Okay, ladies and gentlemen, we're going to start what is at least my final session. Very happy to have Leo Salom, CEO, TD USA. That's good. It's good to be here again. Well, Leo, thank you very much for joining us. I'm just gonna open up with, obviously, the U.S. We saw some funding deposit issues earlier on in the year. Wanted to get your view on what happened and how TD is approaching this business post this event. Yeah. Well, John, just to reflect on 2023, it was a remarkable year. I mean, we had the second, third, fourth largest bank failures in U.S. history. And that did trigger a tremendous amount of uncertainty in the marketplace overall. When you couple that with the fact that we'd already seen deposit outflows, in fact, I think in the last 15 months, we've seen about $1 trillion leave the U.S. banking industry. The two forces did bring a tremendous amount of uncertainty in the marketplace. I think fortunately, TD weathered that process quite well. I think we're somewhat unique, just based on our balance sheet. We've got $150 billion of excess deposits, and in this environment, that's given us a tremendous amount of flexibility. The product of that is largely really the bank itself. I mean, at our core, we are a community institution. We've got a very rich retail and small business deposit base, and I think that almost 60% of our deposits are, in fact, retail checking accounts and low savings products. So I think that gives us a really stable funding base to be able to then protect. We're still very focused on growing our core customer, you know, franchise. Likewise, we've got a very strong corporate cash management business. In fact, just recently, we became the third- largest government banking cash manager in the country. And so given that focus on deposit base, that has certainly served us well, and it should serve us well as we move forward. It'll give us the liquidity to be able to stand by our clients, support them through this, you know, this period, but also to selectively be able to take share and be present from a lending perspective, at a time when some of our competitors might be a little bit more challenged from a liquidity standpoint. So, clearly, I, I don't think we've seen the end of this. There, there's still a tremendous amount of downward pressure on deposit levels overall- in the industry. But I think TD finds itself in a very enviable position. Can you speak to the arrangement with Schwab, sweep accounts. Sure. And, how that impacts your strategy? And can you also talk about, there was a recent, or not as recent, but a recent change to the. Sure. To the agreement. What, what was driving that on your side? Because, of course, Schwab has, we can sweep Schwab over their side. Sure. And maybe for the broader group. So we do have a 12.4% stake in Schwab. It's a very important, very strategic relationship for us. We're extremely impressed with that franchise. Serves over, you know, clients with over $8 trillion in savings. So it's a, it's a very important part of our overall, you know, financial holdings. I would say that, part of that is that we do have a sweep arrangement with Schwab. Currently, at the end of the third quarter, those sweeps totaled about $103 billion overall. Now, that number has come down on a year-over-year basis as a result of clients using a term that Schwab uses, sorting their cash and putting more of it to work, either in T-bills or other equity investments. And so that number has come down a bit, but it is at $103 billion, it's an important part of our overall deposit base. We would expect that number to continue to decline. The new agreement that we put in place, we did provide Schwab with a little bit more flexibility, just given the overall market environment. And in exchange for that flexibility, we raised the floor, the minimum floor, that Schwab sweep agreement, to $60 billion from $50 billion, and we extended the contract to the year 2034. The reason why we did that was essentially to be a very good partner. This is a period of tremendous uncertainty in the marketplace. There was liquidity concerns. We wanted to provide Schwab with some short-term flexibility, but in exchange, we were able to extend a contract that we're, you know, quite comfortable with. And then, post First Horizon, you've obviously have spent personally a lot of time on the transaction. Yeah. But we're in the new reality. You know, what are, what are the lessons learned from the experience? And then what are you doing now to move the business forward? So, John, let me say that we were disappointed that we weren't able to close, you know, that transaction. I think First Horizon is a terrific organization, and I wish Bryan Jordan and his team the greatest of success as they pivot towards their organic strategy. From our perspective, I think we did learn a lot, but we are pivoting likewise to an organic growth strategy. In fact, I would argue TD in the US has had a proven track record to be able to grow organically. If you think we're the product of three acquisitions, right through to about 2011 timeframe, and then after that, we built organically the franchise that we enjoy today with 10 million clients nearly 1,200 stores from Maine to Florida. I think we've been able to, over time, organically build and scale our franchise. We've got one of the leading retail deposit franchise in the country. We're a leader in the small business lending space. We've got deep community banking presence in every major MSA on the East Coast. And increasingly, we've been building our specialty banking businesses in the mid-market based areas like healthcare, education, municipal sector, and those have been a source of significant growth for us going forward. So where we stand right now, one of the areas that we're really focused on is bringing some additional capabilities to that core franchise. What I mean by that, there's probably three areas that we're leaning into quite deliberately. One, building our cards business, our consumer lending business broadly, but specifically cards. Secondly, building out the wealth franchise. Third, building out our mid-market business, our C&I mid, you know, mid-market business, really across the country. Those three areas we think are highly complementary to our existing franchise and should give us additional revenue lift in the, you know, in the near term. That's actually fantastic. It literally moved into my next question in terms of what, outside of Schwab. Yeah. What actually is TD's U.S. wealth management strategy? Sure. Where are your aspirations? What would you like it to look like in 10 years' time? Sure. And maybe just to provide a little bit of context. As part of the shareholder agreement we had with TD Ameritrade, the agreement basically said that we were the bank and TD Ameritrade was the investment provider. With the sale of TD Ameritrade to Schwab, it basically opened up the door for us to be able to build a investment advisory business to serve both mass affluent and high net worth clients. And that's what we've been doing. So for the last 2+ years, we've been adding to our ranks. We added another 75 advisors to our mass affluent ranks this year. We'll continue to scale that business. I, you know, I'd like to have a physical presence, financial advisory presence in most of the stores where we deem high net worth and mass affluent opportunities exist. We also want to continue to build our high net worth coverage across the country and build our specialty teams to support the needs of high net worth clients. So very similar to what, John, I know you and I talked about the wealth franchise up in Canada. I think we have an opportunity to be able to replicate the same success that we had there. And I come back to just the embedded opportunity we've got. We've got 10 million clients, 3 million mass affluent clients, and I want more of those having their entire relationship with TD as opposed to strictly the retail sort of banking relationship with us. Is the growth just coming from attracting or recruiting advisors? What are your plans for product offering? Are you going to try to do that in-house? So we have completely retooled the product offering. So I'm quite comfortable from a product standpoint. We've also invested quite a bit of time on the referral and the, you know, customer relationship abilities between retail wealth and between our commercial bank and wealth team. This year, the growth that we did experience, the business was up almost 13% from an AUA perspective on a year-on-year basis. The growth that we've seen is as a result of the partnerships, stitching the various parts of the bank together. Not too different from what you might have observed in Canada, but, you know, obviously, the U.S. marketplace is a little different. But bringing those teams together has been really, you know, quite successful. We're also building infrastructure. So we've retooled our brokerages and our investment advisory platform. We've introduced a new wealth lending platform. We've deployed Salesforce across both our retail and wealth teams so that we can automate leads management and the entire, you know, wealth discovery process. So I think we're really dressed to play at this point, to be able to scale this franchise going forward. I wish I could go a little faster, quite frankly, but, you know, selecting advisors and trusting them with our clients', you know, wealth objectives is something that we take quite seriously. We want to make sure that we're building a very high-quality franchise going forward. And then, one other interesting piece for TD was the recent acquisition of Cowen. How are you working towards integrating with that platform? Yeah. A s you expand out capital markets in the U.S.? Yeah, I am truly thrilled about the addition of Cowen to the team. You know, obviously, from a TD Securities perspective, this was a very complementary transaction. So if you think of TD Securities previously, we've had a very strong capital markets business. We had strong equity capabilities, a strong corporate banking franchise. And what Cowen brings is all of the other sides of the ledger, a strong equity capital markets capability, equity research, strong M&A, and a mid-market clientele that was quite complementary to our large client clientele. For the bank, what's exciting about the bank is that, Cowen brings a whole new set of client introduction opportunities in that mid-market space, an area that we want to grow nationally. I think Cowen immediately, you know, brings us a significant prospecting, you know, base of client opportunities. I also think it gives us a chance to be able to offer a full range of services to those mid-market clients that have grown to a point, have the sophistication to tap into equity, you know, equity market. Now we have a unit research coverage and the capabilities to be able to serve that client through their life cycle. So I think for the bank, it will accelerate some of our plans in the markets space. Fantastic. Well, I'll pause, Leo, and just see if there's any questions from the audience. We have one. I understand that the reason that you couldn't close First Horizon, I don't know if the reports were confirmed, but that it might have revolved around regulatory concerns about AML and KYC. If that is an ongoing issue, what are you doing to resolve it? Because I would think that would still impact your ability to open new branches on an organic sense. Yeah. Let me separate the two items for a moment. You know, our decision to walk away from First Horizon was really predicated on the fact that we just did not have regulatory certainty with regard to the timetable. And we felt that as time was lapsing, the best thing we could do, given that uncertainty, was to walk away from the transaction. And I assure you, that was not an easy decision. Separately, last quarter, we did make a disclosure saying that we are in discussions with both the DOJ and our regulators about a specific matter at hand. So I don't want to conflate the two. We made that disclosure because we felt it was appropriate to do so. What I can tell you is anytime we have any sort of inquiry from any of our regulators, we take those items very seriously, and we deploy whatever resources are required to be able to deal with that issue. I can tell you, we believe that's a manageable item, and in the fullness of time, we will be able to resolve. One other question. Nope. Okay, asked and answered. So, Leo, what's TD's view in terms of the economic outlook for the U.S., and how is that shaping your plans in terms of revenue growth, earnings, however you want to characterize it? I mean, I think we've been incredibly impressed with the state, you know, of the U.S. economy. It's demonstrated a tremendous amount of resilience. Job growth, albeit decelerating, has still been positive. The U.S. consumer, you know, continues to spend, albeit we're seeing a shift from goods to services, but notwithstanding, still strong fundamental growth. Inflation is cooling, maybe not as quickly as some would like, but we are seeing a cooling effect, which hopefully will give the Fed some flexibility as to what they need to do over the next FOMC meetings. I do believe we'll see some deceleration in terms of overall economic growth as we go into next year. Just the absolute level of interest rates will begin to weigh on both consumer and commercial clients alike. From my perspective, I do think there's still some intangibles that are important. You know, what capital rules finally get enacted? What are the liquidity implications? What TLAC and other resolution requirements actually are imposed on the industry? Those are big factors, and they will influence the lending capacity of a good portion of the U.S. banking industry. So that's an important factor in terms of supporting the overall U.S. economy. I'd say, likewise, the geopolitical risks that exist are still quite significant. We're seeing, as China decelerates, we're seeing global trade, decline, and I think that is also something that could weigh on the overall outlook. That said, we don't see a significant downside recessionary scenario, materializing next year. What we do see is a gradual deceleration from this year, and we believe that the ability to avoid a recession is still feasible, but it's still a 50/50 proposition with regard to what, you know, that outlook looks like for next year. I come back to, from TD's perspective, I think we're extremely well positioned. We have one of the strongest capital ratios in the industry. We have the liquidity to be able to serve our clients and to be able to once again, selectively take share. I think we've got a proven growth model. We are quite comfortable being able to grow in down market scenarios. I think we've demonstrated that in the past, through the financial crisis, you know, through other recessionary scenarios. I think we've got, we're very well positioned to be able to deal with whatever economic outlook come our way. What is this? How is that, like, affecting your budgeting for growth in terms of your lending volumes? Like, you obviously have some initiatives that you have in place that are trying to grow, but what are you looking for lending to fall, and if you can give us a range in 2024? Well, maybe I'll just anchor it based on what we saw in the third quarter, John, just to give you a sense. I think we saw some really strong lending performance in the third quarter. Our mortgage business was up 17%. Our cards and auto businesses were in that 7%-8% territory. Our commercial lending business is still at 9%. So, on balance, we still see some, you know, lending momentum. I think there are signs of decelerating at the industry level. But as I said before, I think our relative position might give us a chance to be a little more selective and continue to grow our loan portfolio in a profitable risk-adjusted manner. I'd say from overall outlook perspective, I would like—cards is an area that we have specifically said we want to grow and target for growth. Today, about 14%-15% of our customers have a TD credit card. I think there's a natural ability to move that needle. We've thrown objectives of 25, 30 as a desired result. That would allow us to nearly double our bank card business. This past quarter, we grew that business by 13%, but we'd like to continue to lean in on that. We've done a lot in that space. We've launched new two new credit card offerings. We revamped our, you know, new cash back cards. We signed a new seven-year agreement with Visa that provides us with the wherewithal to make some reinvestment back into, the growth of that, you know, that franchise. We've repatriated our servicing back into our center of excellence, and now we're converting multiple card platforms into one. So we really are positioning the cards business for accelerated growth with a focus, first and foremost, on making sure that our clients, you know, have a, you know, a TD credit card in their wallet. Just to underscore this, this is the TD branded cards that you're planning on growing, not the white label partnership, which. That's correct. Will have its own growth that way. That's correct. Now, that said, I am equally pleased that we did extend both the Nordstrom and the Target co-branded cards. And we're very comfortable with both of those relationships. I think we're fortunate to be associated with two premier retailers. Still on the personal side, TD in the U.S. takes with residential mortgages a bit of a different approach than most U.S. banks do. Can you talk about the philosophy of keeping the residential mortgages on the book as opposed to securitizing them out? Yeah. First, you know, we think the mortgage product is an important, critical decision in the client life cycle. And so obviously for our clients, for our franchise clients, we want to make sure that we can, you know, we can provide them those services. Our mortgage portfolio has grown nicely. So this past quarter, it was up 17%. Not necessarily because originations have been up sharply. In fact, they haven't. Purchase mortgage money has been down something about 30%-40%, you know, all year long, and the refi business has been all but non-existent this year, given the overall rate structure. So we are, for our existing clients, we're still active in the market. We want to be able to increase our penetration of, you know, mortgage sold to our existing core client base. That said, I don't expect mortgage volumes to necessarily expand dramatically. Just to give you a stat, you know, today, rates are flirting with a 7, 7.25 handle. Most of our book, you know, 97% of our book has an interest rate of less than 6%. 87% of the book has interest rates of less than 5%. So it's unlikely in the near term that we're going to see a big refi boom, et cetera. So this is really about purchase money focused on our existing clients, making sure we're there and providing them good value and a, and a, you know, effective solution to some of their more. And then, on the commercial slide, you mentioned a couple industries that you're looking to focus on. What do you need to be able to continue to grow that business? Is it bringing bankers on, is it just expanding business relationships? From a commercial lending perspective? You know, I think we're doing a number of things. I think both commercial banking is all about the quality of the talent. So, making sure we've got strong mid-market bankers in the communities that matter, supporting the critical sectors that we choose to be able to play in. That is first and foremost. So you would expect us to continue to add to our ranks selectively, and to also add to our ranks geographically in those markets that we want to continue to lean into. I'd say likewise, we're also leaning into the infrastructure discussion as well. We are consolidating multiple commercial banking platforms into one, creating more end-to-end straight-through capability. And that has two fundamental impacts. It allows us to be able to serve our clients much more effectively, improve our response times, but also, you know, bring down the unit cost for that particular business and generate some productivity savings that we can reinvest back in the business. So we're doing a number of things, but there's no question that Cowen will be a critical part of that overall expansion plan. Leveraging the Cowen client base, marrying it to our existing banking footprint, is going to be a, you know, big source of growth going forward. I guess we've seen interesting developments in margins. Can you remind the audience of what, what your outlook is for margins for your, for your line of business? Sure, and I think we shared some guidance in our most recent earnings. Just to put the NIM into some degree of perspective, if you look at the five quarters ending the first quarter of 2023, our overall NIM expanded 118 basis points, the second largest of any of our expanded peer set. In the last two quarters, we've given about 29 basis points of that back, really anchored around two fundamental reasons. One, just overall deposit rates have increased more broadly in the book, but the bigger impact was the actual deposit migration that we saw, and largely among mass affluent clients. Now, the opportunity cost of not sorting cash is just too high, and so we saw a significant movement in that space. I would expect, just to be clear, that that deposit migration impact will continue over the next few quarters. That said, though, we are providing guidance that in the near term, NIM will be relatively stable. So how do I reconcile that? Our on tractor rates are giving us a significant tailwind. So we've got some headwinds associated with deposit migration among our customer base, but we've got a tailwind with regards to on rates with regards to our tractors. Those two will largely neutralize themselves, and so we'll see more stability in terms of overall deposit NIMs in the short term. And then, in terms of just overall growth on the platform, dovetailing to the question that was asked earlier, are there plans to increase your footprint, maybe expand into geographic regions that you're excited about with First Horizon? Well, I think a couple of things. We still have growth opportunities within Florida, the Carolinas. We've operated in those markets, you know, for a very long time. This past quarter, we did open up seven stores, largely focused on the Carolinas and Florida market. So, I think we want to make sure that we achieve density i n the markets in which we operate. It's just a stat that I think, you know, is important to us. 78% of our deposits are in markets where we have the top- three in the market position. And that's not, that's not by coincidence. In other words, we truly believe in making sure that we own a particular marketplace. We find that we are more effective when we have critical mass in a marketplace, as opposed to simply having a number of beachheads, spread widely. So, there's still work for us to do in Florida. We think that's a really attractive market, and there's pockets in Central and Northern Florida, which are important to us. And likewise, you know, growing in the Carolinas, both in South Carolina, where we've had a presence with the, you know, with the former acquisition, and in North Carolina, which we think is an exciting new market. You know, Charlotte, the place I believe this past quarter, we added three new stores. And that is, you know, that's, you know, being able to build enough critical mass to be able to support our presence in the marketplace and serve the community is really important to us. When you mention Florida, it triggers obviously the North American platform that TD enjoys. How much integration do you have with the Canadian retail banking operations and the connectivity? How does your platform benefit with Canadians migrating the snowbirds? What. So, just on a number of fronts, whether it's in retail, we have a series of, you know, transaction, you know, payment solutions that allow snowbirds, you know, Canadian snowbirds to be able to track back, forward. Wealth, we have wealth advisory teams that are dedicated on clients that have a dual presence, a dual residence. In our commercial banking business, our commercial banking teams are collaborating on a regular basis with clients that have a footprint in both locations. You know, that's one of the things that we can do. We're uniquely positioned to be able to support clients that straddle those two markets, and we want them to feel just as at home in the U.S. as they might feel as, you know, being served by, you know, TD Canada Trust in Canada. So, my Canadian clients, how it feels very weird walking through New York, where I've got a TD on every second quarter. Sure. Feels almost like Toronto. But before, as we're slowly winding down time, I want to give opportunity in case anyone has additional questions. Thanks. We've heard a lot from your U.S.-based peers about the Basel III process and the risk that some products, particularly, credit card and mortgage, would suffer adverse capital requirements from the proposed changes. And, I won't repeat all of the horror other words I've heard, but, question is: Is there a similar movement at even at the Canadian level, that would similarly affect your ability to do an effective mortgage or credit card business in the United States? Or, is the Canadian regulatory picture, more stable than the U.S. seems to be? Yes. There's nothing underway that is explicit as the Basel III Endgame rules presently. But as you can imagine, regulators around the world tend to, you know, converge over time. So certainly, the Canadian regulators will take a look at, you know, some of these proposals, and they will assess whether it's appropriate with maybe a market or not. I would say with regards to the Endgame rules itself, I think we find ourselves with more than sufficient capital buffers to be able to step into whatever proposed regime that takes place. And that. I think that gives us a degree of flexibility. The fact that we're a global G-SIB means that on some of the TLAC and other recovery, you know, related measures have been introduced and announced by the FDIC, that we're already ahead of that curve as well, and I think that's a huge advantage. And liquidity, while nothing's formally come out on liquidity, I think likewise, given what we talked about from a liquidity standpoint, I think we find ourselves. So I think what we're most focused about is, regardless of what final combination, you know, gets presented, I think it's important for us to be in a position to continue to serve our clients and to be able to, you know, grow our franchise. And I think we do find ourselves in that envious position to be able to do that. I know that there was, today there were a number of, you know, lawsuits and filings and challenges with regards to, you know, what's been proposed, but from my standpoint, you know, regulators are responding to the events that, you know, took place over the past, you know, three-four months. So I'm not surprised that we find, I think some degree of reaction, certainly around liquidity rules, was to be expected. Some response to the AOCI rules, certainly, given the interest rate changes that took place, that was to be expected as well. I think there are some areas in the endgame rules that do create some pause. Some of the increased capital requirements for mortgages from a policy standpoint is historically been an area that both government regulators, et cetera, have wanted to support. I think that's an area that, you know, we want to take a look, make sure that there isn't anything that we might inadvertently do that might input in a mortgage lending in the country. I think likewise, in some of the other areas, access to consumer credit, we don't want to increase capital such that certain segments might find themselves not having access to credit. But, you know, distinctly, there's some elements of the proposal that I think, you know, really merit a harder look. But on balance, I would say I'm not surprised by some of the proposals that are being presented. I think they reflect, you know, regulators wanting to make sure that they weather-proof the industry for, you know, what might be the next, you know, set of concerns. Anything else from the audience? So one of the things that has differentiated each of the banks in this more challenging macro environment is the ability to manage expenses, focus on operating leverage. Can you talk about how TD and you and your platform balance the investing in growth and business investing and what needs to be done from a regulatory standpoint, but also trying to manage the cost inflation in an environment where revenues aren't growing as strong as they have been in the past? Because a critical issue, managing productivity in order to be able to create the space for us to selectively invest in our franchise and to be able to invest in just the infrastructure of the franchise, we continue to grow sustainably and, and, you know, profitably, particularly important. There are a number of things that we're doing. I think, the question came up maybe two quarters ago, and I did indicate that we had kicked off a productivity exercise. There's a number of levers that we're looking to pull in order to create some more short-term, you know, expense opportunity. Those being first and foremost, really staring at our data and technical architectures and trying to simplify that at the core. I mentioned the card platform consolidations, commercial banking platform consolidations, our data infrastructure, making sure we have a single data lake, cloud-based, that supports the franchise, as opposed to a more distributed, redundant, data infrastructure. I mean, those things, they might seem like bread and butter, but they, they go to driving greater efficiency and greater quality, hardening of the actual infrastructure for the bank, which, which we think is really, really important. Corporate real estate. The reality is our lives have changed. You know, hybrid is, is, you know, is a reality, and we, we, we do sit on, on a corporate real estate footprint that's larger than the one we need. So rationalizing that will, will create, you know, some degree of savings. Core optimization. You know, notwithstanding that, you know, we've talked about potentially adding stores at times, but being very, you know, disciplined and looking at our store network and pruning, you know, where appropriate to make sure that our stores are optimally positioned, to be able to serve our clients, you know, critically important. Likewise, you know, vendor management arrangements. I'm somewhat obsessed about making sure that, you know, the marginal tiering structures of those agreements, you know, do provide the bank with economies of scale going forward. And so working with our strategic vendors, making sure that we're, you know, we're building long-term, long-term partnerships, that makes sense, you know, key area of focus. And then I would say, just looking at our organizational health and just making sure that we are, you know, positioned effectively, you know, to be able to grow in the areas that we want to, support our core control environments, and make sure that we are, you know, adequately staffed to serve clients, but doing that in a very productive way, it, you know, clearly a, you know, big priority going forward. I think those, you know, working those areas, amongst others, will give us some of the, the savings to be able to reinvest in our franchise, whether that be in terms of growth or in terms of building the infrastructure required to be able to continue to grow profitably and sustainably. My next question on, on this, and in terms of scale, this is not to imply that you're subscale in the U.S., it's definitely not. But are there any advantages that your platform can utilize with the fact that you've actually got a North American platform on both sides? Is there any technological or any other advantages that, that you're able to, to eke out? Oh, you know, we do that on a number of different fronts. John, to give you a sense, an area that we're investing in, you know, quite significantly is our digital mobile application. A proprietary piece of software, which we refer to as Easy Apply, which is our online account opening and online digital marketing platforms. That's a piece of code, very evolved piece of code that was first developed in our Canadian business. And we've been able to rapidly redeploy it, and it is now sort of the core of all of the account opening procedures that take place in the stores. And increasingly, it can move into our digital assets. So being able to exchange, you know, capabilities between our Canadian development centers and our U.S. development centers, certainly that gives us a big advantage against the, you know, other players. But that's not the only one. I mean, our, you know, we've got a Cyber Fusion Center that straddles all of North America, and so our ability to alert across multiple markets and be able to bring that knowledge to bear, you know, to be able to support the U.S. franchise, is just a huge advantage. And there's many others, but I do think that while the U.S. needs to have the maturity independently to be able to operate, you know, at scale, I think that, that being part of a North American, a significant North American player gives us huge advantages as well. Well, that's fantastic. We're bumping up against time. I hope you know that I didn't ask one question about it. Yeah. Next time. Yeah. Thank you very much. Really appreciate it. John, thank you.