Highlights BANK FINANCIAL GROUP THIRD QUARTER. Dan Marinangeli

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1 THIRD QUARTER 1999 BANK FINANCIAL GROUP Dan Marinangeli Highlights Record cash EPS of $0.66 excluding gain on sale of TD Waterhouse - up 38% from last year and 14% from last quarter (accrual EPS $ up 39% from last year) Cash ROE 21.4% excluding gain on Waterhouse (accrual ROE 18.9%) Transacted $US 1.0B IPO for TD Waterhouse - the largest internet related IPO in NYSE history. Resulted in gain of $CDN Billion Increased Tier 1 and Total Capital ratios to 8.7% and 12.1% respectively Reduced expected full year PCL by $100MM to $300MM including $100MM special general provision 2 1

2 ROE Cash Basis* % Fiscal 1997 = 19.0% Fiscal 1998 = 17.4% 15 Cash Basis ROE Accrual Basis ROE 10 Q1/97 Q2/97 Q3/97 Q4/97 Q1/98 Q2/98 Q3/98 Q4/98 Q1/99 Q2/99 Q3/99 * Cash basis measurement is based on excluding goodwill effect from both earnings and capital. Data adjusted to exclude extraordinary items. 3 Cash EPS Growth Base = Q1/ * Q1 98 Q2 98 Q3 98 Q4 98 Q1 99 Q2 99 Q3 99 TD 4 Peer Average *Q3/99 peer average based on adjusted consensus analyst estimates 4 2

3 General Reserves & Securities Surplus $ Millions % of RWA 2,274 1,413 1,113 1,644 1, Q3/98 Q4/98 Q1/99 Q2/99 Q3/99 Q3/98 Q4/98 Q1/99 Q2/99 Q3/99 Q2/99 4 Bank Peer Average: 1.81% 5 Expenses Q3/Q3 Q3/Q2 Reported Increase in Expenses* 11 % 1 % Less: TD Waterhouse Group 8 (2) Corporate & Investment Banking 6 2 Base Bank (3) % 1 % * Excludes Goodwill 6 3

4 THREE GROWTH STRATEGIES 1 Invest in wealth management businesses 2 Reposition retail banking network 3 Focus corporate and investment banking businesses Wealth Management Segment vs TD Waterhouse Group Wealth Management Segment - TD Bank comprised of: TD Waterhouse - global discount brokerage TD Investments - investment management Mutual Funds - Canadian fund operations Wealth Management/Discount Brokerage segment results differ from the public company TD Waterhouse Group results because: $CDN versus $US Minority interest of 11.5% Goodwill adjustments U.S. GAAP accounting for option expense Knight/Trimark shares not owned by TD Waterhouse Group 8 4

5 Wealth Management Revenue $ Millions Net Income $ Millions $1,485 $1,130 $93 $298 $471 $403* $403* $37 $52* $48* Q3/98 Q2/99 Q3/99 Q3/98 Q2/99 Q3/99 * Excludes gains, restated for transfer of Private Client business to P&C 9 Wealth Management Revenue by Component $ Millions 500 Fund Services 400 TD Investments 300 Mutual Funds 200 TD Waterhouse:Other 100 TD Waterhouse:Canada 0 Q3/98 Q4/98 Q1/99 Q2/99* Q3/99 TD Waterhouse:USA *Excludes gains 10 5

6 Wealth Management Assets Under Administration $ Billions TD Investments Mutual Funds TD Waterhouse:Other TD Waterhouse:Canada TD Waterhouse:USA Q2/97 Q3/97 Q4/97 Q1/98 Q2/98 Q3/98 Q4/98 Q1/99 Q2/99 Q3/99 11 TD Waterhouse Group ($US Millions) Yr/Yr July 31 April 30 July 31 Change Commission/Fees $106 $177 $155 47% Other Revenue % Total Revenues $163 $249 $243 49% Total Expenses % Net Income $ 13 $ 30 $ % EPS (Diluted) $0.04 $0.09 $ % 12 6

7 TD Waterhouse Group ($US) Yr/Yr July 31 April 30 July 31 Change Active Accounts (000) 1,485 1,884 2,066 39% New accounts (000) % Trades/day (000) % Online penetration 45% 59% 64% 43% Customer Assets($B) $74 $106 $113 51% 13 Mutual Funds - Canada $ Billions WAF: 1.12% 1.16% 1.19% 1.17% 1.13% 1.14% 1.12% 1.12% $18 $16 $14 $12 $10 $8 $6 $4 Q3/97 Q1/98 Q3/98 Q1/99 Q3/99 6% 5% 4% Canada Waterhouse Cdn M.F. Industry Mkt. Share to June/

8 THREE GROWTH STRATEGIES 1 Invest in wealth management businesses 2 Reposition retail banking network 3 Focus corporate and investment banking businesses Personal & Commercial Bank Revenue $ Millions $794 $779 $819 Net Income $ Millions $139 $104 $101 Q3/98 Q2/99 Q3/99 Q3/98 Q2/99 Q3/99 * Restated to include transfer of Private Client group 16 8

9 Personal and Commercial Banking Margin 4.00% 3.50% 3.00% 2.50% Q3 98 Q4 98 Q1 99 Q2 99 Q Residential Mortgages $ Billions $39 8% year over year growth 15% $36 $33 $30 $27 $24 Insured mortgages Q3/99: 74 % Q3/98: 73 % Q3/97 Q1/98 Q3/98 Q1/99 Q3/99 14% 13% Volume Cdn. Bank Mkt. Share to June/99 Note: Data includes securitized mortgages. 18 9

10 Personal Loans & Cards (Canadian Currency) $ Billions $16 $14 $12 $10 $8 9% year over year growth 13% 12% 11% $6 Q3/97 Q1/98 Q3/98 Q1/99 Q3/99 10% Volume Cdn. Bank Mkt. Share to June/99 Note: Data includes securitized loans. 19 Personal Deposits (Canadian Currency) $ Billions $42 7% year over year growth 14% $41 $40 $39 13% $38 $37 $36 Q3/97 Q1/98 Q3/98 Q1/99 Q3/99 12% Volume Cdn. Bank Mkt. Share to June/

11 Electronic Banking Web and telephone banking customers as a % penetration of TD households vs number of counter transactions 45% % % Q1 97 Q3 97 Q1 98 Q3 98 Q1 99 Q3 99 Web & Telephone Banking Counter Transactions (MM's) % penetration and 1.7MM customers (181M web and 1.5MM telephone) 21 THREE GROWTH STRATEGIES 1 Invest in wealth management businesses 2 Reposition retail banking network 3 Focus corporate and investment banking businesses 11

12 Corporate & Investment Banking: Revenue $ Millions $744 $573 $623 $544* Q3/98 Q2/99 Q3/99 *Excludes special gains 23 Corporate & Investment Banking Net Income $ Millions ROE % $258 26% $163 $192 16% 20% $150* 15%* Q3/98 Q2/99 Q3/99 Q3/98 Q2/99 Q3/99 * Excludes special gains 24 12

13 Capital Allocated Wholesale 55% Wholesale 50% Goal (2001) 40% Retail 45% Retail 50%* 60% YTD Other Wealth Management Personal & Commercial Banking Corporate & Investment Banking *Other Capital included in Retail 25 Q Risk Management BANK FINANCIAL GROUP Tom Spencer 13

14 Strong Asset Quality 1.00 % Ratio of PCL to Loans & BAs TD 4 Bank Peer 10 bps* Q1/99 Q2/99 Q3/99 Notes: Excludes special general provisions and reverse repos. *1999 full year estimate for PCL to loans and BA s at July 31/99 20 bps 27 General Reserves & Net Impaired Loans $ Millions $744 $740 $749 $636 $402 $ General Reserves as a % of RWA Q1 99 Q2 99 Q3 99 Net Impaired Loans $(411)million Q1 99 Q2 99 Q3 99 Q Bank Peer Average: 0.61% 28 14

15 BUSINESS & GOVERNMENT $ Millions $1,500 $1,250 $1,000 Net Impaired Loans (before General Reserves) As a % of Loans & BA s 4% 3% $750 $500 $250 $0 61 bps Q2/99Q3/99 2% 1% 0% 29 Asian Exposure Country China * Hong Kong Indonesia Malaysia Philippines Singapore South Korea Taiwan Thailand Sub-total Gross Outstanding Loans and other Credit Exposures Millions of Canadian Dollars July 31, 1999 Sovereign Banks Commercial & Industrial Mark to Market Total ,468 Total Apr./ ,412 Japan 2, , ,140 3,514 Total $2,741 $469 $2,271 $127 $5,608 * We have no exposure to International Trusts and Investment Corporations. $4,

16 Latin American Exposure Gross Outstanding Loans and other Credit Exposures Millions of Canadian Dollars July 31, 1999 Country Banks Commercial & Industrial Mark to Market Total Total Apr./99 Argentina Brazil Chile Colombia Mexico Peru All Other Total $904 $624 $0 $1,528 $1, Q BANK FINANCIAL GROUP An overview of TD Waterhouse National Bank Bob Kelly Vice Chair, Retail Banking 16

17 TD Waterhouse National Bank Background TD s original purchase of Waterhouse included a national US banking license. Original purpose of the bank was to house Investor s Money Market accounts. NOW: a fully functional electronic bank available to both US and Canadian customers. 33 TD Waterhouse National Bank Strategy Sell Banking services to 1.9 million TD Waterhouse U.S. investing customers. Provide cross-border electronic banking services to Canadian customers. Integrate banking/brokerage services on both sides of the border. Identify profitable customer segments to build further banking presence in U.S

18 TD Waterhouse National Bank Competition Non-bank competitors: offer integrated banking and brokerage services: Schwab, Merrill-Lynch, E*Trade/Telebank. Pure electronic plays: NetBank, Wingspan, American Express, Royal s SFNB. Multi-channel banks: Citi, BankOne, Wells Fargo 35 TD Waterhouse National Bank Penetration of E-Banks Eatimated total customers per institu Penetration of Electronic Banks vs. U.S. online customer base is still less than 1% of total customers online. 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 First Internet Bank of Indiana US Access Bank CompuBank Security First Network Bank Net.B@nk TD Waterhouse National Bank Telebanc Branchless customers as a % of total online custo Source: Banking Strategies Magazine, July/August 1999, FI web pages 36 18

19 TD Waterhouse National Bank Competitive Advantages: Growing TD Waterhouse customer base, of which 837,000 are now on-line. Integration of Bank and Broker on both sides of the border TDW branch network. TD Waterhouse brand Canadian E-Banking know-how. 37 TD Waterhouse National Bank The opportunity is signficant TWE Customer Accounts showing penetration of Online and Banking accounts. TD WNB accounts represent 5% of target population. 2,000 1,500 accounts (000 1, TWE accounts (US) TWE accounts online(us) WNB accounts q3/

20 TD Waterhouse National Bank What we have built to date: A Complete product suite: Credit cards ATM/Check cards checking accounts secured and unsecured lines of credit mortgages. 39 TD Waterhouse National Bank A complete set of Channels: Fully functional phone support (based in Canada), Web Banking offering transactions, product applications and bill payment, Marketing Web site with links to TWE Web Broker and to TD. Funds transfer between TD and WNB. Coming this month: funds transfer on the Web between Bank and Broker in the US. Partnership with TWE Branch network

21 TD Waterhouse National Bank Next Steps: Sept. launch in conjunction with TD Waterhouse. More complete banking product suite, incorporating the Open Finance model: a commitment to provide best of breed banking offers from other providers. Continued integration between bank and brokerage, US and Canada. Loyalty Plan. Identify new profitable customer segments. 41 Forward Looking Statements This document may contain forward-looking statements, including statements regarding the business and anticipated financial performance of TD. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include legislative or regulatory developments, competition, technological change, global capital market activity, interest rates, inflation and general economic conditions in geographic areas where TD operates. Also, additional risk factors relating to the pending acquisition of CT Financial Services Inc. are described in TD's Report on Form 6-K, filed with the U.S. Securities and Exchange Commission on August 3, 1999 and TD's Material Change Report, filed with the Ontario Securities Commission on August 3,

22 THIRD QUARTER 1999 BANK FINANCIAL GROUP 22