EPS was $2.04, beating estimates of $1.85; revenue of $12.63B beat estimates of $12.26B. It was a good quarter, which should relieve some investor angst. Toronto-Dominion Bank's net interest margin (NIM) is positioned to benefit from higher-for-longer rates, and consensus sees higher net interest income in 2H. The bank expects US Retail net interest margin to rise in 2H, while Canadian NIM could decline in 3Q. Loan growth may stay limited to single digits, and Wholesale gains could be variable. A US investigation will continue to weigh, while its costs and settlement may rise. TD will conclude its restructuring charges in 3Q, with C$50 million bringing the aggregate to C$819 million, which is above expectations. This may drive savings to a C$725 million run rate; the 2024 goal remains at C$400 million, confirming mid-single-digit adjusted expense growth this year, including a 2% core gain. TD's provisions could stay near the top of 40-50 bps 2024 guidance. It may take several months, but another good quarter would help. The big uncertainty is its punishment for its money laundering issue. Investors are fearing the worst here, so even with a big fine it is hard to predict the reaction. We think investors can start to chip away on the buy side now. We would be surprised to see it significantly lower, unless we see a market-related sell off or some other unknown. Of course, anything is possible in the markets, though.
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