1.4 billion, a decrease of US$71 million, or 5%. Net impaired loans, excluding ACI loans and debt securities classified as loans, as a percentage of total loans were 1.0% as at April 30, 2017, a decrease of 5 bps compared to the prior quarter.

Non-interest expenses for the quarter increased US$11 million, or 1%, compared with the prior quarter, primarily reflecting higher employee costs and spend for customer-focused initiatives, partially offset by the effect of fewer days in the quarter.

The efficiency ratio for the quarter was 57.6%, compared with 56.7% in the prior quarter.

Year-to-date comparison – Q2 2017 vs. Q2 2016

U.S. Retail net income for the six months ended April 30, 2017, was $1,645 million (US$1,237 million), which included net income of $1,426 million (US$1,072 million) from the U.S. Retail Bank and $219 million (US$165 million) from TD's investment in TD Ameritrade. U.S. Retail earnings increased US$148 million, or 14%, compared with same period last year. U.S. Retail Canadian dollar earnings were up $175 million, or 12%. The annualized ROE for the period was 9.6%, compared with 8.7% in the same period last year.

The contribution from TD Ameritrade of US$165 million was up US$5 million, or 3%, compared with the same period last year.

U.S. Retail Bank net income for the period was US$1,072 million, an increase of US$143 million, or 15%, compared with the same period last year, primarily due to a more favourable interest rate environment, continuing growth in loan and deposit volumes and fee income growth, partially offset by higher expenses.

Revenue for the period was US$3,787 million, an increase of US$315 million, or 9%, compared with same period last year. Net interest income increased US$176 million, or 7%, primarily due to a more favourable interest rate environment and continuing growth in loan and deposit volumes, partially offset by accretion and the prior year accounting impact from balance sheet management activities, which was largely offset in Non-interest income. Margin on average earning assets was 3.04%, a 7 bps decrease due to the same accounting impact. Excluding this impact, margin was up 2 bps, primarily reflecting higher deposit margins, partially offset by balance sheet mix and accretion. Non-interest income increased US$139 million, or 16%, reflecting fee income growth in personal banking and wealth management, and a favourable accounting impact from balance sheet management activities.

Average loan volumes increased US$9 billion, or 7%, compared with the same period last year, due to growth in personal loans of 4% and business loans of 9%. Average deposit volumes increased US$23 billion, or 10%, reflecting 6% growth in business deposit volumes, 9% growth in personal deposit volumes, and a 15% increase in sweep deposit volume from TD Ameritrade.

PCL was US$307 million, an increase of US$24 million, or 8%, compared with the same period last year. Personal banking PCL was US$255 million, an increase of US$50 million, or 24%, primarily due to higher provisions for auto loans and credit cards. Business banking PCL was US$56 million, a decrease of US$20 million, primarily due to higher increase in commercial allowance in the prior year. PCL associated with debt securities classified as loans was US$(4) million, a decrease of US$6 million, due to a recovery in the current quarter. Net impaired loans, excluding ACI loans and debt securities classified as loans, were US$1.4 billion, a decrease of US$218 million, or 13%. The decrease was mainly related to certain legacy home equity loans returning to performing status after demonstrating a sustained ability to pay. Net impaired loans, excluding ACI loans and debt securities classified as loans, as a percentage of total loans were 1.0% as at April 30, 2017, a decrease of 21 bps compared with same period last year.

Non-interest expenses for the period were US$2,165 million, an increase of US$76 million, or 4%, compared with same period last year, reflecting volume growth, higher employee costs, higher spend in technology modernization as well as customer-focused initiatives, and additional charges by the FDIC, partially offset by productivity savings.

The efficiency ratio for the period was 57.2%, compared with 60.2%, for the same period last year.

TD AMERITRADE HOLDING CORPORATION

Refer to Note 6 of the Bank's Interim Consolidated Financial Statements for further information on TD Ameritrade.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 16

TABLE 12: WHOLESALE 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
	2017			2017			2016			2017			2016
Net interest income (TEB)	$	805		$	393		$	440		$	1,198		$	899
Non-interest income1		13			464			326			477			531
Total revenue		818			857			766			1,675			1,430
Provision for (recovery of) credit losses		(4)			(24)			50			(28)			62
Non-interest expenses		481			524			441			1,005			870
Net income	$	248		$	267		$	219		$	515		$	380
Selected volumes and ratios
Trading-related revenue (TEB)	$	425		$	515		$	429		$	940		$	809
Gross drawn (billions of Canadian dollars)2		20.2			18.6			18.5			20.2			18.5
Return on common equity		16.4	%		17.5	%		14.8	%		16.9	%		12.7	%
Efficiency ratio		58.8			61.1			57.6			60.0			60.8
Average number of full-time equivalent staff		3,969			3,929			3,649			3,949			3,681

1 Effective February 1, 2017, the total gains and losses on derivatives hedging the reclassified available-for-sale securities portfolio are recorded in Wholesale Banking, previously reported in the Corporate segment and treated as an item of note. Refer to the "Non-GAAP Financial Measures – Reconciliation of Adjusted to Reported Net Income" table in the "How We Performed" section of this document.

2 Includes gross loans and bankers' acceptances, excluding letters of credit, cash collateral, credit default swaps, and reserves for the corporate lending business.

Quarterly comparison – Q2 2017 vs. Q2 2016

Wholesale Banking net income for the quarter was $248 million, an increase of $29 million, or 13%, compared with the second quarter last year reflecting higher revenue and a net recovery of credit losses, partially offset by higher non-interest expenses and a lower effective tax rate in the second quarter last year. The annualized ROE for the quarter was 16.4%, compared with 14.8% in the second quarter last year.

Wholesale Banking revenue is derived primarily from capital markets services and corporate lending. The capital markets businesses generate revenue from advisory, underwriting, trading, facilitation, and trade execution services. Revenue for the quarter was $818 million, an increase of $52 million, or 7%, compared with the second quarter last year reflecting higher corporate lending fees and increased client activity in equity trading, partially offset by lower fixed income trading. Changes in net interest income (TEB) and non-interest income this quarter were impacted by business mix.

PCL for the quarter was a net recovery of $4 million as compared with a charge of $50 million in the prior year, reflecting the recovery of specific provisions in the oil and gas sector.

Non-interest expenses were $481 million, an increase of $40 million, or 9%, compared with the second quarter last year reflecting higher technology costs as well as focused investments made in our U.S. businesses, including in client facing employees, enhanced product offerings, e-trading capabilities, the acquisition of Albert Fried & Company, and the unfavourable impact of foreign exchange translation.

Quarterly comparison – Q2 2017 vs. Q1 2017

Wholesale Banking net income for the quarter decreased $19 million, or 7%, compared with the prior quarter reflecting lower revenue and a lower net recovery of credit losses, partially offset by lower non-interest expenses. The annualized ROE for the quarter was 16.4%, compared with 17.5% in the prior quarter.

Revenue for the quarter decreased $39 million, or 5%, compared with the prior quarter reflecting lower fixed income trading, partially offset by higher corporate lending fees and increased client activity in equity trading. Changes in net interest income (TEB) and non-interest income this quarter were impacted by business mix.

PCL for the quarter increased $20 million compared with the prior quarter reflecting a lower recovery of specific provisions in the oil and gas sector.

Non-interest expenses for the quarter decreased $43 million, or 8%, compared with the prior quarter reflecting lower variable compensation.

Year-to-date comparison – Q2 2017 vs. Q2 2016

Wholesale Banking net income for the six months ended April 30, 2017, was $515 million, an increase of $135 million, or 36%, compared with the same period last year reflecting higher revenue and a net recovery of credit losses, partially offset by higher non-interest expenses. The annualized ROE was 16.9%, compared with 12.7% in the same period last year.

Revenue was $1,675 million, an increase of $245 million, or 17%, compared with the same period last year reflecting higher corporate lending fees, increased client activity in equity trading, and higher origination activity in debt and equity capital markets, partially offset by lower fixed income trading. Changes in net interest income (TEB) and non-interest income for the six months ended April 30, 2017, were impacted by business mix.

PCL was a net recovery of $28 million as compared with a charge of $62 million in the same period last year, reflecting the recovery of specific provisions in the oil and gas sector.

Non-interest expenses were $1,005 million, an increase of $135 million, or 16%, compared with the same period last year reflecting higher variable compensation and higher technology costs as well as focused investments made in our U.S. businesses, including in client facing employees, enhanced product offerings, e-trading capabilities, the acquisition of Albert Fried & Company, and the unfavourable impact of foreign exchange translation.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 17

TABLE 13: 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
		2017		2017		2016		2017		2016
Net income (loss) – reported1,2		$	(160)	$	(100)	$	(350)	$	(260)	$	(552)
Pre-tax adjustments for items of note3
Amortization of intangibles			78		80		86		158		176
Fair value of derivatives hedging the reclassified available-for-sale securities
	portfolio2		–		(41)		58		(41)		12
Impairment of goodwill, non-financial assets, and other charges			–		–		111		–		111
Total pre-tax adjustments for items of note			78		39		255		117		299
Provision for (recovery of) income taxes for items of note			20		14		25		34		45
Net income (loss) – adjusted		$	(102)	$	(75)	$	(120)	$	(177)	$	(298)
Decomposition of items included in net income (loss) – adjusted
Net corporate expenses		$	(186)	$	(233)	$	(196)	$	(419)	$	(399)
Other			56		129		48		185		44
Non-controlling interests			28		29		28		57		57
Net income (loss) – adjusted		$	(102)	$	(75)	$	(120)	$	(177)	$	(298)
Selected volumes
Average number of full-time equivalent staff			14,540		14,195		12,790		14,364		12,739

1 Effective the first quarter of 2017, the impact from certain treasury and balance sheet management activities relating to the U.S. Retail segment is recorded in the Corporate segment.

2 Effective February 1, 2017, the total gains and losses on derivatives hedging the reclassified available-for-sale securities portfolio are recorded in Wholesale Banking. Refer to the "Non-GAAP Financial Measures – Reconciliation of Adjusted to Reported Net Income" table in the "How We Performed" section of this document.

3 For explanations of items of note, refer to the "Non-GAAP Financial Measures – Reconciliation of Adjusted to Reported Net Income" table in the "How We Performed" section of this document.

Quarterly comparison – Q2 2017 vs. Q2 2016

Corporate segment's reported net loss for the quarter was $160 million, compared with a reported net loss of $350 million in the second quarter last year. Reported net loss decreased primarily due to impairment of goodwill, non-financial assets, and other charges relating to the Direct Investing business in Europe and losses related to the fair value of derivatives hedging the reclassified available-for-sale securities portfolio, both recognized in the second quarter last year, lower net corporate expenses in the current quarter and higher contribution from Other items. The higher contribution from Other items was largely due to provisions for incurred but not identified credit losses recognized in the second quarter last year and higher revenue from treasury and balance sheet management activities this quarter, partially offset by higher expense provisions this quarter and the positive impact of certain tax items in the same quarter last year. Adjusted net loss was $102 million, compared with an adjusted net loss of $120 million in the second quarter last year.

Quarterly comparison – Q2 2017 vs. Q1 2017

Corporate segment's reported net loss for the quarter was $160 million, compared with a reported net loss of $100 million in the prior quarter. Reported net loss increased primarily due to gains related to the fair value of derivatives hedging the reclassified available-for-sale securities portfolio recognized in the first quarter this year and lower contribution from Other items, partially offset by lower net corporate expenses in the current quarter. Lower contribution from Other items was primarily due to higher revenue from treasury and balance sheet management activities recognized in the first quarter this year and higher expense provisions this quarter. Net corporate expenses were lower largely due to timing of regulatory fees and seasonality of certain other expenses in the first quarter this year. Adjusted net loss was $102 million, compared with an adjusted net loss of $75 million in the prior quarter.

Year-to-date comparison – Q2 2017 vs. Q2 2016

Corporate segment's reported net loss for the six months ended April 30, 2017, was $260 million, compared with a reported net loss of $552 million in the same period last year. The decrease in reported net loss was attributable to higher contribution from Other items, impairment of goodwill, non-financial assets, and other charges relating to the Direct Investing business in Europe in the second quarter last year and higher gains on change in fair value of derivatives hedging the reclassified available-for-sale securities portfolio in the first quarter this year, partially offset by higher net corporate expenses. Higher contribution from Other items was primarily due to higher revenue from treasury and balance sheet management activities in the current period, provisions for incurred but not identified credit losses recognized in the prior period, partially offset by the positive impact of certain tax items in the prior year. Net corporate expenses increased primarily due to ongoing investments in enterprise and regulatory projects. Adjusted net loss for the six months ended April 30, 2017, was $177 million, compared with an adjusted net loss of $298 million in the same period last year.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 18

QUARTERLY RESULTS

The following table provides summary information related to the Bank's eight most recently completed quarters.

TABLE 14: QUARTERLY RESULTS
(millions of Canadian dollars, except as noted)											For the three months ended
					2017													2016						2015
		Apr. 30			Jan. 31			Oct. 31			Jul. 31			Apr. 30			Jan. 31			Oct. 31			Jul. 31
Net interest income		$	5,109		$	5,141		$	5,072		$	4,924		$	4,880		$	5,047		$	4,887		$	4,697
Non-interest income			3,364			3,979			3,673			3,777			3,379			3,563			3,160			3,309
Total revenue			8,473			9,120			8,745			8,701			8,259			8,610			8,047			8,006
Provision for credit losses			500			633			548			556			584			642			509			437
Insurance claims and related expenses			538			574			585			692			530			655			637			600
Non-interest expenses			4,786			4,897			4,848			4,640			4,736			4,653			4,911			4,292
Provision for (recovery of) income taxes			257			596			555			576			466			546			259			502
Equity in net income of an investment in
	TD Ameritrade		111			113			94			121			109			109			108			91
Net income – reported			2,503			2,533			2,303			2,358			2,052			2,223			1,839			2,266
Pre-tax adjustments for items of note
Amortization of intangibles1			78			80			80			79			86			90			89			85
Fair value of derivatives hedging the
	reclassified available-for-sale
	securities portfolio1		–			(41)			(19)			–			58			(46)			(24)			(21)
Impairment of goodwill, non-financial assets,
	and other charges2		–			–			–			–			111			–			–			–
Restructuring charges3			–			–			–			–			–			–			349			–
Charge related to the acquisition in U.S. strategic
	cards portfolio and related integration costs4		–			–			–			–			–			–			82			–
Litigation and litigation-related
	charge(s)/reserve(s)5		–			–			–			–			–			–			–			(39)
Total pre-tax adjustments for items of note			78			39			61			79			255			44			496			25
Provision for (recovery of) income taxes for
	items of note		20			14			17			21			25			20			158			6
Net income – adjusted			2,561			2,558			2,347			2,416			2,282			2,247			2,177			2,285
Preferred dividends			48			48			43			36			37			25			26			25
Net income available to common
	shareholders and non-controlling
	interests in subsidiaries – adjusted		2,513			2,510			2,304			2,380			2,245			2,222			2,151			2,260
Attributable to:
	Common shareholders – adjusted		2,485			2,481			2,275			2,351			2,217			2,193			2,122			2,232
	Non-controlling interests – adjusted	$	28		$	29		$	29		$	29		$	28		$	29		$	29		$	28
(Canadian dollars, except as noted)
Basic earnings per share
Reported		$	1.31		$	1.32		$	1.20		$	1.24		$	1.07		$	1.17		$	0.96		$	1.20
Adjusted			1.34			1.34			1.23			1.27			1.20			1.18			1.15			1.21
Diluted earnings per share
Reported			1.31			1.32			1.20			1.24			1.07			1.17			0.96			1.19
Adjusted			1.34			1.33			1.22			1.27			1.20			1.18			1.14			1.20
Return on common equity – reported			14.4	%		14.4	%		13.3	%		14.1	%		12.5	%		13.3	%		11.4	%		14.9	%
Return on common equity – adjusted			14.8			14.5			13.6			14.5			14.0			13.5			13.5			15.0
(billions of Canadian dollars, except as noted)
Average earning assets		$	1,056		$	1,041		$	1,031		$	989		$	969		$	975		$	958		$	925
Net interest margin as a percentage
	of average earning assets		1.98	%		1.96	%		1.96	%		1.98	%		2.05	%		2.06	%		2.02	%		2.01	%

1 For explanations of items of note, refer to the "Non-GAAP Financial Measures – Reconciliation of Adjusted to Reported Net Income" table in the "How We Performed" section of this document.

2 In the second quarter of 2016, the Bank recorded impairment losses on goodwill, certain intangibles, other non-financial assets and deferred tax assets, as well as other charges relating to the Direct Investing business in Europe that has been experiencing continued losses. These amounts are reported in the Corporate segment.

3 During the fourth quarter of 2015, the Bank recorded restructuring charges of $349 million ($243 million after tax) on a net basis. The restructuring initiatives were intended to reduce costs and manage expenses in a sustainable manner and to achieve greater operational efficiencies. These measures included process redesign and business restructuring, retail branch and real estate optimization, and organizational review. The restructuring charges have been recorded as an adjustment to net income within the Corporate segment.

4 On October 1, 2015, the Bank acquired substantially all of Nordstrom's existing U.S. Visa and private label consumer credit card portfolio and became the primary issuer of Nordstrom credit cards in the U.S. The transaction was treated as an asset acquisition and the difference on the date of acquisition of the transaction price over the fair value of assets acquired has been recorded in Non-interest income. In addition, the Bank incurred set-up, conversion and other one-time costs related to integration of the acquired cards and related program agreement. These amounts are included as an item of note in the U.S. Retail segment.

5 During the third quarter of 2015, distributions of $39 million ($24 million after tax) were received by the Bank as a result of previous settlements reached on certain matters in the U.S., whereby the Bank was assigned the right to these distributions, if and when made available. The amount in the third quarter of 2015 reflects this recovery of previous settlements.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 19

BALANCE SHEET REVIEW

TABLE 15: SELECTED CONSOLIDATED BALANCE SHEET ITEMS
(millions of Canadian dollars)				As at
		April 30, 2017		October 31, 2016
Assets
Interest-bearing deposits with banks	$	54,227	$	53,714
Trading loans, securities, and other		111,833		99,257
Derivatives		62,674		72,242
Available-for-sale securities		121,992		107,571
Held-to-maturity securities		82,330		84,395
Securities purchased under reverse repurchase agreements		113,834		86,052
Loans, net of allowance for loan losses		598,461		585,656
Other		106,569		88,080
Total assets	$	1,251,920	$	1,176,967
Liabilities
Trading deposits	$	92,958	$	79,786
Derivatives		57,353		65,425
Deposits		807,112		773,660
Obligations related to securities sold under repurchase agreements		74,608		48,973
Subordinated notes and debentures		8,482		10,891
Other		135,168		124,018
Total liabilities		1,175,681		1,102,753
Total equity		76,239		74,214
Total liabilities and equity	$	1,251,920	$	1,176,967

Total assets were $1,252 billion as at April 30, 2017, an increase of $75 billion, or 6%, from October 31, 2016. The increase was primarily due to an increase in securities purchased under reverse repurchase agreements of $28 billion, available-for-sale securities of $14 billion, amounts receivable from brokers, dealers, and clients of $14 billion, loans net of allowances for loan losses of $13 billion, trading loans, securities, and other of $13 billion, partially offset by a decrease in derivatives of $10 billion. The foreign currency translation impact on total assets, primarily in the U.S. Retail segment, was $9 billion, or 1%.

Trading loans, securities, and other increased $13 billion primarily in Wholesale Banking.

Derivatives decreased $10 billion primarily due to the current interest rate and foreign exchange environment, partially offset by netting of positions.

Available-for-sale securities increased $14 billion primarily due to new investments, net of maturities and foreign currency translation.

Securities purchased under reverse repurchase agreements increased $28 billion primarily due to an increase in trade volumes.

Loans (net of allowance for loan losses) increased $13 billion primarily due to increases in the U.S. Retail, Canadian Retail, and Wholesale Banking segments. The increase in U.S. Retail was primarily due to foreign currency translation and growth in business and government loans. The increase in Canadian Retail and Wholesale was primarily due to growth in business and government loans.

Other amounts received from brokers, dealers and clients increased $14 billion primarily due to unsettled and pending trades.

Total liabilities were $1,176 billion as at April 30, 2017, an increase of $73 billion, or 7%, from October 31, 2016. The increase was primarily due to an increase in deposits of $33 billion, obligations related to securities sold under repurchase agreements of $26 billion, trading deposits of $13 billion, and amounts payable to brokers, dealers and clients of $12 billion, partially offset by a decrease in derivatives of $8 billion. The foreign currency translation impact on total liabilities, primarily in the U.S. Retail segment, was $8 billion, or 1%.

Trading deposits increased $13 billion primarily due to higher issuance of certificates of deposits.

Derivatives decreased $8 billion primarily due to the current interest rate and foreign exchange environment, partially offset by netting of positions.

Deposits increased $33 billion primarily due to increases in personal deposits in all segments and foreign currency translation in U.S. Retail.

Obligations related to securities sold under repurchase agreements increased $26 billion primarily due to higher trading volumes.

Other amounts payable to brokers, dealers and clients increased $12 billion primarily due to unsettled and pending trades.

Equity was $76 billion as at April 30, 2017, an increase of $2 billion, or 3%, from October 31, 2016. The increase was primarily due to year-to-date net income of $5 billion, partially offset by dividends paid of $2 billion and the repurchase of common shares of $1 billion.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 20

CREDIT PORTFOLIO QUALITY

Quarterly comparison – Q2 2017 vs. Q2 2016

Gross impaired loans excluding debt securities classified as loans, FDIC covered loans, and other ACI loans were $3,290 million as at April 30, 2017, a decrease of $277 million, or 8%, compared with the second quarter last year. Canadian Retail gross impaired loans decreased $97 million, or 9%, compared with the second quarter last year driven by resolutions outpacing formations across the consumer lending portfolios. U.S. Retail gross impaired loans decreased $61 million, or 3%, compared with the second quarter last year. Wholesale gross impaired loans decreased $119 million, or 67%, compared with the second quarter last year due to resolutions in the oil and gas sector. Net impaired loans were $2,624 million as at April 30, 2017, a decrease of $284 million, or 10%, compared with the second quarter last year, primarily due to resolutions outpacing new credit impaired formations in the Canadian Retail and Wholesale portfolios, offset by the impact of foreign exchange.

The allowance for credit losses of $4,451 million as at April 30, 2017, was composed of a counterparty-specific allowance of $280 million, a collectively assessed allowance for individually insignificant impaired loans of $574 million, and an allowance for incurred but not identified credit losses of $3,597 million.

The counterparty-specific allowance decreased $125 million, or 31%, compared with the second quarter last year primarily due to decreases in the debt securities classified as loans and Wholesale portfolios, offset by the impact of foreign exchange. The collectively assessed allowance for individually insignificant impaired loans increased $50 million, or 10%, compared with the second quarter last year primarily due to an increase in the U.S. credit card portfolio and the impact of foreign exchange. The allowance for incurred but not identified credit losses increased $517 million, or 17%, compared with the second quarter last year primarily due to increases in the U.S. business and government portfolios, the U.S. credit card portfolio and the impact of foreign exchange.

The allowance for incurred but not identified credit losses is established to recognize losses that management estimates to have occurred at the portfolio level as at the balance sheet date for loans not yet specifically identified as impaired. The Bank periodically reviews the methodology for calculating the allowance for incurred but not identified credit losses. As part of this review, certain revisions may be made to reflect updates in statistically derived loss estimates for the Bank's recent loss experience of its credit portfolios, which may cause the Bank to provide or release amounts from the allowance for incurred but not identified losses. During the second quarter of 2017, certain refinements were made to the methodology, the cumulative effect of which was not material and which was included in the change for the quarter.

Quarterly comparison – Q2 2017 vs. Q1 2017

Gross impaired loans excluding debt securities classified as loans, FDIC covered loans, and other ACI loans decreased $109 million, or 3%, compared with the prior quarter. Impaired loans net of allowance decreased $66 million, or 2%, compared with the prior quarter.

The counterparty-specific allowance decreased $16 million, or 5%, compared with the prior quarter primarily due to decreases in the U.S. business and government portfolio offset by the impact of foreign exchange. The collectively assessed allowance for individually insignificant impaired loans decreased $35 million, or 6%, compared with the prior quarter, primarily due decreases in U.S. home equity line of credit and Canadian indirect auto portfolios, offset by the impact of foreign exchange. The allowance for incurred but not identified credit losses increased $171 million, or 5%, compared with the prior quarter primarily due to the impact of foreign exchange.

TABLE 16: CHANGES IN GROSS IMPAIRED LOANS AND ACCEPTANCES
(millions of Canadian dollars)	For the three months ended							For the six months ended
	April 30		January 31		April 30		April 30		April 30
	2017		2017		2016		2017		2016
Personal, Business, and Government Loans1,2
Impaired loans as at beginning of period	$	3,399	$	3,509	$	3,799	$	3,509	$	3,244
Classified as impaired during the period		1,154		1,281		1,453		2,435		3,170
Transferred to not impaired during the period		(340)		(220)		(414)		(560)		(784)
Net repayments		(392)		(474)		(391)		(866)		(790)
Disposals of loans		–		–		–		–		–
Amounts written off		(648)		(623)		(592)		(1,271)		(1,151)
Recoveries of loans and advances previously written off		–		–		–		–		–
Exchange and other movements		117		(74)		(288)		43		(122)
Impaired loans as at end of period	$	3,290	$	3,399	$	3,567	$	3,290	$	3,567

1 Excludes debt securities classified as loans. For additional information refer to the "Exposure to Non-Agency Collateralized Mortgage Obligations" section of this document and Note 5 of the Interim Consolidated Financial Statements.

2 Excludes FDIC covered loans and other ACI loans. For additional information refer to the "Exposure to Acquired Credit-Impaired Loans" discussion and table in this section of the document and Note 5 of the Interim Consolidated Financial Statements.

TABLE 17: ALLOWANCE FOR CREDIT LOSSES
(millions of Canadian dollars, except as noted)								As at
	April 30			January 31			April 30
	2017			2017			2016
Allowance for loan losses for on-balance sheet loans
Counterparty-specific	$	280		$	296		$	405
Individually insignificant		574			609			524
Incurred but not identified credit losses		3,038			2,910			2,687
Total allowance for loan losses for on-balance sheet loans		3,892			3,815			3,616
Allowance for off-balance sheet positions
Incurred but not identified credit losses		559			516			393
Total allowance for off-balance sheet positions		559			516			393
Allowance for credit losses	$	4,451		$	4,331		$	4,009
Impaired loans, net of allowance1,2	$	2,624		$	2,690		$	2,908
Net impaired loans as a percentage of net loans1,2		0.43	%		0.45	%		0.51	%
Provision for credit losses as a percentage of net average loans and acceptances		0.34			0.42			0.42

1 Excludes debt securities classified as loans. For additional information refer to the "Exposure to Non-Agency Collateralized Mortgage Obligations" section of this document and Note 5 of the Interim Consolidated Financial Statements.

2 Excludes FDIC covered loans and other ACI loans. For additional information refer to the "Exposure to Acquired Credit-Impaired Loans" discussion and table in this section of the document and Note 5 of the Interim Consolidated Financial Statements.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 21

Real Estate Secured Lending

Retail real estate secured lending includes mortgages and lines of credit to North American consumers to satisfy financing needs including home purchases and refinancing. While the Bank retains first lien on the majority of properties held as security, there is a small portion of loans with second liens, but most of these are behind a TD mortgage that is in first position. In Canada, credit policies ensure that the combined exposure of all uninsured facilities on one property does not exceed 80% of the collateral value at origination. Lending at a higher loan-to-value ratio is permitted by legislation but requires default insurance. This insurance is contractual coverage for the life of eligible facilities and protects the Bank's real estate secured lending portfolio against potential losses caused by borrowers' default. The Bank also purchases default insurance on lower loan-to-value ratio loans. The insurance is provided by either government-backed entities or approved private mortgage insurers. In the U.S., for residential mortgage originations, mortgage insurance is usually obtained from either government-backed entities or approved private mortgage insurers when the loan-to-value exceeds 80% of the collateral value at origination.

The Bank regularly performs stress tests on its real estate lending portfolio as part of its overall stress testing program. This is done with a view to determine the extent to which the portfolio would be vulnerable to a severe downturn in economic conditions. The effect of severe changes in house prices, interest rates, and unemployment levels are among the factors considered when assessing the impact on credit losses and the Bank's overall profitability. A variety of portfolio segments, including dwelling type and geographical regions, are examined during the exercise to determine whether specific vulnerabilities exist. Based on the Bank's most recent reviews, potential losses on all real estate secured lending exposures are considered manageable.

TABLE 18: REAL ESTATE SECURED LENDING1,2
(millions of Canadian dollars, except as noted)																							As at
	Residential mortgages								Home equity lines of credit								Total
	Insured3				Uninsured				Insured3				Uninsured				Insured3				Uninsured
																April 30, 2017
Canada
Atlantic provinces	$	3,877	2.1	%	$	2,055	1.1	%	$	494	0.7	%	$	1,104	1.6	%	$	4,371	1.7	%	$	3,159	1.2	%
British Columbia4		15,946	8.5			17,722	9.4			2,487	3.7			9,847	14.5			18,433	7.2			27,569	10.8
Ontario4		44,901	23.8			45,523	24.2			8,573	12.6			27,634	40.5			53,474	20.9			73,157	28.5
Prairies4		26,385	14.0			13,459	7.1			3,917	5.8			8,861	13.0			30,302	11.8			22,320	8.7
Québec		11,210	6.0			7,215	3.8			1,511	2.2			3,676	5.4			12,721	5.0			10,891	4.2
Total Canada		102,319	54.4	%		85,974	45.6	%		16,982	25.0	%		51,122	75.0	%		119,301	46.6	%		137,096	53.4	%
United States		921				27,929				11				13,251				932				41,180
Total	$	103,240			$	113,903			$	16,993			$	64,373			$	120,233			$	178,276
																October 31, 2016
Canada
Atlantic provinces	$	4,007	2.1	%	$	1,940	1.0	%	$	515	0.8	%	$	1,052	1.6	%	$	4,522	1.8	%	$	2,992	1.2	%
British Columbia4		17,134	9.1			16,789	8.9			2,639	4.1			9,211	14.2			19,773	7.8			26,000	10.2
Ontario4		48,307	25.5			42,234	22.3			9,053	13.9			25,181	38.6			57,360	22.6			67,415	26.4
Prairies4		27,236	14.4			12,999	6.9			4,100	6.3			8,321	12.8			31,336	12.3			21,320	8.4
Québec		11,750	6.2			6,903	3.6			1,595	2.5			3,401	5.2			13,345	5.2			10,304	4.1
Total Canada		108,434	57.3	%		80,865	42.7	%		17,902	27.6	%		47,166	72.4	%		126,336	49.7	%		128,031	50.3	%
United States		917				27,120				10				13,280				927				40,400
Total	$	109,351			$	107,985			$	17,912			$	60,446			$	127,263			$	168,431

1 Geographic location is based on the address of the property mortgaged.

2 Excludes loans classified as trading as the Bank intends to sell the loans immediately or in the near term, and loans designated at fair value through profit or loss for which no allowance is recorded.

3 Default insurance is contractual coverage for the life of eligible facilities whereby the Bank's exposure to real estate secured lending, all or in part, is protected against potential losses caused by borrower default. It is provided by either government-backed entities or other approved private mortgage insurers.

4 The territories are included as follows: Yukon is included in British Columbia; Nunavut is included in Ontario; and the Northwest Territories is included in the Prairies region.

The following table provides a summary of the Bank's residential mortgages by remaining amortization period. All figures are calculated based on current customer payment behaviour in order to properly reflect the propensity to prepay by borrowers. The current customer payment basis accounts for any accelerated payments made to date and projects remaining amortization based on existing balance outstanding and current payment terms.

TABLE 19: RESIDENTIAL MORTGAGES BY REMAINING AMORTIZATION1,2
																	As at
	<5		5– <10		10– <15		15– <20		20– <25		25– <30		30– <35		>=35
	years		years		years		years		years		years		years		years		Total
												April 30, 2017
Canada	1.1	%	4.1	%	7.7	%	14.7	%	40.4	%	30.8	%	1.2	%	–	%	100	%
United States	4.5		6.5		9.7		4.5		17.7		56.3		0.5		0.3		100
Total	1.6	%	4.4	%	7.9	%	13.3	%	37.5	%	34.2	%	1.1	%	–	%	100	%
												October 31, 2016
Canada	1.1	%	4.2	%	7.7	%	14.3	%	39.4	%	31.7	%	1.6	%	–	%	100	%
United States	3.7		4.8		12.1		4.7		14.7		58.5		1.2		0.3		100
Total	1.5	%	4.2	%	8.2	%	13.1	%	36.3	%	35.2	%	1.5	%	–	%	100	%

1 Excludes loans classified as trading as the Bank intends to sell the loans immediately or in the near term, and loans designated at fair value through profit or loss for which no allowance is recorded.

2 Percentage based on outstanding balance.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 22

TABLE 20: UNINSURED AVERAGE LOAN-TO-VALUE – Newly Originated and Newly Acquired1,2,3
	For the three months ended
	Residential		Home equity				Residential		Home equity
	mortgages		lines of credit4,5		Total		mortgages		lines of credit4,5		Total
			April 30, 2017						October 31, 2016
Canada
Atlantic provinces	74	%	70	%	73	%	73	%	69	%	72	%
British Columbia6	68		62		65		66		61		64
Ontario6	68		65		67		68		64		66
Prairies6	74		70		72		73		69		72
Québec	73		72		73		73		72		72
Total Canada	69		66		67		69		65		67
United States	67		62		64		67		62		65
Total	69	%	65	%	67	%	68	%	64	%	67	%

1 Geographic location is based on the address of the property mortgaged.

2 Excludes loans classified as trading as the Bank intends to sell the loans immediately or in the near term, and loans designated at fair value through profit or loss for which no allowance is recorded.

3 Based on house price at origination.

4 Home equity lines of credit loan-to-value includes first position collateral mortgage if applicable.

5 Home equity lines of credit fixed rate advantage option is included in loan-to-value calculation.

6 The territories are included as follows: Yukon is included in British Columbia; Nunavut is included in Ontario; and the Northwest Territories is included in the Prairies region.

Non-Prime Loans

As at April 30, 2017, the Bank had approximately $2.5 billion (October 31, 2016 – $2.6 billion) gross exposure to non-prime loans, which primarily consists of automotive loans originated in Canada. The credit loss rate, an indicator of credit quality, and defined as the quarterly PCL divided by average month-end loan balances, was approximately 3.39% on an annual basis (October 31, 2016 – 6.79%). PCL primarily declined due to lower provisions for individually insignificant impaired loans, reflecting the positive economic recovery in oil and gas impacted regions. These loans are recorded at amortized cost.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 23

Sovereign Risk

The following table provides a summary of the Bank's credit exposure to certain European countries, including Greece, Italy, Ireland, Portugal, and Spain (GIIPS).

TABLE 21: EXPOSURE TO EUROPE – Total Net Exposure by Country and Counterparty1
(millions of Canadian dollars)																										As at
		Loans and commitments2							Derivatives, repos, and securities lending3									Trading and investment portfolio4,5								Total
	Corporate		Sovereign		Financial			Total	Corporate		Sovereign		Financial			Total	Corporate		Sovereign		Financial			Total	Exposure6
Country																					April 30, 2017
GIIPS
Greece	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–
Italy		–		171		6		177		–		–		1		1		14		36		22		72		250
Ireland		–		–		–		–		3		–		673		676		–		–		–		–		676
Portugal		–		–		–		–		–		–		16		16		5		–		–		5		21
Spain		–		70		46		116		–		–		84		84		2		–		2		4		204
Total GIIPS		–		241		52		293		3		–		774		777		21		36		24		81		1,151
Rest of Europe
Finland		7		19		–		26		–		17		1		18		–		1,313		–		1,313		1,357
France		438		739		137		1,314		113		417		1,912		2,442		103		6,393		316		6,812		10,568
Germany		2,098		728		41		2,867		421		720		971		2,112		108		7,247		26		7,381		12,360
Netherlands		589		525		189		1,303		573		411		419		1,403		37		4,281		455		4,773		7,479
Norway		–		25		4		29		14		219		33		266		1		451		438		890		1,185
Sweden		–		136		112		248		–		290		259		549		6		1,369		743		2,118		2,915
Switzerland		952		58		62		1,072		62		–		663		725		48		–		166		214		2,011
United Kingdom		2,585		6,150		28		8,763		972		721		7,225		8,918		167		3,235		3,389		6,791		24,472
Other7		273		–		1		274		191		179		809		1,179		31		1,202		71		1,304		2,757
Total Rest of Europe		6,942		8,380		574		15,896		2,346		2,974		12,292		17,612		501		25,491		5,604		31,596		65,104
Total Europe	$	6,942	$	8,621	$	626	$	16,189	$	2,349	$	2,974	$	13,066	$	18,389	$	522	$	25,527	$	5,628	$	31,677	$	66,255
Country																						October 31, 2016
GIIPS
Greece	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–
Italy		–		168		6		174		–		–		9		9		22		36		1		59		242
Ireland		–		–		–		–		45		–		592		637		–		–		–		–		637
Portugal		–		–		–		–		–		–		26		26		1		–		–		1		27
Spain		–		105		48		153		–		–		52		52		2		–		–		2		207
Total GIIPS		–		273		54		327		45		–		679		724		25		36		1		62		1,113
Rest of Europe
Finland		7		64		13		84		–		21		100		121		–		1,379		–		1,379		1,584
France		437		765		169		1,371		96		863		1,582		2,541		108		6,734		262		7,104		11,016
Germany		1,037		644		55		1,736		464		738		709		1,911		186		10,779		19		10,984		14,631
Netherlands		588		555		271		1,414		604		240		367		1,211		16		4,271		506		4,793		7,418
Norway		–		4		4		8		1		95		34		130		7		305		272		584		722
Sweden		–		64		222		286		–		247		76		323		7		1,359		451		1,817		2,426
Switzerland		1,125		58		125		1,308		75		–		802		877		51		–		168		219		2,404
United Kingdom		1,787		3,009		37		4,833		1,000		550		4,823		6,373		158		1,765		3,429		5,352		16,558
Other7		268		–		8		276		225		267		670		1,162		5		1,155		299		1,459		2,897
Total Rest of Europe		5,249		5,163		904		11,316		2,465		3,021		9,163		14,649		538		27,747		5,406		33,691		59,656
Total Europe	$	5,249	$	5,436	$	958	$	11,643	$	2,510	$	3,021	$	9,842	$	15,373	$	563	$	27,783	$	5,407	$	33,753	$	60,769

1 Certain comparative amounts have been recast to conform with the presentation adopted in the current period.

2 Exposures include interest-bearing deposits with banks and are presented net of impairment charges where applicable. There were no impairment charges for European exposures as at April 30, 2017, or October 31, 2016.

3 Exposures are calculated on a fair value basis and are net of collateral. Total market value of pledged collateral is $8.7 billion for GIIPS (October 31, 2016 – $6.9 billion) and $57.4 billion for the rest of Europe (October 31, 2016 – $24.7 billion). Derivatives are presented as net exposures where there is an International Swaps and Derivatives Association (ISDA) master netting agreement.

4 Trading Portfolio exposures are net of eligible short positions. Deposits of $1.2 billion (October 31, 2016 – $1.3 billion) are included in the trading and investment portfolio.

5 The fair values of the GIIPS exposures in Level 3 in the Trading and Investment Portfolio were not significant as at April 30, 2017, and October 31, 2016.

6 The reported exposures do not include $0.2 billion of protection the Bank purchased through credit default swaps (October 31, 2016 – $0.3 billion).

7 Other European exposure is distributed across 11 countries (October 31, 2016 – 10 countries), each of which has a net exposure including loans and commitments, derivatives, repos and securities lending, and trading and investment portfolio below $1.0 billion as at April 30, 2017, and October 31, 2016.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 24

TABLE 22: EXPOSURE TO EUROPE – Gross European Lending Exposure by Country1
(millions of Canadian dollars)												As at
		Loans and commitments						Loans and commitments
		Direct2	Indirect3			Total		Direct2	Indirect3			Total
Country		April 30, 2017						October 31, 2016
GIIPS
Greece	$	–	$	–	$	–	$	–	$	–	$	–
Italy		173		4		177		170		4		174
Ireland		–		–		–		–		–		–
Portugal		–		–		–		–		–		–
Spain		–		116		116		–		153		153
Total GIIPS		173		120		293		170		157		327
Rest of Europe
Finland		26		–		26		71		13		84
France		816		498		1,314		830		541		1,371
Germany		1,030		1,837		2,867		788		948		1,736
Netherlands		892		411		1,303		970		444		1,414
Norway		25		4		29		4		4		8
Sweden		235		13		248		282		4		286
Switzerland		348		724		1,072		562		746		1,308
United Kingdom		6,575		2,188		8,763		3,117		1,716		4,833
Other4		–		274		274		1		275		276
Total Rest of Europe		9,947		5,949		15,896		6,625		4,691		11,316
Total Europe	$	10,120	$	6,069	$	16,189	$	6,795	$	4,848	$	11,643

1 Certain comparative amounts have been recast to conform with the presentation adopted in the current period.

2 Includes interest-bearing deposits with banks, funded loans, and banker's acceptances.

3 Includes undrawn commitments and letters of credit.

4 Other European exposure is distributed across 11 countries (October 31, 2016 – 10 countries), each of which has a net exposure including loans and commitments, derivatives, repos and securities lending, and trading and investment portfolio below $1.0 billion as at April 30, 2017, and October 31, 2016.

Of the Bank's European exposure, approximately 98% (October 31, 2016 – 98%) is to counterparties in countries rated AA or better by either Moody's Investor Services (Moody's) or Standard & Poor's (S&P), with the majority of this exposure to the sovereigns themselves and to well-rated, systemically important banks in these countries. Derivatives and securities repurchase transactions are completed on a collateralized basis. The vast majority of derivatives exposure is offset by cash collateral while the repurchase transactions are backed largely by government securities rated A+ or better by either Moody's or S&P, and cash. Additionally, the Bank has exposure to well-rated corporate issuers in Europe where the Bank also does business with their related entities in North America.

In addition to the European exposure identified above, the Bank also has $9.7 billion (October 31, 2016 – $8.9 billion) of direct exposure to supranational entities with European sponsorship and indirect exposure including 0.7 billion (October 31, 2016 – $0.2 billion) of European collateral from non-European counterparties related to repurchase and securities lending transactions that are margined daily.

As part of the Bank's usual credit risk and exposure monitoring processes, all exposures are reviewed on a regular basis. European exposures are reviewed monthly or more frequently as circumstances dictate and are periodically stress tested to identify and understand any potential vulnerabilities. Based on the most recent reviews, all European exposures are considered manageable.

Exposure to ACQUIRED CREDIT-IMPAIRED LOANS

ACI loans are generally loans with evidence of incurred credit loss where it is probable at the purchase date that the Bank will be unable to collect all contractually required principal and interest payments. Evidence of credit quality deterioration as of the acquisition date may include statistics such as past due status and credit scores. ACI loans are initially recorded at fair value and, as a result, no allowance for credit losses is recorded on the date of acquisition.

ACI loans originated from FDIC-assisted transactions, including covered loans subject to loss sharing agreements with the FDIC and the South Financial acquisition. The following table presents the unpaid principal balance, carrying value, counterparty-specific allowance, allowance for individually insignificant impaired loans, and the net carrying value as a percentage of the unpaid principal balance for ACI loans.

TABLE 23: ACQUIRED CREDIT-IMPAIRED LOAN PORTFOLIO
(millions of Canadian dollars, except as noted)												As at
							Allowance for
	Unpaid				Counterparty-			individually		Carrying	Percentage of
	principal		Carrying		specific			insignificant		value net of	unpaid principal
		balance1		value		allowance2	impaired loans2			allowances		balance
										April 30, 2017
FDIC-assisted acquisitions3	$	448	$	421	$	1	$	31	$	389		86.8	%
South Financial		451		418		2		20		396		87.8
Total ACI loan portfolio	$	899	$	839	$	3	$	51	$	785		87.3	%
										October 31, 2016
FDIC-assisted acquisitions3	$	508	$	480	$	1	$	35	$	444		87.4	%
South Financial		529		494		3		23		468		88.5
Total ACI loan portfolio	$	1,037	$	974	$	4	$	58	$	912		87.9	%

1 Represents contractual amount owed net of charge-offs since acquisition of the loan.

2 Management concluded as part of the Bank's assessment of the ACI loans that it was probable that higher than estimated principal credit losses would result in a decrease in expected cash flows subsequent to acquisition. As a result, counterparty-specific and individually insignificant allowances have been recognized.

3 Carrying value does not include the effect of the FDIC loss sharing agreement.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 25

During the three and six months ended April 30, 2017, the Bank recorded a recovery of $13 million and $16 million, respectively, in PCL on ACI loans (three and six months ended April 30, 2016 – $9 million and $16 million, respectively). The following table provides key credit statistics by past due contractual status and geographic concentrations based on ACI loans unpaid principal balance.

TABLE 24: ACQUIRED CREDIT-IMPAIRED LOANS – Key Credit Statistics
(millions of Canadian dollars, except as noted)							As at
	April 30, 2017				October 31, 2016
	Unpaid principal balance1				Unpaid principal balance1
Past due contractual status
Current and less than 30 days past due	$	779	86.7	%	$	912	88.0	%
30-89 days past due		30	3.3			24	2.3
90 or more days past due		90	10.0			101	9.7
Total ACI loans		899	100.0			1,037	100.0
Geographic region
Florida		604	67.2			691	66.6
South Carolina		217	24.1			260	25.1
North Carolina		77	8.6			83	8.0
Other U.S. and Canada		1	0.1			3	0.3
Total ACI loans	$	899	100.0	%	$	1,037	100.0	%

1 Represents contractual amount owed net of charge-offs since acquisition of the loan.

Exposure to Non-Agency Collateralized Mortgage Obligations

As a result of the acquisition of Commerce Bancorp Inc., the Bank has exposure to non-agency collateralized mortgage obligations (CMOs) collateralized primarily by Alt-A and Prime Jumbo mortgages, most of which are pre-payable fixed-rate mortgages without rate reset features. At the time of acquisition, the portfolio was recorded at fair value, which became the new cost basis for this portfolio. Refer to the "Exposure to Non-Agency Collateralized Mortgage Obligations" section of the 2016 Annual Report for further details on CMOs.

The allowance for losses that are incurred but not identified as at April 30, 2017, was US$26 million (October 31, 2016 – US$41 million).

The following table presents the par value, carrying value, allowance for loan losses, and the net carrying value as a percentage of the par value for the non-agency CMO portfolio as at April 30, 2017, and October 31, 2016. As at April 30, 2017, the balance of the remaining acquisition-related incurred loss was US$121 million (October 31, 2016 – US$160 million). This amount is reflected in the following table as a component of the discount from par to carrying value.

TABLE 25: NON-AGENCY CMO LOANS PORTFOLIO
(millions of U.S. dollars, except as noted)									As at
					Allowance		Carrying		Percentage
	Par		Carrying		for loan		value net of		of par
	value		value		losses		allowance		value
								April 30, 2017
Non-Agency CMOs	$	672	$	592	$	124	$	468		69.6	%
								October 31, 2016
Non-Agency CMOs	$	1,158	$	1,020	$	195	$	825		71.2	%

During the second quarter of 2009, the Bank re-securitized a portion of the non-agency CMO portfolio. As part of the on-balance sheet re-securitization, new credit ratings were obtained for the re-securitized securities that better reflected the discount on acquisition and the Bank's risk inherent on the entire portfolio, resulting in a net capital benefit. The net capital benefit expired on October 31, 2016. During the first quarter of 2017, the Bank unwound the re-securitizations and sold a portion of the non-agency CMO portfolio resulting in a gain on sale, recognized in other income within the Corporate segment. The impact of the sale on the portfolio and related allowance for loan losses is reflected in the table above.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 26

TABLE 26: NON-AGENCY ALT-A AND PRIME JUMBO CMO PORTFOLIO BY VINTAGE YEAR
(millions of U.S. dollars)													As at
		Alt-A				Prime Jumbo				Total
		Amortized			Fair	Amortized		Fair		Amortized		Fair
			cost	value			cost	value			cost	value
											April 30, 2017
2003		$	18	$	20	$	10	$	11	$	28	$	31
2004			45		50		14		15		59		65
2005			57		77		7		8		64		85
2006			102		121		36		40		138		161
2007			169		200		36		43		205		243
Total portfolio net of counterparty-specific
	and individually insignificant credit losses	$	391	$	468	$	103	$	117	$	494	$	585
Less: allowance for incurred but not identified credit losses											26
Total										$	468
											October 31, 2016
2003		$	20	$	23	$	20	$	21	$	40	$	44
2004			49		55		15		17		64		72
2005			204		248		14		16		218		264
2006			157		187		73		84		230		271
2007			226		270		88		99		314		369
Total portfolio net of counterparty-specific
	and individually insignificant credit losses	$	656	$	783	$	210	$	237	$	866	$	1,020
Less: allowance for incurred but not identified credit losses											41
Total										$	825

CAPITAL POSITION

REGULATORY CAPITAL

Capital requirements of the Basel Committee on Banking Supervision (BCBS) are commonly referred to as Basel III. Under Basel III, Total Capital consists of three components, namely CET1, Additional Tier 1, and Tier 2 Capital. Risk sensitive regulatory capital ratios are calculated by dividing CET1, Tier 1, and Total Capital by their respective RWA, inclusive of any minimum requirements outlined under the Basel I floor. In 2015, Basel III implemented a non-risk sensitive leverage ratio to act as a supplementary measure to the risk-sensitive capital requirements. The objective of the leverage ratio is to constrain the build-up of excess leverage in the banking sector. The leverage ratio is calculated by dividing Tier 1 Capital by leverage exposure which is primarily comprised of on-balance sheet assets with adjustments made to derivative and securities financing transaction exposures, and credit equivalent amounts of off-balance sheet exposures. TD continues to manage its regulatory capital in accordance with the Basel III Capital Framework as discussed in the "Capital Position" section of the 2016 Annual Report.

OSFI's Capital Requirements under Basel III

OSFI's Capital Adequacy Requirements (CAR) guideline details how the Basel III capital rules apply to Canadian banks.

Effective January 1, 2014, the CVA capital charge is to be phased in over a five year period based on a scalar approach. For fiscal 2017, the scalars for inclusion of the CVA for CET1, Tier 1, and Total Capital RWA are 72%, 77%, and 81%. This scalar increases to 80% in 2018 and 100% in 2019 for the CET1 calculation. A similar set of scalar phase-in percentages apply to the Tier 1 and Total Capital ratio calculations.

Effective January 1, 2013, all newly issued non-common Tier 1 and Tier 2 Capital instruments must include non-viability contingent capital (NVCC) provisions to qualify as regulatory capital. NVCC provisions require the conversion of non-common capital instruments into a variable number of common shares of the Bank upon the occurrence of a trigger event as defined in the guidance. Existing non-common Tier 1 and Tier 2 capital instruments which do not include NVCC provisions are non-qualifying capital instruments and are subject to a phase-out period which began in 2013 and ends in 2022.

The CAR guideline contains two methodologies for capital ratio calculation: (1) the "transitional" method; and (2) the "all-in" method. The minimum CET1, Tier 1, and Total Capital ratios, based on the "all-in" method, are 4.5%, 6%, and 8%, respectively. OSFI expects Canadian banks to include an additional capital conservation buffer of 2.5%, effectively raising the CET1, Tier 1 Capital, and Total Capital ratio minimum requirements to 7%, 8.5%, and 10.5%, respectively.

In March 2013, OSFI designated the six major Canadian banks as domestic systemically important banks (D-SIBs), for which a 1% common equity capital surcharge is in effect from January 1, 2016. As a result, the six Canadian banks designated as D-SIBs, including TD, are required to meet an "all-in" Pillar 1 target CET1, Tier 1, and Total Capital ratios of 8%, 9.5%, and 11.5%, respectively.

At the discretion of OSFI, a common equity countercyclical capital buffer (CCB) within a range of 0% to 2.5% may be imposed. The primary objective of the CCB is to protect the banking sector against future potential losses resulting from periods of excess aggregate credit growth that have often been associated with the build-up of system-wide risk. The CCB is an extension of the capital conservation buffer and must be met with CET1 capital. The CCB is calculated using the weighted average of the buffers deployed in Canada and across BCBS member jurisdictions and selected non-member jurisdictions to which the bank has private sector credit exposures.

Effective the first quarter of 2017, OSFI required D-SIBs and foreign bank subsidiaries in Canada to comply with the CCB regime, phased-in according to the transitional arrangements. As a result, the maximum countercyclical buffer relating to foreign private sector credit exposures will be capped at 1.25% of total RWA in the first quarter of 2017 and increase each subsequent year by an additional 0.625%, to reach its final maximum of 2.5% of total RWA in the first quarter of 2019. As at April 30, 2017, the CCB is only applicable to private sector credit exposures located in Hong Kong SAR, Sweden, and Norway. Based on the allocation of exposures and buffers currently in place in Hong Kong SAR, Sweden, and Norway, the Bank's countercyclical buffer requirement is 0% as at April 30, 2017.

The leverage ratio is calculated as per OSFI's Leverage Requirements guideline and has a regulatory minimum requirement of 3%.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 27

The following table provides details of TD's regulatory capital position.

TABLE 27: REGULATORY CAPITAL POSITION
(millions of Canadian dollars, except as noted)								As at
	April 30			October 31			April 30
		2017			2016			2016
Capital
Common Equity Tier 1 Capital	$	45,417		$	42,328		$	38,933
Tier 1 Capital		52,337			49,397			44,992
Total Capital		62,542			61,816			55,549
Common Equity Tier 1 Capital risk-weighted assets for:
Credit risk1,2	$	350,018		$	340,296		$	327,545
Market risk		13,781			12,211			12,892
Operational risk3		50,920			48,001			43,152
Regulatory floor		5,334			5,336			–
Total	$	420,053		$	405,844		$	383,589
Capital and leverage ratios
Common Equity Tier 1 Capital ratio1		10.8	%		10.4	%		10.1	%
Tier 1 Capital ratio1		12.5			12.2			11.7
Total Capital ratio1		14.9			15.2			14.4
Leverage ratio		3.9			4.0			3.8

1 Each capital ratio has its own RWA measure due to the OSFI-prescribed scalar for inclusion of the CVA. For fiscal 2016, the scalars for inclusion of CVA for Common Equity Tier 1 (CET1), Tier 1, and Total Capital RWA were 64%, 71%, and 77%, respectively. For fiscal 2017, the scalars are 72%, 77%, and 81%.

2 Effective the third quarter of 2016, OSFI approved the Bank to calculate the majority of retail portfolio credit RWAs in the U.S. Retail segment using the Advanced Internal Ratings Based (AIRB) approach.

3 Effective the third quarter of 2016, OSFI approved the Bank to use Advanced Measurement Approach (AMA).

As at April 30, 2017, the Bank's CET1, Tier 1, and Total Capital ratios were 10.8%, 12.5%, and 14.9%, respectively. Compared with the Bank's CET1 Capital ratio of 10.4% at October 31, 2016, the CET1 Capital ratio, as at April 30, 2017, increased due to organic capital growth and unrealized gains in Accumulated other comprehensive income from AFS portfolio due to tightening of the credit spreads, partially offset by common shares repurchased and RWA growth.

As at April 30, 2017, the Bank's leverage ratio was 3.9%, relatively flat compared with the leverage ratio of 4.0% at October 31, 2016.

Future Regulatory Capital Developments

Future regulatory capital developments, in addition to those described in the "Future Changes in Basel" section of the 2016 Annual Report, are noted below.

In April 2017, OSFI issued the final guidelines on Phase 1 of the Pillar 3 Disclosure Requirements. This guideline clarifies OSFI's expectations regarding domestic implementation by federally regulated deposit-taking institutions of the Revised Pillar 3 Disclosure Requirements (Revised Basel Pillar 3 standard) issued by the BCBS in January 2015. The revised standard requires disclosure of fixed format tables and templates to provide comparability and consistency of capital and risk disclosures amongst banks with the focus on improving the transparency of the internal model-based approaches that banks use to calculate RWA. The guideline replaces OSFI's November 2007 Advisory on Pillar 3 Disclosure Requirements. D-SIBs are expected to prospectively disclose the reporting requirements under the Revised Basel Pillar 3 standard by the fourth quarter of 2018.

In March 2017, BCBS issued the final standard on Phase 2 of the Pillar 3 Disclosure Requirements. The final standard consolidates all existing and prospective BCBS disclosure requirements into the Pillar 3 framework, prescribes enhanced disclosure of key prudential metrics, and for banks which record prudent valuation adjustments, a new disclosure requirement for a granular breakdown of how the adjustments are calculated. The standard also includes new disclosure requirements for the total loss-absorbing capital regime for global systemically important banks (G-SIBS) and revised disclosure requirements for market risk. The implementation date for these disclosure requirements will be determined when OSFI issues Phase 2 of the Pillar 3 Disclosure Requirements.

The BCBS has commenced Phase 3, the final phase of the Pillar 3 review. The objectives of Phase 3 is to develop disclosure requirements for standardized RWA to benchmark internally modelled capital requirements, asset encumbrances, operational risk, and ongoing policy reforms.

In March 2017, BCBS released the second consultative document on identification and management of step-in risk. Step-in risk is the risk that the Bank decides to provide financial support to an unconsolidated entity that is facing stress, in the absence of, or in excess of, any contractual obligations. The framework entails no automatic Pillar 1 capital or liquidity charge additional to the existing Basel standards. The implementation date is expected to be the fourth quarter of 2019.

In March 2017, BCBS issued the final standard "Regulatory treatment of accounting provisions – interim approach and transitional arrangements" given the upcoming accounting provisioning standard under IFRS 9. The standard retains, for an interim period, the current regulatory treatment of accounting provisions under the standardized and internal rating-based approaches. The BCBS has determined that jurisdictions may introduce a transitional arrangement for the impact on regulatory capital from the implementation of IFRS 9 and outlines the requirements for jurisdictions choosing to adopt a transitional arrangement. The Bank is awaiting final guidance from OSFI as it relates to the BCBS standard.

Normal Course Issuer Bid

On March 16, 2017, the Bank announced that the Toronto Stock Exchange (TSX) and OSFI approved the Bank's previously announced normal course issuer bid (NCIB) to repurchase for cancellation up to 15 million of the Bank's common shares. On March 28, 2017, in connection with its NCIB, the Bank announced its intention to purchase for cancellation up to 14.5 million of its common shares pursuant to a specific share repurchase program. During the quarter ended April 30, 2017, the Bank completed the purchase of common shares pursuant to the specific share repurchase program, which shares were purchased at a discount to the prevailing market price of the Bank's common shares on the TSX at the time of purchase. During the three months ended April 30, 2017, the Bank repurchased 15 million common shares under its NCIB at an average price of $58.65 per share for a total amount of $880 million.

On December 9, 2015, the Bank announced that the TSX and OSFI approved the Bank's previously announced NCIB to repurchase for cancellation up to 9.5 million of the Bank's common shares. On January 11, 2016, in connection with its NCIB, the Bank announced its intention to purchase for cancellation up to 3 million of its common shares pursuant to private agreements between the Bank and an arm's length third party seller. During the quarter ended January 31, 2016, the Bank completed the purchase of common shares by way of private agreements, which shares were purchased at a discount to the prevailing market price of the Bank's common shares on the TSX at the time of purchase. During the three months ended January 31, 2016, the Bank repurchased 9.5 million common shares under its NCIB at an average price of $51.23 per share for a total amount of $487 million.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 28

TABLE 28: OUTSTANDING EQUITY AND SECURITIES EXCHANGEABLE/CONVERTIBLE INTO EQUITY1
(millions of shares/units, except as noted)			As at
		April 30, 2017	October 31, 2016
		Number of	Number of
		shares/units	shares/units
Common shares outstanding		1,847.2	1,857.6
Treasury shares – common		(3.8)	(0.4)
Total common shares		1,843.4	1,857.2
Stock options
Vested		6.1	5.5
Non-vested		9.0	9.9
Series S		5.4	5.4
Series T		4.6	4.6
Series Y		5.5	5.5
Series Z		4.5	4.5
Series 12		20.0	20.0
Series 32		20.0	20.0
Series 52		20.0	20.0
Series 72		14.0	14.0
Series 92		8.0	8.0
Series 112		6.0	6.0
Series 122		28.0	28.0
Series 142		40.0	40.0
Total preferred shares – equity		176.0	176.0
Treasury shares – preferred		(0.3)	(0.2)
Total preferred shares		175.7	175.8
Capital Trust Securities (thousands of shares)
Trust units issued by TD Capital Trust III:
	TD Capital Trust III Securities – Series 2008	1,000.0	1,000.0
Debt issued by TD Capital Trust IV:
	TD Capital Trust IV Notes – Series 1	550.0	550.0
	TD Capital Trust IV Notes – Series 2	450.0	450.0
	TD Capital Trust IV Notes – Series 3	750.0	750.0

1 For further details, including the principal amount, conversion and exchange features, and distributions, refer to Note 12 of the Interim Consolidated Financial Statements.

2 NVCC Series 1, 3, 5, 7, 9, 11, 12, and 14 Preferred Shares qualify as regulatory capital under OSFI's CAR guideline. If a NVCC conversion were to occur in accordance with the NVCC Provisions, the maximum number of common shares that could be issued based on the formula for conversion set out in the respective terms and conditions applicable to each Series of shares, assuming there are no declared and unpaid dividends on the respective Series of shares at the time of conversion, as applicable, would be 100 million, 100 million, 100 million, 70 million, 40 million, 30 million, 140 million, and 200 million, respectively.

TABLE 29: FLOW STATEMENT FOR RISK-WEIGHTED ASSETS – Disclosure for Non-Counterparty Credit Risk and Counterparty Credit Risk
	Risk-Weighted Assets Movement by Key Driver
(millions of Canadian dollars)							For the three months ended
		April 30, 2017					January 31, 2017
		Non-counterparty		Counterparty		Non-counterparty		Counterparty
		credit risk		credit risk		credit risk		credit risk
Common Equity Tier 1 Capital RWA, balance at
	beginning of period	$	319,523	$	14,960	$	324,335	$	15,961
Book size			4,927		(243)		(3,034)		(1,167)
Book quality			(867)		(9)		(676)		(4)
Model updates			448		–		–		–
Methodology and policy			–		–		4,948		578
Acquisitions and disposals			–		–		–		–
Foreign exchange movements			10,358		606		(6,441)		(408)
Other			315		–		391		–
Total RWA movement			15,181		354		(4,812)		(1,001)
Common Equity Tier 1 Capital RWA, balance at
	end of period	$	334,704	$	15,314	$	319,523	$	14,960

Counterparty credit risk is comprised of over-the-counter (OTC) derivatives, repo-style transactions, trades cleared through central counterparties, and CVA RWA which is phased in at 72% for fiscal 2017.

Non-counterparty credit risk includes loans and advances to individuals and small business retail customers, wholesale and commercial corporate customers, and banks and governments, as well as holdings of debt, equity securities, and other assets including prepaid expenses, deferred income taxes, land, building, equipment, and other depreciable property.

The Book size category consists of organic changes in book size and composition (including new business and maturing loans) and, for the second quarter of 2017, increased due to growth in various retail portfolios and commercial exposures in the U.S. Retail and Canadian Retail Segments.

The Book quality category includes quality of book changes caused by experience such as underlying customer behaviour or demographics, including changes through model calibrations/realignments.

The Model updates category relates to model implementation, changes in model scope, or any changes to address model malfunctions.

The Methodology and policy category impacts reflect newly adopted methodology changes to the calculations driven by regulatory policy changes, such as new regulations.

Foreign exchange movements are mainly due to a change in the U.S. dollar foreign exchange rate for the U.S. portfolios in the U.S. Retail and Wholesale Banking segments.

The Other category consists of items not described in the above categories, including changes in exposures not included under advanced or standardized methodologies, such as prepaid expenses, deferred income taxes, land, building, equipment and other depreciable property, and other assets. 

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 29

TABLE 30: FLOW STATEMENT FOR RISK-WEIGHTED ASSETS – Disclosure for Market Risk
Risk-Weighted Assets Movement by Key Driver
(millions of Canadian dollars)		For the three months ended
	April 30, 2017		January 31, 2017
RWA, balance at beginning of period	$	13,587	$	12,211
Movement in risk levels		194		1,376
Model updates		–		–
Methodology and policy		–		–
Acquisitions and disposals		–		–
Foreign exchange movements and other		n/m1		n/m1
Total RWA movement		194		1,376
RWA, balance at end of period	$	13,781	$	13,587

1 Not meaningful.

The Movement in risk levels category reflects changes in risk due to position changes and market movements. Increased base metals exposures contributed to the increase in RWA. The Model updates category reflects updates to the model to reflect recent experience and change in model scope. The Methodology and policy category reflects newly adopted methodology changes to the calculations driven by regulatory policy changes. Foreign exchange movements and other are deemed not meaningful since RWA exposure measures are calculated in Canadian dollars. Therefore, no foreign exchange translation is required.

TABLE 31: FLOW STATEMENT FOR RISK-WEIGHTED ASSETS – Disclosure for Operational Risk
	Risk-Weighted Assets Movement by Key Driver
(millions of Canadian dollars)			For the three months ended
		April 30, 2017		January 31, 2017
RWA, balance at beginning of period		$	48,796	$	48,001
Revenue generation			140		157
Movement in risk levels			1,984		638
Model updates			–		–
Methodology and policy			–		–
Acquisitions and disposals			–		–
RWA, balance at end of period		$	50,920	$	48,796

The movement in the Revenue generation category is due to a change in gross income. The Movement in risk levels category primarily reflects changes in risk due to operational loss experience, business environment and internal control factors, scenario analysis and movements in foreign exchange. The Model updates category relates to model implementation, changes in model scope, or any changes to address model malfunctions. The Methodology and policy category reflects newly adopted methodology changes to the calculations driven by regulatory policy changes.

MANAGING RISK

EXECUTIVE SUMMARY

Growing profitability in financial services involves selectively taking and managing risks within TD's risk appetite. The Bank's goal is to earn a stable and sustainable rate of return for every dollar of risk it takes, while putting significant emphasis on investing in TD's businesses to ensure it can meet its future strategic objectives.

TD's businesses and operations are exposed to a broad number of risks that have been identified and defined in the Enterprise Risk Framework. The Bank's tolerance to those risks is defined in the Enterprise Risk Appetite which has been developed within a comprehensive framework that takes into consideration current conditions in which the Bank operates and the impact that emerging risks will have on TD's strategy and risk profile. The Bank's risk appetite states that it takes risks required to build its business, but only if those risks: (1) fit the business strategy, and can be understood and managed; (2) do not expose the enterprise to any significant single loss events; TD does not 'bet the bank' on any single acquisition, business, or product; and (3) do not risk harming the TD brand. Each business is responsible for setting and aligning its individual risk appetites with that of the enterprise based on a thorough examination of the specific risks to which it is exposed.

TD considers it critical to assess regularly the operating environment and highlight top and emerging risks within the individual business and enterprise that could have a significant impact on the Bank. These risks can be internal or external, impacting the financial results, reputation, or sustainability of the business. They may also represent exposures or potential events which may or may not materialize. These risks are identified, discussed, and actioned by senior risk leaders and reported quarterly to the Risk Committee of the Board. Specific plans to mitigate top and emerging risks are prepared, monitored, and adjusted as required.

The Bank's risk governance structure and risk management approach have not substantially changed from that described in the 2016 MD&A. Additional information on risk factors can be found in the 2016 MD&A under the heading "Risk Factors and Management". For a complete discussion of the risk governance structure and the risk management approach, refer to the "Managing Risk" section in the 2016 MD&A.

The shaded sections of this MD&A represent a discussion relating to market and liquidity risks and form an integral part of the Interim Consolidated Financial Statements for the period ended April 30, 2017.

CREDIT RISK

Gross credit risk exposure, also referred to as exposure at default (EAD), is the total amount the Bank is exposed to at the time of default of a loan and is measured before counterparty-specific provisions or write-offs. Gross credit risk exposure does not reflect the effects of credit risk mitigation and includes both on-balance sheet and off-balance sheet exposures. On-balance sheet exposures consist primarily of outstanding loans, acceptances, non-trading securities, derivatives, and certain other repo-style transactions. Off-balance sheet exposures consist primarily of undrawn commitments, guarantees, and certain other repo-style transactions.

Gross credit risk exposures for the two approaches the Bank uses to measure credit risk are included in the following table.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 30

TABLE 32: GROSS CREDIT RISK EXPOSURES – Standardized and Advanced Internal Ratings Based (AIRB) Approaches1
(millions of Canadian dollars)												As at
				April 30, 2017				October 31, 2016
	Standardized		AIRB		Total		Standardized		AIRB		Total
Retail
Residential secured	$	1,475	$	340,343	$	341,818	$	1,334	$	334,878	$	336,212
Qualifying revolving retail		–		93,696		93,696		–		90,778		90,778
Other retail		19,498		73,387		92,885		18,894		71,940		90,834
Total retail		20,973		507,426		528,399		20,228		497,596		517,824
Non-retail
Corporate		130,616		293,391		424,007		127,399		252,616		380,015
Sovereign		89,670		151,984		241,654		77,166		139,367		216,533
Bank		17,949		88,992		106,941		17,721		66,432		84,153
Total non-retail		238,235		534,367		772,602		222,286		458,415		680,701
Gross credit risk exposures	$	259,208	$	1,041,793	$	1,301,001	$	242,514	$	956,011	$	1,198,525

1 Gross credit risk exposures represent EAD and are before the effects of credit risk mitigation. This table excludes securitization, equity, and other credit RWA.

MARKET RISK

Market risk capital is calculated using internal models and comprises three components: (1) Value-at-Risk (VaR); (2) Stressed VaR; and (3) Incremental Risk Charge (IRC). In addition, the Bank calculates market risk capital using the Standardized approach for a limited number of portfolios.

Market Risk Linkage to the Balance Sheet

The following table provides a breakdown of the Bank's balance sheet into assets and liabilities exposed to trading and non-trading market risks. Market risk of assets and liabilities included in the calculation of VaR and other metrics used for regulatory market risk capital purposes is classified as trading market risk.

TABLE 33: MARKET RISK LINKAGE TO THE BALANCE SHEET
(millions of Canadian dollars)					As at
			April 30, 2017								October 31, 2016
																		Non-trading market
		Balance		Trading		Non-trading				Balance		Trading		Non-trading				risk – primary
		sheet		market risk		market risk			Other	sheet		market risk		market risk			Other	sensitivity
Assets subject to market risk
Interest-bearing deposits with banks		$	54,227	$	438	$	53,789	$	–	$	53,714	$	258	$	53,456	$	–	Interest rate
Trading loans, securities, and other			111,833		105,888		5,945		–		99,257		92,282		6,975		–	Interest rate
Derivatives			62,674		55,897		6,777		–		72,242		63,931		8,311		–	Equity,
																		foreign exchange,
																		interest rate
Financial assets designated at
	fair value through profit or loss		3,971		–		3,971		–		4,283		–		4,283		–	Interest rate
Available-for-sale securities			121,992		–		121,992		–		107,571		–		107,571		–	Foreign exchange,
																		interest rate
Held-to-maturity securities			82,330		–		82,330		–		84,395		–		84,395		–	Foreign exchange,
																		interest rate
Securities purchased under
	reverse repurchase agreements		113,834		1,570		112,264		–		86,052		1,728		84,324		–	Interest rate
Loans			602,353		–		602,353		–		589,529		–		589,529		–	Interest rate
Customers' liability under
	acceptances		17,002		–		17,002		–		15,706		–		15,706		–	Interest rate
Investment in TD Ameritrade			7,281		–		7,281		–		7,091		–		7,091		–	Equity
Other assets1			1,603		–		1,603		–		1,769		–		1,769		–	Interest rate
Assets not exposed to
market risk			72,820		–		–		72,820		55,358		–		–		55,358
Total Assets			1,251,920		163,793		1,015,307		72,820		1,176,967		158,199		963,410		55,358
Liabilities subject to market risk
Trading deposits			92,958		4,472		88,486		–		79,786		3,876		75,910		–	Interest rate
Derivatives			57,353		51,728		5,625		–		65,425		60,221		5,204		–	Foreign exchange,
																		interest rate
Securitization liabilities at fair value			12,824		12,824		–		–		12,490		12,490		–		–	Interest rate
Other financial liabilities designated
	at fair value through profit or loss		6		1		5		–		190		177		13		–	Interest rate
Deposits			807,112		–		807,112		–		773,660		–		773,660		–	Equity, interest rate
Acceptances			17,002		–		17,002		–		15,706		–		15,706		–	Interest rate
Obligations related to securities sold
	short		32,611		30,485		2,126		–		33,115		29,973		3,142		–	Interest rate
Obligations related to securities sold
	under repurchase agreements		74,608		2,182		72,426		–		48,973		3,657		45,316		–	Interest rate
Securitization liabilities at amortized
	cost		17,198		–		17,198		–		17,918		–		17,918		–	Interest rate
Subordinated notes and debentures			8,482		–		8,482		–		10,891		–		10,891		–	Interest rate
Other liabilities1			14,849		–		14,849		–		15,526		–		15,526		–	Interest rate
Liabilities and Equity not
	exposed to market risk		116,917		–		–		116,917		103,287		–		–		103,287
Total Liabilities and Equity		$	1,251,920	$	101,692	$	1,033,311	$	116,917	$	1,176,967	$	110,394	$	963,286	$	103,287

1 Relates to retirement benefits, insurance, and structured entity liabilities.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 31

Calculating VaR

TD computes total VaR on a daily basis by combining the General Market Risk (GMR) and Idiosyncratic Debt Specific Risk (IDSR) associated with the Bank's trading positions.

GMR is determined by creating a distribution of potential changes in the market value of the current portfolio using historical simulation. The Bank values the current portfolio using the market price and rate changes of the most recent 259 trading days for equity, interest rate, foreign exchange, credit, and commodity products. GMR is computed as the threshold level that portfolio losses are not expected to exceed more than one out of every 100 trading days. A one-day holding period is used for GMR calculation, which is scaled up to ten days for regulatory capital calculation purposes.

IDSR measures idiosyncratic (single-name) credit spread risk for credit exposures in the trading portfolio using Monte Carlo simulation. The IDSR model is based on the historical behaviour of five-year idiosyncratic credit spreads. Similar to GMR, IDSR is computed as the threshold level that portfolio losses are not expected to exceed more than one out of every 100 trading days. IDSR is measured for a ten-day holding period.

The following graph discloses daily one-day VaR usage and trading-related revenue within Wholesale Banking. Trading-related revenue is the total of trading revenue reported in non-interest income and the net interest income on trading positions reported in net interest income, and is reported on a taxable equivalent basis. For the quarter ended April 30, 2017, there were 5 days of trading losses and trading-related revenue was positive for 92% of the trading days, reflecting normal trading activity. Losses in the quarter did not exceed VaR on any trading day.

 

VaR is a valuable risk measure but it should be used in the context of its limitations, for example:

• VaR uses historical data to estimate future events, which limits its forecasting abilities;

• it does not provide information on losses beyond the selected confidence level; and

• it assumes that all positions can be liquidated during the holding period used for VaR calculation.

The Bank continuously improves its VaR methodologies and incorporates new risk measures in line with market conventions, industry best practices, and regulatory requirements.

To mitigate some of the shortcomings of VaR, the Bank uses additional metrics designed for risk management and capital purposes. These include Stressed VaR, IRC, Stress Testing Framework, as well as limits based on the sensitivity to various market risk factors.

Calculating Stressed VaR

In addition to VaR, the Bank also calculates Stressed VaR, which includes Stressed GMR and Stressed IDSR. Stressed VaR is designed to measure the adverse impact that potential changes in market rates and prices could have on the value of a portfolio over a specified period of stressed market conditions. Stressed VaR is determined using similar techniques and assumptions in GMR and IDSR VaR. However, instead of using the most recent 259 trading days (one year), the Bank uses a selected year of stressed market conditions. In the second quarter of 2017, Stressed VaR was calculated using the one-year period that began on February 1, 2008. The appropriate historical one-year period to use for Stressed VaR is determined on a quarterly basis. Stressed VaR is a part of regulatory capital requirements.

Calculating the Incremental Risk Charge

The IRC is applied to all instruments in the trading book subject to migration and default risk. Migration risk represents the risk of changes in the credit ratings of the Bank's exposures. TD applies a Monte Carlo simulation with a one-year horizon and a 99.9% confidence level to determine IRC, which is consistent with regulatory requirements. IRC is based on a "constant level of risk" assumption, which requires banks to assign a liquidity horizon to positions that are subject to IRC. IRC is a part of regulatory capital requirements.

The following table presents the end of quarter, average, high, and low usage of TD's portfolio metrics.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 32

TABLE 34: PORTFOLIO MARKET RISK MEASURES
(millions of Canadian dollars)			For the three months ended											For the six months ended
		April 30								January 31		April 30			April 30	April 30
									2017	2017		2016			2017	2016
		As at		Average		High		Low		Average		Average		Average		Average
Interest rate risk		$	13.0	$	15.6	$	27.3	$	9.3	$	14.8	$	10.2	$	15.2	$	11.8
Credit spread risk			9.8		8.8		10.1		7.5		8.0		9.5		8.4		9.5
Equity risk			7.8		8.5		9.6		7.2		7.7		8.9		8.1		9.2
Foreign exchange risk			3.7		4.2		5.9		2.8		3.7		3.7		3.9		3.7
Commodity risk			0.9		1.1		1.5		0.9		1.5		1.8		1.3		1.8
Idiosyncratic debt specific risk			13.9		13.5		15.1		11.2		13.1		16.1		13.3		14.2
Diversification effect1			(29.8)		(30.4)		n/m2		n/m2		(27.3)		(26.3)		(28.8)		(26.4)
Total Value-at-Risk (one-day)			19.3		21.3		27.1		15.9		21.5		23.9		21.4		23.8
Stressed Value-at-Risk (one-day)			40.3		33.4		40.3		28.1		36.5		37.2		35.0		33.5
Incremental Risk Capital Charge
	(one-year)	$	220.2	$	226.2	$	290.3	$	171.3	$	260.9	$	209.3	$	243.6	$	210.4

1 The aggregate VaR is less than the sum of the VaR of the different risk types due to risk offsets resulting from portfolio diversification.

2 Not meaningful. It is not meaningful to compute a diversification effect because the high and low may occur on different days for different risk types.

Average VaR was relatively unchanged compared to the prior quarter. Year-over-year, there was an increase in the average interest rate VaR driven by U.S. interest rate risk positions. The total VaR decreased year-over-year due to a reduction in IDSR driven by the positions in the bonds of Canadian provinces. The quarter-over-quarter decrease in average Stressed VaR was driven by a reduction in financial bond positions. Average Stressed VaR decreased year-over-year as a result of a reduction in equity risk positions.

Average IRC decreased quarter-over-quarter driven by U.S. Agency positions.

Validation of VaR Model

The Bank uses a back-testing process to compare the actual and theoretical profit and losses to VaR to ensure that they are consistent with the statistical results of the VaR model. The theoretical profit or loss is generated using the daily price movements on the assumption that there is no change in the composition of the portfolio. Validation of the IRC model must follow a different approach since the one-year horizon and 99.9% confidence level preclude standard back-testing techniques. Instead, key parameters of the IRC model such as transition and correlation matrices are subject to independent validation by benchmarking against external study results or through analysis using internal or external data.

Interest Rate Risk

The following graph³ shows the Bank's interest rate risk exposure (as measured by Economic Value at Risk (EVaR)) on all non-trading assets, liabilities, and derivative instruments used for interest rate risk management. EVaR is defined as the difference between the change in the present value of the Bank's asset portfolio and the change in the present value of the Bank's liability portfolio, including off-balance sheet instruments and assumed profiles for non-rate sensitive products, resulting from an immediate and sustained 100 bps unfavourable interest rate shock. EVaR measures the relative sensitivity of asset and liability cash flow mismatches to changes in long-term interest rates. Closely matching asset and liability cash flows reduces EVaR and mitigates the risk of volatility in future net interest income.

³ The footnotes included in Table 35 are also applicable to this graph.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 33

The Bank uses derivative financial instruments, wholesale investments, funding instruments, other capital market alternatives, and, less frequently, product pricing strategies to manage interest rate risk. As at April 30, 2017, an immediate and sustained 100 bps increase in interest rates would have decreased the economic value of shareholders' equity by $190 million (January 31, 2017 – $183 million) after tax. An immediate and sustained 100 bps decrease in interest rates is typically used to determine the reduction in the economic value of shareholders' equity. However, due to the low rate environment in Canada at the end of the quarter, it was only possible to shock Canadian rates by 75 bps, while maintaining a floor at 0%. The impact of these scenarios would have reduced the economic value of shareholders' equity by $217 million (January 31, 2017 – $57 million) after tax.

The interest risk exposure, or EVaR, in the insurance business is not included in the above graph. Interest rate risk is managed using defined exposure limits and processes, as set and governed by the insurance Board of Directors.

The following table shows the sensitivity of the economic value of shareholders' equity (after tax) by currency for those currencies where TD has material exposure.

TABLE 35: SENSITIVITY OF AFTER-TAX ECONOMIC VALUE AT RISK BY CURRENCY1,2
(millions of Canadian dollars)										As at
		April 30, 2017				January 31, 2017				April 30, 2016
		100 bps		100 bps		100 bps		100 bps		100 bps		100 bps
	increase		decrease		increase		decrease		increase		decrease
Canadian dollar	$	16	$	(55)3	$	1	$	(47)3	$	124	$	(155)3
U.S. dollar		(206)		(162)		(184)		(10)4		(188)		(52)4
	$	(190)	$	(217)	$	(183)	$	(57)	$	(64)	$	(207)

1 Effective the second quarter of 2016, unfunded pension and benefit liabilities are included in EVaR sensitivity.

2 Effective the third quarter of 2016, the Bank enhanced the methodology used to stabilize product margins over time.

3 Due to the low rate environment EVaR sensitivity has been measured using a 75 bps rate decline for Canadian interest rates for the quarter ended April 30, 2017, a 75 bps decline for the quarter ended January 31, 2017, and a 75 bps decline for the quarter ended April 30, 2016, corresponding to an interest rate environment that is floored at 0%.

4 Due to the low rate environment EVaR sensitivity has been measured using a 75 bps rate decline for U.S. interest rates for the quarter ended January 31, 2017 and a 50 bps decline for the quarter ended April 30, 2016. All rate shocks are floored at 0%.

Liquidity Risk

The risk of having insufficient cash or collateral to meet financial obligations and an inability to, in a timely manner, raise funding or monetize assets at a non-distressed price. Financial obligations can arise from deposit withdrawals, debt maturities, commitments to provide credit or liquidity support or the need to pledge additional collateral.

TD’S LIQUIDITY RISK APPETITE

The Bank maintains a prudent and disciplined approach to managing its potential exposure to liquidity risk. The Bank targets a 90-day survival horizon under a combined Bank-specific and market-wide stress scenario, and a minimum buffer over regulatory requirements prescribed by the OSFI Liquidity Adequacy

Requirements (LAR) guidelines. Under the LAR guidelines, Canadian banks are required to maintain a Liquidity Coverage Ratio (LCR) at the minimum of 100%. The Bank operates under a prudent funding paradigm with an emphasis on maximizing deposits as a core source of funding, and having a ready access to wholesale funding markets across diversified terms, funding types, and currencies so as to ensure low exposure to a sudden contraction of wholesale funding capacity and to minimize structural liquidity gaps. The Bank also maintains a comprehensive contingency funding plan to enhance preparedness for recovery from potential liquidity stress events. The resultant management strategies and actions comprise an integrated liquidity risk management program that ensures low exposure to identified sources of liquidity risk and compliance with regulatory requirements.

LIQUIDITY RISK MANAGEMENT RESPONSIBILITY

The Bank's Asset/Liability & Capital Committee (ALCO) oversees the Bank's liquidity risk management program. It ensures there are effective management structures and policies in place to properly measure and manage liquidity risk. The Global Liquidity Forum (GLF), a subcommittee of the ALCO comprised of senior management from Treasury and Balance Sheet Management (TBSM), Risk Management, Finance, and Wholesale Banking, identifies and monitors TD's liquidity risks. The management of liquidity risk globally is the responsibility of the Head of TBSM, while oversight and challenge is provided by the ALCO and independently by Risk Management. The Risk Committee of the Board regularly reviews the Bank's liquidity position and approves the Bank's Global Liquidity Risk Management Framework and Policies annually. TD's regional operations are responsible for managing their liquidity risk in compliance with the local regulatory requirements and their own regional policies established in alignment with the global policies. In U.S. TD has established TD Group US Holding LLC (TDGUS), as TD's U.S. Intermediate Holding Company (IHC), and a Combined U.S. Operations (CUSO) that consists of the IHC and TD's U.S. branch and agency network. Both TDGUS and CUSO are managed to the U.S. Enhanced Prudential Standards liquidity requirements in addition to the Bank's liquidity management framework.

The Bank's liquidity risk appetite and liquidity risk management approach have not substantially changed from that described in the 2016 Annual Report. For a complete discussion of liquidity risk, refer to the "Liquidity Risk" section in the 2016 Annual report.

Liquid assets

The unencumbered liquid assets TD holds to satisfy its liquidity requirements must be high quality securities that the Bank believes can be monetized quickly in stress conditions with minimum loss in market value. Unencumbered liquid assets are represented in a cumulative liquidity gap framework with adjustments made for estimated market or trading depths, settlement timing, and/or other identified impediments to potential sale or pledging. Overall, the Bank expects any reduction in market value of its liquid asset portfolio to be modest given the underlying high credit quality and demonstrated liquidity.

Although TD has access to the Bank of Canada's Emergency Lending Assistance Program, the Federal Reserve Bank Discount Window in the U.S., and the European Central Bank standby facilities, TD generally does not consider borrowing capacity at central banks under these types of programs as a source of available liquidity when assessing liquidity positions.

Assets held by TD to satisfy liquidity requirements are summarized in the following tables. The tables do not include assets held within the Bank's insurance businesses due to investment restrictions.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 34

TABLE 36: SUMMARY OF LIQUID ASSETS BY TYPE AND CURRENCY1
(millions of Canadian dollars, except as noted)													As at
				Securities
				received as
				collateral from
				securities
				financing and
		Bank-owned		derivative		Total				Encumbered		Unencumbered
		liquid assets		transactions2		liquid assets				liquid assets		liquid assets2
					April 30, 2017
Cash and due from banks		$	4,831	$	–	$	4,831	1	%	$	358	$	4,473
Canadian government obligations			14,550		44,307		58,857	11			31,288		27,569
National Housing Act Mortgage-Backed
	Securities (NHA MBS)		38,195		245		38,440	8			3,430		35,010
Provincial government obligations			8,509		13,299		21,808	4			13,437		8,371
Corporate issuer obligations			2,486		3,999		6,485	1			1,659		4,826
Equities			20,059		1,992		22,051	4			5,948		16,103
Other marketable securities and/or loans			2,981		1,089		4,070	1			1,182		2,888
Total Canadian dollar-denominated			91,611		64,931		156,542	30			57,302		99,240
Cash and due from banks			47,412		–		47,412	9			54		47,358
U.S. government obligations			33,915		36,866		70,781	14			38,471		32,310
U.S. federal agency obligations, including U.S.
	federal agency mortgage-backed obligations		36,685		742		37,427	7			11,282		26,145
Other sovereign obligations			51,347		47,623		98,970	19			34,232		64,738
Corporate issuer obligations			62,893		419		63,312	12			4,925		58,387
Equities			18,375		9,831		28,206	5			4,465		23,741
Other marketable securities and/or loans			4,506		13,600		18,106	4			7,018		11,088
Total non-Canadian dollar-denominated			255,133		109,081		364,214	70			100,447		263,767
Total		$	346,744	$	174,012	$	520,756	100	%	$	157,749	$	363,007
					October 31, 2016
Cash and due from banks		$	3,147	$	–	$	3,147	1	%	$	349	$	2,798
Canadian government obligations			15,860		39,156		55,016	12			23,360		31,656
NHA MBS			35,134		211		35,345	8			3,183		32,162
Provincial government obligations			9,230		10,255		19,485	4			10,450		9,035
Corporate issuer obligations			5,279		3,699		8,978	2			1,617		7,361
Equities			22,304		6,049		28,353	6			8,514		19,839
Other marketable securities and/or loans			4,179		1,037		5,216	1			963		4,253
Total Canadian dollar-denominated			95,133		60,407		155,540	34			48,436		107,104
Cash and due from banks			46,035		–		46,035	10			1,093		44,942
U.S. government obligations			26,242		32,914		59,156	13			29,214		29,942
U.S. federal agency obligations, including U.S.
	federal agency mortgage-backed obligations		33,492		6,091		39,583	8			15,460		24,123
Other sovereign obligations			53,218		20,027		73,245	16			12,979		60,266
Corporate issuer obligations			57,441		9,192		66,633	14			13,046		53,587
Equities			6,828		8,787		15,615	3			3,202		12,413
Other marketable securities and/or loans			6,325		1,027		7,352	2			–		7,352
Total non-Canadian dollar-denominated			229,581		78,038		307,619	66			74,994		232,625
Total		$	324,714	$	138,445	$	463,159	100	%	$	123,430	$	339,729

1 Positions stated include gross asset values pertaining to secured borrowing/lending and reverse-repurchase/repurchase businesses.

2 Liquid assets include collateral received that can be re-hypothecated or otherwise redeployed.

The increase of $23 billion in total unencumbered liquid assets from October 31, 2016, was primarily due to the impact of foreign currency translation and normal balance sheet growth. Liquid assets are held in The Toronto-Dominion Bank and multiple domestic and foreign subsidiaries and branches and are summarized in the following table.

TABLE 37: SUMMARY OF UNENCUMBERED LIQUID ASSETS BY BANK, SUBSIDIARIES, AND BRANCHES
(millions of Canadian dollars)			As at
	April 30		October 31
	2017		2016
The Toronto-Dominion Bank (Parent)	$	123,208	$	115,816
Bank subsidiaries		214,415		201,945
Foreign branches		25,384		21,968
Total	$	363,007	$	339,729

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 35

The Bank's monthly average liquid assets (excluding those held in insurance subsidiaries) for the quarters ended April 30, 2017, and October 31, 2016, are summarized in the following table.

TABLE 38: SUMMARY OF AVERAGE LIQUID ASSETS BY TYPE AND CURRENCY1
(millions of Canadian dollars, except as noted)					Average for the three months ended
				Securities
				received as
				collateral from
				securities
				financing and
		Bank-owned		derivative		Total				Encumbered		Unencumbered
		liquid assets		transactions2		liquid assets				liquid assets		liquid assets2
					April 30, 2017
Cash and due from banks		$	3,770	$	–	$	3,770	1	%	$	345	$	3,425
Canadian government obligations			17,249		41,954		59,203	11			31,629		27,574
NHA MBS			38,005		207		38,212	7			3,544		34,668
Provincial government obligations			8,297		11,905		20,202	4			12,751		7,451
Corporate issuer obligations			3,625		4,595		8,220	2			2,377		5,843
Equities			20,567		2,810		23,377	4			6,367		17,010
Other marketable securities and/or loans			2,900		958		3,858	1			1,012		2,846
Total Canadian dollar-denominated			94,413		62,429		156,842	30			58,025		98,817
Cash and due from banks			50,869		–		50,869	10			53		50,816
U.S. government obligations			29,725		41,231		70,956	14			37,393		33,563
U.S. federal agency obligations, including U.S.
	federal agency mortgage-backed obligations		35,172		1,223		36,395	7			11,411		24,984
Other sovereign obligations			51,353		44,300		95,653	18			31,566		64,087
Corporate issuer obligations			60,276		323		60,599	12			4,741		55,858
Equities			17,537		8,827		26,364	5			4,032		22,332
Other marketable securities and/or loans			4,296		14,896		19,192	4			7,546		11,646
Total non-Canadian dollar-denominated			249,228		110,800		360,028	70			96,742		263,286
Total		$	343,641	$	173,229	$	516,870	100	%	$	154,767	$	362,103
					January 31, 2017
Cash and due from banks		$	2,226	$	–	$	2,226	–	%	$	339	$	1,887
Canadian government obligations			14,695		37,360		52,055	10			21,588		30,467
NHA MBS			37,262		470		37,732	8			3,526		34,206
Provincial government obligations			9,501		11,809		21,310	4			12,190		9,120
Corporate issuer obligations			7,258		3,615		10,873	2			1,394		9,479
Equities			19,806		4,171		23,977	5			8,540		15,437
Other marketable securities and/or loans			3,011		343		3,354	1			300		3,054
Total Canadian dollar-denominated			93,759		57,768		151,527	30			47,877		103,650
Cash and due from banks			46,484		–		46,484	9			25		46,459
U.S. government obligations			27,336		42,822		70,158	14			36,148		34,010
U.S. federal agency obligations, including U.S.			33,260		557		33,817	7			10,686		23,131
	federal agency mortgage-backed obligations
Other sovereign obligations			52,924		34,313		87,237	18			21,011		66,226
Corporate issuer obligations			60,576		1,066		61,642	13			4,686		56,956
Equities			16,827		9,733		26,560	5			5,030		21,530
Other marketable securities and/or loans			5,229		14,397		19,626	4			10,021		9,605
Total non-Canadian dollar-denominated			242,636		102,888		345,524	70			87,607		257,917
Total		$	336,395	$	160,656	$	497,051	100	%	$	135,484	$	361,567

1 Positions stated include gross asset values pertaining to secured borrowing/lending and reverse-repurchase/repurchase businesses.

2 Liquid assets include collateral received that can be re-hypothecated or otherwise redeployed.

Average liquid assets held in The Toronto-Dominion Bank and multiple domestic and foreign subsidiaries and branches are summarized in the following table.

TABLE 39: SUMMARY OF AVERAGE UNENCUMBERED LIQUID ASSETS BY BANK, SUBSIDIARIES, AND BRANCHES
(millions of Canadian dollars)	Average for the three months ended
	April 30		January 31
	2017		2017
The Toronto-Dominion Bank (Parent)	$	120,418	$	122,377
Bank subsidiaries		216,189		208,345
Foreign branches		25,496		30,845
Total	$	362,103	$	361,567

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 36

Asset Encumbrance

In the course of the Bank’s day-to-day operations, securities and other assets are pledged to obtain funding, support trading and prime brokerage business, and participate in clearing and settlement systems. In addition to liquid assets, a summary of encumbered and unencumbered assets is presented in the following table to identify assets that are used or available for potential funding needs.

TABLE 40: ENCUMBERED AND UNENCUMBERED ASSETS1
(millions of Canadian dollars, except as noted)		As at
			Encumbered2				Unencumbered
												Encumbered
		Pledged as					Available as				Total	assets as a %
		collateral3			Other4		collateral5		Other6		assets	of total assets
											April 30, 2017
Cash and due from banks		$	–	$	–	$	–	$	5,271	$	5,271	–	%
Interest-bearing deposits with banks			4,562		387		42,542		6,736		54,227	0.4
Securities, trading loans, and other7			56,559		12,262		240,942		10,363		320,126	5.5
Derivatives			–		–		–		62,674		62,674	–
Securities purchased under reverse
	repurchase agreements8		–		–		–		113,834		113,834	–
Loans, net of allowance for loan losses			22,649		55,389		76,693		443,730		598,461	6.2
Customers' liability under acceptances			–		–		–		17,002		17,002	–
Investment in TD Ameritrade			–		–		–		7,281		7,281	–
Goodwill			–		–		–		16,942		16,942	–
Other intangibles			–		–		–		2,716		2,716	–
Land, buildings, equipment, and other
	depreciable assets		–		–		–		5,461		5,461	–
Deferred tax assets			–		–		–		2,394		2,394	–
Other assets9			487		–		–		45,044		45,531	–
Total on-balance sheet assets		$	84,257	$	68,038	$	360,177	$	739,448	$	1,251,920	12.1	%
Off-balance sheet items10
Securities purchased under reverse
	repurchase agreements		95,738		–		25,376		(113,834)
Securities borrowing and collateral received			30,885		580		9,861		–
Margin loans and other client activity			4,570		–		17,960		(11,238)
Total off-balance sheet items			131,193		580		53,197		(125,072)
Total		$	215,450	$	68,618	$	413,374	$	614,376
											October 31, 2016
Total on-balance sheet assets		$	81,705	$	66,329	$	335,959	$	692,974	$	1,176,967	12.6	%
Total off-balance sheet items			104,407		569		49,748		(94,799)
Total		$	186,112	$	66,898	$	385,707	$	598,175

1 Certain comparative amounts have been restated to conform with the presentation adopted in the current period.

2 Asset encumbrance has been analyzed on an individual asset basis. Where a particular asset has been encumbered and TD has holdings of the asset both on-balance sheet and off- balance sheet, for the purpose of this disclosure, the on and off-balance sheet holdings are encumbered in alignment with the business practice.

3 Represents assets that have been posted externally to support the Bank's obligations in day-to-day operations, including securities related to repurchase agreements, securities lending, clearing and payment systems, and assets pledged for derivative transactions. Also includes assets that have been pledged supporting Federal Home Loan Bank (FHLB) activity.

4 Assets supporting TD's long-term funding activities, assets pledged against securitization liabilities, and assets held by consolidated securitization vehicles or in pools for covered bond issuance.

5 Assets that are considered readily available in their current legal form to generate funding or support collateral needs. This category includes reported FHLB assets that remain unutilized and held-to-maturity securities that are available for collateral purposes however not regularly utilized in practice.

6 Assets that cannot be used to support funding or collateral requirements in their current form. This category includes those assets that are potentially eligible as funding program collateral (for example, Canada Mortgage and Housing Corporation (CMHC) insured mortgages that can be securitized into NHA MBS).

7 Securities include trading loans, securities, and other financial assets designated at fair value through profit or loss, available-for-sale securities, and held-to-maturity securities.

8 Assets reported in Securities purchased under reverse repurchase agreements represent the value of the loans extended and not the value of the collateral received.

9 Other assets include amounts receivable from brokers, dealers, and clients.

10 Off-balance sheet items include the collateral value from the securities received under reverse repurchase agreements, securities borrowing, margin loans, and other client activity. The loan value from the reverse repurchase transactions and margin loans/client activity is deducted from the on-balance sheet Unencumbered – Other category.

LIQUIDITY Stress Testing and Contingency Funding Plans

In addition to the "Severe Combined Stress" scenario, TD also performs liquidity stress testing on multiple alternate scenarios. These scenarios are a mix of TD-specific events, global macroeconomic stress events, and/or regional/subsidiary specific events designed to test the impact from unique drivers. Liquidity assessments are also part of the Bank's enterprise-wide stress testing program. Results from these stress event scenarios are used to inform the establishment of or make enhancements to policy limits and contingency funding plan actions.

The Bank has liquidity contingency funding plans (CFP) in place at the enterprise level ("Enterprise CFP") and for subsidiaries operating in both domestic and foreign jurisdictions ("Regional CFP"). The Enterprise CFP provides a documented framework for managing unexpected liquidity situations and thus is an integral component of the Bank's overall liquidity risk management program. It outlines different contingency stages based on the severity and duration of the liquidity situation, and identifies recovery actions appropriate for each stage. For each recovery action, it provides key operational steps required to execute the action. Regional CFP recovery actions are aligned to support the Enterprise CFP as well as any identified local liquidity needs during stress. The actions and governance structure proposed in the Enterprise CFP are aligned with the Bank's Crisis Management Recovery Plan.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 37

Credit Ratings

Credit ratings impact TD's borrowing costs and ability to raise funds. Rating downgrades could potentially result in higher financing costs, increased requirement to pledge collateral, reduced access to capital markets, and could also affect the Bank's ability to enter into derivative transactions.

Credit ratings and outlooks provided by rating agencies reflect their views and are subject to change from time-to-time, based on a number of factors including the Bank's financial strength, competitive position, and liquidity, as well as factors not entirely within the Bank's control, including the methodologies used by rating agencies and conditions affecting the overall financial services industry.

TABLE 41: CREDIT RATINGS1
			As at
			April 30, 2017
	Short-term	Senior long-term
Rating agency	debt rating	debt rating	Outlook
Moody's	P-1	Aa12	Negative
S&P	A-1+	AA-	Stable
DBRS	R-1 (high)	AA	Negative

1 The above ratings are for The Toronto-Dominion Bank legal entity. A more extensive listing, including subsidiaries' ratings, is available on the Bank's website at http://www.td.com/investor/credit.jsp. Credit ratings are not recommendations to purchase, sell, or hold a financial obligation inasmuch as they do not comment on market price or suitability for a particular investor. Ratings are subject to revision or withdrawal at any time by the rating organization.

2 On May 10, 2017, Moody's downgraded the Bank's long-term debt rating to Aa2, reflecting Moody's expectation of a more challenging operating environment for banks in Canada.

The Bank regularly reviews the level of increased collateral its trading counterparties would require in the event of a downgrade of TD’s credit rating. The Bank holds liquid assets to ensure TD is able to provide additional collateral required by trading counterparties in the event of a one-notch downgrade in the Bank's senior long-term credit ratings. Severe downgrades could have an impact on liquidity by requiring the Bank to post additional collateral for the benefit of the Bank's trading counterparties. The following table presents the additional collateral that could have been called at the reporting date in the event of one, two, and three-notch downgrades of the Bank's credit ratings.

TABLE 42: ADDITIONAL COLLATERAL REQUIREMENTS FOR RATING DOWNGRADES1
(millions of Canadian dollars)	Average for the three months ended
	April 30			January 31
	2017		2017
One-notch downgrade	$	85	$	125
Two-notch downgrade		137		132
Three-notch downgrade		399		406

1 The above collateral requirements are based on trading counterparty Credit Support Annex (CSA) and the Bank’s credit rating across rating agencies. Where the CSA calls for multiple ratings, downgrades are determined by the change of the lower credit rating.

LIQUIDITY COVERAGE RATIO

The Liquidity Coverage Ratio (LCR) is a Basel III metric calculated as the ratio of the stock of unencumbered high quality liquid assets (HQLA) over the net cash outflow requirements in the next 30 days under a hypothetical liquidity stress event. The stress event incorporates a number of idiosyncratic and market-wide shocks, including deposit run-offs, loss of wholesale funding, additional collateral requirements due to credit rating downgrades and market volatility, increases in usage of credit and liquidity facilities provided to the Bank's clients, and other obligations the Bank expects to honour during stress to mitigate reputational risk.

The Bank must maintain the LCR above 100% under normal operating conditions in accordance with the OSFI LAR requirement. The Bank’s LCR is calculated according to the scenario parameters in the OSFI LAR guideline, including prescribed HQLA eligibility criteria and haircuts, deposit run-off rates, and other outflow and inflow rates. HQLA eligible for the LCR calculation under the OSFI LAR are primarily central bank reserves, sovereign issued or guaranteed securities, and high quality securities issued by non-financial entities.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 38

The following table summarizes the Bank's average daily LCR position for the quarter ended April 30, 2017.

TABLE 43: AVERAGE BASEL III LIQUIDITY COVERAGE RATIO1
(millions of Canadian dollars, except as noted)		Average for the three months ended
						April 30, 2017
		Total unweighted			Total weighted
		value (average)2			value (average)3
High-quality liquid assets
Total high-quality liquid assets		$	n/a4		$	210,858
Cash outflows
Retail deposits and deposits from small business customers, of which:		$	420,029		$	29,464
	Stable deposits5		179,132			5,374
	Less stable deposits		240,897			24,090
Unsecured wholesale funding, of which:			228,160			109,474
	Operational deposits (all counterparties) and deposits in networks of cooperative banks6		91,362			21,467
	Non-operational deposits (all counterparties)		105,422			56,631
	Unsecured debt		31,376			31,376
Secured wholesale funding			n/a4			8,774
Additional requirements, of which:			172,030			43,368
	Outflows related to derivative exposures and other collateral requirements		25,264			6,547
	Outflows related to loss of funding on debt products		7,813			7,813
	Credit and liquidity facilities		138,953			29,008
Other contractual funding obligations			8,573			3,552
Other contingent funding obligations7			527,708			7,987
Total cash outflows		$	n/a4		$	202,619
Cash inflows
Secured lending		$	135,185		$	17,471
Inflows from fully performing exposures			13,881			7,535
Other cash inflows			4,586			4,586
Total cash inflows		$	153,652		$	29,592
		Average for the three months ended
			April 30, 2017			January 31, 2017
		Total adjusted			Total adjusted
			value			value
Total high-quality liquid assets8		$	210,858		$	208,549
Total net cash outflows9			173,027			168,209
Liquidity coverage ratio			122	%		124	%

1 The LCR for the quarter ended April 30, 2017, is calculated as an average of the 61 daily data points in the quarter.

2 Unweighted inflow and outflow values are outstanding balances maturing or callable within 30 days.

3 Weighted values are calculated after the application of respective HQLA haircuts or inflow and outflow rates, as prescribed by the OSFI LAR guidelines.

4 Not applicable.

5 As defined by OSFI LAR, stable deposits from retail and small medium-sized enterprise (SME) customers are deposits that are insured, and are either held in transactional accounts or the depositors have an established relationship with the Bank that make deposit withdrawal highly unlikely.

6 Operational deposits from non-SME business customers are deposits kept with the Bank in order to facilitate their access and ability to conduct payment and settlement activities. These activities include clearing, custody, or cash management services.

7 Includes uncommitted credit and liquidity facilities, stable value money market mutual funds, outstanding debt securities with remaining maturity greater than 30 days, and other contractual cash outflows. TD has no contractual obligation to buyback these outstanding TD debt securities, and as a result, a 0% outflow rate is applied under the OSFI LAR guideline.

8 Adjusted HQLA includes both asset haircut and applicable caps, as prescribed by the OSFI LAR (HQLA assets after haircuts are capped at 40% for Level 2 and 15% for Level 2B).

9 Adjusted Net Cash Outflows include both inflow and outflow rates and applicable caps, as prescribed by the OSFI LAR (inflows are capped at 75% of outflows).

The Bank’s average LCR of 122% for quarter ended April 30, 2017, continues to meet the regulatory requirement. The ratio remained relatively constant over the prior quarter's LCR with a decrease in surplus of $2.5 billion.

The Bank holds a variety of liquid assets commensurate with liquidity needs in the organization. Many of these assets qualify as HQLA under the OSFI LAR guidelines. The average HQLA of the Bank for the quarter ended April 30, 2017, was $210.9 billion (January 31, 2017 – $208.5 billion), with Level 1 assets representing 83% (January 31, 2017 – 83%). The Bank’s reported HQLA excludes excess HQLA from the U.S. Retail operations, as required by the OSFI LAR, to reflect liquidity transfer considerations between U.S. Retail and its affiliates in the Bank as a result of U.S. Federal Reserve Board's regulations. By excluding excess HQLA, the U.S. Retail LCR is effectively capped at 100% prior to total Bank consolidation.

The Bank manages its LCR position with a target minimum that reflects management's liquidity risk tolerances. As described in the "How TD Manages Liquidity Risk" section of the 2016 Annual Report, the Bank manages its HQLA and other liquidity buffers to the higher of TD's 90-day surplus requirement and the target buffers over regulatory requirements from the LCR and the Net Cumulative Cash Flow (NCCF) metrics. As a result, the total stock of HQLA is subject to ongoing rebalancing against the projected liquidity requirements.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 39

FUNDING

The Bank has access to a variety of unsecured and secured funding sources. The Bank’s funding activities are conducted in accordance with the liquidity management policy that requires assets be funded to the appropriate term and to a prudent diversification profile.

The Bank's primary approach to managing funding activities is to maximize the use of deposits raised through personal and commercial banking channels. The following table illustrates the Bank’s large base of personal and commercial, wealth, and TD Ameritrade sweep deposits (collectively, "P&C deposits") that make up over 73% of total funding excluding securitization.

TABLE 44: SUMMARY OF DEPOSIT FUNDING
(millions of Canadian dollars)				As at
		April 30		October 31
	2017		2016
P&C deposits – Canadian Retail	$	338,564	$	324,606
P&C deposits – U.S. Retail		333,088		318,503
Other deposits		761		795
Total	$	672,413	$	643,904

The Bank actively maintains various external wholesale term (greater than 1 year) funding programs to provide access to diversified funding sources, including asset securitization, covered bonds, and unsecured wholesale debt. The Bank's wholesale funding is diversified by geography, by currency, and by funding channel. The Bank also utilizes certificates of deposit and commercial paper as short term (1 year and less) funding.

The following table summarizes by geography the term funding programs, with the related program size. The Bank also maintains Evergreen Credit Card Trust to issue notes securitized by credit card receivables.

Canada	United States	Europe/Australia
Capital Securities Program ($10 billion) Senior Medium Term Linked Notes Program ($2 billion)	U.S. SEC (F-3) Registered Capital and Debt Program (US$40 billion)	United Kingdom Listing Authority (UKLA) Registered Legislative Covered Bond Program ($40 billion) UKLA Registered European Medium Term Note Program (US$20 billion) Australian Debt Program (A$5 billion)

TD regularly evaluates opportunities to diversify its funding into new markets and to new investors in order to manage funding risk and cost. The following table presents a breakdown of the Bank's term debt by currency and funding type. Term funding for the quarter ended April 30, 2017, was $114.7 billion (October 31, 2016 – $112.4 billion).

TABLE 45: LONG-TERM FUNDING
			As at
	April 30		October 31
Long-term funding by currency	2017		2016
Canadian dollar	38	%	40	%
U.S. dollar	40		41
Euro	15		13
British pound	4		3
Other	3		3
Total	100	%	100	%
Long-term funding by type
Senior unsecured medium term notes	54	%	53	%
Covered bonds	26		26
Mortgage securitization1	15		16
Term asset backed securities	5		5
Total	100	%	100	%

1 Mortgage securitization excludes the residential mortgage trading business.

The Bank maintains depositor concentration limits against short-term wholesale deposits so that it does not depend on one or small groups of depositors for funding. The Bank further limits short-term wholesale funding that can mature in a given time period in an effort to mitigate exposures to refinancing risk during a stress event.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 40

The following table represents the remaining maturity of various sources of funding outstanding as at April 30, 2017, and October 31, 2016.

TABLE 46: WHOLESALE FUNDING
(millions of Canadian dollars)	As at
											April 30				October 31
												2017			2016
	Less than			1 to 3		3 to 6	6 months		Over 1 to			Over
	1 month			months		months	to 1 year			2 years		2 years		Total		Total
Deposits from banks1	$	7,423	$	5,960	$	1,316	$	406	$	7	$	–	$	15,112	$	13,133
Bearer deposit note		621		363		279		1,238		–		–		2,501		2,814
Certificates of deposit		10,503		16,763		20,480		24,296		526		–		72,568		54,544
Commercial paper		2,525		11,350		3,410		599		–		–		17,884		21,411
Asset backed commercial paper2		–		–		–		–		–		–		–		–
Covered bonds		–		–		–		2,475		707		26,678		29,860		28,855
Mortgage securitization		22		1,180		1,389		3,167		5,702		18,562		30,022		30,406
Senior unsecured medium term notes		3,071		2,637		1,499		10,202		13,330		31,768		62,507		60,259
Subordinated notes and debentures3		–		–		–		–		–		8,482		8,482		10,891
Term asset backed securitization		–		–		–		1,365		1,427		2,401		5,193		5,469
Other4		1,747		2,120		467		3		3		12		4,352		3,566
Total	$	25,912	$	40,373	$	28,840	$	43,751	$	21,702	$	87,903	$	248,481	$	231,348
Of which:
Secured	$	1,769	$	3,300	$	1,856	$	7,010	$	7,839	$	47,653	$	69,427	$	64,749
Unsecured		24,143		37,073		26,984		36,741		13,863		40,250		179,054		166,599
Total	$	25,912	$	40,373	$	28,840	$	43,751	$	21,702	$	87,903	$	248,481	$	231,348

1 Includes fixed-term deposits from banks.

2 Represents Asset backed commercial paper (ABCP) issued by consolidated bank-sponsored structured entities.

3 Subordinated notes and debentures are not considered wholesale funding as they may be raised primarily for capital management purposes.

4 Includes fixed-term deposits from non-bank institutions (unsecured) of $4.4 billion (October 31, 2016 – $3.5 billion).

Excluding the Wholesale Banking mortgage aggregation business, the Bank's total mortgage-backed securities issuance for the three and six months ended

April 30, 2017, was $0.7 billion and $1.2 billion, respectively (three and six months ended April 30, 2016 – $0.4 billion and $0.8 billion, respectively). Other asset backed securities issuance for the three and six months ended April 30, 2017, was nil and $0.7 billion, respectively (three and six months ended April 30, 2016 – nil). The Bank also issued $1.9 billion and $4.5 billion, respectively, of unsecured medium-term notes for the three and six months ended April 30, 2017 (three months ended April 30, 2016 – $7.5 billion and $12.2 billion, respectively) in various currencies and markets. The total covered bonds issuance for the three and six months ended April 30, 2017, was $2.3 billion and $4.6 billion, respectively (three and six months ended April 30, 2016 – $4.3 billion and $6.6 billion, respectively).

REGULATORY DEVELOPMENTS CONCERNING LIQUIDITY AND FUNDING

On March 22, 2016, the Government of Canada, in its 2016 federal budget, proposed to introduce framework legislation for the bail-in regime along with accompanying enhancements to Canada’s bank resolution toolkit. The regime will provide the Canada Deposit Insurance Corporation (CDIC) with a new statutory power to convert specified eligible liabilities of D-SIBs into common shares in the unlikely event such banks become non-viable. The Budget Implementation Act, providing amendments to the CDIC Act, Bank Act and other statutes to allow for bail-in, was passed in June 2016. TD is monitoring the bail-in developments and expects further details to be included in the regulations and an implementation timeline to be clarified in the near future.

In October 2014, the BCBS released the final standard for "Basel III: the net stable funding ratio" with an implementation date of January 1, 2018. The net stable funding ratio (NSFR) requires that the ratio of available stable funding over required stable funding be greater than 100%. The NSFR is designed to reduce structural funding risk by requiring banks to have sufficient stable sources of funding and lower reliance on funding maturing in one year to support their businesses. In March 2017, OSFI provided notification that due to the uncertainty of implementation in key foreign markets, the timeline of domestic NSFR reporting for Canadian institutions has been extended to January 2019. Relevant areas of the LAR Guidelines have been updated to reflect the implementation delay, with OSFI planning to meet with industry stakeholders in the coming months to discuss NSFR standards as they relate to the Canadian market.

MATURITY ANALYSIS OF ASSETS, LIABILITIES, AND OFF-bALANCE SHEET COMMITMENTS

The following table summarizes on-balance sheet and off-balance sheet categories by remaining contractual maturity. Off-balance sheet commitments include contractual obligations to make future payments on operating and capital lease commitments, certain purchase obligations and other liabilities. The values of credit instruments reported in the following table represent the maximum amount of additional credit that the Bank could be obligated to extend should contracts be fully utilized. Since a significant portion of guarantees and commitments are expected to expire without being drawn upon, the total of the contractual amounts is not representative of future liquidity requirements. These contractual obligations have an impact on the Bank’s short-term and long-term liquidity and capital resource needs.

The maturity analysis presented does not depict the Bank’s degree of maturity transformation or the Bank’s exposure to interest rate and liquidity risk. The Bank ensures that assets are appropriately funded to protect against borrowing cost volatility and potential reductions to funding market availability. The Bank utilizes stable P&C non-specific maturity deposits (chequing and savings accounts) and P&C term deposits as the primary source of long-term funding for the Bank’s non-trading assets. The Bank also funds the stable balance of revolving lines of credit with long-term funding sources. The Bank conducts long-term funding activities based on the projected net growth for non-trading assets after considering such items as new business volumes, renewals of both term loans and term deposits, and how customers exercise options to prepay loans and pre-redeem deposits. The Bank also raises shorter-term unsecured wholesale deposits to fund trading assets based on its internal estimates of liquidity of these assets under stressed market conditions.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 41

TABLE 47: REMAINING CONTRACTUAL MATURITY
(millions of Canadian dollars)																As at
																April 30, 2017
																		No
		Less than		1 to 3		3 to 6		6 to 9		9 months		Over 1 to		Over 2 to		Over		specific
		1 month		months		months		months		to 1 year		2 years		5 years		5 years		maturity			Total
Assets
Cash and due from banks		$	5,271	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	5,271
Interest-bearing deposits with banks			52,991		720		13		1		1		–		–		–		501		54,227
Trading loans, securities, and other1			1,732		2,058		3,220		3,974		3,222		8,235		21,929		16,380		51,083		111,833
Derivatives			5,820		7,117		4,040		3,158		4,068		7,904		16,323		14,244		–		62,674
Financial assets designated at fair value through
	profit or loss		126		294		456		260		75		555		1,198		834		173		3,971
Available-for-sale securities			233		2,371		1,469		1,641		1,514		12,878		72,468		27,089		2,329		121,992
Held-to-maturity securities			655		3,869		1,239		857		2,891		10,221		33,767		28,831		–		82,330
Securities purchased under reverse repurchase agreements			72,147		29,309		9,043		1,783		1,533		19		–		–		–		113,834
Loans
	Residential mortgages		1,030		4,089		8,295		8,654		10,347		47,281		106,332		31,115		–		217,143
	Consumer instalment and other personal		707		1,553		2,920		2,820		3,954		13,296		38,544		23,805		61,442		149,041
	Credit card		–		–		–		–		–		–		–		–		32,463		32,463
	Business and government		22,298		4,427		5,435		8,886		6,057		16,238		61,387		61,393		16,551		202,672
	Debt securities classified as loans		–		27		10		16		–		46		97		838		–		1,034
Total loans			24,035		10,096		16,660		20,376		20,358		76,861		206,360		117,151		110,456		602,353
Allowance for loan losses			–		–		–		–		–		–		–		–		(3,892)		(3,892)
Loans, net of allowance for loan losses			24,035		10,096		16,660		20,376		20,358		76,861		206,360		117,151		106,564		598,461
Customers' liability under acceptances			14,604		2,289		77		32		–		–		–		–		–		17,002
Investment in TD Ameritrade			–		–		–		–		–		–		–		–		7,281		7,281
Goodwill2			–		–		–		–		–		–		–		–		16,942		16,942
Other intangibles2			–		–		–		–		–		–		–		–		2,716		2,716
Land, buildings, equipment, and other depreciable assets2			–		–		–		–		–		–		–		–		5,461		5,461
Deferred tax assets			–		–		–		–		–		–		–		–		2,394		2,394
Amounts receivable from brokers, dealers, and clients			31,188		–		–		–		–		–		–		–		–		31,188
Other assets			2,616		673		329		106		1,286		149		343		129		8,712		14,343
Total assets		$	211,418	$	58,796	$	36,546	$	32,188	$	34,948	$	116,822	$	352,388	$	204,658	$	204,156	$	1,251,920
Liabilities
Trading deposits		$	11,342	$	25,763	$	26,028	$	14,505	$	12,028	$	1,090	$	1,433	$	769	$	–	$	92,958
Derivatives			5,463		6,686		3,454		2,993		3,256		7,043		14,663		13,795		–		57,353
Securitization liabilities at fair value			–		677		213		1,013		158		1,626		5,943		3,194		–		12,824
Other financial liabilities designated at fair value through
	profit or loss		1		4		1		–		–		–		–		–		–		6
Deposits3,4
	Personal		5,315		6,829		5,771		5,224		5,786		10,652		10,715		103		409,701		460,096
	Banks		7,032		4,924		137		56		3		3		–		12		10,522		22,689
	Business and government		19,801		16,115		5,412		3,876		11,744		15,137		51,454		10,046		190,742		324,327
Total deposits			32,148		27,868		11,320		9,156		17,533		25,792		62,169		10,161		610,965		807,112
Acceptances			14,604		2,289		81		28		–		–		–		–		–		17,002
Obligations related to securities sold short1			826		587		1,367		638		1,020		4,446		10,980		11,738		1,009		32,611
Obligations related to securities sold under repurchase
	agreements		62,333		10,169		1,218		485		308		60		35		–		–		74,608
Securitization liabilities at amortized cost			22		504		1,176		894		1,102		4,076		6,458		2,966		–		17,198
Amounts payable to brokers, dealers, and clients			29,433																		29,433
Insurance-related liabilities			120		201		310		354		412		969		1,810		1,033		1,569		6,778
Other liabilities5			3,587		776		455		1,186		1,928		1,819		2,316		860		6,389		19,316
Subordinated notes and debentures			–		–		–		–		–		–		–		8,482		–		8,482
Equity			–		–		–		–		–		–		–		–		76,239		76,239
Total liabilities and equity		$	159,879	$	75,524	$	45,623	$	31,252	$	37,745	$	46,921	$	105,807	$	52,998	$	696,171	$	1,251,920
Off-balance sheet commitments
Purchase obligations
	Operating lease commitments	$	81	$	162	$	242	$	240	$	237	$	905	$	2,172	$	3,778	$	–	$	7,817
	Network service agreements		–		–		–		–		–		–		–		–		–		–
	Automated teller machines		12		25		30		17		17		70		132		–		–		303
	Contact center technology		2		4		5		5		9		20		–		–		–		45
	Software licensing and equipment maintenance		27		16		33		92		25		163		188		–		–		544
Credit and liquidity commitments
	Financial and performance standby letters of credit		449		1,896		1,879		2,869		3,991		3,397		10,182		129		–		24,792
	Documentary and commercial letters of credit		44		88		30		191		7		13		393		–		–		766
	Commitments to extend credit and liquidity6,7		14,601		20,898		9,095		9,454		5,848		17,488		75,080		3,336		2,462		158,262
Unconsolidated structured entity commitments
	Commitments to liquidity facilities for ABCP		255		1,322		–		561		148		430		–		–		–		2,716

1 Amount has been recorded according to the remaining contractual maturity of the underlying security. 

2 For the purposes of this table, non-financial assets have been recorded as having 'no specific maturity'.

3 As the timing of demand deposits and notice deposits is non-specific and callable by the depositor, obligations have been included as having 'no specific maturity'.

4 Includes $30 billion of covered bonds with remaining contractual maturities of $2 billion in ‘over 6 months to 9 months’, $1 billion in ‘over 9 months to 1 year’, $1 billion in 'over 1 to 2 years', $23 billion in 'over 2 to 5 years', and $3 billion in 'over 5 years'.

5 Includes $105 million of capital lease commitments with remaining contractual maturities of $4 million in 'less than 1 month', $5 million in '1 month to 3 months', $7 million in '3 months to 6 months', $7 million in '6 months to 9 months', $7 million in '9 months to 1 year', $28 million in 'over 1 to 2 years', $36 million in 'over 2 to 5 years', and $11 million in 'over 5 years'.

6 Includes $138 million in commitments to extend credit to private equity investments.

7 Commitments to extend credit exclude personal lines of credit and credit card lines, which are unconditionally cancellable at the Bank's discretion at any time.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 42

TABLE 47: REMAINING CONTRACTUAL MATURITY (continued)
(millions of Canadian dollars)																		As at
																October 31, 2016
																		No
		Less than		1 to 3		3 to 6		6 to 9		9 months		Over 1 to		Over 2 to		Over		specific
		1 month		months		months		months		to 1 year		2 years		5 years		5 years		maturity			Total
Assets
Cash and due from banks		$	3,907	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	3,907
Interest-bearing deposits with banks			52,081		617		236		199		–		–		–		–		581		53,714
Trading loans, securities, and other1			843		2,466		6,685		5,211		3,421		8,069		19,671		15,589		37,302		99,257
Derivatives			5,577		6,938		5,001		3,821		2,680		10,103		19,780		18,342		–		72,242
Financial assets designated at fair value through
	profit or loss		41		83		801		353		159		415		1,333		915		183		4,283
Available-for-sale securities			200		1,976		995		1,757		1,593		10,175		48,890		39,916		2,069		107,571
Held-to-maturity securities			560		5,791		3,290		1,065		1,172		8,360		37,182		26,975		–		84,395
Securities purchased under reverse repurchase agreements			56,641		21,541		5,855		1,777		238		–		–		–		–		86,052
Loans
	Residential mortgages		772		2,252		4,483		8,598		9,786		52,123		108,256		31,066		–		217,336
	Consumer instalment and other personal		438		881		1,934		2,734		3,401		14,724		35,505		24,058		60,856		144,531
	Credit card		–		–		–		–		–		–		–		–		31,914		31,914
	Business and government		21,293		4,574		7,006		6,581		5,153		16,402		59,765		59,006		14,294		194,074
	Debt securities classified as loans		–		68		16		27		10		66		78		1,409		–		1,674
Total loans			22,503		7,775		13,439		17,940		18,350		83,315		203,604		115,539		107,064		589,529
Allowance for loan losses			–		–		–		–		–		–		–		–		(3,873)		(3,873)
Loans, net of allowance for loan losses			22,503		7,775		13,439		17,940		18,350		83,315		203,604		115,539		103,191		585,656
Customers' liability under acceptances			13,589		2,046		67		3		1		–		–		–		–		15,706
Investment in TD Ameritrade			–		–		–		–		–		–		–		–		7,091		7,091
Goodwill2			–		–		–		–		–		–		–		–		16,662		16,662
Other intangibles2			–		–		–		–		–		–		–		–		2,639		2,639
Land, buildings, equipment, and other depreciable assets2			–		–		–		–		–		–		–		–		5,482		5,482
Deferred tax assets			–		–		–		–		–		–		–		–		2,084		2,084
Amounts receivable from brokers, dealers, and clients			17,436		–		–		–		–		–		–		–		–		17,436
Other assets			2,488		518		686		128		97		150		269		153		8,301		12,790
Total assets		$	175,866	$	49,751	$	37,055	$	32,254	$	27,711	$	120,587	$	330,729	$	217,429	$	185,585	$	1,176,967
Liabilities
Trading deposits		$	13,002	$	14,604	$	23,930	$	13,070	$	12,071	$	1,103	$	1,226	$	780	$	–	$	79,786
Derivatives			5,526		6,623		4,890		3,066		1,962		8,106		17,779		17,473		–		65,425
Securitization liabilities at fair value			–		594		334		678		226		1,944		4,989		3,725		–		12,490
Other financial liabilities designated at fair value through
	profit or loss		73		41		13		25		37		–		–		1		–		190
Deposits3,4
	Personal		3,846		6,024		7,794		6,038		5,195		9,236		11,915		132		389,052		439,232
	Banks		5,741		3,056		231		77		10		3		3		12		8,068		17,201
	Business and government		14,654		15,307		8,064		7,563		2,623		19,927		46,952		12,492		189,645		317,227
Total deposits			24,241		24,387		16,089		13,678		7,828		29,166		58,870		12,636		586,765		773,660
Acceptances			13,589		2,046		67		3		1		–		–		–		–		15,706
Obligations related to securities sold short1			1,066		1,118		1,127		1,311		883		3,406		11,239		11,869		1,096		33,115
Obligations related to securities sold under repurchase
	agreements		39,986		5,315		2,545		540		507		40		40		–		–		48,973
Securitization liabilities at amortized cost			–		141		481		570		1,108		3,989		8,597		3,032		–		17,918
Amounts payable to brokers, dealers, and clients			17,857		–		–		–		–		–		–		–		–		17,857
Insurance-related liabilities			145		216		313		378		372		974		1,891		1,057		1,700		7,046
Other liabilities5			2,960		2,247		1,734		276		196		2,535		2,551		808		6,389		19,696
Subordinated notes and debentures			–		–		–		–		–		–		–		10,891		–		10,891
Equity			–		–		–		–		–		–		–		–		74,214		74,214
Total liabilities and equity		$	118,445	$	57,332	$	51,523	$	33,595	$	25,191	$	51,263	$	107,182	$	62,272	$	670,164	$	1,176,967
Off-balance sheet commitments
Purchase obligations
	Operating lease commitments	$	80	$	159	$	237	$	235	$	232	$	896	$	2,173	$	3,943	$	–	$	7,955
	Network service agreements		–		–		–		–		–		–		–		–		–		–
	Automated teller machines		13		26		23		6		6		24		20		–		–		118
	Contact center technology		3		5		8		8		8		29		–		–		–		61
	Software licensing and equipment maintenance		15		85		30		47		36		127		103		–		–		443
Credit and liquidity commitments
	Financial and performance standby letters of credit		841		1,386		3,159		3,006		1,856		3,951		8,405		142		–		22,746
	Documentary and commercial letters of credit		24		21		217		68		9		30		67		–		–		436
	Commitments to extend credit and liquidity6,7		16,582		15,349		9,217		6,405		5,544		15,116		73,544		3,342		2,271		147,370
Unconsolidated structured entity commitments
	Commitments to liquidity facilities for ABCP		–		1,180		830		395		923		212		–		–		–		3,540

1 Amount has been recorded according to the remaining contractual maturity of the underlying security.

2 For the purposes of this table, non-financial assets have been recorded as having 'no specific maturity'.

3 As the timing of demand deposits and notice deposits is non-specific and callable by the depositor, obligations have been included as having 'no specific maturity'.

4 Includes $29 billion of covered bonds with remaining contractual maturities of $4 billion in 'over 3 months to 6 months', $2 billion in 'over 1 to 2 years', $20 billion in 'over 2 to 5 years', and $3 billion in 'over 5 years'.

5 Includes $115 million of capital lease commitments with remaining contractual maturities of $1 million in 'less than 1 month', $5 million in '1 month to 3 months', $7 million in '3 months to 6 months', $7 million in '6 months to 9 months', $7 million in '9 months to 1 year', $28 million in 'over 1 to 2 years', $46 million in 'over 2 to 5 years', and $14 million in 'over 5 years'.

6 Includes $131 million in commitments to extend credit to private equity investments.

7 Commitments to extend credit exclude personal lines of credit and credit card lines, which are unconditionally cancellable at the Bank's discretion at any time.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 43

securitization and off-balance sheet arrangements

The Bank enters into securitization and off-balance sheet arrangements in the normal course of operations. The Bank is involved with structured entities that it sponsors, as well as entities sponsored by third-parties. Refer to "Securitization and Off-Balance Sheet Arrangements" section, Note 9: Transfer of Financial Assets and Note 10: Structured Entities of the 2016 Annual Report for further details. There have been no changes of substance during the quarter ended April 30, 2017.

Securitization of Bank-Originated Assets

The Bank securitizes residential mortgages, business and government loans, credit cards, and personal loans to enhance its liquidity position, to diversify sources of funding, and to optimize the management of the balance sheet.

Residential Mortgage Loans

The Bank securitizes residential mortgage loans through significant unconsolidated special purpose entities (SPEs) and Canadian non-SPE third-parties. Residential mortgage loans securitized by the Bank may give rise to full derecognition of the financial assets depending on the individual arrangement of each transaction. In instances where the Bank fully derecognizes residential mortgage loans, the Bank may be exposed to the risks of transferred loans through retained interests.

Consumer Instalment and Other Personal Loans

The Bank securitizes consumer instalment and other personal loans through a SPE. The Bank consolidates the SPE as it serves as a financing vehicle for the Bank's assets, the Bank has power over the key economic decisions of the SPE, and the Bank is exposed to the majority of the residual risks of the SPE. As at April 30, 2017, the SPE had $2 billion of issued notes outstanding (October 31, 2016 – $4 billion) with a fair value of $2 billion (October 31, 2016 – $4 billion).

Credit Card Loans

The Bank securitizes credit card loans through a SPE. The Bank consolidates the SPE as it serves as a financing vehicle for the Bank’s assets, the Bank has power over the key economic decisions of the SPE, and the Bank is exposed to the majority of the residual risks of the SPE.

Business and Government Loans

The Bank securitizes business and government loans through significant unconsolidated SPEs and Canadian non-SPE third parties. Business and government loans securitized by the Bank may be derecognized from the Bank's balance sheet depending on the individual arrangement of each transaction. In instances where the Bank fully derecognizes business and government loans, the Bank may be exposed to the risks of transferred loans through retained interests. There are no expected credit losses (ECL) on the retained interests of the securitized business and government loans as the mortgages are all government insured.

Securitization of Third Party-Originated Assets

Significant Unconsolidated Special Purpose Entities

Multi-Seller Conduits

The Bank administers multi-seller conduits and provides liquidity facilities as well as securities distribution services; it may also provide credit enhancements. Third party-originated assets are securitized through Bank-sponsored SPEs, which are not consolidated by the Bank.

All third-party assets securitized by the Bank's unconsolidated multi-seller conduits were originated in Canada and sold to Canadian securitization structures.

Off-Balance Sheet Exposure to Third Party-Sponsored Conduits

The Bank has off-balance sheet exposure to third party-sponsored conduits arising from providing liquidity facilities and funding commitments. The assets within these conduits are comprised of individual notes backed by automotive loan receivables, credit card receivables, and trade receivables. As at April 30, 2017, these assets have maintained ratings from various credit rating agencies, with a minimum rating of A. On-balance sheet exposure to third party-sponsored conduits have been included in the financial statements.

ACCOUNTING POLICIES AND ESTIMATES

The Bank's unaudited Interim Consolidated Financial Statements have been prepared in accordance with IFRS. For details of the Bank's accounting policies under IFRS, refer to Note 2 of the Bank's 2016 Annual Consolidated Financial Statements. For details of the Bank's significant accounting judgments, estimates, and assumptions under IFRS, refer to Note 3 of the Bank's 2016 Annual Consolidated Financial Statements.

CURRENT CHANGES IN ACCOUNTING POLICIES

There are no new or amended significant accounting policies that are effective for the Bank for the six months ended April 30, 2017.

FUTURE CHANGES IN ACCOUNTING POLICIES

The following standards have been issued, but are not yet effective on the date of issuance of the Bank's Interim Consolidated Financial Statements. The Bank is currently assessing the impact of the application of these standards on the Interim Consolidated Financial Statements and will adopt these standards when they become effective.

Financial Instruments

In July 2014, the IASB issued the final version of IFRS 9, Financial Instruments (IFRS 9), which replaces the guidance in IAS 39, Financial Instruments: Recognition and Measurement (IAS 39). This final version includes requirements on: (1) Classification and measurement of financial assets and liabilities; (2) Impairment of financial assets; and (3) General hedge accounting. IFRS 9 is effective for annual periods beginning on or after January 1, 2018 and is to be applied retrospectively with certain exceptions. IFRS 9 does not require restatement of comparative period financial statements except in limited circumstances related to aspects of hedge accounting. Entities are permitted to restate comparatives as long as hindsight is not applied. The Bank has made the decision not to restate comparative period financial information and will recognize any measurement difference between the previous carrying amount and the new carrying amount on November 1, 2017 through an adjustment to opening retained earnings. In January 2015, OSFI issued the final version of the Advisory titled "Early adoption of IFRS 9 Financial Instruments for Domestic Systemically Important Banks". All D-SIBs, including the Bank, are required to early adopt IFRS 9 for the annual period beginning on November 1, 2017. Consequential amendments were made to IFRS 7, Financial Instruments: Disclosures (IFRS 7) introducing expanded qualitative and quantitative disclosures related to IFRS 9, which are required to be adopted for the annual period beginning on November 1, 2017, when the Bank first applies IFRS 9. In December 2015, the BCBS issued "Guidance on credit risk and accounting for expected credit losses" which sets out supervisory guidance on sound credit risk practices associated with the implementation and ongoing application of expected credit loss accounting frameworks. In June 2016, OSFI issued the guideline, "IFRS 9 Financial Instruments and Disclosures", which provides guidance to Federally Regulated Entities on the application of IFRS 9 that is consistent with the BCBS guidance. This guideline, which is effective for the Bank upon adoption of IFRS 9, replaces certain guidelines that were in effect under IAS 39.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 44

The adoption of IFRS 9 is a significant initiative for the Bank supported by a formal governance framework and a robust implementation plan. An Executive Steering Committee has been formed with joint leadership from Finance and Risk and with representation from Technology, Internal Audit, and project management teams. A communication plan including progress reporting protocols has been established with regular updates provided to the Executive Steering Committee on key decisions. IFRS 9 overview sessions have been held at various levels within the Bank, including the Audit and Risk Committees of the Board.

The Bank has enhanced its governance framework and has established a dedicated committee to review, challenge, and approve key areas of judgment and assumptions used in forecasting multiple economic scenarios and associated probabilities upon adoption of IFRS 9. The committee will include representation from Risk, Finance and Economics.

The key responsibilities of the project include defining IFRS 9 risk methodology and accounting policy, identifying data and system requirements, and developing an appropriate operating model and governance framework. The Bank's implementation plan includes the following phases: (a) Initiation and Planning; (b) Detailed Assessment; (c) Design and Solution Development; and (d) Implementation, with work streams focused on each of the three required sections of IFRS 9 noted above as well as Reporting and Disclosures. The Bank is on track with its project timelines. The Solution Development and Implementation phases are in progress.

The following is a summary of the new accounting concepts and project status under IFRS 9:

Classification and Measurement

Financial assets will be classified based on the Bank's business model for managing its financial assets and the contractual cash flow characteristics of the financial asset. Financial assets are classified into one of the following three categories, which determine how it is measured subsequent to initial recognition: amortized cost, fair value through other comprehensive income (FVOCI), and fair value through profit or loss. An election may be made to hold certain equity securities at FVOCI, with no subsequent recycling of gains and losses into net income. In addition to the classification tests described above, IFRS 9 also includes an option to irrevocably designate a financial asset as measured at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch.

The classification and measurement of financial liabilities remain largely unchanged under IFRS 9, except for financial liabilities measured at fair value through profit or loss when classified as held for trading or designated using the fair value option. When the fair value option is elected, the Bank will be required to recognize the change in the fair value of the financial liability arising from changes in the Bank's own credit risk in other comprehensive income.

The Bank has defined its significant business models and is in the process of assessing the cash flow characteristics for all financial assets under the scope of IFRS 9. Potential classification and measurement changes include the reclassification of certain debt securities that are currently measured at FVOCI to an amortized cost category under IFRS 9 as a result of the business model assessment.

Impairment

Expected Credit Loss Model

IFRS 9 introduces a new impairment model based on ECL which will replace the existing incurred loss model under IAS 39. Currently, impairment losses are recognized when there is objective evidence of credit quality deterioration to the extent that the Bank no longer has reasonable assurance as to the timely collection of the full amount of principal and interest. If there is no objective evidence of impairment for an individual loan, the loan is included in a group of assets with similar credit risk characteristics and collectively assessed for impairment losses incurred but not identified. Under IFRS 9, ECL will be recognized in profit or loss before a loss event has occurred, which could result in earlier recognition of credit losses compared to the current model.

The expected credit loss model requires the recognition of impairment at an amount equal to the probability-weighted 12-month ECL or lifetime ECL depending on whether there has been a significant increase in credit risk since initial recognition of the financial instrument. If a significant increase in credit risk has occurred since initial recognition, then impairment is measured as lifetime ECL otherwise 12-month ECL are measured, which represent the portion of lifetime ECL that are expected to occur based on default events that are possible within 12 months after the reporting date. IFRS 9 introduces the rebuttable presumption that credit risk has increased significantly since initial recognition when contractual payments are more than 30 days past due. The Bank does not expect to rebut this presumption. If credit quality improves in a subsequent period such that the increase in credit risk since initial recognition is no longer considered significant, the loss allowance will revert back to being measured based on 12-month ECL. The movement between 12-month and lifetime ECL and incorporation of forward-looking information may increase the volatility of provisions across the product groups, under IFRS 9 compared to IAS 39. The IFRS 9 model breaks down into three stages: Stage 1 – 12-month ECL for performing instruments, Stage 2 – Lifetime ECL for performing instruments that have experienced a significant increase in credit risk, and Stage 3 – Lifetime ECL for non-performing financial assets. The Stage 3 population is expected to largely align with the impaired population under IAS 39 and the write-off policy is expected to remain the same.

Measurement of Expected Credit Losses

ECL will be measured as the probability-weighted present value of expected cash shortfalls over the remaining expected life of the financial instrument and will consider reasonable and supportable information about past events, current conditions and forecasts of future events and economic conditions that impact the Bank's credit risk assessment. Expected life is the maximum contractual period the Bank is exposed to credit risk, including extension options for which the borrower has unilateral right to exercise. For certain financial instruments that include both a loan and an undrawn commitment and the Bank's contractual ability to demand repayment and cancel the undrawn commitment does not limit the Bank's exposure to credit losses to the contractual notice period, ECL will be measured over the period the Bank is exposed to credit risk. Forward-looking macroeconomic factors are incorporated in the risk parameters as relevant. Examples of relevant macroeconomic factors include unemployment rates, housing price index, interest rates, and gross domestic product.

Probability-weighted multiple scenarios will be considered when determining stage allocation and measuring ECL. IFRS 9 requires ECL to be recognized in a way that reflects an unbiased and probability-weighted amount determined by evaluating a range of possible outcomes. While entities are not expected to consider every possible scenario, the scenarios considered should reflect a representative sample of possible outcomes. When there is a non-linear relationship between the different forward-looking scenarios and the associated change in ECL, using a single forward-looking scenario will not meet the objectives of IFRS 9. Economic forecasts must consider internal and external information and be consistent with the forward-looking information used for other purposes such as budgeting and forecasting. The scenarios must be representative and not biased to extreme scenarios. Parameter coherence is considered in each scenario so that it is realistic. The scenarios considered must take into account key drivers of ECL, particularly non-linearity and asymmetric sensitivities within portfolios to estimate effects of changes in parameters on ECL.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 45

Assessment of Significant Increase in Credit Risk

For retail exposures, significant increase in credit risk will be assessed based on changes in the probability of default (PD) since initial recognition, using a combination of individual and collective information that incorporates borrower and account specific attributes and relevant forward-looking macroeconomic variables. ECL will be calculated as the product of PD, loss given default (LGD), and exposure at default (EAD) at each time step over the remaining expected life of the financial instrument and discounted to the reporting date.

For non-retail exposures, significant increase in credit risk will be assessed based on changes in the internal risk rating since initial recognition, incorporating relevant forward-looking macroeconomic information. ECL will be calculated based on the present value of cash shortfalls determined as the difference between contractual cash flows and expected cash flows over the remaining expected life of the financial instrument. Similar to IAS 39, ECL for significant non-retail impaired exposures will be measured individually.

Comparison of Regulatory Expected Loss Model and IFRS 9 Expected Credit Loss Model

The IFRS 9 expected credit loss calculation will leverage where appropriate the Bank’s existing expected loss model parameters used for regulatory capital purposes including PD, LGD and EAD with adjustments as required to comply with the IFRS 9 requirements. The main differences are summarized in the following chart:

	Regulatory Capital	IFRS 9
PD	Through-the-cycle 12-month PD based on the long run average of a full economic cycle. The default backstop is generally 90 days past due.	Point-in-time 12-month or lifetime PD based on historical experience, current conditions and relevant forward-looking expectations. The default backstop will generally be 90 days past due.
LGD	Downturn LGD based on losses that would be expected in an economic downturn and subject to certain regulatory floors. Both direct and indirect collection costs are considered.	Expected LGD based on historical charge-off events and recovery payments, current information about attributes specific to borrower, and direct costs. Macroeconomic variables and expected cash flows from credit enhancements will be incorporated as appropriate and excludes undue conservatism and floors.
EAD	Based on the drawn balance plus expected utilization of any undrawn portion prior to default, and cannot be lower than the drawn balance.	EAD represents the expected balance at default across the lifetime horizon and conditional on forward-looking expectations.
Other		Expected credit losses are discounted from the default date to the reporting date.

Capital Impact

Based on the current regulatory requirements, a negative impact from potential increases in the balance sheet allowances under IFRS 9 on CET1 capital could be partially mitigated by reductions in negative regulatory capital adjustments related to any shortfall of allowances to regulatory expected losses in the CET1 calculation. Similarly, a positive impact from potential decreases in accounting allowances under IFRS 9 could be partially offset by increases in the deduction from CET1 capital through an increase in the shortfall of allowances to regulatory expected losses. In October 2016, the BCBS issued a discussion paper, "Regulatory treatment of accounting provisions", which provides policy options for long-term regulatory treatment of provisions. In March 2017, the BCBS issued "Regulatory treatment of accounting provisions – interim approach and transitional arrangements". This standard retains, for an interim period, the current regulatory treatment of accounting provisions under the standardized and internal ratings-based approaches and also provides potential transitional arrangements. The Bank is awaiting final guidance from OSFI as it relates to the BCBS standard.

Scope

The new impairment model will apply to all financial assets measured at amortized cost or FVOCI with the most significant impact expected to be on loan assets. The model will also apply to loan commitments and financial guarantees that are not measured at fair value through profit or loss.

IFRS 9 Impairment Program

The Bank has defined the functional requirements for the calculation of ECL and is currently developing and integrating the end-to-end technology solution for tracking credit migration under the new ECL model as well as the impact to forecasting economic variables, risk parameters, and credit risk modelling processes. For the remainder of the year, the Bank will continue to focus on the development, testing and validation of the new impairment models and related processes and controls and assess the quantitative impact of applying an ECL approach by the end of 2017. The Bank is in the process of updating its accounting and risk policies, implementing changes to financial reporting systems and processes, and developing and implementing financial and regulatory disclosures related to IFRS 9.

General Hedge Accounting

IFRS 9 introduces a new general hedge accounting model which better aligns accounting with risk management activities. The new standard permits a wider range of qualifying hedged items and hedged risks as well as types of hedging instruments. Effectiveness testing will have an increased focus on establishing an economic relationship, achieving a target hedge ratio and monitoring credit risk exposures. Voluntary discontinuation of hedging relationships is no longer permitted except in limited circumstances based on the risk management objectives of hedge strategies. The Bank has an accounting policy choice to adopt the new general hedge accounting model under IFRS 9 or continue to apply the hedge accounting requirements under IAS 39. The Bank has made the decision to continue applying the IAS 39 hedge accounting requirements at this time and will comply with the revised hedge accounting disclosures as required by the related amendments to IFRS 7.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 46

Revenue from Contracts with Customers

In May 2014, the IASB issued IFRS 15, Revenue from Contracts with Customers (IFRS 15), which establishes the principles for recognizing revenue and cash flows arising from contracts with customers and prescribes the application of a five-step recognition and measurement model. The standard excludes from its scope revenue arising from items such as financial instruments, insurance contracts, and leases. The standard also requires additional qualitative and quantitative disclosures. In July 2015, the IASB confirmed a one-year deferral of the effective date to annual periods beginning on or after January 1, 2018, which will be November 1, 2018 for the Bank, and is to be applied retrospectively. In April 2016, the IASB issued amendments to IFRS 15, which provided additional guidance on the identification of performance obligations, on assessing principal versus agent considerations and on licensing revenue. The amendments also provided additional transitional relief upon initial adoption of IFRS 15 and have the same effective date as the IFRS 15 standard. The Bank is currently assessing the impact of adopting this standard.

Leases

In January 2016, the IASB issued IFRS 16, Leases (IFRS 16), which will replace IAS 17, introducing a single lessee accounting model for all leases by eliminating the distinction between operating and financing leases. IFRS 16 requires lessees to recognize right-of-use assets and lease liabilities for most leases. Lessees will also recognize depreciation expense on the right-of-use asset and interest expense on the lease liability in the statement of income. Short-term leases, which are defined as those that have a lease term of 12 months or less and leases of low-value assets are exempt. Lessor accounting remains substantially unchanged. IFRS 16 is effective for annual periods beginning on or after January 1, 2019, which will be November 1, 2019 for the Bank, and is to be applied retrospectively. Early adoption is permitted only if aligned with or after the adoption of IFRS 15. The Bank is currently assessing the impact of adopting this standard.

Share-based Payment

In June 2016, the IASB published amendments to IFRS 2, Share-based Payment, which provide additional guidance on the classification and measurement of share-based payment transactions. The amendments clarify the accounting for cash-settled share-based payment transactions that include a performance condition, the classification of share-based payment transactions with net settlement features for withholding tax obligations, and the accounting for modifications of share-based payment transactions from cash-settled to equity-settled. The amendments to IFRS 2 are effective for annual periods beginning on or after January 1, 2018, which will be November 1, 2018 for the Bank, and is to be applied prospectively; however, retrospective application is permitted in certain instances. Early adoption is permitted. The amendments to IFRS 2 are not expected to have a material impact on the Bank.

Insurance Contracts

In May 2017, the IASB issued IFRS 17, Insurance Contracts (IFRS 17), which replaces the guidance in IFRS 4, Insurance Contracts and establishes a new model for recognizing insurance policy obligations, premium revenue, and claims-related expenses. IFRS 17 will be effective for the Bank’s annual period beginning November 1, 2021. Early application is permitted on or before the date of initial application of IFRS 17. The Bank is currently assessing the impact of adopting this standard.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

During the most recent interim period, there have been no changes in the Bank's policies and procedures and other processes that comprise its internal control over financial reporting, that have materially affected, or are reasonably likely to materially affect, the Bank's internal control over financial reporting.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 47

INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
INTERIM CONSOLIDATED BALANCE SHEET (unaudited)
(millions of Canadian dollars)	As at
	April 30		October 31
		2017		2016
ASSETS
Cash and due from banks	$	5,271	$	3,907
Interest-bearing deposits with banks		54,227		53,714
		59,498		57,621
Trading loans, securities, and other (Note 3)		111,833		99,257
Derivatives (Note 3)		62,674		72,242
Financial assets designated at fair value through profit or loss (Note 3)		3,971		4,283
Available-for-sale securities (Notes 3, 4)		121,992		107,571
		300,470		283,353
Held-to-maturity securities (Note 4)		82,330		84,395
Securities purchased under reverse repurchase agreements		113,834		86,052
Loans (Note 5)
Residential mortgages		217,143		217,336
Consumer instalment and other personal		149,041		144,531
Credit card		32,463		31,914
Business and government		202,672		194,074
Debt securities classified as loans		1,034		1,674
		602,353		589,529
Allowance for loan losses (Note 5)		(3,892)		(3,873)
Loans, net of allowance for loan losses		598,461		585,656
Other
Customers' liability under acceptances		17,002		15,706
Investment in TD Ameritrade (Note 6)		7,281		7,091
Goodwill (Note 7)		16,942		16,662
Other intangibles		2,716		2,639
Land, buildings, equipment, and other depreciable assets		5,461		5,482
Deferred tax assets		2,394		2,084
Amounts receivable from brokers, dealers, and clients		31,188		17,436
Other assets (Note 8)		14,343		12,790
		97,327		79,890
Total assets	$	1,251,920	$	1,176,967
LIABILITIES
Trading deposits (Notes 3, 9)	$	92,958	$	79,786
Derivatives (Note 3)		57,353		65,425
Securitization liabilities at fair value (Note 3)		12,824		12,490
Other financial liabilities designated at fair value through profit or loss (Note 3)		6		190
		163,141		157,891
Deposits (Note 9)
Personal		460,096		439,232
Banks		22,689		17,201
Business and government		324,327		317,227
		807,112		773,660
Other
Acceptances		17,002		15,706
Obligations related to securities sold short (Note 3)		32,611		33,115
Obligations related to securities sold under repurchase agreements (Note 3)		74,608		48,973
Securitization liabilities at amortized cost		17,198		17,918
Amounts payable to brokers, dealers, and clients (Note 3)		29,433		17,857
Insurance-related liabilities		6,778		7,046
Other liabilities (Note 10)		19,316		19,696
		196,946		160,311
Subordinated notes and debentures (Note 11)		8,482		10,891
Total liabilities		1,175,681		1,102,753
EQUITY
Shareholders' Equity
Common shares (Note 12)		20,809		20,711
Preferred shares (Note 12)		4,400		4,400
Treasury shares – common (Note 12)		(245)		(31)
Treasury shares – preferred (Note 12)		(7)		(5)
Contributed surplus		200		203
Retained earnings		37,577		35,452
Accumulated other comprehensive income (loss)		11,853		11,834
		74,587		72,564
Non-controlling interests in subsidiaries		1,652		1,650
Total equity		76,239		74,214
Total liabilities and equity	$	1,251,920	$	1,176,967

The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 48

INTERIM CONSOLIDATED STATEMENT OF INCOME (unaudited)
(millions of Canadian dollars, except as noted)			For the three months ended				For the six months ended
			April 30		April 30		April 30		April 30
		2017		2016		2017		2016
Interest income
Loans		$	5,655	$	5,297	$	11,360	$	10,729
Securities
	Interest		1,065		904		2,131		1,809
	Dividends		360		211		641		456
Deposits with banks			115		58		190		95
			7,195		6,470		14,322		13,089
Interest expense
Deposits			1,553		1,126		3,028		2,224
Securitization liabilities			112		112		223		236
Subordinated notes and debentures			91		96		191		184
Other			330		256		630		518
			2,086		1,590		4,072		3,162
Net interest income			5,109		4,880		10,250		9,927
Non-interest income
Investment and securities services			1,109		1,011		2,222		1,993
Credit fees			284		258		548		509
Net securities gain (loss) (Note 4)			36		1		50		(11)
Trading income (loss)			(288)		97		(75)		138
Service charges			645		631		1,308		1,274
Card services			566		543		1,190		1,139
Insurance revenue			909		924		1,861		1,892
Other income (loss)			103		(86)		239		8
			3,364		3,379		7,343		6,942
Total revenue			8,473		8,259		17,593		16,869
Provision for credit losses (Note 5)			500		584		1,133		1,226
Insurance claims and related expenses			538		530		1,112		1,185
Non-interest expenses
Salaries and employee benefits (Note 14)			2,478		2,323		5,064		4,651
Occupancy, including depreciation			445		453		896		912
Equipment, including depreciation			249		248		491		474
Amortization of other intangibles			175		173		345		348
Marketing and business development			184		182		350		355
Restructuring charges			17		(14)		12		(16)
Brokerage-related fees			82		80		164		161
Professional and advisory services			280		282		569		553
Other			876		1,009		1,792		1,951
			4,786		4,736		9,683		9,389
Income before income taxes and equity in net income of an investment
	in TD Ameritrade		2,649		2,409		5,665		5,069
Provision for (recovery of) income taxes			257		466		853		1,012
Equity in net income of an investment in TD Ameritrade (Note 6)			111		109		224		218
Net income			2,503		2,052		5,036		4,275
Preferred dividends			48		37		96		62
Net income available to common shareholders and non-controlling
	interests in subsidiaries	$	2,455	$	2,015	$	4,940	$	4,213
Attributable to:
	Common shareholders	$	2,427	$	1,987	$	4,883	$	4,156
	Non-controlling interests in subsidiaries		28		28		57		57
Earnings per share (dollars) (Note 16)
Basic		$	1.31	$	1.07	$	2.63	$	2.24
Diluted			1.31		1.07		2.63		2.24
Dividends per share (dollars)			0.60		0.55		1.15		1.06

The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 49

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)
(millions of Canadian dollars)		For the three months ended				For the six months ended
		April 30		April 30		April 30		April 30
		2017		2016		2017		2016
Net income		$	2,503	$	2,052	$	5,036	$	4,275
Other comprehensive income (loss), net of income taxes
Items that will be subsequently reclassified to net income
Change in unrealized gains (losses) on available-for-sale securities1			296		265		416		2
Reclassification to earnings of net losses (gains) in respect of
	available-for-sale securities2		(7)		(35)		(34)		(17)
Net change in unrealized foreign currency translation gains (losses) on investments
	in foreign operations		3,210		(6,670)		1,303		(2,617)
Reclassification to earnings of net losses (gains) on investment in foreign operations3			(9)		–		8		–
Net foreign currency translation gains (losses) from hedging activities in foreign operations4			(882)		2,135		(403)		1,016
Reclassification to earnings of net losses (gains) on hedges of investments in foreign
	operations5		6		–		(6)		–
Change in net gains (losses) on derivatives designated as cash flow hedges6			1,375		(3,215)		161		(1,286)
Reclassification to earnings of net losses (gains) on cash flow hedges7			(1,267)		2,742		(1,426)		1,382
Items that will not be subsequently reclassified to net income
Actuarial gains (losses) on employee benefit plans8			(354)		(113)		89		(415)
			2,368		(4,891)		108		(1,935)
Comprehensive income (loss) for the period		$	4,871	$	(2,839)	$	5,144	$	2,340
Attributable to:
	Common shareholders	$	4,795	$	(2,904)	$	4,991	$	2,221
	Preferred shareholders		48		37		96		62
	Non-controlling interests in subsidiaries		28		28		57		57

1 Net of income tax provision of $177 million for the three months ended April 30, 2017 (three months ended April 30, 2016 – net of income tax provision of $27 million). Net of income tax provision of $228 million for the six months ended April 30, 2017 (six months ended April 30, 2016 – net of income tax recovery of $29 million).

2 Net of income tax provision of $24 million for the three months ended April 30, 2017 (three months ended April 30, 2016 – net of income tax recovery of $29 million). Net of income tax provision of $7 million for the six months ended April 30, 2017 (six months ended April 30, 2016 – net of income tax recovery of $4 million).

3 Net of income tax provision of nil for the three months ended April 30, 2017 (three months ended April 30, 2016 – net of income tax provision of nil). Net of income tax provision of nil for the six months ended April 30, 2017 (six months ended April 30, 2016 – net of income tax provision of nil).

4 Net of income tax recovery of $318 million for the three months ended April 30, 2017 (three months ended April 30, 2016 – net of income tax provision of $765 million). Net of income tax recovery of $145 million for the six months ended April 30, 2017 (six months ended April 30, 2016 – net of income tax provision of $363 million).

5 Net of income tax recovery of $3 million for the three months ended April 30, 2017 (three months ended April 30, 2016 – net of income tax provision of nil). Net of income tax provision of $2 million for the six months ended April 30, 2017 (six months ended April 30, 2016 – net of income tax provision of nil).

6 Net of income tax provision of $838 million for the three months ended April 30, 2017 (three months ended April 30, 2016 – net of income tax recovery of $2,063 million). Net of income tax provision of $162 million for the six months ended April 30, 2017 (six months ended April 30, 2016 – net of income tax recovery of $672 million).

7 Net of income tax provision of $820 million for the three months ended April 30, 2017 (three months ended April 30, 2016 – net of income tax recovery of $1,877 million). Net of income tax provision of $797 million for the six months ended April 30, 2017 (six months ended April 30, 2016 – net of income tax recovery of $773 million).

8 Net of income tax recovery of $128 million for the three months ended April 30, 2017 (three months ended April 30, 2016 – net of income tax recovery of $41 million). Net of income tax provision of $32 million for the six months ended April 30, 2017 (six months ended April 30, 2016 – net of income tax recovery of $151 million).

Certain comparative amounts have been reclassified to conform with the presentation adopted in the current period.

The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 50

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)
(millions of Canadian dollars)		For the three months ended				For the six months ended
			April 30		April 30		April 30		April 30
			2017		2016		2017		2016
Common shares (Note 12)
Balance at beginning of period		$	20,836	$	20,395	$	20,711	$	20,294
Proceeds from shares issued on exercise of stock options			56		20		103		144
Shares issued as a result of dividend reinvestment plan			84		84		162		165
Purchase of shares for cancellation			(167)		–		(167)		(104)
Balance at end of period			20,809		20,499		20,809		20,499
Preferred shares (Note 12)
Balance at beginning of period			4,400		3,400		4,400		2,700
Issue of shares			–		–		–		700
Balance at end of period			4,400		3,400		4,400		3,400
Treasury shares – common (Note 12)
Balance at beginning of period			(218)		(51)		(31)		(49)
Purchase of shares			(2,312)		(1,405)		(4,790)		(3,019)
Sale of shares			2,285		1,452		4,576		3,064
Balance at end of period			(245)		(4)		(245)		(4)
Treasury shares – preferred (Note 12)
Balance at beginning of period			(5)		(4)		(5)		(3)
Purchase of shares			(41)		(17)		(91)		(34)
Sale of shares			39		17		89		33
Balance at end of period			(7)		(4)		(7)		(4)
Contributed surplus
Balance at beginning of period			206		198		203		214
Net premium (discount) on sale of treasury shares			1		1		8		6
Issuance of stock options, net of options exercised			(5)		(6)		(8)		(28)
Other			(2)		(4)		(3)		(3)
Balance at end of period			200		189		200		189
Retained earnings
Balance at beginning of period			37,330		32,585		35,452		32,053
Net income attributable to shareholders			2,475		2,024		4,979		4,218
Common dividends			(1,113)		(1,017)		(2,134)		(1,963)
Preferred dividends			(48)		(37)		(96)		(62)
Share issue expenses and others			–		–		–		(6)
Net premium on repurchase of common shares and redemption of preferred shares			(713)		–		(713)		(383)
Actuarial gains (losses) on employee benefit plans			(354)		(113)		89		(415)
Balance at end of period			37,577		33,442		37,577		33,442
Accumulated other comprehensive income (loss)
Net unrealized gain (loss) on available-for-sale securities:
Balance at beginning of period			392		(164)		299		81
Other comprehensive income (loss)			289		230		382		(15)
Balance at end of period			681		66		681		66
Net unrealized foreign currency translation gain (loss) on investments in foreign
	operations, net of hedging activities:
Balance at beginning of period			8,256		11,289		9,679		8,355
Other comprehensive income (loss)			2,325		(4,535)		902		(1,601)
Balance at end of period			10,581		6,754		10,581		6,754
Net gain (loss) on derivatives designated as cash flow hedges:
Balance at beginning of period			483		2,342		1,856		1,773
Other comprehensive income (loss)			108		(473)		(1,265)		96
Balance at end of period			591		1,869		591		1,869
Total			11,853		8,689		11,853		8,689
Non-controlling interests in subsidiaries
Balance at beginning of period			1,622		1,684		1,650		1,610
Net income attributable to non-controlling interests in subsidiaries			28		28		57		57
Other			2		(100)		(55)		(55)
Balance at end of period			1,652		1,612		1,652		1,612
Total equity		$	76,239	$	67,823	$	76,239	$	67,823

The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 51

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
(millions of Canadian dollars)		For the three months ended				For the six months ended
			April 30		April 30		April 30		April 30
		2017		2016		2017		2016
Cash flows from (used in) operating activities
Net income before income taxes, including equity in net income of an investment in
	TD Ameritrade	$	2,760	$	2,518	$	5,889	$	5,287
Adjustments to determine net cash flows from (used in) operating activities
	Provision for credit losses (Note 5)		500		584		1,133		1,226
	Depreciation		145		156		293		305
	Amortization of other intangibles		175		173		345		348
	Net securities losses (gains) (Note 4)		(36)		(1)		(50)		11
	Equity in net income of an investment in TD Ameritrade (Note 6)		(111)		(109)		(224)		(218)
	Deferred taxes		(147)		178		72		57
Changes in operating assets and liabilities
	Interest receivable and payable (Notes 8, 10)		(232)		133		(306)		(22)
	Securities sold short		2,079		(1,150)		(504)		1,923
	Trading loans and securities		(1,572)		8,220		(12,576)		2,017
	Loans net of securitization and sales		(14,245)		12,398		(14,736)		(10,777)
	Deposits		34,039		(40,056)		46,448		9,934
	Derivatives		(2,617)		8,821		1,496		6,411
	Financial assets and liabilities designated at fair value through profit or loss		617		266		304		110
	Securitization liabilities		302		(612)		(386)		(1,915)
	Other		(11,477)		9,149		(9,066)		2,172
Net cash from (used in) operating activities			10,180		668		18,132		16,869
Cash flows from (used in) financing activities
Change in securities sold under repurchase agreements			15,270		(1,609)		25,635		(3,328)
Issuance of subordinated notes and debentures			–		1,250		–		1,250
Redemption of subordinated notes and debentures (Note 11)			–		–		(2,250)		(1,000)
Common shares issued (Note 12)			47		13		86		116
Preferred shares issued (Note 12)			–		–		–		694
Repurchase of common shares (Note 12)			(880)		–		(880)		(487)
Sale of treasury shares (Note 12)			2,325		1,470		4,673		3,103
Purchase of treasury shares (Note 12)			(2,353)		(1,422)		(4,881)		(3,053)
Dividends paid			(1,077)		(970)		(2,068)		(1,860)
Distributions to non-controlling interests in subsidiaries			(28)		(28)		(57)		(57)
Net cash from (used in) financing activities			13,304		(1,296)		20,258		(4,622)
Cash flows from (used in) investing activities
Interest-bearing deposits with banks			211		961		(513)		(5,295)
Activities in available-for-sale securities (Note 4)
	Purchases		(13,332)		(12,688)		(29,658)		(22,818)
	Proceeds from maturities		7,576		6,388		15,156		14,396
	Proceeds from sales		1,262		1,742		2,271		1,930
Activities in held-to-maturity securities (Note 4)
	Purchases		(6,001)		(5,917)		(13,046)		(9,668)
	Proceeds from maturities		5,828		2,887		15,648		5,716
	Proceeds from sales		–		–		452		–
Activities in debt securities classified as loans
	Purchases		(17)		(27)		(30)		(36)
	Proceeds from maturities		67		223		233		349
	Proceeds from sales		23		–		473		1
Net purchases of land, building, equipment, and other depreciable assets			(251)		241		(272)		(151)
Changes in securities purchased under reverse repurchase agreements			(17,445)		7,121		(27,782)		3,544
Net cash from (used in) investing activities			(22,079)		931		(37,068)		(12,032)
Effect of exchange rate changes on cash and due from banks			118		(215)		42		(77)
Net increase (decrease) in cash and due from banks			1,523		88		1,364		138
Cash and due from banks at beginning of period			3,748		3,204		3,907		3,154
Cash and due from banks at end of period		$	5,271	$	3,292	$	5,271	$	3,292
Supplementary disclosure of cash flows from operating activities
Amount of income taxes paid (refunded) during the period		$	619	$	97	$	1,399	$	382
Amount of interest paid during the period			2,056		1,492		4,116		3,134
Amount of interest received during the period			6,573		6,294		13,419		12,583
Amount of dividends received during the period			298		164		538		438

The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 52

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1: NATURE OF OPERATIONS

CORPORATE INFORMATION

The Toronto-Dominion Bank is a bank chartered under the Bank Act. The shareholders of a bank are not, as shareholders, liable for any liability, act, or default of the bank except as otherwise provided under the Bank Act. The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group ("TD" or the "Bank"). The Bank was formed through the amalgamation on February 1, 1955, of The Bank of Toronto (chartered in 1855) and The Dominion Bank (chartered in 1869). The Bank is incorporated and domiciled in Canada with its registered and principal business offices located at 66 Wellington Street West, Toronto, Ontario. TD serves customers in three business segments operating in a number of locations in key financial centres around the globe: Canadian Retail, U.S. Retail, and Wholesale Banking.

BASIS OF PREPARATION

The accompanying Interim Consolidated Financial Statements and accounting principles followed by the Bank have been prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), including the accounting requirements of the Office of the Superintendent of Financial Institutions Canada (OSFI). The Interim Consolidated Financial Statements are presented in Canadian dollars, unless otherwise indicated.

These Interim Consolidated Financial Statements were prepared on a condensed basis in accordance with International Accounting Standard 34, Interim Financial Reporting (IAS 34) using the accounting policies as described in Note 2 of the Bank's 2016 Annual Consolidated Financial Statements. Certain comparative amounts have been restated/reclassified to conform with the presentation adopted in the current period.

The preparation of consolidated financial statements requires that management make estimates, assumptions, and judgments regarding the reported amount of assets, liabilities, revenue and expenses, and disclosure of contingent assets and liabilities, as further described in Note 3 of the Bank's 2016 Annual Consolidated Financial Statements. Accordingly, actual results may differ from estimated amounts as future confirming events occur.

The Bank's Interim Consolidated Financial Statements have been prepared using uniform accounting policies for like transactions and events in similar circumstances. All intercompany transactions, balances, and unrealized gains and losses on transactions are eliminated on consolidation.

The Interim Consolidated Financial Statements for the three and six months ended April 30, 2017, were approved and authorized for issue by the Bank's Board of Directors, in accordance with a recommendation of the Audit Committee, on May 24, 2017.

As the Interim Consolidated Financial Statements do not include all of the disclosures normally provided in the Annual Consolidated Financial Statements, it should be read in conjunction with the 2016 Annual Consolidated Financial Statements and the accompanying Notes, and the shaded sections of the 2016 Management's Discussion and Analysis (MD&A). Certain disclosures are included in the shaded sections of the "Managing Risk" section of the MD&A in this report, as permitted by IFRS, and form an integral part of the Interim Consolidated Financial Statements. The Interim Consolidated Financial Statements were prepared under a historical cost basis, except for certain items carried at fair value as discussed in Note 2 of the Bank's 2016 Annual Consolidated Financial Statements.

NOTE 2: CURRENT AND FUTURE CHANGES IN ACCOUNTING POLICIES

CURRENT CHANGES IN ACCOUNTING POLICIES

There are no new or amended significant accounting policies that are effective for the Bank for the six months ended April 30, 2017.

FUTURE CHANGES IN ACCOUNTING POLICIES

The following standards have been issued, but are not yet effective on the date of issuance of the Bank's Interim Consolidated Financial Statements. The Bank is currently assessing the impact of the application of these standards on the Interim Consolidated Financial Statements and will adopt these standards when they become effective.

Financial Instruments

In July 2014, the IASB issued the final version of IFRS 9, Financial Instruments (IFRS 9), which replaces the guidance in IAS 39, Financial Instruments: Recognition and Measurement (IAS 39). This final version includes requirements on: (1) Classification and measurement of financial assets and liabilities; (2) Impairment of financial assets; and (3) General hedge accounting. Accounting for macro hedging has been decoupled from IFRS 9. The Bank has an accounting policy choice to apply the hedge accounting requirements of IFRS 9 or IAS 39. The Bank has made the decision to continue applying the IAS 39 hedge accounting requirements at this time and will comply with the revised hedge accounting disclosures as required by the related amendments to IFRS 7, Financial Instruments: Disclosures (IFRS 7).

IFRS 9 is effective for annual periods beginning on or after January 1, 2018, and is to be applied retrospectively with certain exceptions. IFRS 9 does not require restatement of comparative period financial statements except in limited circumstances related to aspects of hedge accounting. Entities are permitted to restate comparatives as long as hindsight is not applied. The Bank has made the decision not to restate comparative period financial information and will recognize any measurement difference between the previous carrying amount and the new carrying amount on November 1, 2017, through an adjustment to opening retained earnings. In January 2015, OSFI issued the final version of the Advisory titled "Early adoption of IFRS 9 Financial Instruments for Domestic Systemically Important Banks". All domestic systemically important banks (D-SIBs), including the Bank, are required to early adopt IFRS 9 for the annual period beginning on November 1, 2017. Consequential amendments were made to IFRS 7 introducing expanded qualitative and quantitative disclosures related to IFRS 9, which are required to be adopted for the annual period beginning on November 1, 2017, when the Bank first applies IFRS 9.

In December 2015, the Basel Committee on Banking Supervision (BCBS) issued "Guidance on credit risk and accounting for expected credit losses" which sets out supervisory guidance on sound credit risk practices associated with the implementation and ongoing application of expected credit loss accounting frameworks. In June 2016, OSFI issued the guideline, "IFRS 9 Financial Instruments and Disclosures", which provides guidance to Federally Regulated Entities on the application of IFRS 9 that is consistent with the BCBS guidance. This guideline, which is effective for the Bank upon adoption of IFRS 9, replaces certain guidelines that were in effect under IAS 39. The adoption of IFRS 9 is a significant initiative for the Bank supported by a formal governance framework and a robust implementation plan.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 53

Revenue from Contracts with Customers

In May 2014, the IASB issued IFRS 15, Revenue from Contracts with Customers (IFRS 15), which establishes the principles for recognizing revenue and cash flows arising from contracts with customers and prescribes the application of a five-step recognition and measurement model. The standard excludes from its scope revenue arising from items such as financial instruments, insurance contracts, and leases. The standard also requires additional qualitative and quantitative disclosures. In July 2015, the IASB confirmed a one-year deferral of the effective date to annual periods beginning on or after January 1, 2018, which will be November 1, 2018 for the Bank, and is to be applied retrospectively. In April 2016, the IASB issued amendments to IFRS 15, which provided additional guidance on the identification of performance obligations, on assessing principal versus agent considerations and on licensing revenue. The amendments also provided additional transitional relief upon initial adoption of IFRS 15 and have the same effective date as the IFRS 15 standard. The Bank is currently assessing the impact of adopting this standard.

Leases

In January 2016, the IASB issued IFRS 16, Leases (IFRS 16), which will replace IAS 17, introducing a single lessee accounting model for all leases by eliminating the distinction between operating and financing leases. IFRS 16 requires lessees to recognize right-of-use assets and lease liabilities for most leases. Lessees will also recognize depreciation expense on the right-of-use asset and interest expense on the lease liability in the statement of income. Short-term leases, which are defined as those that have a lease term of 12 months or less and leases of low-value assets are exempt. Lessor accounting remains substantially unchanged. IFRS 16 is effective for annual periods beginning on or after January 1, 2019, which will be November 1, 2019 for the Bank, and is to be applied retrospectively. Early adoption is permitted only if aligned with or after the adoption of IFRS 15. The Bank is currently assessing the impact of adopting this standard.

Share-based Payment

In June 2016, the IASB published amendments to IFRS 2, Share-based Payment, which provide additional guidance on the classification and measurement of share-based payment transactions. The amendments clarify the accounting for cash-settled share-based payment transactions that include a performance condition, the classification of share-based payment transactions with net settlement features for withholding tax obligations, and the accounting for modifications of share-based payment transactions from cash-settled to equity-settled. The amendments to IFRS 2 are effective for annual periods beginning on or after January 1, 2018, which will be November 1, 2018 for the Bank, and is to be applied prospectively; however, retrospective application is permitted in certain instances. Early adoption is permitted. The amendments to IFRS 2 are not expected to have a material impact on the Bank.

Insurance Contracts

In May 2017, the IASB issued IFRS 17, Insurance Contracts (IFRS 17), which replaces the guidance in IFRS 4, Insurance Contracts and establishes a new model for recognizing insurance policy obligations, premium revenue, and claims-related expenses. IFRS 17 will be effective for the Bank’s annual period beginning November 1, 2021. Early application is permitted on or before the date of initial application of IFRS 17. The Bank is currently assessing the impact of adopting this standard.

NOTE 3: FAIR VALUE MEASUREMENTS

Certain assets and liabilities, primarily financial instruments, are carried on the balance sheet at their fair value on a recurring basis. These financial instruments include trading loans and securities, assets and liabilities designated at fair value through profit or loss, instruments classified as available-for-sale, derivatives, certain securities purchased under reverse repurchase agreements, certain deposits classified as trading, securitization liabilities at fair value, obligations related to securities sold short, and certain obligations related to securities sold under repurchase agreements. All other financial assets and financial liabilities are carried at amortized cost. The fair value of assets and liabilities subsequently not measured at fair value include most loans, deposits, certain securitization liabilities, certain securities purchased under reverse repurchase agreements, obligations relating to securities sold under repurchase agreements, and subordinated notes and debentures. There have been no significant changes to the Bank's approach and methodologies used to determine fair value measurements during the three and six months ended April 30, 2017. Refer to Note 5 of the 2016 Annual Consolidated Financial Statements for a description of the valuation techniques and inputs used in the fair value measurement of the Bank's financial instruments.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 54

Carrying Value and Fair Value of Financial Instruments not carried at Fair Value

The fair values in the following table exclude the value of assets that are not financial instruments, such as land, buildings and equipment, as well as goodwill and other intangible assets, including customer relationships, which are of significant value to the Bank.

Financial Assets and Liabilities not carried at Fair Value
(millions of Canadian dollars)							As at
			April 30, 2017				October 31, 2016
		Carrying		Fair		Carrying		Fair
		value		value		value		value
FINANCIAL ASSETS
Cash and due from banks		$	5,271	$	5,271	$	3,907	$	3,907
Interest-bearing deposits with banks			54,227		54,227		53,714		53,714
Held-to-maturity securities1
	Government and government-related securities		50,961		51,204		51,290		51,855
	Other debt securities		31,369		31,279		33,105		33,135
Total held-to-maturity securities			82,330		82,483		84,395		84,990
Securities purchased under reverse repurchase agreements			112,264		112,264		84,324		84,324
Loans			597,597		600,642		584,243		589,080
Debt securities classified as loans			864		1,028		1,413		1,678
Total loans			598,461		601,670		585,656		590,758
Other
	Customers' liability under acceptances		17,002		17,002		15,706		15,706
	Amounts receivable from brokers, dealers, and clients		31,188		31,188		17,436		17,436
	Other assets		4,998		4,998		4,352		4,352
Total assets not carried at fair value		$	905,741	$	909,103	$	849,490	$	855,187
FINANCIAL LIABILITIES
Deposits		$	807,112	$	809,072	$	773,660	$	776,161
Acceptances			17,002		17,002		15,706		15,706
Obligations related to securities sold under repurchase agreements			72,426		72,426		45,316		45,316
Securitization liabilities at amortized cost			17,198		17,475		17,918		18,276
Amounts payable to brokers, dealers, and clients			29,433		29,433		17,857		17,857
Other liabilities			9,905		9,939		9,229		9,288
Subordinated notes and debentures			8,482		9,110		10,891		11,331
Total liabilities not carried at fair value		$	961,558	$	964,457	$	890,577	$	893,935

1 Includes debt securities reclassified from available-for-sale to held-to-maturity. Refer to Note 4 for carrying value and fair value of the reclassified debt securities.

Fair Value Hierarchy and Valuation of Assets and Liabilities Classified as Level 3

IFRS requires disclosure of a three-level hierarchy for fair value measurements based upon the observability of inputs to the valuation of an asset or liability as of the measurement date. Refer to Note 5 of the 2016 Annual Consolidated Financial Statements for a description of the three levels.

There have been no significant changes to these valuation techniques, unobservable inputs, and sensitivities during the three and six months ended April 30, 2017. The significant valuation techniques and significant unobservable inputs used in the fair value measurements of Level 3 financial assets and financial liabilities are described and quantified within the "Valuation of Assets and Liabilities Classified as Level 3" section in Note 5 of the 2016 Annual Consolidated Financial Statements. 

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 55

The following table presents the levels within the fair value hierarchy for each of the assets and liabilities measured at fair value on a recurring basis as at April 30, 2017, and October 31, 2016.

Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value on a Recurring Basis
(millions of Canadian dollars)																	As at
							April 30, 2017								October 31, 2016
		Level 1		Level 2		Level 3		Total1		Level 1		Level 2		Level 3		Total1
FINANCIAL ASSETS AND COMMODITIES
Trading loans, securities, and other2
Government and government-related securities
Canadian government debt
	Federal	$	497	$	7,617	$	27	$	8,141	$	70	$	9,978	$	34	$	10,082
	Provinces		–		5,951		7		5,958		–		5,678		–		5,678
U.S. federal, state, municipal governments,
	and agencies debt		–		18,502		–		18,502		724		17,246		–		17,970
Other OECD government guaranteed debt			–		3,011		37		3,048		–		4,424		73		4,497
Mortgage-backed securities			–		2,060		–		2,060		–		1,472		–		1,472
Other debt securities
Canadian issuers			–		3,095		17		3,112		–		2,697		15		2,712
Other issuers			–		7,790		160		7,950		–		7,572		148		7,720
Equity securities
Common shares			39,220		220		–		39,440		29,054		96		65		29,215
Preferred shares			55		48		–		103		27		–		–		27
Trading loans			–		11,765		–		11,765		–		11,606		–		11,606
Commodities			11,544		183		–		11,727		8,071		176		–		8,247
Retained interests			–		–		27		27		–		–		31		31
			51,316		60,242		275		111,833		37,946		60,945		366		99,257
Derivatives
Interest rate contracts			8		18,894		–		18,902		4		27,364		–		27,368
Foreign exchange contracts			56		40,799		5		40,860		44		41,828		9		41,881
Credit contracts			–		14		–		14		–		–		–		–
Equity contracts			–		1,305		762		2,067		–		1,391		729		2,120
Commodity contracts			103		724		4		831		51		816		6		873
			167		61,736		771		62,674		99		71,399		744		72,242
Financial assets designated at
	fair value through profit or loss
Securities2			230		3,635		106		3,971		80		4,046		157		4,283
Loans			–		–		–		–		–		–		–		–
			230		3,635		106		3,971		80		4,046		157		4,283
Available-for-sale securities
Government and government-related securities
Canadian government debt
	Federal		–		15,058		–		15,058		–		14,717		–		14,717
	Provinces		–		8,031		–		8,031		–		7,851		–		7,851
U.S. federal, state, municipal governments,
	and agencies debt		–		39,004		–		39,004		–		34,473		–		34,473
Other OECD government guaranteed debt			–		17,976		6		17,982		–		15,503		6		15,509
Mortgage-backed securities			–		8,258		–		8,258		–		4,949		–		4,949
Other debt securities
Asset-backed securities			–		22,461		–		22,461		–		18,593		–		18,593
Non-agency collateralized mortgage obligation portfolio			–		824		–		824		–		625		–		625
Corporate and other debt			–		7,618		20		7,638		–		8,266		20		8,286
Equity securities
Common shares3,4			354		160		1,644		2,158		231		223		1,594		2,048
Preferred shares			171		–		109		280		88		–		98		186
Debt securities reclassified from trading			–		10		281		291		–		49		279		328
			525		119,400		2,060		121,985		319		105,249		1,997		107,565
Securities purchased under reverse
	repurchase agreements		–		1,570		–		1,570		–		1,728		–		1,728
FINANCIAL LIABILITIES
Trading deposits		$	–	$	90,467	$	2,491	$	92,958	$	–	$	77,572	$	2,214	$	79,786
Derivatives
Interest rate contracts			13		15,759		81		15,853		3		22,092		95		22,190
Foreign exchange contracts			25		37,463		4		37,492		16		39,535		5		39,556
Credit contracts			–		240		–		240		–		257		–		257
Equity contracts			–		1,454		1,545		2,999		–		1,351		1,408		2,759
Commodity contracts			79		685		5		769		75		587		1		663
			117		55,601		1,635		57,353		94		63,822		1,509		65,425
Securitization liabilities at fair value			–		12,824		–		12,824		–		12,490		–		12,490
Other financial liabilities designated
	at fair value through profit or loss		–		1		5		6		–		177		13		190
Obligations related to securities sold short2			1,354		31,257		–		32,611		1,396		31,705		14		33,115
Obligations related to securities sold
	under repurchase agreements		–		2,182		–		2,182		–		3,657		–		3,657

1 Fair value is the same as carrying value.

2 Balances reflect the reduction of securities owned (long positions) by the amount of identical securities sold but not yet purchased (short positions).

3 As at April 30, 2017, the carrying values of certain available-for-sale equity securities of $7 million (October 31, 2016 – $6 million) are assumed to approximate fair value in the absence of quoted market prices in an active market.

4 As at April 30, 2017, common shares include the fair value of Federal Reserve Stock and Federal Home Loan Bank stock of $1.4 billion (October 31, 2016 – $1.3 billion) which are redeemable by the issuer at cost for which cost approximates fair value. These securities cannot be traded in the market, hence, these securities have not been subject to sensitivity analysis of Level 3 financial assets and liabilities.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 56

The Bank's policy is to record transfers of assets and liabilities between the different levels of the fair value hierarchy using the fair values as at the end of each reporting period. Assets are transferred between Level 1 and Level 2 depending on if there is sufficient frequency and volume in an active market.

There were no significant transfers between Level 1 and Level 2 during the three and six months ended April 30, 2017 and April 30, 2016.

Movements of Level 3 instruments

Significant transfers into and out of Level 3 occur mainly due to the following reasons:

• Transfers from Level 3 to Level 2 occur when techniques used for valuing the instrument incorporate significant observable market inputs or broker-dealer quotes which were previously not observable.

• Transfers from Level 2 to Level 3 occur when an instrument's fair value, which was previously determined using valuation techniques with significant observable market inputs, is now determined using valuation techniques with significant non-observable inputs.

Due to the unobservable nature of the inputs used to value Level 3 financial instruments there may be uncertainty about the valuation of these instruments. The fair value of Level 3 instruments may be drawn from a range of reasonably possible alternatives. In determining the appropriate levels for these unobservable inputs, parameters are chosen so that they are consistent with prevailing market evidence and management judgment.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 57

The following tables reconcile changes in fair value of all assets and liabilities measured at fair value using significant Level 3 non-observable inputs for the three and six months ended April 30.

Reconciliation of Changes in Fair Value for Level 3 Assets and Liabilities

(millions of Canadian dollars)

Total realized and

Change in

Fair

unrealized gains

Fair

unrealized

value

(losses)

Movements

Transfers

value

gains

as at

Included

as at

(losses) on

February 1

in

Included

Into

Out of

April 30

instruments

2017

income1

in OCI2

Purchases

Issuances

Other3

Level 3

Level 3

2017

still held4

FINANCIAL ASSETS

Trading loans, securities,

and other

Government and government-

related securities

Canadian government debt

Federal

$

26

$

1

$

–

$

–

$

–

$

–

$

–

$

–

$

27

$

1

Provinces

–

–

–

–

–

–

7

–

7

–

Other OECD government

guaranteed debt

64

3

–

3

–

(27)

20

(26)

37

2

Other debt securities

Canadian issuers

21

1

–

–

–

(10)

5

–

17

1

Other issuers

128

3

–

157

–

(162)

55

(21)

160

5

Equity securities

Common shares

48

–

–

–

–

(48)

–

–

–

–

Preferred shares

–

–

–

–

–

–

–

–

–

–

Trading loans

–

–

–

–

–

–

–

–

–

–

Commodities

–

–

–

–

–

–

–

–

–

–

Retained interests

29

–

–

–

–

(2)

–

–

27

–

316

8

–

160

–

(249)

87

(47)

275

9

Financial assets designated

at fair value through

profit or loss

Securities

140

2

–

1

–

(37)

–

–

106

2

Loans

–

–

–

–

–

–

–

–

–

–

140

2

–

1

–

(37)

–

–

106

2

Available-for-sale securities

Government and government-

related securities

Other OECD government

guaranteed debt

6

–

–

–

–

–

–

–

6

–

Other debt securities

Asset-backed securities

–

–

–

–

–

–

–

–

–

–

Corporate and other debt

20

–

–

–

–

–

–

–

20

–

Equity securities

Common shares

1,573

(5)

10

15

–

51

–

–

1,644

10

Preferred shares

107

6

2

4

–

(10)

–

–

109

2

Debt securities reclassified

from trading

255

18

8

–

–

–

–

–

281

8

$

1,961

$

19

$

20

$

19

$

–

$

41

$

–

$

–

$

2,060

$

20

Total realized and

Change in

Fair

unrealized losses

Fair

unrealized

value

(gains)

Movements

Transfers

value

gains

as at

Included

as at

(losses) on

February 1

in

Included

Into

Out of

April 30

instruments

2017

income1

in OCI2

Purchases

Issuances

Other3

Level 3

Level 3

2017

still held4

FINANCIAL LIABILITIES

Trading deposits5

$

2,265

$

50

$

–

$

(144)

$

433

$

(108)

$

–

$

(5)

$

2,491

$

65

Derivatives6

Interest rate contracts

77

4

–

–

–

–

–

–

81

6

Foreign exchange contracts

(4)

4

–

–

–

(2)

1

–

(1)

–

Credit contracts

–

–

–

–

–

–

–

–

–

–

Equity contracts

810

(11)

–

(20)

55

(51)

–

–

783

(11)

Commodity contracts

(1)

2

–

–

–

–

–

–

1

2

882

(1)

–

(20)

55

(53)

1

–

864

(3)

Other financial liabilities

designated at fair value

through profit or loss

11

(20)

–

–

27

(13)

–

–

5

(15)

Obligations related to

securities sold short

25

–

–

(25)

–

–

–

–

–

–

1 Gains (losses) on financial assets and liabilities are recognized in Net securities gains (losses), Trading income (loss), and Other income (loss) on the Interim Consolidated Statement of Income.

2 Other comprehensive income (OCI).

3 Consists of sales, settlements, and foreign exchange.

4 Changes in unrealized gains (losses) on available-for-sale securities are recognized in accumulated other comprehensive income (AOCI).

5 Issuances and repurchases of trading deposits are reported on a gross basis.

6 As at April 30, 2017, consists of derivative assets of $0.8 billion (February 1, 2017 – $0.8 billion) and derivative liabilities of $1.6 billion (February 1, 2017 – $1.7 billion), which have been netted on this table for presentation purposes only.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 58

Reconciliation of Changes in Fair Value for Level 3 Assets and Liabilities

(millions of Canadian dollars)

Total realized and

Change in

Fair

unrealized gains

Fair

unrealized

value

(losses)

Movements

Transfers

value

gains

as at

Included

as at

(losses) on

November 1

in

Included

Into

Out of

April 30

instruments

2016

income1

in OCI

Purchases

Issuances

Other2

Level 3

Level 3

2017

still held3

FINANCIAL ASSETS

Trading loans, securities,

and other

Government and government-

related securities

Canadian government debt

Federal

$

34

$

(2)

$

–

$

3

$

–

$

(8)

$

–

$

–

$

27

$

(3)

Provinces

–

–

–

–

–

–

7

–

7

–

Other OECD government

guaranteed debt

73

6

–

16

–

(44)

20

(34)

37

1

Other debt securities

Canadian issuers

15

–

–

–

–

(1)

5

(2)

17

–

Other issuers

148

5

–

214

–

(263)

93

(37)

160

–

Equity securities

Common shares

65

–

–

–

–

(65)

–

–

–

–

Preferred shares

–

–

–

–

–

–

–

–

–

–

Trading loans

–

–

–

–

–

–

–

–

–

–

Commodities

–

–

–

–

–

–

–

–

–

–

Retained interests

31

–

–

–

–

(4)

–

–

27

–

366

9

–

233

–

(385)

125

(73)

275

(2)

Financial assets designated

at fair value through

profit or loss

Securities

157

(1)

–

4

–

(54)

–

–

106

(1)

Loans

–

–

–

–

–

–

–

–

–

–

157

(1)

–

4

–

(54)

–

–

106

(1)

Available-for-sale securities

Government and government-

related securities

Other OECD government

guaranteed debt

6

–

–

–

–

–

–

–

6

–

Other debt securities

Asset-backed securities

–

–

–

–

–

–

–

–

–

–

Corporate and other debt

20

–

–

–

–

–

–

–

20

–

Equity securities

Common shares

1,594

1

16

39

–

(6)

–

–

1,644

16

Preferred shares

98

6

12

4

–

(11)

–

–

109

12

Debt securities reclassified

from trading

279

8

(3)

–

–

(2)

–

(1)

281

8

$

1,997

$

15

$

25

$

43

$

–

$

(19)

$

–

$

(1)

$

2,060

$

36

Total realized and

Change in

Fair

unrealized losses

Fair

unrealized

value

(gains)

Movements

Transfers

value

losses

as at

Included

as at

(gains) on

November 1

in

Included

Into

Out of

April 30

instruments

2016

income1

in OCI

Purchases

Issuances

Other2

Level 3

Level 3

2017

still held3

FINANCIAL LIABILITIES

Trading deposits4

$

2,214

$

119

$

–

$

(495)

$

859

$

(234)

$

33

$

(5)

$

2,491

$

115

Derivatives5

Interest rate contracts

95

(13)

–

–

–

(1)

–

–

81

(9)

Foreign exchange contracts

(4)

6

–

–

–

(2)

(1)

–

(1)

–

Credit contracts

–

–

–

–

–

–

–

–

–

–

Equity contracts

679

141

–

(41)

104

(100)

–

–

783

143

Commodity contracts

(5)

2

–

–

–

3

–

1

1

2

765

136

–

(41)

104

(100)

(1)

1

864

136

Other financial liabilities

designated at fair value

through profit or loss

13

10

–

–

53

(71)

–

–

5

–

Obligations related to

securities sold short

$

14

$

–

$

–

$

(14)

$

–

$

–

$

–

$

–

$

–

$

–

1 Gains (losses) on financial assets and liabilities are recognized in Net securities gains (losses), Trading income (loss), and Other income (loss) on the Interim Consolidated Statement of Income.

2 Consists of sales, settlements, and foreign exchange.

3 Changes in unrealized gains (losses) on available-for-sale securities are recognized in AOCI.

4 Issuances and repurchases of trading deposits are reported on a gross basis.

5 As at April 30, 2017, consists of derivative assets of $0.8 billion (November 1, 2016 – $0.7 billion) and derivative liabilities of $1.6 billion (November 1, 2016 – $1.5 billion), which have been netted on this table for presentation purposes only.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 59

Reconciliation of Changes in Fair Value for Level 3 Assets and Liabilities
(millions of Canadian dollars)				Total realized and																Change in
			Fair	unrealized gains															Fair	unrealized
			value	(losses)				Movements								Transfers			value	gains
		as at		Included														as at		(losses) on
		February 1		in		Included								Into		Out of		April 30		instruments
		2016		income1		in OCI		Purchases		Issuances		Other2		Level 3		Level 3		2016		still held3
FINANCIAL ASSETS
Trading loans, securities,
	and other
Government and government-
	related securities
Canadian government debt
	Provinces	$	64	$	1	$	–	$	–	$	–	$	(8)	$	–	$	–	$	57	$	(7)
Other OECD government
	guaranteed debt		1		–		–		–		–		–		–		(1)		–		–
Other debt securities
Canadian issuers			22		–		–		–		–		(9)		–		–		13		–
Other issuers			261		3		–		36		–		(54)		189		(191)		244		(2)
Equity securities
Common shares			3		–		–		5		–		(3)		–		–		5		–
Preferred shares			26		–		–		1		–		(26)		–		–		1		–
Retained interests			36		–		–		–		–		(2)		–		–		34		–
			413		4		–		42		–		(102)		189		(192)		354		(9)
Financial assets designated
	at fair value through
	profit or loss
Securities		$	90	$	(1)	$	–	$	1	$	–	$	–	$	–	$	–	$	90	$	(1)
			90		(1)		–		1		–		–		–		–		90		(1)
Available-for-sale securities
Government and government-
	related securities
Other OECD government
	guaranteed debt		7		–		–		–		–		–		–		–		7		–
Other debt securities
Asset-backed securities			–		–		–		–		–		–		–		–		–		–
Corporate and other debt			78		–		(9)		–		–		(1)		3		(51)		20		(4)
Equity securities
Common shares			1,656		6		(6)		13		–		(169)		–		–		1,500		(6)
Preferred shares			82		–		2		5		–		–		–		–		89		2
Debt securities reclassified
	from trading		287		8		(21)		–		–		(2)		–		(19)		253		(21)
		$	2,110	$	14	$	(34)	$	18	$	–	$	(172)	$	3	$	(70)	$	1,869	$	(29)
				Total realized and																Change in
			Fair	unrealized losses															Fair	unrealized
			value	(gains)				Movements								Transfers			value	gains
		as at		Included														as at		(losses) on
		February 1		in		Included								Into		Out of		April 30		instruments
		2016		income1		in OCI		Purchases		Issuances		Other2		Level 3		Level 3		2016		still held3
FINANCIAL LIABILITIES
Trading deposits4		$	1,957	$	91	$	–	$	(75)	$	287	$	(51)	$	–	$	–	$	2,209	$	115
Derivatives5
Interest rate contracts			86		2		–		–		–		(5)		–		–		83		–
Foreign exchange contracts			(10)		(1)		–		–		–		3		–		–		(8)		(6)
Credit contracts			–		–		–		–		–		–		–		–		–		–
Equity contracts			363		96		–		(31)		70		(22)		1		–		477		99
Commodity contracts			1		(2)		–		–		–		(2)		(1)		–		(4)		(2)
			440		95		–		(31)		70		(26)		–		–		548		91
Other financial liabilities
	designated at fair value
	through profit or loss		5		2		–		–		34		(18)		–		–		23		9
Obligations related to
	securities sold short	$	18	$	–	$	–	$	(18)	$	–	$	4	$	–	$	–	$	4	$	–

1 Gains (losses) on financial assets and liabilities are recognized in Net securities gains (losses), Trading income (loss), and Other income (loss) on the Interim Consolidated Statement of Income.

2 Consists of sales, settlements, and foreign exchange.

3 Changes in unrealized gains (losses) on available-for-sale securities are recognized in AOCI.

4 Issuances and repurchases of trading deposits are reported on a gross basis.

5 As at April 30, 2016, consists of derivative assets of $0.7 billion (February 1, 2016 – $0.5 billion) and derivative liabilities of $1.2 billion (February 1, 2016 – $1.0 billion), which have been netted on this table for presentation purposes only.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 60

Reconciliation of Changes in Fair Value for Level 3 Assets and Liabilities
(millions of Canadian dollars)				Total realized and																Change in
			Fair	unrealized gains															Fair	unrealized
			value	(losses)				Movements								Transfers			value	gains
		as at		Included														as at		(losses) on
		November 1		in		Included								Into		Out of		April 30		instruments
		2015		income1		in OCI		Purchases		Issuances		Other2		Level 3		Level 3		2016		still held3
FINANCIAL ASSETS
Trading loans, securities,
	and other
Government and government-
	related securities
Canadian government debt
	Provinces	$	24	$	1	$	–	$	39	$	–	$	(7)	$	–	$	–	$	57	$	(5)
Other OECD government
	guaranteed debt		5		–		–		1		–		–		–		(6)		–		–
Other debt securities
Canadian issuers			57		–		–		8		–		(52)		1		(1)		13		–
Other issuers			191		6		–		69		–		(88)		301		(235)		244		–
Equity securities
Common shares			186		–		–		8		–		(189)		–		–		5		–
Preferred shares			5		–		–		27		–		(31)		–		–		1		–
Retained interests			38		–		–		–		–		(4)		–		–		34		–
			506		7		–		152		–		(371)		302		(242)		354		(5)
Financial assets designated
	at fair value through
	profit or loss
Securities			–		(1)		–		91		–		–		–		–		90		(1)
			–		(1)		–		91		–		–		–		–		90		(1)
Available-for-sale securities
Government and government-
	related securities
Other OECD government
	guaranteed debt		7		–		–		–		–		–		–		–		7		–
Other debt securities
Asset-backed securities			501		–		–		–		–		(501)		–		–		–		–
Corporate and other debt			147		2		(2)		–		–		(6)		3		(124)		20		(4)
Equity securities
Common shares			1,575		30		(27)		36		–		(114)		–		–		1,500		(19)
Preferred shares			94		(17)		6		6		–		–		–		–		89		6
Debt securities reclassified
	from trading		282		15		(6)		–		–		(3)		–		(35)		253		(21)
		$	2,606	$	30	$	(29)	$	42	$	–	$	(624)	$	3	$	(159)	$	1,869	$	(38)
				Total realized and																Change in
			Fair	unrealized losses															Fair	unrealized
			value	(gains)				Movements								Transfers			value	gains
		as at		Included														as at		(losses) on
		November 1		in		Included								Into		Out of		April 30		instruments
		2015		income1		in OCI		Purchases		Issuances		Other2		Level 3		Level 3		2016		still held3
FINANCIAL LIABILITIES
Trading deposits4		$	1,880	$	59	$	–	$	(141)	$	529	$	(106)	$	(12)	$	–	$	2,209	$	83
Derivatives5
Interest rate contracts			88		(1)		–		–		–		(4)		–		–		83		(1)
Foreign exchange contracts			(1)		(9)		–		–		–		2		–		–		(8)		(7)
Credit contracts			(4)		3		–		–		–		1		–		–		–		4
Equity contracts			397		80		–		(57)		125		(69)		1		–		477		81
Commodity contracts			3		3		–		–		–		(8)		(2)		–		(4)		(2)
			483		76		–		(57)		125		(78)		(1)		–		548		75
Other financial liabilities
	designated at fair value
	through profit or loss		13		(16)		–		–		55		(29)		–		–		23		(4)
Obligations related to
	securities sold short	$	59	$	–	$	–	$	(78)	$	–	$	23	$	–	$	–	$	4	$	–

1 Gains (losses) on financial assets and liabilities are recognized in Net securities gains (losses), Trading income (loss), and Other income (loss) on the Interim Consolidated Statement of Income.

2 Consists of sales, settlements, and foreign exchange.

3 Changes in unrealized gains (losses) on available-for-sale securities are recognized in AOCI.

4 Beginning February 1, 2016, issuances and repurchases of trading deposits are reported on a gross basis.

5 As at April 30, 2016, consists of derivative assets of $0.7 billion (November 1, 2015 – $0.6 billion) and derivative liabilities of $1.2 billion (November 1, 2015 – $1.1 billion), which have been netted on this table for presentation purposes only.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 61

FINANCIAL ASSETS AND LIABILITIES Designated at Fair Value

Securities Designated at Fair Value through Profit or Loss

Certain securities supporting insurance reserves within the Bank's insurance underwriting subsidiaries have been designated at fair value through profit or loss. The actuarial valuation of the insurance reserve is measured using a discount factor which is based on the yield of the supporting invested assets, with changes in the discount factor being recognized on the Interim Consolidated Statement of Income. The unrealized gain or loss on securities designated at fair value through profit or loss is recognized on the Interim Consolidated Statement of Income in the same period as gains or losses resulting from changes to the discount rate used to value the insurance liabilities.

In addition, certain debt securities are managed on a fair value basis, or are economically hedged with derivatives as doing so eliminates or significantly reduces an accounting mismatch. As a result, these debt securities have been designated at fair value through profit or loss. The derivatives are carried at fair value, with the change in fair value recognized in non-interest income.

Other Liabilities Designated at Fair Value through Profit or Loss

Certain deposits and loan commitments issued to customers to provide a mortgage at a fixed rate have been designated at fair value through profit or loss. These deposits and commitments are economically hedged with derivatives and other financial instruments where the changes in fair value are recognized in non-interest income. The designation of these deposits and loan commitments at fair value through profit or loss eliminates an accounting mismatch that would otherwise arise. The contractual maturity amounts for the deposits designated at fair value through profit or loss were not significantly more than the carrying amount as at April 30, 2017 and October 31, 2016. As at April 30, 2017 and October 31, 2016, the respective fair value of deposits designated at fair value through profit or loss include insignificant amounts of the Bank's own credit risk. Due to the short-term nature of the loan commitments, changes in the Bank's own credit risk do not have a significant impact on the determination of fair value.

Income (Loss) from Changes in Fair Value of Financial Assets and Liabilities Designated at Fair Value through Profit or Loss

During the three and six months ended April 30, 2017, the income (loss) representing net changes in the fair value of financial assets and liabilities designated at fair value through profit or loss was $26 million and $(86) million, respectively (three and six months ended April 30, 2016 – $(41) million and $(46) million, respectively).

NOTE 4: SECURITIES

RECLASSIFICATION OF CERTAIN DEBT SECURITIES – TRADING TO AVAILABLE-FOR-SALE

The fair value of the reclassified debt securities was $291 million as at April 30, 2017 (October 31, 2016 – $328 million). For the three and six months ended April 30, 2017, net interest income of $3 million and $6 million after tax, respectively (three and six months ended April 30, 2016 – $5 million and $11 million after tax, respectively) was recorded relating to the reclassified debt securities. The increase in fair value of these securities during the three months ended April 30, 2017, of $11 million after tax and the decrease in fair value of these securities during the six months ended April 30, 2017, of $2 million after tax, respectively (three and six months ended April 30, 2016 – increase of $5 million and $2 million after tax, respectively) was recorded in OCI. Had the Bank not reclassified these debt securities, the change in the fair value of these debt securities would have been included as part of trading income, the impact of which would have resulted in an increase in net income for the three months ended April 30, 2017, of $11 million after tax and a decrease in net income for the six months ended April 30, 2017, of $2 million after tax (three and six months ended April 30, 2016 – increase in net income of $5 million and $2 million after tax, respectively).

RECLASSIFICATIONS OF CERTAIN DEBT SECURITIES – AVAILABLE-FOR-SALE TO HELD-TO-MATURITY

The Bank has reclassified certain debt securities from available-for-sale to held-to-maturity. For these debt securities, the Bank's strategy is to earn the yield to maturity to aid in prudent capital management under Basel III. These debt securities were previously recorded at fair value, with changes in fair value recognized in OCI. Subsequent to the date of reclassification, the net unrealized gain or loss recognized in AOCI is amortized to interest income over the remaining life of the reclassified debt securities using the effective interest rate method (EIRM). The reclassifications are non-cash transactions that are excluded from the Interim Consolidated Statement of Cash Flows.

The Bank has completed the following reclassifications.

Reclassifications from Available-for-Sale to Held-to-Maturity Securities
(millions of Canadian dollars, except as noted)
			April 30, 2017				October 31, 2016				As at the reclassification date
											Weighted-Average			Undiscounted
		Amount		Fair		Carrying		Fair		Carrying	effective interest			recoverable
Reclassification Date		reclassified		value		value		value		value	rate			cash flows
March 1, 2013	$	11,084	$	878	$	873	$	1,618	$	1,605	1.8	%	$	11,341
September 23, 2013		9,854		6,428		6,392		7,022		6,934	1.9			10,742
November 1, 2013		21,597		17,127		17,121		20,339		20,401	1.1			24,519
Other reclassifications1		8,342		8,256		8,349		8,607		8,577	2.5			9,490

1 Represents reclassifications completed during the years ended October 31, 2016 and October 31, 2015.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 62

Had the Bank not reclassified these debt securities, the change in the fair value recognized in OCI for these debt securities would have been an increase of $38 million and a decrease of $92 million, respectively, during the three and six months ended April 30, 2017 (three and six months ended April 30, 2016 – an increase of $103 million and $101 million, respectively). After the reclassification, the debt securities contributed the following amounts to net income. 

(millions of Canadian dollars)	For the three months ended				For the six months ended
	April 30, 2017		April 30, 2016		April 30, 2017		April 30, 2016
Net interest income1	$	143	$	152	$	293	$	309
Provision for (recovery of) income taxes		55		58		113		117
Net income	$	88	$	94	$	180	$	192

1 Includes amortization of net unrealized loss of $4 million and $6 million, respectively, during the three and six months ended April 30, 2017 (three and six months ended April 30, 2016 – net unrealized gains of $5 million and $14 million, respectively), associated with these reclassified held-to-maturity securities that is presented as reclassification to earnings of net gains in respect of available-for-sale securities on the Interim Consolidated Statement of Comprehensive Income. The impact of this amortization on net interest income is offset by the amortization of the corresponding net reclassification premium on these debt securities.

Unrealized Securities Gains (Losses)

The following table summarizes the unrealized gains and losses as at April 30, 2017, and October 31, 2016.

Unrealized Securities Gains (Losses) for Available-for-Sale Securities
(millions of Canadian dollars)															As at
							April 30, 2017								October 31, 2016
			Cost/		Gross		Gross				Cost/		Gross		Gross
		amortized		unrealized		unrealized			Fair	amortized		unrealized		unrealized			Fair
			cost1		gains		(losses)		value2		cost1		gains		(losses)		value2
Available-for-sale securities
Government and government-related
	securities
Canadian government debt
	Federal	$	15,015	$	54	$	(11)	$	15,058	$	14,671	$	62	$	(16)	$	14,717
	Provinces		8,008		37		(14)		8,031		7,871		29		(49)		7,851
U.S. federal, state, municipal governments, and
	agencies debt		38,663		389		(48)		39,004		34,377		176		(80)		34,473
Other OECD government guaranteed debt			17,928		80		(26)		17,982		15,574		13		(78)		15,509
Mortgage-backed securities			8,214		49		(5)		8,258		4,916		37		(4)		4,949
			87,828		609		(104)		88,333		77,409		317		(227)		77,499
Other debt securities
Asset-backed securities			22,421		105		(65)		22,461		18,665		57		(129)		18,593
Non-agency collateralized mortgage obligation
	portfolio		820		4		–		824		624		1		–		625
Corporate and other debt			7,580		71		(13)		7,638		8,229		83		(26)		8,286
			30,821		180		(78)		30,923		27,518		141		(155)		27,504
Equity securities
Common shares			1,989		190		(14)		2,165		1,934		134		(14)		2,054
Preferred shares			232		48		–		280		168		18		–		186
			2,221		238		(14)		2,445		2,102		152		(14)		2,240
Debt securities reclassified from trading			268		23		–		291		301		27		–		328
Total available-for-sale securities		$	121,138	$	1,050	$	(196)	$	121,992	$	107,330	$	637	$	(396)	$	107,571

1 Includes the foreign exchange translation of amortized cost balances at the period-end spot rate.

2 As at April 30, 2017, the carrying values of certain available-for-sale equity securities of $7 million (October 31, 2016 – $6 million) are carried at cost in the absence of quoted market prices in an active market and are included in the table above.

Securities Gains (Losses)

During the three and six months ended April 30, 2017, the net realized gains (losses) on available-for-sale securities were $46 million and $68 million, respectively (three and six months ended April 30, 2016 – $4 million and $13 million, respectively) and on held-to-maturity securities were nil and $(8) million, respectively (three and six months ended April 30, 2016 – nil). The Bank did not sell any held-to-maturity securities during the three months ended April 30, 2017 and April 30, 2016. During the six months ended April 30, 2017, the Bank sold certain held-to-maturity securities with an amortized cost of $460 million (six months ended April 30, 2016 - nil), due to significant external credit ratings deterioration, resulting in a significant increase in the Bank's risk-weighted assets. Impairment losses on available-for-sale securities for the three and six months ended April 30, 2017, were $10 million and $10 million, respectively (three and six months ended April 30, 2016 – $3 million and $24 million, respectively). None of these impairment losses related to debt securities in the reclassified portfolio as described in the Reclassification of Certain Debt Securities – Trading to Available-For-Sale section of this Note.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 63

NOTE 5: LOANS, IMPAIRED LOANS, AND ALLOWANCE FOR CREDIT LOSSES

The following table presents the Bank's loans, impaired loans, and related allowance for loan losses.

Loans, Impaired Loans, and Allowance for Loan Losses
(millions of Canadian dollars)	Gross loans									Allowance for loan losses1
		Neither									Individually		Incurred			Total
	past due		Past due						Counter-		insignificant		but not		allowance
		nor	but not						party		impaired		identified		for loan			Net
	impaired		impaired		Impaired2		Total		specific		loans		loan losses			losses		loans
																As at April 30, 2017
Residential mortgages3,4,5	$	213,327	$	2,621	$	845	$	216,793	$	–	$	41	$	43	$	84	$	216,709
Consumer instalment and other personal6		140,782		6,823		1,353		148,958		–		138		667		805		148,153
Credit card		30,297		1,775		391		32,463		–		314		1,005		1,319		31,144
Business and government3,4,5		200,187		1,378		701		202,266		143		30		1,288		1,461		200,805
	$	584,593	$	12,597	$	3,290	$	600,480	$	143	$	523	$	3,003	$	3,669	$	596,811
Debt securities classified as loans								1,034		134		–		35		169		865
Acquired credit-impaired loans								839		3		51		–		54		785
Total							$	602,353	$	280	$	574	$	3,038	$	3,892	$	598,461
																As at October 31, 2016
Residential mortgages3,4,5	$	213,586	$	2,523	$	852	$	216,961	$	–	$	49	$	48	$	97	$	216,864
Consumer instalment and other personal6		136,650		6,390		1,392		144,432		–		166		656		822		143,610
Credit card		29,715		1,825		374		31,914		–		290		924		1,214		30,700
Business and government3,4,5		191,229		1,454		891		193,574		189		30		1,198		1,417		192,157
	$	571,180	$	12,192	$	3,509	$	586,881	$	189	$	535	$	2,826	$	3,550	$	583,331
Debt securities classified as loans								1,674		206		–		55		261		1,413
Acquired credit-impaired loans								974		4		58		–		62		912
Total							$	589,529	$	399	$	593	$	2,881	$	3,873	$	585,656

1 Excludes allowance for off-balance sheet positions.

2 As at April 30, 2017, impaired loans exclude $0.6 billion (October 31, 2016 – $1.1 billion) of gross impaired debt securities classified as loans.

3 Excludes trading loans with a fair value of $12 billion as at April 30, 2017 (October 31, 2016 – $12 billion), and amortized cost of $11 billion as at April 30, 2017 (October 31, 2016 – $11 billion).

4 Includes insured mortgages of $112 billion as at April 30, 2017 (October 31, 2016 – $118 billion).

5 As at April 30, 2017, impaired loans with a balance of $151 million did not have a related allowance for loan losses (October 31, 2016 – $448 million). An allowance was not required for these loans as the balance relates to loans that are insured or loans where the realizable value of the collateral exceeded the loan amount.

6 Includes Canadian government-insured real estate personal loans of $17 billion as at April 30, 2017 (October 31, 2016 – $18 billion).

FORECLOSED ASSETS

Foreclosed assets are repossessed non-financial assets where the Bank gains title, ownership, or possession of individual properties, such as real estate properties, which are managed for sale in an orderly manner with the proceeds used to reduce or repay any outstanding debt. The Bank does not generally occupy foreclosed properties for its business use. The Bank predominantly relies on third-party appraisals to determine the carrying value of foreclosed assets. Foreclosed assets held for sale were $110 million as at April 30, 2017 (October 31, 2016 – $106 million), and were recorded in Other assets on the Interim Consolidated Balance Sheet.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 64

The changes to the Bank's allowance for credit losses, as at and for the six months ended April 30, are shown in the following tables.

Allowance for Credit Losses
(millions of Canadian dollars)												Foreign
		Balance as at		Provision								exchange		Balance as at
		November 1		for credit								and other		April 30
			2016	losses		Write-offs		Recoveries		Disposals		adjustments			2017
Counterparty-specific allowance
Business and government		$	189	$	(48)	$	(32)	$	36	$	–	$	(2)	$	143
Debt securities classified as loans			206		(5)		(5)		–		(63)		1		134
Total counterparty-specific allowance excluding
	acquired credit-impaired loans		395		(53)		(37)		36		(63)		(1)		277
Acquired credit-impaired loans1,2			4		(3)		–		12		–		(10)		3
Total counterparty-specific allowance			399		(56)		(37)		48		(63)		(11)		280
Collectively assessed allowance for
	individually insignificant impaired loans
Residential mortgages			49		7		(20)		5		–		–		41
Consumer instalment and other personal			166		377		(545)		139		–		1		138
Credit card			290		589		(690)		121		–		4		314
Business and government			30		31		(46)		14		–		1		30
Total collectively assessed allowance for
	individually insignificant impaired loans
	excluding acquired credit-impaired loans		535		1,004		(1,301)		279		–		6		523
Acquired credit-impaired loans1,2			58		(13)		(1)		2		–		5		51
Total collectively assessed allowance for
	individually insignificant impaired loans		593		991		(1,302)		281		–		11		574
Collectively assessed allowance for incurred
	but not identified credit losses
Residential mortgages			48		(6)		–		–		–		1		43
Consumer instalment and other personal			685		9		–		–		–		5		699
Credit card			1,169		106		–		–		–		13		1,288
Business and government			1,424		88		–		–		–		20		1,532
Debt securities classified as loans			55		1		–		–		(20)		(1)		35
Total collectively assessed allowance for
	incurred but not identified credit losses		3,381		198		–		–		(20)		38		3,597
Allowance for credit losses
Residential mortgages			97		1		(20)		5		–		1		84
Consumer instalment and other personal			851		386		(545)		139		–		6		837
Credit card			1,459		695		(690)		121		–		17		1,602
Business and government			1,643		71		(78)		50		–		19		1,705
Debt securities classified as loans			261		(4)		(5)		–		(83)		–		169
Total allowance for credit losses excluding
	acquired credit-impaired loans		4,311		1,149		(1,338)		315		(83)		43		4,397
Acquired credit-impaired loans1,2			62		(16)		(1)		14		–		(5)		54
Total allowance for credit losses			4,373		1,133		(1,339)		329		(83)		38		4,451
Less: Allowance for off-balance sheet positions3			500		53		–		–		–		6		559
Allowance for loan losses		$	3,873	$	1,080	$	(1,339)	$	329	$	(83)	$	32	$	3,892

1 Includes all Federal Deposit Insurance Corporation (FDIC) covered loans and other acquired credit-impaired (ACI) loans.

2 Other adjustments are required as a result of the accounting for FDIC covered loans. For additional information, refer to the "FDIC Covered Loans" section in this Note.

3 The allowance for credit losses for off-balance sheet positions is recorded in Other liabilities on the Interim Consolidated Balance Sheet.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 65

Allowance for Credit Losses
(millions of Canadian dollars)												Foreign
		Balance as at		Provision								exchange		Balance as at
		November 1		for credit								and other			April 30
			2015	losses		Write-offs		Recoveries		Disposals		adjustments			2016
Counterparty-specific allowance
Business and government		$	156	$	57	$	(34)	$	26	$	–	$	(4)	$	201
Debt securities classified as loans			207		7		(6)		–		–		(9)		199
Total counterparty-specific allowance excluding
	acquired credit-impaired loans		363		64		(40)		26		–		(13)		400
Acquired credit-impaired loans1,2			6		(4)		–		9		–		(6)		5
Total counterparty-specific allowance			369		60		(40)		35		–		(19)		405
Collectively assessed allowance for
	individually insignificant impaired loans
Residential mortgages			47		1		(20)		5		–		–		33
Consumer instalment and other personal			136		346		(471)		132		–		(4)		139
Credit card			217		515		(589)		128		–		(13)		258
Business and government			28		30		(49)		19		–		–		28
Total collectively assessed allowance for
	individually insignificant impaired loans
	excluding acquired credit-impaired loans		428		892		(1,129)		284		–		(17)		458
Acquired credit-impaired loans1,2			77		(12)		(2)		4		–		(1)		66
Total collectively assessed allowance for
	individually insignificant impaired loans		505		880		(1,131)		288		–		(18)		524
Collectively assessed allowance for incurred
	but not identified credit losses
Residential mortgages			58		16		–		–		–		(3)		71
Consumer instalment and other personal			657		52		–		–		–		(14)		695
Credit card			1,029		61		–		–		–		(22)		1,068
Business and government			1,072		162		–		–		–		(38)		1,196
Debt securities classified as loans			57		(5)		–		–		–		(2)		50
Total collectively assessed allowance for
	incurred but not identified credit losses		2,873		286		–		–		–		(79)		3,080
Allowance for credit losses
Residential mortgages			105		17		(20)		5		–		(3)		104
Consumer instalment and other personal			793		398		(471)		132		–		(18)		834
Credit card			1,246		576		(589)		128		–		(35)		1,326
Business and government			1,256		249		(83)		45		–		(42)		1,425
Debt securities classified as loans			264		2		(6)		–		–		(11)		249
Total allowance for credit losses excluding
	acquired credit-impaired loans		3,664		1,242		(1,169)		310		–		(109)		3,938
Acquired credit-impaired loans1,2			83		(16)		(2)		13		–		(7)		71
Total allowance for credit losses			3,747		1,226		(1,171)		323		–		(116)		4,009
Less: Allowance for off-balance sheet positions3			313		93		–		–		–		(13)		393
Allowance for loan losses		$	3,434	$	1,133	$	(1,171)	$	323	$	–	$	(103)	$	3,616

1 Includes all FDIC covered loans and other ACI loans.

2 Other adjustments are required as a result of the accounting for FDIC covered loans. For additional information, refer to the "FDIC Covered Loans" section in this Note.

3 The allowance for credit losses for off-balance sheet positions is recorded in Other liabilities on the Interim Consolidated Balance Sheet.

LOANS PAST DUE BUT NOT IMPAIRED

A loan is classified as past due when a borrower has failed to make a payment by the contractual due date. The following table summarizes loans that are contractually past due but not impaired as at April 30, 2017 and October 31, 2016.

Loans Past Due but not Impaired1
(millions of Canadian dollars)																As at
		April 30, 2017								October 31, 2016
		1-30		31-60		61-89				1-30		31-60		61-89
	days		days		days		Total		days		days		days		Total
Residential mortgages	$	2,072	$	427	$	122	$	2,621	$	1,876	$	486	$	161	$	2,523
Consumer instalment and other personal		5,908		706		209		6,823		5,364		812		214		6,390
Credit card		1,289		294		192		1,775		1,340		303		182		1,825
Business and government		1,226		95		57		1,378		1,270		138		46		1,454
Total	$	10,495	$	1,522	$	580	$	12,597	$	9,850	$	1,739	$	603	$	12,192

1 Excludes all ACI loans and debt securities classified as loans.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 66

COLLATERAL

As at April 30, 2017, the fair value of financial collateral held against loans that were past due but not impaired was $372 million (October 31, 2016 – $455 million). In addition, the Bank also holds non-financial collateral as security for loans. The fair value of non-financial collateral is determined at the origination date of the loan. A revaluation of non-financial collateral is performed if there has been a significant change in the terms and conditions of the loan and/or the loan is considered impaired. Management considers the nature of the collateral, seniority ranking of the debt, and loan structure in assessing the value of collateral. These estimated cash flows are reviewed at least annually, or more frequently when new information indicates a change in the timing or amount expected to be received.

ACQUIRED CREDIT-IMPAIRED LOANS

ACI loans contain commercial, retail, and FDIC covered loans originating from the South Financial and FDIC-assisted acquisitions. At acquisition date, outstanding unpaid principal balances were $6.3 billion and $2.1 billion, respectively, and related fair values were $5.6 billion and $1.9 billion, respectively.

Acquired Credit-Impaired Loans
(millions of Canadian dollars)		As at
	April 30		October 31
	2017		2016
FDIC-assisted acquisitions
Unpaid principal balance1	$	448	$	508
Credit related fair value adjustments2		(12)		(11)
Interest rate and other related premium/(discount)		(15)		(17)
Carrying value		421		480
Counterparty-specific allowance3		(1)		(1)
Allowance for individually insignificant impaired loans3		(31)		(35)
Carrying value net of related allowance – FDIC-assisted acquisitions4		389		444
South Financial
Unpaid principal balance1		451		529
Credit related fair value adjustments2		(15)		(15)
Interest rate and other related premium/(discount)		(18)		(20)
Carrying value		418		494
Counterparty-specific allowance3		(2)		(3)
Allowance for individually insignificant impaired loans3		(20)		(23)
Carrying value net of related allowance – South Financial		396		468
Total carrying value net of related allowance – Acquired credit-impaired loans	$	785	$	912

1 Represents contractual amount owed net of charge-offs since the acquisition of the loan.

2 Credit related fair value adjustments include incurred credit losses on acquisition and are not accreted to interest income.

3 Management concluded as part of the Bank's assessment of the ACI loans that it was probable that higher than estimated principal credit losses would result in a decrease in expected cash flows subsequent to acquisition. As a result, counterparty-specific and individually insignificant allowances have been recognized.

4 Carrying value does not include the effect of the FDIC loss sharing agreement.

FDIC COVERED LOANS

As at April 30, 2017, the balance of FDIC covered loans was $421 million (October 31, 2016 – $480 million) and was recorded in Loans on the Interim Consolidated Balance Sheet. As at April 30, 2017, the balance of indemnification assets was $20 million (October 31, 2016 – $22 million) and was recorded in Other assets on the Interim Consolidated Balance Sheet.

NOTE 6: INVESTMENT IN TD AMERITRADE HOLDING CORPORATION

The Bank has significant influence over TD Ameritrade Holding Corporation (TD Ameritrade) and accounts for its investment in TD Ameritrade using the equity method. The Bank's equity share in TD Ameritrade's earnings, excluding dividends, is reported on a one-month lag basis. The Bank takes into account changes in the subsequent period that would significantly affect the results.

As at April 30, 2017, the Bank's reported investment in TD Ameritrade was 42.21% (October 31, 2016 – 42.38%) of the outstanding shares of TD Ameritrade with a fair value of $12 billion (US$9 billion) (October 31, 2016 – $10 billion (US$8 billion)) based on the closing price of US$38.27 (October 31, 2016 – US$34.21) on the New York Stock Exchange.

During the six months ended April 30, 2017, TD Ameritrade repurchased nil shares (for the year ended October 31, 2016 – 12.0 million shares). Pursuant to the Stockholders Agreement in relation to the Bank's equity investment in TD Ameritrade, if stock repurchases by TD Ameritrade cause the Bank's ownership percentage to exceed 45%, the Bank is required to use reasonable efforts to sell or dispose of such excess stock, subject to the Bank's commercial judgment as to the optimal timing, amount, and method of sales with a view to maximizing proceeds from such sales. However, in the event that stock repurchases by TD Ameritrade cause the Bank's ownership percentage to exceed 45%, the Bank has no absolute obligation to reduce its ownership percentage to 45%. In addition, stock repurchases by TD Ameritrade cannot result in the Bank's ownership percentage exceeding 47%.

Pursuant to the Stockholders Agreement in relation to the Bank's equity investment in TD Ameritrade, the Bank has the right to designate five of twelve members of TD Ameritrade's Board of Directors. The Bank's designated directors currently include the Bank's Group President and Chief Executive Officer and four independent directors of TD or TD's U.S. subsidiaries.

TD Ameritrade has no significant contingent liabilities to which the Bank is exposed. During the six months ended April 30, 2017 and April 30, 2016, TD Ameritrade did not experience any significant restrictions to transfer funds in the form of cash dividends, or repayment of loans or advances.

Pursuant to its pre-emptive rights and subject to any required regulatory approval, the Bank intends to purchase US$400 million in new common equity from TD Ameritrade in connection with TD Ameritrade's acquisition of Scottrade Financial Services, Inc. (Scottrade). As a result, the Bank's anticipated pro forma common stock ownership in TD Ameritrade is expected to be approximately 41.4%. Refer to the "Financial Results Overview – Significant Events in 2016" section of the 2016 MD&A for a discussion of the announced acquisition of Scottrade Bank.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 67

The condensed financial statements of TD Ameritrade, based on its consolidated financial statements, are included in the following tables.

Condensed Consolidated Balance Sheets1
(millions of Canadian dollars)			As at
	March 31			September 30
			2017			2016
Assets
Receivables from brokers, dealers, and clearing organizations		$	1,503		$	1,596
Receivables from clients, net			16,429			16,014
Other assets, net			21,878			21,038
Total assets		$	39,810		$	38,648
Liabilities
Payable to brokers, dealers, and clearing organizations		$	2,572		$	2,736
Payable to clients			26,260			25,555
Other liabilities			3,710			3,583
Total liabilities			32,542			31,874
Stockholders' equity2			7,268			6,774
Total liabilities and stockholders' equity		$	39,810		$	38,648

1 Customers' securities are reported on a settlement date basis whereas the Bank reports customers' securities on a trade date basis.

2 The difference between the carrying value of the Bank's investment in TD Ameritrade and the Bank's share of TD Ameritrade's stockholders' equity is comprised of goodwill, other intangibles, and the cumulative translation adjustment.

Condensed Consolidated Statements of Income
(millions of Canadian dollars, except as noted)	For the three months ended				For the six months ended
	March 31		March 31		March 31		March 31
	2017		2016		2017		2016
Revenues
Net interest revenue	$	204	$	202	$	405	$	408
Fee-based and other revenue		992		962		1,937		1,840
Total revenues		1,196		1,164		2,342		2,248
Operating expenses
Employee compensation and benefits		303		286		588		554
Other		419		406		809		764
Total operating expenses		722		692		1,397		1,318
Other expense (income)		19		18		38		34
Pre-tax income		455		454		907		896
Provision for income taxes		172		172		336		331
Net income1	$	283	$	282	$	571	$	565
Earnings per share – basic (dollars)	$	0.54	$	0.53	$	1.08	$	1.06
Earnings per share – diluted (dollars)		0.53		0.53		1.08		1.05

1 The Bank's equity share of net income of TD Ameritrade is subject to adjustments relating to amortization of intangibles, which are not included.

NOTE 7: GOODWILL

Goodwill by Segment
(millions of Canadian dollars)	Canadian				Wholesale
	Retail		U.S. Retail1			Banking		Total
Carrying amount of goodwill as at November 1, 2015	$	2,369	$	13,818	$	150	$	16,337
Impairment losses		(52)		–		–		(52)
Foreign currency translation adjustments and other		20		357		–		377
Carrying amount of goodwill as at October 31, 2016		2,337		14,175		150		16,662
Arising during the period		–		–		10		10
Impairment losses		–		–		–		–
Foreign currency translation adjustments and other		16		254		–		270
Carrying amount of goodwill as at April 30, 2017	$	2,353	$	14,429	$	160	$	16,942

1 Goodwill predominantly relates to U.S. personal and commercial banking.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 68

NOTE 8: OTHER ASSETS
Other Assets
(millions of Canadian dollars)		As at
	April 30		October 31
	2017		2016
Accounts receivable and other items	$	8,684	$	8,092
Accrued interest		1,896		1,634
Current income tax receivable		1,185		389
Defined benefit asset		11		11
Insurance-related assets, excluding investments		1,592		1,758
Prepaid expenses		975		906
Total	$	14,343	$	12,790

NOTE 9: DEPOSITS

Demand deposits are those for which the Bank does not have the right to require notice prior to withdrawal. These deposits are in general chequing accounts.

Notice deposits are those for which the Bank can legally require notice prior to withdrawal. These deposits are in general savings accounts.

Term deposits are those payable on a fixed date of maturity purchased by customers to earn interest over a fixed period. The terms are from one day to ten years. Accrued interest on deposits, calculated using the EIRM, is included in Other liabilities on the Interim Consolidated Balance Sheet. The deposits are generally term deposits, guaranteed investment certificates, senior debt, and similar instruments. The aggregate amount of term deposits in denominations of $100,000 or more as at April 30, 2017, was $254 billion (October 31, 2016 – $231 billion).

Certain deposit liabilities are classified as Trading deposits on the Interim Consolidated Balance Sheet and accounted for at fair value with the change in fair value recognized on the Interim Consolidated Statement of Income.

Deposits
(millions of Canadian dollars)															As at
														April 30		October 31
		By Type						By Country							2017	2016
		Demand		Notice			Term		Canada	United States		International			Total		Total
Personal		$	15,517	$	394,184	$	50,395	$	211,811	$	246,970	$	1,315	$	460,096	$	439,232
Banks1			10,426		96		12,167		13,994		635		8,060		22,689		17,201
Business and government2			74,295		116,446		133,586		226,444		93,105		4,778		324,327		317,227
Designated at fair value
	through profit or loss3		–		–		–		–		–		–		–		176
Trading1			–		–		92,958		7,575		67,047		18,336		92,958		79,786
Total		$	100,238	$	510,726	$	289,106	$	459,824	$	407,757	$	32,489	$	900,070	$	853,622
Non-interest-bearing deposits
	included above
In domestic offices														$	38,355	$	35,401
In foreign offices															54,893		53,089
Interest-bearing deposits
	included above
In domestic offices															421,469		409,657
In foreign offices															383,695		355,456
U.S. federal funds deposited1															1,658		19
Total2,4														$	900,070	$	853,622

1 Includes deposits and advances with the Federal Home Loan Bank.

2 As at April 30, 2017, includes $30 billion in Deposits on the Interim Consolidated Balance Sheet relating to covered bondholders (October 31, 2016 – $29 billion) and $2 billion (October 31, 2016 – $2 billion) due to TD Capital Trust lV.

3 Included in Other financial liabilities designated at fair value through profit or loss on the Interim Consolidated Balance Sheet.

4 As at April 30, 2017, includes deposits of $512 billion (October 31, 2016 – $474 billion) denominated in U.S. dollars and $45 billion (October 31, 2016 – $48 billion) denominated in other foreign currencies.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 69

NOTE 10: OTHER LIABILITIES

Other Liabilities
(millions of Canadian dollars)		As at
	April 30		October 31
		2017		2016
Accounts payable, accrued expenses, and other items	$	5,467	$	4,401
Accrued interest		916		960
Accrued salaries and employee benefits		2,306		2,829
Cheques and other items in transit		1,115		1,598
Current income tax payable		79		58
Deferred tax liabilities		346		345
Defined benefit liability		2,879		3,011
Liabilities related to structured entities		5,192		5,469
Provisions		1,016		1,025
Total	$	19,316	$	19,696

NOTE 11: SUBORDINATED NOTES AND DEBENTURES

Issues and Redemptions

On December 14, 2016 (the "Redemption Date"), the Bank redeemed all of its outstanding $2.25 billion 4.779% subordinated debentures due December 14, 2105, at a redemption price of 100% of the principal amount. Interest on the debentures ceased to accrue on and after the Redemption Date.

NOTE 12: SHARE CAPITAL

The following table summarizes the shares issued and outstanding and treasury shares held as at April 30, 2017, and October 31, 2016.

Common and Preferred Shares Issued and Outstanding and Treasury Shares Held
(millions of shares and millions of Canadian dollars)	April 30, 2017			October 31, 2016
	Number			Number
	of shares		Amount	of shares		Amount
Common Shares
Balance as at beginning of year	1,857.6	$	20,711	1,856.2	$	20,294
Proceeds from shares issued on exercise of stock options	2.2		103	4.9		186
Shares issued as a result of dividend reinvestment plan	2.4		162	6.0		335
Purchase of shares for cancellation	(15.0)		(167)	(9.5)		(104)
Balance as at end of period – common shares	1,847.2	$	20,809	1,857.6	$	20,711
Preferred Shares – Class A
Series S	5.4	$	135	5.4	$	135
Series T	4.6		115	4.6		115
Series Y	5.5		137	5.5		137
Series Z	4.5		113	4.5		113
Series 11	20.0		500	20.0		500
Series 31	20.0		500	20.0		500
Series 51	20.0		500	20.0		500
Series 71	14.0		350	14.0		350
Series 91	8.0		200	8.0		200
Series 111	6.0		150	6.0		150
Series 121	28.0		700	28.0		700
Series 141	40.0		1,000	40.0		1,000
Balance as at end of period – preferred shares	176.0	$	4,400	176.0	$	4,400
Treasury shares – common2
Balance as at beginning of year	0.4	$	(31)	1.1	$	(49)
Purchase of shares	74.1		(4,790)	104.9		(5,769)
Sale of shares	(70.7)		4,576	(105.6)		5,787
Balance as at end of period – treasury shares – common	3.8	$	(245)	0.4	$	(31)
Treasury shares – preferred2
Balance as at beginning of year	0.2	$	(5)	0.1	$	(3)
Purchase of shares	3.9		(91)	5.1		(115)
Sale of shares	(3.8)		89	(5.0)		113
Balance as at end of period – treasury shares – preferred	0.3	$	(7)	0.2	$	(5)

1 Non-viability contingent capital (NVCC) Series 1, 3, 5, 7, 9, 11, 12, and 14 Preferred Shares qualify as regulatory capital under OSFI's capital adequacy requirements (CAR) guideline. If a NVCC conversion were to occur in accordance with the NVCC Provisions, the maximum number of common shares that could be issued based on the formula for conversion set out in the respective terms and conditions applicable to each Series of shares, assuming there are no declared and unpaid dividends on the respective Series of shares at the time of conversion, as applicable, would be 100 million, 100 million, 100 million, 70 million, 40 million, 30 million, 140 million, and 200 million, respectively.

2 When the Bank purchases its own shares as part of its trading business, they are classified as treasury shares and the cost of these shares is recorded as a reduction in equity.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 70

Normal Course Issuer Bid

On March 16, 2017, the Bank announced that the Toronto Stock Exchange (TSX) and OSFI approved the Bank's previously announced normal course issuer bid (NCIB) to repurchase for cancellation up to 15 million of the Bank's common shares. On March 28, 2017, in connection with its NCIB, the Bank announced its intention to purchase for cancellation up to 14.5 million of its common shares pursuant to a specific share repurchase program. During the quarter ended April 30, 2017, the Bank completed the purchase of common shares pursuant to the specific share repurchase program, which shares were purchased at a discount to the prevailing market price of the Bank's common shares on the TSX at the time of purchase. During the three months ended April 30, 2017, the Bank repurchased 15 million common shares under its NCIB at an average price of $58.65 per share for a total amount of $880 million.

On December 9, 2015, the Bank announced that the TSX and OSFI approved the Bank's previously announced NCIB to repurchase for cancellation up to 9.5 million of the Bank's common shares. On January 11, 2016, in connection with its NCIB, the Bank announced its intention to purchase for cancellation up to 3 million of its common shares pursuant to private agreements between the Bank and an arm's length third party seller. During the quarter ended January 31, 2016, the Bank completed the purchase of common shares by way of private agreements, which shares were purchased at a discount to the prevailing market price of the Bank's common shares on the TSX at the time of purchase. During the three months ended January 31, 2016, the Bank repurchased 9.5 million common shares under its NCIB at an average price of $51.23 per share for a total amount of $487 million.

NOTE 13: SHARE-BASED COMPENSATION

For the three and six months ended April 30, 2017, the net compensation expense for stock option awards was $4.3 million and $9.3 million, respectively (three and six months ended April 30, 2016 – $1.3 million and nil, respectively).

During the three months ended April 30, 2017 and April 30, 2016, there were no stock options granted. During the six months ended April 30, 2017, 2.0 million stock options (six months ended April 30, 2016 – 2.5 million stock options) were granted by the Bank with a weighted-average fair value of $5.81 per stock option (April 30, 2016 – $4.93 per stock option).

The following table summarizes the assumptions used for estimating the fair value of options for the six months ended April 30.

Assumptions Used for Estimating the Fair Value of Options
(in Canadian dollars, except as noted)	For the six months ended
	April 30			April 30
	2017			2016
Risk-free interest rate		1.24	%		1.00	%
Expected option life		6.3 years			6.3 years
Expected volatility1		14.92	%		15.82	%
Expected dividend yield		3.47	%		3.45	%
Exercise price/share price	$	65.75		$	53.15

1 Expected volatility is calculated based on the average daily volatility measured over a historical period corresponding to the expected option life.

NOTE 14: EMPLOYEE BENEFITS

The following table summarizes expenses for the Bank's principal pension and non-pension post-retirement benefit plans and the Bank's significant other pension and retirement plans, for the three and six months ended April 30.

Employee Benefit Plans' Expenses
(millions of Canadian dollars)					Principal non-pension
					post-retirement				Other pension and
	Principal pension plans				benefit plan				retirement plans1
				For the three months ended
		April 30		April 30		April 30		April 30		April 30		April 30
		2017		2016		2017		2016		2017		2016
Net employee benefits expense
Service cost – benefits earned	$	110	$	83	$	4	$	4	$	3	$	3
Net interest cost (income) on net defined benefit liability (asset)		6		(1)		4		5		7		8
Past service cost (credit)		–		–		–		–		–		–
Defined benefit administrative expenses		3		2		–		–		1		1
Total expense	$	119	$	84	$	8	$	9	$	11	$	12
				For the six months ended
		April 30		April 30		April 30		April 30		April 30		April 30
		2017		2016		2017		2016		2017		2016
Net employee benefits expense
Service cost – benefits earned	$	220	$	166	$	8	$	9	$	6	$	5
Net interest cost (income) on net defined benefit liability (asset)		12		(2)		8		10		15		16
Past service cost (credit)2		–		–		–		–		–		(12)
Defined benefit administrative expenses		5		4		–		–		2		3
Total expense	$	237	$	168	$	16	$	19	$	23	$	12

1 Includes CT defined benefit pension plan, TD Banknorth defined benefit pension plan, certain TD Auto Finance retirement plans, and supplemental employee retirement plans. Other employee benefit plans operated by the Bank and certain of its subsidiaries are not considered material for disclosure purposes. The TD Banknorth defined benefit pension plan was frozen as of December 31, 2008, and no service credits can be earned after that date. Certain TD Auto Finance defined benefit pension plans were frozen as of April 1, 2012, and no service credits can be earned after March 31, 2012.

2 Includes a portion of certain defined benefit pension plans that were settled during the period.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 71

CASH FLOWS

The following table summarizes the Bank's contributions to its principal pension and non-pension post-retirement benefit plans and the Bank's significant other pension and retirement plans during the three and six months ended April 30.

Plan Contributions
(millions of Canadian dollars)	For the three months ended				For the six months ended
	April 30		April 30		April 30		April 30
	2017		2016		2017		2016
Principal pension plans	$	82	$	75	$	268	$	162
Principal non-pension post-retirement benefit plan		4		4		7		7
Other pension and retirement plans1		9		14		17		23
Total	$	95	$	93	$	292	$	192

1 Includes CT defined benefit pension plan, TD Banknorth defined benefit pension plan, certain TD Auto Finance retirement plans, and supplemental employee retirement plans. Other employee benefit plans operated by the Bank and certain of its subsidiaries are not considered material for disclosure purposes.

As at April 30, 2017, the Bank expects to contribute an additional $287 million to its principal pension plans, $8 million to its principal non-pension post-retirement benefit plan, and $22 million to its other pension and retirement plans by the end of the fiscal year. However, future contribution amounts may change upon the Bank's review of current contribution levels during fiscal 2017.

NOTE 15: INCOME TAXES

During the quarter ended April 30, 2017, the Bank received two proposal letters (the "Proposals") from the Canada Revenue Agency (CRA), in respect of its 2011 and 2012 taxation years.

In the first Proposal, the CRA suggests that for 2011 and 2012 certain dividend deductions claimed by the Bank be denied on the basis that the dividends were received as part of a "dividend rental arrangement". The CRA's position is that the Bank owes additional income taxes of approximately $121 million for 2011 and $135 million for 2012, excluding interest. The dividends to which the first Proposal relates were received in transactions similar to those addressed in the 2015 Canadian Federal Budget, which introduced prospective rules that apply as of May 1, 2017, for existing arrangements. Subsequent to the quarter end, the Bank received a notice of reassessment from the CRA for the 2011 taxation year.

In the second Proposal, the CRA suggests that for 2012 certain other dividend deductions claimed by the Bank with respect to deemed dividends received when the Bank tenders into NCIB trades be denied on the basis that the share redemptions were part of a "dividend rental arrangement". The second proposal is in addition to the first proposal and it is the CRA's position that the Bank owes additional income taxes of approximately $32 million for 2012, excluding interest.

The Bank expects the CRA to take similar positions for subsequent years. The Bank is of the view that its tax filing positions were appropriate and intends to challenge any reassessments.

NOTE 16: EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding for the period.

Diluted earnings per share is calculated using the same method as basic earnings per share except that certain adjustments are made to net income attributable to common shareholders and the weighted-average number of shares outstanding for the effects of all dilutive potential common shares that are assumed to be issued by the Bank.

The following table presents the Bank's basic and diluted earnings per share for the three and six months ended April 30, 2017, and April 30, 2016, and the twelve months ended October 31, 2016.

Basic and Diluted Earnings Per Share
(millions of Canadian dollars, except as noted)		For the three				For the six				For the twelve
		months ended				months ended				months ended
			April 30		April 30		April 30		April 30		October 31
		2017		2016		2017		2016		2016
Basic earnings per share
Net income attributable to common shareholders		$	2,427	$	1,987	$	4,883	$	4,156	$	8,680
Weighted-average number of common shares outstanding (millions)			1,854.4		1,850.9		1,855.1		1,852.5		1,853.4
Basic earnings per share (dollars)		$	1.31	$	1.07	$	2.63	$	2.24	$	4.68
Diluted earnings per share
Net income attributable to common shareholders		$	2,427	$	1,987	$	4,883	$	4,156	$	8,680
Net income available to common shareholders including
	impact of dilutive securities		2,427		1,987		4,883		4,156		8,680
Weighted-average number of common shares outstanding (millions)			1,854.4		1,850.9		1,855.1		1,852.5		1,853.4
Effect of dilutive securities
	Stock options potentially exercisable (millions)1		4.3		3.0		4.4		3.3		3.4
Weighted-average number of common shares outstanding
	– diluted (millions)		1,858.7		1,853.9		1,859.5		1,855.8		1,856.8
Diluted earnings per share (dollars)1		$	1.31	$	1.07	$	2.63	$	2.24	$	4.67

1 For the three and six months ended April 30, 2017 and April 30, 2016, and the twelve months ended October 31, 2016, the computation of diluted earnings per share did not include any weighted-average options where the option price was greater than the average market price of the Bank's common shares.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 72

NOTE 17: CONTINGENT LIABILITIES

Other than as described below, there have been no new significant events or transactions as previously identified in Note 28 of the 2016 Annual Consolidated Financial Statements.

LITIGATION

In the ordinary course of business, the Bank and its subsidiaries are involved in various legal and regulatory actions. The Bank establishes legal provisions when it becomes probable that the Bank will incur a loss and the amount can be reliably estimated. The Bank also estimates the aggregate range of reasonably possible losses (RPL) in its legal and regulatory actions (that is, those which are neither probable nor remote), in excess of provisions. As at April 30, 2017, the Bank's RPL is from zero to approximately $600 million. The Bank's provisions and RPL represent the Bank's best estimates based upon currently available information for actions for which estimates can be made, but there are a number of factors that could cause the Bank's provisions and/or RPL to be significantly different from its actual or reasonably possible losses. For example, the Bank’s estimates involve significant judgment due to the varying stages of the proceedings, the existence of multiple defendants in many of such proceedings whose share of liability has yet to be determined, the numerous yet-unresolved issues in many of the proceedings, some of which are beyond the Bank’s control and/or involve novel legal theories and interpretations, the attendant uncertainty of the various potential outcomes of such proceedings, and the fact that the underlying matters will change from time to time. In addition, some matters seek very large or indeterminate damages.

In management’s opinion, based on its current knowledge and after consultation with counsel, the ultimate disposition of these actions, individually or in the aggregate, will not have a material adverse effect on the consolidated financial condition or the consolidated cash flows of the Bank. However, because of the factors listed above, as well as other uncertainties inherent in litigation and regulatory matters, there is a possibility that the ultimate resolution of those legal or regulatory actions may be material to the Bank’s consolidated results of operations for any particular reporting period.

Stanford Litigation ─ The Official Stanford Investors Committee filed an amended intervenor complaint against the Bank on November 4, 2016 and the Bank filed its answer to this amended complaint on December 19, 2016. The two cases filed in the Ontario Superior Court of Justice are being managed jointly; discovery is ongoing.

Overdraft Litigation ─ The parties' briefing of class certification issues has been completed and a class certification hearing in the consolidated matter has been scheduled.

Credit Card Fees ─ The plaintiffs' motion to amend their claims to reinstate the extended class period was unsuccessful and the decision from the plaintiffs' appeal to the B.C. Court of Appeal is pending.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 73

NOTE 18: SEGMENTED INFORMATION

For management reporting purposes, the Bank reports its results under three key business segments: Canadian Retail, which includes the results of the Canadian personal and commercial banking, wealth, and insurance businesses; U.S. Retail, which includes the results of the U.S. personal and business banking operations, wealth management services, and the Bank's investment in TD Ameritrade; and Wholesale Banking. The Bank's other activities are grouped into the Corporate segment.

The following table summarizes the segment results for the three and six months ended April 30.

Results by Business Segment1
(millions of Canadian dollars, except as noted)
		Canadian Retail				U.S. Retail				Wholesale Banking2,3				Corporate3				Total
						For the three months ended
		April 30		April 30		April 30		April 30		April 30		April 30		April 30		April 30		April 30		April 30
			2017		2016		2017		2016		2017		2016		2017		2016		2017		2016
Net interest income (loss)		$	2,533	$	2,418	$	1,851	$	1,737	$	805	$	440	$	(80)	$	285	$	5,109	$	4,880
Non-interest income (loss)			2,599		2,469		664		553		13		326		88		31		3,364		3,379
Total revenue4			5,132		4,887		2,515		2,290		818		766		8		316		8,473		8,259
Provision for (recovery of)
	credit losses		235		262		152		162		(4)		50		117		110		500		584
Insurance claims and related
	expenses		538		530		–		–		–		–		–		–		538		530
Non-interest expenses			2,218		2,095		1,449		1,416		481		441		638		784		4,786		4,736
Income (loss) before income taxes			2,141		2,000		914		712		341		275		(747)		(578)		2,649		2,409
Provision for (recovery of)
	income taxes		571		536		177		101		93		56		(584)		(227)		257		466
Equity in net income of an
	investment in TD Ameritrade		–		–		108		108		–		–		3		1		111		109
Net income (loss)		$	1,570	$	1,464	$	845	$	719	$	248	$	219	$	(160)	$	(350)	$	2,503	$	2,052
						For the six months ended
		April 30		April 30		April 30		April 30		April 30		April 30		April 30		April 30		April 30		April 30
			2017		2016		2017		2016		2017		2016		2017		2016		2017		2016
Net interest income (loss)		$	5,146	$	4,909	$	3,690	$	3,506	$	1,198	$	899	$	216	$	613	$	10,250	$	9,927
Non-interest income (loss)			5,189		5,009		1,351		1,183		477		531		326		219		7,343		6,942
Total revenue4			10,335		9,918		5,041		4,689		1,675		1,430		542		832		17,593		16,869
Provision for (reversal of)
	credit losses		504		490		409		383		(28)		62		248		291		1,133		1,226
Insurance claims and related
	expenses		1,112		1,185		–		–		–		–		–		–		1,112		1,185
Non-interest expenses			4,443		4,174		2,883		2,822		1,005		870		1,352		1,523		9,683		9,389
Income (loss) before income taxes			4,276		4,069		1,749		1,484		698		498		(1,058)		(982)		5,665		5,069
Provision for (recovery of)
	income taxes		1,140		1,092		323		231		183		118		(793)		(429)		853		1,012
Equity in net income of an
	investment in TD Ameritrade		–		–		219		217		–		–		5		1		224		218
Net income (loss)		$	3,136	$	2,977	$	1,645	$	1,470	$	515	$	380	$	(260)	$	(552)	$	5,036	$	4,275
Total assets		$	388,692	$	370,255	$	403,876	$	343,873	$	390,204	$	353,881	$	69,148	$	56,777	$	1,251,920	$	1,124,786

1 The presentation of the U.S. strategic cards portfolio revenues, provision for credit losses, and expenses in the U.S. Retail segment includes only the Bank's agreed portion of the U.S. strategic cards portfolio, while the Corporate segment includes the retailer program partners' share.

2 Net interest income within Wholesale Banking is calculated on a taxable equivalent basis (TEB). The TEB adjustment reflected in Wholesale Banking is reversed in the Corporate segment.

3 Effective February 1, 2017, the total gains and losses as a result of changes in fair value of the credit default swap (CDS) and interest rate swap contracts hedging the reclassified available-for-sale securities portfolio are recorded in Wholesale Banking. Previously, these derivatives were accounted for on an accrual basis in Wholesale Banking and the gains and losses related to the derivatives, in excess of the accrued costs were reported in Corporate Segment. Refer to Note 30 of the 2016 Annual Consolidated Financial Statements for additional details.

4 Effective the first quarter of 2017, the impact from certain treasury and balance sheet management activities relating to the U.S. Retail segment is recorded in the Corporate segment.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 74

NOTE 19: REGULATORY CAPITAL

The Bank manages its capital under guidelines established by OSFI. The regulatory capital guidelines measure capital in relation to credit, market, and operational risks. The Bank has various capital policies, procedures, and controls which it utilizes to achieve its goals and objectives.

During the six months ended April 30, 2017, the Bank complied with the OSFI Basel III guideline related to capital ratios and the leverage ratio. Effective January 1, 2016, OSFI's target Common Equity Tier 1 (CET1), Tier 1, and Total Capital ratios for Canadian banks designated as D-SIBs includes a 1% common equity capital surcharge bringing the targets to 8%, 9.5%, and 11.5%, respectively.

The following table summarizes the Bank's regulatory capital positions as at April 30, 2017 and October 31, 2016.

Regulatory Capital Position
(millions of Canadian dollars, except as noted)		As at
	April 30			October 31
		2017			2016
Capital
Common Equity Tier 1 Capital	$	45,417		$	42,328
Tier 1 Capital		52,337			49,397
Total Capital		62,542			61,816
Risk-weighted assets used in the calculation of capital ratios1
Common Equity Tier 1 Capital	$	420,053		$	405,844
Tier 1 Capital		420,053			405,844
Total Capital		420,053			405,844
Capital and leverage ratios
Common Equity Tier 1 Capital ratio1		10.8	%		10.4	%
Tier 1 Capital ratio1		12.5			12.2
Total Capital ratio1		14.9			15.2
Leverage ratio		3.9			4.0

1 In accordance with the final CAR guideline, the Credit Valuation Adjustment (CVA) capital charge is being phased in until the first quarter of 2019. Each capital ratio has its own risk-weighted assets (RWA) measure due to the OSFI prescribed scalar for inclusion of the CVA. For fiscal 2016, the scalars for inclusion of CVA for CET1, Tier 1, and Total Capital RWA were 64%, 71%, and 77%, respectively. For fiscal 2017, the scalars are 72%, 77%, and 81%, respectively.

NOTE 20: RISK MANAGEMENT

The risk management policies and procedures of the Bank are provided in the MD&A. The shaded sections of the "Managing Risk" section of the MD&A relating to market, liquidity, and insurance risks are an integral part of the Interim Consolidated Financial Statements.

NOTE 21: SUBSEQUENT EVENT

On May 11, 2017, Air Canada announced that it will not renew its Aeroplan partnership with Aimia Inc. upon expiry in June 2020. As announced by TD on May 11, 2017, given the lengthy timeline and potential mitigating actions, the Bank does not expect a material impact to TD's net income after tax when the partnership expires. The Bank is assessing the implications relating to its contractual arrangements associated with this matter as it continues to develop.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 75

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 (and resuming) receiving annual and quarterly reports	Transfer Agent: CST Trust Company P.O. Box 700, Station B Montréal, Québec H3B 3K3 1-800-387-0825 (Canada and U.S. only) or 416-682-3860 Facsimile: 1-888-249-6189 inquiries@canstockta.com or www.canstockta.com
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 (and resuming) receiving annual and quarterly reports	Co-Transfer Agent and Registrar Computershare P.O. Box 30170 College Station, TX 77842-3170, or Computershare 211 Quality Circle, Suite 210 College Station, TX 77845 1-866-233-4836 TDD for hearing impaired: 1-800-231-5469 Shareholders outside of U.S.: 201-680-6578 TDD shareholders outside of U.S.: 201-680-6610 www.computershare.com
Beneficially own TD shares that are held in the name of an intermediary, such as a bank, a trust company, a securities broker or other nominee	Your TD shares, including questions regarding the dividend reinvestment plan and mailings of shareholder materials	Your intermediary

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

Normal Course Issuer Bid

On March 21, 2017, the Bank commenced an NCIB to repurchase for cancellation up to 15 million of the Bank's common shares. Pursuant to the Notice of Intention filed with the TSX, the NCIB ends on March 20, 2018, such earlier date as the Bank may determine or such earlier date as the Bank may complete its purchases. During the quarter ended April 30, 2017, the Bank completed its share purchases under the NCIB. A copy of the Notice may be obtained, without charge, by contacting TD Shareholder Relations by phone at 416-944-6367 or 1-866-756-8936 or by e-mail at tdshinfo@td.com.

General Information

Products and services: Contact TD Canada Trust, 24 hours a day, seven days a week: 1-866-567-8888

French: 1-866-233-2323

Cantonese/Mandarin: 1-800-328-3698

Telephone device for the hearing impaired (TTY): 1-800-361-1180

Website: www.td.com

Email: customer.service@td.com

Quarterly Earnings Conference Call

TD Bank Group will host an earnings conference call in Toronto, Ontario on May 25, 2017. The call will be audio webcast live through TD's website at 3 p.m. ET. The call and audio webcast will feature presentations by TD executives on the Bank's financial results for the second quarter, discussions of related disclosures, and will be followed by a question-and-answer period with analysts. The presentation material referenced during the call will be available on the TD website at www.td.com/investor/qr_2017.jsp on May 25, 2017, by approximately 12 p.m. ET. A listen-only telephone line is available at 416-640-5944 or 1-800-263-0877 (toll free) and the passcode is 7180889.

The audio webcast and presentations will be archived at www.td.com/investor/qr_2017.jsp. Replay of the teleconference will be available from 6 p.m. ET on May 25, 2017, until 6 p.m. ET on June 30, 2017, by calling 647-436-0148 or 1-888-203-1112 (toll free). The passcode is 7180889.

TD BANK GROUP • SECOND QUARTER 2017 • REPORT TO SHAREHOLDERS Page 76