Exhibit 99.1

FIRST QUARTER FINANCIAL HIGHLIGHTS, compared with the first quarter last year:

FIRST QUARTER ADJUSTMENTS (ITEMS OF NOTE)

The first quarter reported earnings figures included the following items of note:

TORONTO, February  28, 2019 – TD Bank Group ("TD" or the "Bank") today announced its financial results for the first quarter ended January 31, 2019. First quarter reported earnings were $2.4 billion, up 2% on a reported basis and flat on an adjusted basis, compared with the same quarter last year.

"TD's Retail segments in both Canada and the U.S. had a strong start to the year, with continued revenue growth and solid earnings. However, market volatility and lower client activity impacted our Wholesale segment in the quarter," said Bharat Masrani, Group President and Chief Executive Officer, TD Bank Group. "TD's diversified business and geographic mix continues to serve us well and we are focused on the work ahead to advance our business strategy and innovate to build new capabilities to serve our over 25 million customers."

The Bank also announced a dividend increase of seven cents per common share for the quarter ending in April, an increase of 10%.

Canadian Retail

Reported net income for Canadian Retail was $1,379 million, down 22% from the first quarter last year. Adjusted net income, which excludes the Air Canada and Greystone charges above, was $1,855 million, an increase of 6% over the first quarter of 2018. Revenue growth was 8%, reflecting contributions across all businesses. The real estate secured lending business launched an industry-leading digital mortgage application and gained market share for the third quarter in a row. We solidified our position as Canada's leading credit card issuer with our agreement to become the primary credit card issuer for Air Canada's new loyalty program and became Canada's largest money manager with the acquisition of Greystone.

U.S. Retail

U.S. Retail reported net income was $1,240 million (US$935 million), an increase of 30% (25% in U.S. dollars) and up 21% (16% in U.S. dollars) on an adjusted basis, compared with the same quarter last year. TD Ameritrade contributed $311 million (US$235 million) to the segment this quarter compared to $106 million in the same quarter last year.

The U.S. Retail Bank, which excludes the Bank's investment in TD Ameritrade, reported net income of $929 million (US$700 million), up 10% (5% in U.S. dollars) on a reported basis and 9% (4% in U.S. dollars) on an adjusted basis, from the same period last year. Earnings reflect loan and deposit volume growth, and higher margins. The U.S. Retail Bank remains focused on providing legendary customer service and making it easier for customers to bank with us with the roll-out of new customer capabilities such as Mobile Bill Pay and eSignature.

Wholesale

Wholesale Banking reported a net loss for the quarter of $17 million, compared to net earnings of $278 million in the first quarter last year, reflecting lower trading-related revenue and origination activity, and higher expenses. Revenue was down 35% from the same period last year, impacted by challenging market conditions and reduced client activity. Non-interest expenses were up 14%, from the same quarter last year due to continued investment in the global expansion of our U.S. dollar business and the benefit of a revaluation of certain liabilities for post-retirement benefits in the prior year, which was partially offset by lower variable compensation accrual in the current quarter.

Capital

TD's Common Equity Tier 1 Capital ratio on a Basel lll fully phased-in basis was 12%.

Innovation

"New digital capabilities are deepening our customer relationships, allowing us to offer more personalized and connected experiences to our growing North American customer base," continued Masrani. "We are particularly excited by the launch of TD Clari, an artificial intelligence powered chatbot that allows our customers to engage with us in truly differentiated ways."

Conclusion

"We're continuing to invest in our business, colleagues, and brand, and the dividend increase announced today further reinforces the confidence we have in our proven business model," concluded Masrani. "We continue to face many of the same challenges and opportunities that we identified at the end of 2018. Subject to these, and assuming the improvements in market conditions we are now seeing are sustained, we expect our full-year performance to be closer to the low end of our 7-10 per cent medium-term target for adjusted EPS growth."

The foregoing contains forward-looking statements. Please refer to the "Caution Regarding Forward-Looking Statements" on page 4.

ENHANCED DISCLOSURE TASK FORCE

The Enhanced Disclosure Task Force (EDTF) was established by the Financial Stability Board in 2012 to identify fundamental disclosure principles, recommendations and leading practices to enhance risk disclosures of banks. The index below includes the recommendations (as published by the EDTF) and lists the location of the related EDTF disclosures presented in the first quarter 2019 Report to Shareholders (RTS), Supplemental Financial Information (SFI), or Supplemental Regulatory Disclosures (SRD). Information on TD's website, SFI, and SRD is not and should not be considered incorporated herein by reference into the first quarter 2019 RTS, Management's Discussion and Analysis, or the Interim Consolidated Financial Statements. Certain disclosure references have been made to the Bank's 2018 Annual Report.

TABLE OF CONTENTS

MANAGEMENT ' S DISCUSSION AND ANALYSIS OF OPERATING PERFORMANCE

This MD&A is presented to enable readers to assess material changes in the financial condition and operating results of TD Bank Group ("TD" or the "Bank") for the three months ended January 31, 2019, compared with the corresponding periods shown. This MD&A should be read in conjunction with the Bank's unaudited Interim Consolidated Financial Statements and related Notes included in this Report to Shareholders and with the 2018 Consolidated Financial Statements and related Notes and 2018 MD&A. This MD&A is dated February 27, 2019. Unless otherwise indicated, all amounts are expressed in Canadian dollars and have been primarily derived from the Bank's 2018 Consolidated Financial Statements and related Notes or Interim Consolidated Financial Statements and related Notes, prepared in accordance with IFRS as issued by the IASB. Note that certain comparative amounts have been restated/reclassified to conform with the presentation adopted in the current period. Additional information relating to the Bank, including the Bank's 2018 Annual Information Form, is available on the Bank's website at http://www.td.com , as well as on SEDAR at http://www.sedar.com and on the SEC's website at http://www.sec.gov (EDGAR filers section).

This document was reviewed by the Bank ' s Audit Committee and was approved by the Bank ' s Board of Directors, on the Audit Committee ' s recommendation, prior to its release.

HOW WE PERFORMED

Corporate Overview

The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group ("TD" or the "Bank"). TD is the sixth largest bank in North America by branches and serves more than 25 million customers in three key businesses operating in a number of locations in financial centres around the globe: Canadian Retail, which includes the results of the Canadian personal and commercial banking, wealth, and insurance businesses; U.S. Retail, which includes the results of the U.S. personal and business banking operations, wealth management services, and the Bank's investment in TD Ameritrade; and Wholesale Banking. TD also ranks among the world's leading online financial services firms, with approximately 12 million active online and mobile customers. TD had $1.3 trillion in assets on January 31, 2019. The Toronto-Dominion Bank trades under the symbol "TD" on the Toronto and New York Stock Exchanges.

How the Bank Reports

The Bank prepares its Interim Consolidated Financial Statements in accordance with IFRS, the current GAAP, and refers to results prepared in accordance with IFRS as "reported" results. The Bank also utilizes non-GAAP financial measures referred to as "adjusted" results to assess each of its businesses and to measure the Bank's overall performance. To arrive at adjusted results, the Bank removes "items of note", from reported results. The items of note relate to items which management does not believe are indicative of underlying business performance. The Bank believes that adjusted results provide the reader with a better understanding of how management views the Bank's performance. The items of note are disclosed in Table 3. As explained, adjusted results differ from reported results determined in accordance with IFRS. Adjusted results, items of note, and related terms used in this document are not defined terms under IFRS and, therefore, may not be comparable to similar terms used by other issuers.

The Bank's U.S. strategic cards portfolio comprises agreements with certain U.S. retailers pursuant to which TD is the U.S. issuer of private label and co-branded consumer credit cards to their U.S. customers. Under the terms of the individual agreements, the Bank and the retailers share in the profits generated by the relevant portfolios after credit losses. Under IFRS, TD is required to present the gross amount of revenue and provisions for credit losses related to these portfolios in the Bank's Interim Consolidated Statement of Income. At the segment level, the retailer program partners' share of revenues and credit losses is presented in the Corporate segment, with an offsetting amount (representing the partners' net share) recorded in Non-interest expenses, resulting in no impact to Corporate reported Net income (loss). The Net income (loss) included in the U.S. Retail segment includes only the portion of revenue and credit losses attributable to TD under the agreements.

The following table provides a reconciliation between the Bank's adjusted and reported results.

Return on Common Equity

The Bank's methodology for allocating capital to its business segments is aligned with the common equity capital requirements under Basel III. For fiscal 2019, the capital allocated to the business segments is based on 10% CET1 Capital. Capital allocated to the business segments was based on 9% for fiscal 2018.

Adjusted ROE is adjusted net income available to common shareholders as a percentage of average common equity.

Adjusted ROE is a non-GAAP financial measure as it is not a defined term under IFRS. Readers are cautioned that earnings and other measures adjusted to a basis other than IFRS do not have standardized meanings under IFRS and, therefore, may not be comparable to similar terms used by other issuers.

Return on Tangible Common Equity

Tangible common equity (TCE) is calculated as common shareholders' equity less goodwill, imputed goodwill and intangibles on an investment in TD Ameritrade and other acquired intangible assets, net of related deferred tax liabilities. Return on tangible common equity (ROTCE) is calculated as reported net income available to common shareholders after adjusting for the after-tax amortization of acquired intangibles, which are treated as an item of note, as a percentage of average TCE. Adjusted ROTCE is calculated using reported net income available to common shareholders, adjusted for items of note, as a percentage of average TCE. Adjusted ROTCE provides a useful measure of the performance of the Bank's income producing assets, independent of whether or not they were acquired or developed internally. TCE, ROTCE, and adjusted ROTCE are each non-GAAP financial measures and are not defined terms under IFRS. Readers are cautioned that earnings and other measures adjusted to a basis other than IFRS do not have standardized meanings under IFRS and, therefore, may not be comparable to similar terms used by other issuers.

SIGNIFICANT EVENTS IN 2019

Agreement for Air Canada Credit Card Loyalty Program

On January 10, 2019, the Bank's long-term loyalty program agreement (the "Loyalty Agreement") with Air Canada became effective in conjunction with Air Canada completing its acquisition of Aimia Canada Inc., which operates the Aeroplan loyalty business (the "Transaction"). Under the terms of the Loyalty Agreement, the Bank will become the primary credit card issuer for Air Canada's new loyalty program when it launches in 2020 through to 2030. TD Aeroplan cardholders will become members of Air Canada's new loyalty program and their miles will be transitioned when Air Canada's new loyalty program launches in 2020.

In connection with the Transaction, the Bank paid $622 million plus applicable sales tax to Air Canada, of which $547 million ($446 million after sales and income taxes) was recognized in non-interest expenses – other in the Canadian Retail segment, and $75 million was recognized as an intangible asset which will be amortized over the Loyalty Agreement term. In addition, the Bank prepaid $308 million plus applicable sales tax for the future purchase of loyalty points over a ten-year period. The Bank also expects to incur additional pre-tax costs of approximately $100 million over two years to build the functionality required to facilitate the new program. The Transaction reduced the Bank's CET1 ratio by approximately 13 basis points (bps).

Acquisition of Greystone

On November 1, 2018, the Bank acquired 100% of the outstanding equity of Greystone for consideration of $817 million, of which $475 million was paid in cash and $342 million was paid in the Bank's common shares. The value of 4.7 million common shares issued as consideration was based on the volume weighted-average market price of the Bank's common shares over the 10 trading day period immediately preceding the fifth business day prior to the acquisition date and was recorded based on market price at close. Common shares of $167 million issued to employee shareholders in respect of the purchase price will be held in escrow for two years post-acquisition, subject to their continued employment, and will be recorded as a compensation expense over the two-year escrow period.

The acquisition is accounted for as a business combination under the purchase method. As at November 1, 2018, the acquisition contributed $169 million of assets and $55 million of liabilities. The excess of accounting consideration over the fair value of the identifiable net assets is allocated to customer relationship intangibles of $140 million, deferred tax liability of $37 million and goodwill of $433 million. Goodwill is not deductible for tax purposes. The results of the acquisition have been consolidated from the acquisition date and reported in the Canadian Retail segment. The purchase price allocation is subject to refinement and may be adjusted to reflect new information about facts and circumstances that existed at the acquisition date during the measurement period.

FINANCIAL RESULTS OVERVIEW

Performance Summary

Outlined below is an overview of the Bank's performance on an adjusted basis for the first quarter of 2019. Shareholder performance indicators help guide and benchmark the Bank's accomplishments. For the purposes of this analysis, the Bank utilizes adjusted earnings, which excludes items of note from the reported results that are prepared in accordance with IFRS. Reported and adjusted results and items of note are explained in the "How the Bank Reports" section of this document.

Net Income

Quarterly comparison – Q1 2019 vs. Q1 2018

Reported net income for the quarter was $2,410 million, an increase of $57 million, or 2%, compared with the first quarter last year. The increase reflects revenue growth, the impact from U.S. tax reform during the first quarter of 2018, and a higher contribution from TD Ameritrade, partially offset by charges related to the agreement with Air Canada, higher non-interest expenses, and higher provision for credit losses (PCL). Adjusted net income for the quarter was $2,953 million, an increase of $7 million.

By segment, the increase in reported net income was due to an increase in U.S. Retail of $288 million, or 30%, and a lower net loss in the Corporate segment of $442 million, or 70%, partially offset by a decrease in Canadian Retail of $378 million, or 22%, and a decrease in Wholesale Banking of $295 million. Adjusted net income for Canadian Retail increased $98 million, or 6%.

Quarterly comparison – Q1 2019 vs. Q4 2018

Reported net income for the quarter decreased $550 million, or 19%, compared with the prior quarter. The decrease was largely due to charges related to the agreement with Air Canada and lower revenue in Wholesale Banking, partially offset by lower non-interest expenses, higher deposit margins, higher contribution from TD Ameritrade and Insurance, and loan and deposit growth. Adjusted net income for the quarter decreased $95 million, or 3%.

By segment, the decrease in reported net income was due to a decrease in Wholesale Banking of $303 million, a decrease in Canadian Retail of $362 million, or 21%, and a higher net loss in the Corporate segment of $11 million, or 6%, partially offset by an increase in U.S. Retail of $126 million, or 11%. Adjusted net income for Canadian Retail increased $114 million, or 7%.

Net Interest Income

Quarterly comparison – Q1 2019 vs. Q1 2018

Net interest income for the quarter was $5,860 million, an increase of $430 million, or 8%, compared with the first quarter last year. The increase reflects higher deposit margins and loan and deposit volume growth in the Canadian and U.S. Retail segments, and the impact of foreign currency translation, partially offset by lower net interest income in Wholesale Banking.

By segment, the increase in net interest income was due to an increase in U.S. Retail of $307 million, or 16%, an increase in Canadian Retail of $219 million, or 8%, and an increase in the Corporate segment of $60 million, or 18%, partially offset by a decrease in Wholesale Banking of $156 million, or 47%.

Quarterly comparison – Q1 2019 vs. Q4 2018

Net interest income for the quarter increased $104 million, or 2%, compared with the prior quarter, primarily due to higher deposit margins and loan and deposit volume growth in the Canadian and U.S. Retail segments, and the impact of foreign currency translation, partially offset by lower net interest income in Wholesale Banking.

By segment, the increase in net interest income was due to an increase in U.S. Retail of $102 million, or 5%, an increase in Canadian Retail of $22 million, or 1%, and an increase in the Corporate segment of $80 million, or 25%, partially offset by a decrease in Wholesale Banking of $100 million, or 37%.

Non-Interest Income

Quarterly comparison – Q1 2019 vs. Q1 2018

Reported non-interest income for the quarter was $4,138 million, an increase of $193 million, or 5%, compared with the first quarter last year. The increase was due to higher revenues from the insurance business, the impact from U.S. tax reform during the first quarter of 2018, changes in fair value of investments supporting claims liabilities, the impact of foreign currency translation, and the acquisition of Greystone, partially offset by lower non-interest income in Wholesale Banking.

By segment, the increase in reported non-interest income was due to an increase in Canadian Retail of $219 million, or 8%, and an increase in the Corporate segment of $128 million, partially offset by a decrease in Wholesale Banking of $152 million, or 27%, and a decrease in U.S. Retail of $2 million.

Quarterly comparison – Q1 2019 vs. Q4 2018

Reported non-interest income for the quarter decreased $242 million, or 6%, compared with the prior quarter. The decrease was primarily due to lower non-interest income in Wholesale Banking and lower fee income, partially offset by changes in fair value of investments supporting claims liabilities, and the acquisition of Greystone.

By segment, the decrease in reported non-interest income was due to a decrease in Wholesale Banking of $249 million, or 38%, a decrease in the Corporate segment of $95 million, or 53%, and a decrease in U.S. Retail of $12 million, or 2%, partially offset by an increase in Canadian Retail of $114 million, or 4%.

Provision for Credit Losses

Quarterly comparison – Q1 2019 vs. Q1 2018

PCL for the quarter was $850 million, an increase of $157 million, or 23%, compared with the first quarter last year. PCL – impaired for the quarter was $717 million, an increase of $160 million, or 29%, reflecting higher provisions for the U.S. commercial portfolio, as well as volume growth, seasoning, and mix in the U.S. credit card portfolio. PCL – performing for the quarter was $133 million, a decrease of $3 million, or 2%. The decrease primarily reflects migration from performing to impaired in the U.S. commercial portfolio, partially offset by volume growth and credit migration in Canadian Retail. Total PCL for the quarter as an annualized percentage of credit volume was 0.50%.

PCL increased across all segments as U.S. Retail increased $59 million, or 24%, the Corporate segment increased $44 million, or 24%, Canadian Retail increased $40 million, or 15%, and Wholesale Banking increased $14 million.

Quarterly comparison – Q1 2019 vs. Q4 2018

PCL for the quarter increased by $180 million, or 27%, compared with the prior quarter. PCL – impaired was $717 million, an increase of $158 million, or 28%, reflecting higher provisions for the U.S. commercial portfolio, seasonal trends in the U.S. credit card and auto portfolios, and higher provisions in Canadian personal lending. PCL – performing was $133 million, an increase of $22 million, or 20%, reflecting credit migration in the Canadian personal lending and commercial portfolios, and seasonal trends in the U.S. credit card and auto portfolios, partially offset by migration from performing to impaired in the U.S. commercial portfolio. Total PCL for the quarter as an annualized percentage of credit volume was 0.50%.

By segment, the increase in PCL was due to an increase in Corporate segment of $72 million, or 46%, an increase in U.S. Retail of $62 million, or 25%, an increase in Canadian Retail of $47 million, or 18%, and a decrease in Wholesale Banking of $1 million, or 13%.

Insurance claims and related expenses

Quarterly comparison – Q1 2019 vs. Q1 2018

Insurance claims and related expenses for the quarter were $702 million, an increase of $127 million, or 22%, compared with the first quarter last year, reflecting changes in the fair value of investments supporting claims liabilities, increases in reinsurance claims assumed, less favourable prior years' claims development and higher current year claims, partially offset by the impact of changes to actuarial assumptions in the life and health business.

Quarterly comparison – Q1 2019 vs. Q4 2018

Insurance claims and related expenses for the quarter increased $18 million, or 3%, compared with the prior quarter, reflecting changes in the fair value of investments supporting claims liabilities and less favourable prior years' claims development, partially offset by lower current year claims, less severe weather-related events, and the impact of changes to actuarial assumptions in the life and health business.

Non-Interest Expenses and Efficiency Ratio

Quarterly comparison – Q1 2019 vs. Q1 2018

Reported non-interest expenses were $5,855 million, an increase of $994 million, or 20%, compared with the first quarter last year, reflecting charges related to the agreement with Air Canada, the impact of foreign currency translation, higher spend on strategic initiatives, and additional employees supporting business growth. Adjusted non-interest expenses were $5,161 million, an increase of $368 million, or 8%.

By segment, the increase in reported non-interest expenses was due to an increase in Canadian Retail of $773 million, or 33%, an increase in U.S. Retail of $164 million, or 11%, and an increase in Wholesale Banking of $76 million, or 14%, partially offset by a decrease in the Corporate segment of $19 million, or 3%. Adjusted non-interest expenses for Canadian Retail increased $135 million, or 6%.

The Bank's reported efficiency ratio was 58.6%, compared with 51.9% in the first quarter last year. The Bank's adjusted efficiency ratio was 51.6%, compared with 50.6% in the first quarter last year.

Quarterly comparison – Q1 2019 vs. Q4 2018

Reported non-interest expenses for the quarter increased $489 million, or 9%, compared with the prior quarter, largely due to charges related to the agreement with Air Canada, partially offset by lower spend related to projects and higher spend related to marketing and promotion in the prior quarter. Adjusted non-interest expenses decreased $152 million, or 3%.

By segment, the increase in reported non-interest expenses was due to an increase in Canadian Retail of $554 million, or 22%, and an increase in Wholesale Banking of $51 million, or 9%, partially offset by a decrease in the Corporate segment of $90 million, or 14%, and a decrease in U.S. Retail of $26 million, or 2%. Adjusted non-interest expenses for Canadian Retail decreased $84 million, or 3%.

The Bank's reported efficiency ratio was 58.6%, compared with 52.9% in the prior quarter. The Bank's adjusted efficiency ratio was 51.6%, compared with 52.4% in the prior quarter.

Income Taxes

As discussed in the "How the Bank Reports" section of this document, the Bank adjusts its reported results to assess each of its businesses and to measure overall Bank performance. As such, the provision for income taxes is stated on a reported and an adjusted basis.

The Bank's effective income tax rate on a reported basis was 19.4% for the first quarter, compared with 32.0% in the first quarter last year and 20.2% in the prior quarter. The year-over-year decrease was largely due to the impact from U.S. tax reform during the first quarter of 2018 and lower income before taxes in the current quarter, partially offset by lower tax-exempt dividend income in the current quarter and business mix. The quarter-over-quarter decrease was mainly due to lower income before taxes in the current quarter and business mix.

The Bank's adjusted effective tax rate was 20.6% for the quarter, higher than 19.2% in the first quarter last year and similar to 20.3% in the prior quarter. The year-over-year increase was mainly due to lower tax-exempt dividend income in the current quarter and business mix. The quarter-over-quarter increase was mainly due to business mix.

Impact of Foreign Exchange Rate on U.S. Retail Segment Translated Earnings

U.S. Retail segment earnings, including the contribution from the Bank's investment in TD Ameritrade, reflect fluctuations in the U.S. dollar to Canadian dollar exchange rate compared with the same period last year. Depreciation of the Canadian dollar had a favourable impact on U.S. Retail segment earnings for the three months ended January 31, 2019, compared with the same period last year, as shown in the following table.

On a trailing twelve-month basis, a one cent appreciation/depreciation in the U.S. dollar to Canadian dollar average exchange rate would have increased/decreased U.S. Retail segment net income by approximately $60 million.

Economic Summary and Outlook

Since the midway point of calendar 2018, synchronicity in the global economic slowdown has become more reinforced. This more subdued pace is expected to persist, with gains in world real gross domestic product (GDP) poised to average about 3.4% per year over calendar 2019 and 2020. This compares to a rate of nearly 4% in the 2017 and 2018 calendar years. China has been a key catalyst of this recent downshift, in part reflecting government efforts to rebalance sources of growth away from debt-fuelled activities. However, more recently, the data has conveyed the impact of U.S. tariffs. These impacts are being transmitted globally via supply chains and financial market volatility. Growth in advanced economies has also moderated, particularly in the euro area. The perception of increased downside risks to growth is leading central banks to signal greater patience with respect to further withdrawal of monetary stimulus.

Among the major advanced economies, the U.S. has remained the strongest performer. Real GDP is estimated to have expanded by roughly 3% in calendar 2018, supported by robust consumer spending and healthy business investment. For the 2019 calendar year, the U.S. economy is expected to remain a top performer relative to international peers, but at a more moderate average quarterly pace of 2% growth. Several factors underpin this view, including near-term data that indicate the U.S. is not immune to global dynamics, as evidenced by greater financial market volatility and waning business sentiment relative to levels in the prior year. In addition, the growth lift from fiscal stimulus will fade as the year goes on, at the same time as the higher interest rate environment weighs on activity. Although we anticipate that GDP growth will be marginally weighed down over the January to March 2019 period due to the 35-day federal government shutdown, this is expected to be a transitory impact that will be largely recovered in the following quarter.

With the Federal Reserve balancing domestic and international considerations, expectations for policy interest rate increases have been reduced relative to the prior quarter. Calendar 2019 is expected to remain the peak in the interest rate cycle, with the expectation now being that the central bank will either not raise its policy interest rate, or will do so only once during the calendar year, versus prior expectations of two hikes.

Canadian economic growth appears to have moderated in the final quarter of calendar 2018. Current data indicate only a 1% pace of growth is likely to be reported. The moderation of economic activity is due to two factors. The first is expected to be temporary. Production shut-ins among energy producers, as well as unusual refinery maintenance in the U.S. have weighed on economic activity. We anticipate that the impact will become more apparent within GDP in the January to March 2019 period, as the Alberta government enforces mandatory production cuts among oil producers. Thereafter, smaller curtailments will be in effect, and the net effect should help buoy economic growth. Current government communications indicate that all mandatory curtailment will be concluded by January 2020. The second factor constraining growth is more permanent in nature. The impacts of past Bank of Canada policy interest rate increases, as well as macroprudential policy related to housing markets are reverberating in rate-sensitive areas of the economy. Household spending on areas such as automobiles, furnishings, and building supplies continues to moderate in the wake of higher borrowing costs. Higher borrowing costs and regulatory changes have caused resale housing activity to moderate in recent months. The Vancouver market is particularly soft, with resale activity down 32% in calendar 2018.

Canadian household credit growth has undergone a marked deceleration in the latter half of 2018, and at the same time there has been a slight uptick in consumer insolvencies. Much of this can be attributed to the unique challenges facing Alberta. Regardless, higher borrowing costs are clearly impacting consumer finances, reducing spending power.

The impact of past interest rate increases is expected to continue to constrain activity in these sectors. The result is a forecast moderation of economic growth to 1.5% in calendar 2019 from 2.0% in calendar 2018. Central bank communication has become more cautious, reflective of both the near- and long-term factors slowing the pace of expansion, as well as trade uncertainty and a softer global demand backdrop. However, a bias towards further rate increases remains given the current low level relative to estimates of the neutral rate. We expect the Bank of Canada to take a cautious approach to further rate increases, and we forecast a 25 bps policy rate increase in late 2019 calendar year. However, this is contingent on clear evidence of a rebound in economic activity following the oil adjustment process and, importantly, household sector developments in the wake of prior interest rate increases. Yields in Canada should remain below those in the U.S., and the currency is expected to remain in a range of US75 to US77 cents in calendar 2019.

Downside risks remain on both the domestic and global landscapes. Domestically, the Bank of Canada will need to remain watchful of the possibility of a renewed slowdown in housing activity and a period of household deleveraging. Energy sector developments are also important, with prices subject to international forces and the possibility of a further investment retrenchment in light of transportation capacity issues. A negative shock to energy producing provinces would likely intensify consumer stresses in those regions. Within the U.S., trade tensions with China and Europe remain unresolved and may intensify a disruption to globally integrated supply chains. Likewise, it is possible that inflationary pressures will unexpectedly heat up in light of escalating global trade tensions coupled with greater labour scarcity within the U.S. and Canada. Globally, the political situation in Venezuela remains fluid, with potential impacts on North American energy markets. The United Kingdom's exit from the European Union is progressing more slowly than expected, creating longer lasting uncertainty on the investment backdrop. Lastly, other areas that continue to present a downside risk include ongoing tensions in the Middle East, and populist threats to established political and economic systems. These all keep global uncertainty elevated and may drive periods of financial market volatility. However, it should be noted that upside risk can also quickly come into the foreground, particularly if progress becomes evident in regards to trade tensions and Brexit developments.

HOW OUR BUSINESSES PERFORMED

For management reporting purposes, the Bank reports its results under three key business segments: Canadian Retail, which includes the results of the Canadian personal and commercial banking, wealth, and insurance businesses; U.S. Retail, which includes the results of the U.S. personal and business banking operations, wealth management services, and the Bank's investment in TD Ameritrade; and Wholesale Banking. The Bank's other activities are grouped into the Corporate segment.

Results of each business segment reflect revenue, expenses, assets, and liabilities generated by the businesses in that segment. Where applicable, the Bank measures and evaluates the performance of each segment based on adjusted results and ROE, and for those segments the Bank indicates that the measure is adjusted. For further details, refer to the "How the Bank Reports" section of this document, the "Business Focus" section in the Bank's 2018 MD&A, and Note 29 Segmented Information of the Bank's Consolidated Financial Statements for the year ended October 31, 2018. For information concerning the Bank's measure of ROE, which is a non-GAAP financial measure, refer to the "How We Performed" section of this document.

PCL related to performing (Stage 1 and Stage 2) and impaired (Stage 3) financial assets, loan commitments, and financial guarantees is recorded within the respective segment.

Net interest income within Wholesale Banking is calculated on a taxable equivalent basis (TEB), which means that the value of non-taxable or tax-exempt income, including certain dividends, is adjusted to its equivalent before-tax value. Using TEB allows the Bank to measure income from all securities and loans consistently and makes for a more meaningful comparison of net interest income with similar institutions. The TEB increase to net interest income and provision for income taxes reflected in Wholesale Banking's results are reversed in the Corporate segment. The TEB adjustment for the quarter was $21 million, compared with $105 million in the first quarter last year and $28 million in the prior quarter.

Quarterly comparison – Q1 2019 vs. Q1 2018

Canadian Retail reported net income for the quarter was $1,379 million, a decrease of $378 million, or 22%, compared with the first quarter last year, reflecting charges related to the agreement with Air Canada and the acquisition of Greystone, higher other non-interest expenses, insurance claims, and PCL, partially offset by revenue growth. On an adjusted basis, net income for the quarter was $1,855 million, an increase of $98 million, or 6%. The reported and adjusted annualized ROE for the quarter was 31.6% and 42.5% respectively, compared with 47.2% in the first quarter last year.

Canadian Retail revenue is derived from Canadian personal and commercial banking, wealth, and insurance businesses. Revenue for the quarter was $5,988 million, an increase of $438 million, or 8%, compared with the first quarter last year.

Net interest income was $3,044 million, an increase of $219 million, or 8%, reflecting volume growth and higher margins. Average loan volumes increased $24 billion, or 6%, reflecting 5% growth in personal loans and 9% growth in business loans. Average deposit volumes increased $8 billion, or 3%, reflecting 3% growth in both personal and business deposits, partially offset by a 1% decrease in wealth deposits. Net interest margin was 2.94%, an increase of 6 bps, reflecting rising interest rates, partially offset by lower margins on loans and a refinement in treasury allocation methodology.

Non-interest income was $2,944 million, an increase of $219 million, or 8%, reflecting higher revenues from the insurance business, higher fee-based revenue in the banking businesses, and the acquisition of Greystone. The increase in non-interest income also includes $60 million related to higher fair value of investments supporting claims liabilities, which resulted in a similar increase to insurance claims.

Assets under administration (AUA) were $396 billion as at January 31, 2019, in line with the first quarter last year. Assets under management (AUM) were $332 billion as at January 31, 2019, an increase of $43 billion, or 15%, compared with the first quarter last year, reflecting the acquisition of Greystone, increases in market value, and new asset growth.

PCL was $310 million, an increase of $40 million, or 15%, compared with the first quarter last year. PCL – impaired for the quarter was $264 million, an increase of $27 million, or 11%, primarily in the personal lending portfolios, and a prior year change in methodology regarding the timing of loss recognition in the indirect auto portfolio. PCL – performing was $46 million, an increase of $13 million, reflecting volume growth, and credit migration in the commercial portfolio,

partially offset by the impact of a change in macroeconomic assumptions in the prior year. Total PCL as an annualized percentage of credit volume was 0.29%, or an increase of 2 bps.

Insurance claims and related expenses for the quarter were $702 million, an increase of $127 million, or 22%, compared with the first quarter last year reflecting changes in the fair value of investments supporting claims liabilities, increases in reinsurance claims assumed, less favourable prior years' claims development and higher current year claims, partially offset by the impact of changes to actuarial assumptions in the life and health business.

Reported non-interest expenses for the quarter were $3,084 million, an increase of $773 million, or 33%, compared with the first quarter last year, reflecting charges related to the agreement with Air Canada and the acquisition of Greystone, higher spend on strategic initiatives, and additional employees supporting business growth. On an adjusted basis, non-interest expenses were $2,446 million, an increase of $135 million, or 6%.

The reported and adjusted efficiency ratio for the quarter was 51.5% and 40.8% respectively, compared with 41.6% in the first quarter last year.

Quarterly comparison – Q1 2019 vs. Q4 2018

Canadian Retail reported net income for the quarter decreased $362 million, or 21%, compared with the prior quarter. The decrease in earnings reflects charges related to the agreement with Air Canada and the acquisition of Greystone, higher insurance claims and PCL, partially offset by revenue growth, and lower other non-interest expenses. On an adjusted basis, net income increased $114 million, or 7%. The reported and adjusted annualized ROE for the quarter was 31.6% and 42.5% respectively, compared with 45.1% in the prior quarter.

Revenue increased $136 million, or 2%, compared with the prior quarter. Net interest income increased $22 million, or 1%, reflecting volume growth. Average loan volumes increased $4 billion, or 1%, reflecting 1% growth in both personal and business loans. Average deposit volumes increased $3 billion, or 1%, reflecting 1% growth in both personal and wealth deposits, while business deposits were relatively consistent with the prior quarter. Net interest margin was 2.94%, consistent with the prior quarter, reflecting rising interest rates offset by lower margins on loans and a refinement in treasury allocation methodology.

Non-interest income increased $114 million, or 4%, reflecting higher revenues from the insurance business, higher fee-based revenue in the banking businesses, and the acquisition of Greystone. The increase in non-interest income also includes $69 million related to higher fair value of investments supporting claims liabilities, which resulted in a similar increase to insurance claims.

AUA increased $7 billion, or 2%, compared with the prior quarter, reflecting new asset growth, and increases in market value. AUM increased $43 billion, or 15%, reflecting the acquisition of Greystone, increases in market value, and new asset growth.

PCL increased $47 million, or 18%, compared with the prior quarter. PCL – impaired increased by $19 million, or 8%, primarily in the personal lending portfolios. PCL – performing increased $28 million due to credit migration in the personal lending and commercial portfolios. Total PCL as an annualized percentage of credit volume was 0.29%, or an increase of 4 bps.

Insurance claims and related expenses for the quarter increased $18 million, or 3%, compared with the prior quarter reflecting changes in the fair value of investments supporting claims liabilities and less favourable prior years' claims development, partially offset by lower current year claims, less severe weather-related events, and the impact of changes to actuarial assumptions in the life and health business.

Reported non-interest expenses increased $554 million, or 22%, compared with the prior quarter, reflecting charges related to the agreement with Air Canada and the acquisition of Greystone, and additional employees supporting business growth, partially offset by higher spend related to marketing and promotion in the prior quarter. On an adjusted basis, non-interest expenses decreased $84 million, or 3%.

The reported and adjusted efficiency ratio for the quarter was 51.5% and 40.8% respectively, compared with 43.2% in the prior quarter.

Quarterly comparison – Q1 2019 vs. Q1 2018

U.S. Retail reported net income for the quarter was $1,240 million (US$935 million), an increase of $288 million (US$184 million), or 30% (25% in U.S. dollars), compared with the first quarter last year. On an adjusted basis, net income for the quarter was $1,240 million (US$935 million), an increase of $216 million (US$126 million), or 21% (16% in U.S. dollars). The reported and adjusted annualized ROE for the quarter was 12.6%, compared with 11.2% and 12.0%, respectively, in the first quarter last year.

U.S. Retail net income includes contributions from the U.S. Retail Bank and the Bank's investment in TD Ameritrade. Net income for the quarter from the U.S. Retail Bank was $929 million (US$700 million). Reported and adjusted net income for the quarter from the Bank's investment in TD Ameritrade was $311 million (US$235 million).

The reported contribution from TD Ameritrade of US$235 million, an increase of US$153 million, compared with the first quarter last year, primarily due to higher asset-based revenue and increased trading volumes. Adjusted contribution from TD Ameritrade increased US$98 million, or 72%.

U.S. Retail Bank reported net income of US$700 million for the quarter increased US$31 million, or 5%, due to higher revenue, partially offset by higher expenses and PCL. U.S. Retail Bank adjusted net income increased US$28 million, or 4%.

U.S. Retail Bank revenue is derived from personal and business banking, and wealth management. Revenue for the quarter was US$2,216 million, an increase of US$128 million, or 6%, compared with the first quarter last year. Net interest income increased US$155 million, or 10%, reflecting higher deposit margins and growth in loan and deposit volumes. Net interest margin was 3.42%, an increase of 23 bps, primarily due to higher deposit margins and balance sheet mix. Non-interest income decreased US$27 million, or 5%, reflecting lower contribution from low income housing investments and wealth management fee income due to lower AUM.

Average loan volumes increased US$5 billion, or 3%, compared with the first quarter last year due to growth in business and personal loans of 4% and 3%, respectively. Average deposit volumes increased US$5 billion, or 2%, reflecting 5% growth in business deposit volumes, 3% growth in personal deposit volumes, and 1% decrease in sweep deposit volume.

AUA were US$19 billion as at January 31, 2019, flat compared with the first quarter last year. AUM were US$46 billion as at January 31, 2019, a decrease of US$19 billion, or 29%, reflecting net fund outflows including the impact of the strategic disposition of U.S. money market funds and negative market impact.

PCL for the quarter was US$230 million, an increase of US$35 million, or 18%, compared with the first quarter last year. PCL – impaired was US$214 million, an increase of US$66 million, or 45%, reflecting higher provisions primarily attributable to the power and utilities sector, coupled with volume growth, seasoning, and mix in the credit card portfolio. PCL – performing was US$16 million, a decrease of US$31 million, or 66%, primarily reflecting migration from performing to impaired in the commercial portfolio. U.S. Retail PCL including only the Bank's contractual portion of credit losses in the U.S. strategic cards portfolio, as an annualized percentage of credit volume was 0.59%, or an increase of 7 bps.

Reported non-interest expenses for the quarter were US$1,209 million, an increase of US$65 million, or 6%, compared with the first quarter last year, reflecting higher investments in business initiatives, business volume growth, and higher employee-related costs, partially offset by productivity savings and the elimination of the Federal Deposit Insurance Corporation (FDIC) deposit insurance surcharge. On an adjusted basis, non-interest expenses increased US$69 million, or 6%.

The reported and adjusted efficiency ratio for the quarter was 54.6%, compared with 54.8% and 54.6%, respectively, in the first quarter last year.

Quarterly comparison – Q1 2019 vs. Q4 2018

U.S. Retail reported net income of $1,240 million (US$935 million) increased $126 million (US$80 million), or 11% (9% in U.S. dollars), compared with the prior quarter, while adjusted net income of $1,240 million (US$935 million) increased $101 million (US$61 million), or 9% (7% in U.S. dollars). The reported and adjusted annualized ROE for the quarter was 12.6%, compared with 12.8% and 13.0%, respectively, in the prior quarter.

The reported contribution from TD Ameritrade was US$235 million, an increase of US$60 million, or 34%, compared with the prior quarter, primarily due to higher asset-based revenue and increased trading volumes. Adjusted contribution from TD Ameritrade was US$235 million, an increase of US$41 million, or 21%.

U.S. Retail Bank net income for the quarter was US$700 million, an increase of US$20 million, or 3%, compared with the prior quarter, due to higher revenue and lower expenses, partially offset by higher PCL.

Revenue for the quarter increased US$23 million, or 1%, compared with the prior quarter. Net interest income increased US$42 million, or 3%, due to growth in loan and deposit volumes and higher deposit margins. Net interest margin was 3.42%, an increase of 9 bps, primarily due to higher deposit margins and balance sheet mix. Non-interest income decreased US$19 million, or 3%, reflecting lower personal banking and wealth management fee income.

Average loan volumes increased US$4 billion, or 2%, compared with prior quarter, due to growth in business and personal loans of 3% and 2%, respectively. Average deposit volumes increased US$2 billion, or 1%, due to growth in personal and sweep deposit volumes.

AUA were US$19 billion as at January 31, 2019, flat to prior quarter. AUM were US$46 billion as at January 31, 2019, a decrease of US$6 billion, or 12%, reflecting net fund outflows including the impact of the strategic disposition of U.S. money market funds.

PCL for the quarter increased US$43 million, or 23%, compared with the prior quarter. PCL – impaired was US$214 million, an increase of US$57 million, or 36%, primarily reflecting higher provisions for the commercial portfolio, coupled with seasonal trends in the credit card and auto portfolios. PCL – performing was US$16 million, a decrease of US$14 million, or 47%, primarily reflecting migration from performing to impaired in the commercial portfolio, partially offset by seasonal trends in the credit card and auto portfolios. U.S. Retail PCL including only the Bank's contractual portion of credit losses in the U.S. strategic cards portfolio, as an annualized percentage of credit volume was 0.59%, or an increase of 9 bps.

Non-interest expenses for the quarter were US$1,209 million, a decrease of US$47 million, or 4%, compared with the prior quarter, reflecting the elimination of the FDIC deposit insurance surcharge and timing of investment spending.

The efficiency ratio for the quarter was 54.6%, compared with 57.3% in the prior quarter.

TD AMERITRADE HOLDING CORPORATION

Refer to Note 7, Investment in Associates and Joint Ventures of the Bank's Interim Consolidated Financial Statements for further information on TD Ameritrade.