Toronto Dominion Bank Barclays 24th Annual Global Financial Services Conference

Very excited to be able to make that announcement. This is really a return to a proven track record that we've had previously. We did open up about 250 stores over the last decade. Obviously, given the last two or three years with the remediation, we took a pause. This is returning to that expansion strategy. I think maybe a couple of things that I would cite. We have a pretty substantial existing footprint across the U.S. today, 1,100 stores. This is really a focus to densify, strengthen our footprint in those particular markets, and with two critical objectives. One, in the major markets in New England, the New York area and New Jersey, Philadelphia, where we already have a top three deposit position. We really want to ensure that we're properly positioned for the emerging demographic trends that are taking place.

Think of that as a true repositioning, and an extension in terms of the existing footprint that we have. The other part of the expansion is the Southeast expansion, where we really want to take on a greater footprint in markets like Florida, really the Carolinas more broadly. We would like to try to embed or increase our presence in those particular markets. Taken in aggregate, it will be a substantial move in a relatively short period of time. We said we would open up 100 stores by the end of 2028. We will get started on that in short order here. It is an exciting step forward, and it brings us back to a bit of an expansionary posture.

Sure, Brian, and I know I have mentioned this in the past. I would not want anyone to interpret the fact that we are opening up stores as the fact that our remediation plan is complete, or that we have satisfied all elements of the consent order. The consent order always provided for the ability for the bank to be able to open up stores or branches. This is essentially us having a degree of confidence in discussions with our regulators that we will be able to open up those 100 stores by the end of 2028. I should say that with regards to the AML program itself, we feel quite comfortable with the work that we have done in that space. A tremendous amount of progress, Brian, in a relatively short period of time.

I think that where we are on that remediation, where we are from a maturity standpoint, gives us the confidence that we can embark on this expansion plan at this point in time.

Sure. I know I've had conversations with many of you with regards to the work that we've done from an AML standpoint. I'd say, first of all, we are very pleased with the progress that we've made on our overall AML remediation plan, and I've signaled that on various analyst calls. If I just take a moment to describe what we've done, we've completely rebuilt the management team around the BSA/AML program. Today, we have 40 very seasoned titled officers supporting various aspects of our AML program. We have strengthened and renewed a lot of our policies and procedures and upgraded them accordingly. We've implemented a new customer risk rating program. We've implemented a new transaction monitoring core platform. We've revamped our investigations capabilities, changed our training programs, and really strengthened the relationship with the sort of engagement model with law enforcement.

Put all those things together, a lot has been done in a relatively short period of time. There's still more work to do with regards to the AML program, but I think we're entering into a very important phase with regards to the program, and that is the phase associated with validation and sustainability. That's really the work ahead of us now is really to ensure that it gets validated. For some of you that you might have heard me say this in the past, when we say validation, it means that every management action that we've implemented will be challenged by the business community, by the business itself, will be subject to internal audit validation, will be reviewed by the monitor, and ultimately it has to be accepted as effective by the regulator. That's the process we're in right now.

I think we've made a lot of progress on the actual management actions themselves. We're now in that important validation stage to be able to secure regulatory relief.

Yeah. Brian, we did say on the call that we were going to come in for the full year at $550 million. So a $50 million increase vis-à-vis what we had said before. What we did say is that the majority of that expense increase was associated with the look-back exercise that we're running. To a lesser extent, it was also related to the fact that we've accelerated a series of management actions that were previously scheduled for later on in 2026, outside of our fiscal period, and 2027, and we've brought those in to be able to get out in front of some of the critical deliverables that we had. I'd say, as I think about 2027, we do believe we'll be able to moderate overall governance and control costs associated with the AML remediation effort.

I'd say that moderation is probably to take place more in the second half of the year versus in the first half of the year, but it will allow us to be able to start to realize some degree of benefits. Some of you might recall in the investor day, we did communicate that we do expect that more than half of the total remediation expense will be able to be reduced permanently, while there'll be a portion of that that will remain as part of our run cost as part of the AML program. But I think being able to experience some degree of moderation will certainly help us in next year's overall expense profile.