Mr. Bharat Masrani reports

TD BANK GROUP ANNOUNCES RESOLUTION OF AML INVESTIGATIONS

Following several years of active co-operation and engagement with authorities and regulators, Toronto-Dominion Bank's TD Bank Group has reached a resolution of previously disclosed investigations related to its U.S. Bank Secrecy Act (BSA) and anti-money-laundering (AML) compliance programs.

The bank and certain of its U.S. subsidiaries have consented to orders with the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board and the Financial Crimes Enforcement Network (FinCEN) and entered into plea agreements with the Department of Justice, criminal division, money laundering and asset recovery section, and the U.S. Attorney's Office for the District of New Jersey.

Details of the resolution include:

• A total payment of approximately $3.09-billion (U.S.), largely covered by previous provisions of $3.05-billion (U.S.);
• Requirements to remediate the bank's U.S. AML program, broadly aligned to its existing remediation program, which is progressing steadily under the direction of its new U.S. AML leadership team;
• Requirement to prioritize the financing and staffing of the remediation, which is already in place;
• Formal oversight of the AML remediation through a monitorship;
• The total assets of TD's two U.S. banking subsidiaries (TD Bank, North America, and TD Bank USA, North America) (U.S. bank) cannot exceed $434-billion (U.S.) (total assets as at Sept. 30, 2024); the limitation does not apply to TD Securities or any of the bank's Canadian or other global businesses;
• The U.S. bank is subject to more stringent approval processes for new bank products, services, markets and stores to ensure the AML risk of new initiatives is appropriately considered and mitigated.

Plans are in place to address the requirements and limitations contained in the consent orders, including adjustments to the bank's U.S. balance sheet. These actions will provide the asset capacity required to serve and support U.S. customers' financial needs without interruption now and into the future.

TD has the financial strength, stability and operational flexibility to deliver the required U.S. AML remediation program, continue to serve the financial needs of its more than 10 million U.S. customers and invest to strengthen the business.

"We have taken full responsibility for the failures of our U.S. AML program and are making the investments, changes and enhancements required to deliver on our commitments. This is a difficult chapter in our bank's history. These failures took place on my watch as CEO and I apologize to all our stakeholders," said Bharat Masrani, group president and chief executive officer, TD Bank Group. "I want to thank our colleagues, who continue to demonstrate their dedication and who play an important role in preventing criminal activity."

The bank has actively co-operated in good faith with regulators and the Department of Justice throughout their investigations and continues to assist in the prosecution of the criminals who leveraged its AML program weaknesses, including five of its store-level employees.

"Money laundering is a serious global threat, and our U.S. operation did not maintain an adequate AML program to thwart criminal activity. The board has and continues to take action to address these failures and hold those responsible accountable. We have appointed new leaders across our U.S. operations, overhauled our U.S. AML team and prioritized investments to drive the required changes," said Alan MacGibbon, chair of the board, TD Bank Group. "Enhancing our program and meeting our obligations today and into the future is the No. 1 priority of the board and management."

U.S. AML program remediation

"Criminals were able to exploit our systems and our U.S. AML program did not deliver. We continue to work with purpose, focus and urgency to remediate our AML program and earn back the trust of our regulators and other stakeholders. We are committed to working productively with the monitorship to build a sustainable AML program and meet our obligations under the terms of the resolution," said Leo Salom, president and chief executive officer, TD Bank, America's Most Convenient Bank. "Our U.S. operation is strong, and we will continue to serve the needs of the 10 million households and businesses in the U.S. who rely on us for their financial goals."

A significant, multiyear effort is required to implement a strong, effective and sustainable AML program. Work is under way and progress to date includes:

• Overhauled AML program leadership and talent, including the appointment of new U.S. head of financial crime risk management and BSA/AML officer, with proven leadership and experience; added 40 new leaders and over 700 new AML specialists with experience and qualifications in money laundering prevention, financial crimes and AML remediation;
• Strengthened oversight structure and accountability across all three lines of defence, starting at the front lines and carrying through to risk management and audit teams; established a dedicated committee at the U.S. boards for AML/BSA oversight;
• Introduced new standards, processes and stronger bankwide training to better prevent, detect and measure financial crime risk and improve escalation and decision making;
• Deployed new data-driven technology solutions with stronger detection and data management, analytics and modelling capabilities; additional work under way to build long-term sustainable risk mitigation.

The bank is committed to the critical work effort ahead and has mobilized the required resources to deliver its long-term U.S. AML remediation program.

More information about the resolution and TD's remediation program is available on the investor relations page of TD's website.

Conference call

TD Bank Group will host a conference call on Oct. 10, 2024, at 2:30 p.m. ET. The call will be audio webcast live through TD's website. Call details are as follows.

Audio webcast:  on the TD website

Toll-free dial-in number (Canada/United States):  1-800-806-5484

Local dial-in number:  416-340-2217

Participant passcode:  6048921 followed by the number sign

The audio webcast will be archived on TD's website. A replay of the teleconference will be available on Oct. 10, 2024, until 11:59 p.m. ET on Nov. 10, 2024, by calling 905-694-9451 or 1-800-408-3053 (toll-free) and the passcode is 9939131 followed by the number sign.

About Toronto-Dominion Bank

TD and its subsidiaries are collectively known as TD Bank Group. TD is the sixth-largest bank in North America by assets and serves over 27.5 million customers in four key businesses operating in a number of locations in financial centres around the globe: Canadian personal and commercial banking, including TD Canada Trust and TD Auto Finance Canada; U.S. retail, including TD Bank, America's Most Convenient Bank, TD Auto Finance U.S., TD Wealth (U.S.) and an investment in The Charles Schwab Corp.; wealth management and insurance, including TD Wealth (Canada), TD Direct Investing and TD Insurance; and wholesale banking, including TD Securities and TD Cowen. TD also ranks among the world's leading on-line financial services firms, with more than 17 million active on-line and mobile customers. TD had $1.97-trillion in assets on July 31, 2024. The bank trades under the symbol TD on the Toronto and New York stock exchanges.

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