Profits at Toronto-Dominion Bank's U.S. retail bank rose slightly during the fiscal third quarter despite higher expenses, some of which related to the company's proposed $13.4 billion acquisition of First Horizon Corp.
Net income from the Canadian bank's U.S. retail operation rose by 1%, or $5 million in U.S. dollars, compared with the same period last year, while noninterest expenses increased by $99 million.
During the fiscal third quarter, which runs from May to July, TD recorded $22 million in charges related to the acquisition and integration of Memphis, Tennessee-based First Horizon. TD also pointed to higher employee-related expenses and more spending on investments in the business as reasons for the uptick.
TD Chief Executive Bharat Masrani said during a call with analysts Thursday that the Toronto-based bank still expects the First Horizon deal, which was announced in February, to close between November and January.
TD has until Nov. 27 to
The TD-First Horizon merger has drawn opposition from Sen. Elizabeth Warren, D-Mass., and various
TD has responded to the criticism by pointing to various changes it has made in its U.S. operations, including the launch of a program meant to increase homeownership opportunities in communities of color, the introduction of an overdraft-free bank account and other overdraft-related reforms.
The Center for Responsible Lending, the Woodstock Institute and other left-leaning groups argue that the $13.4 billion merger will harm low-income communities, reduce small-business lending and add to systemic risk.
At a recent public meeting hosted by the Federal Reserve and the Office of the Comptroller of the Currency, some community groups said they support the TD-First Horizon deal. Other groups pushed regulators to hold off on approving the merger unless both banks
Masrani said Thursday that TD executives are "pleased that our commitment to the communities that we serve was reflected in the support we heard for the transaction at the joint public meeting."
"We are excited about the benefits that our combined banks will deliver for all our stakeholders," Masrani said.
Between May and July, noninterest income from TD's U.S. retail bank fell by 10% from the same period last year to $504 million, which the company said primarily reflected a "higher valuation of certain investments" the previous year.
Across the entire company in the fiscal third quarter, TD reported a 9.4% decline in net income from the same period a year earlier. The company's results were hurt by a nearly $300 million increase in its provision for credit losses.
