This quarterly earnings news release should be read in conjunction with our unaudited fourth quarter 2012 consolidated financial results ended October 31, 2012, included in this Earnings News Release and with our audited 2012 Consolidated Financial Statements, which is available on our website at http://www.td.com/investor/. This analysis is dated December 5, 2012. Unless otherwise indicated, all amounts are expressed in Canadian dollars, and have been primarily derived from the Bank's Annual or Interim Consolidated Financial Statements prepared in accordance with International Financial Reporting Standards (IFRS). The accounting policies used in the preparation of these consolidated financial results are consistent with those used in the Bank's October 31, 2012 Consolidated Financial Statements. Additional information relating to the Bank 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 U.S. Securities and Exchange Commission's (SEC's) website at http://www.sec.gov (EDGAR filers section).   The Bank transitioned from Canadian Generally Accepted Accounting Principles (Canadian GAAP) to IFRS effective for interim and annual periods beginning the first quarter of fiscal 2012. Comparative periods in 2011 have also been prepared under IFRS, unless otherwise indicated.       Reported results conform to generally accepted accounting principles (GAAP) under IFRS. Adjusted measures are non-GAAP measures. Refer to the "How the Bank Reports" section of the Management's Discussion and Analysis for an explanation of reported and adjusted results.        Effective the first quarter of 2012, the Insurance business was transferred from Canadian Personal and Commercial Banking to Wealth and Insurance (formerly called Wealth Management). The prior period results have been restated accordingly.

FOURTH QUARTER FINANCIAL HIGHLIGHTS, compared with the fourth quarter last year:

• Reported diluted earnings per share were $1.66, compared with $1.68.
• Adjusted diluted earnings per share were $1.83, compared with $1.75.
• Reported net income was $1,597 million, compared with $1,589 million.
• Adjusted net income was $1,757 million, compared with $1,656 million.

FULL YEAR FINANCIAL HIGHLIGHTS, compared with last year:

• Reported diluted earnings per share were $6.76, compared with $6.43.
• Adjusted diluted earnings per share were $7.42, compared with $6.86.
• Reported net income was $6,471 million, compared with $6,045 million.
• Adjusted net income was $7,075 million, compared with $6,432 million.

FOURTH QUARTER ADJUSTMENTS (ITEMS OF NOTE)

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

• Amortization of intangibles of $60 million after tax (6 cents per share), compared with $95 million after tax (10 cents per share) in the fourth quarter last year.
• A loss of $35 million after tax (4 cents per share), due to the change in fair value of derivatives hedging the reclassified available-for-sale securities portfolio, compared with a gain of $37 million after tax (4 cents per share) in the fourth quarter last year.
• Integration charges relating to the Chrysler Financial acquisition of $3 million after tax, compared with $19 million after tax (2 cents per share) in the fourth quarter last year.
• Integration charges of $25 million after tax (3 cents per share), relating to the acquisition of the MBNA Canada credit card portfolio.
• The negative impact of Superstorm Sandy of $37 million after tax (4 cents per share).

TORONTO, Dec. 6, 2012 /PRNewswire/ - TD Bank Group (TD or the Bank) today announced its financial results for the fourth quarter ended October 31, 2012. Overall results for the quarter reflected strong performances from TD's Canadian and U.S. personal and commercial banking businesses as well as from Wholesale Banking.

"The fourth quarter earnings contributed to a strong year for TD," said Ed Clark, Group President and Chief Executive Officer. "TD's adjusted earnings for the year were more than $7 billion, with all businesses posting adjusted earnings growth. We achieved those results despite a tough operating environment, demonstrating the strength and resilience of our business model."

Canadian Personal and Commercial Banking
Canadian Personal and Commercial Banking posted reported net income of $806 million in the fourth quarter. On an adjusted basis, net income was $831 million, up 10% from the same period last year. Good volume growth in loans and deposits, strong contribution from MBNA, and stable credit quality helped to drive core earnings growth.

"Canadian Personal and Commercial Banking had a good fourth quarter and a strong 2012. We continued to invest in our industry-leading customer service and convenience platform by opening 24 new branches, extending hours, and rolling out innovative new products to meet our customer needs,
" said Tim Hockey, Group Head, Canadian Banking, Auto Finance, and Credit Cards. "Looking ahead, we expect a more challenging operating environment in 2013, with low interest rates and moderating retail volume growth. But, we're confident that maintaining our focus on our
customers and employees, making strategic investments to grow the franchise, and increasing productivity will position us well for the future."

Wealth and Insurance
Wealth and Insurance delivered net income of $293 million in the quarter, down 15% from the same period last year. In the Wealth business, higher fee-based revenue from strong growth in client assets was partially offset by lower transaction revenue due to decreased trading volumes. In the Insurance business, increased revenue from premium growth and the inclusion of MBNA was more than offset by unfavourable prior years claims development in the Ontario auto market and weather-related events. TD Ameritrade contributed $51 million in earnings to the segment, down 6% from the same period last year.

"Our Wealth business performed well in a difficult operating environment," said Mike Pedersen, Group Head, Wealth Management, Insurance, and Corporate Shared Services. "The Insurance business showed strong core fundamentals and delivered positive earnings growth for the year, but experienced challenges in the fourth quarter related to prior years claims development and weather-related events. Looking ahead, we expect good earnings growth driven by continued momentum in gaining new client assets in the Wealth business and premiums growth in the Insurance business."

U.S. Personal and Commercial Banking
U.S. Personal and Commercial Banking generated US$321 million in reported net income for the quarter. On an adjusted basis, the segment earned US$358 million, up 23% from the fourth quarter last year, driven by organic loan and deposit growth, partially offset by the impact of the Durbin Amendment.

"TD Bank, America's Most Convenient Bank delivered a strong fourth quarter," said Bharat Masrani, Group Head, U.S. Personal and Commercial Banking. "With more than US$1.4 billion in adjusted earnings and 41 new stores, it was a strong year for our business. We also supported our customers and employees through the impact of Superstorm Sandy. As we look ahead, we remain concerned about the low interest rate environment and regulatory uncertainty. However, the U.S. economy continues to show signs of modest recovery and we will continue to leverage our legendary service and convenience brand for future growth."

Wholesale Banking
Wholesale Banking recorded net income of $309 million for the quarter, an increase of 10% compared with the same period last year. The increase was primarily due to higher revenue and reduced expenses in our core businesses, partially offset by lower securities gains in our investment portfolio.

"We had a strong quarter in our core businesses," said Bob Dorrance, Group Head, Wholesale Banking. "Improved client flows and another solid performance in investment banking more than offset industry-wide declines in equity trading and underwriting. While macroeconomic headwinds remain, our client-centric business model has demonstrated the ability to deliver solid returns in difficult markets."

Capital
TD's Basel II Tier 1 capital ratio was 12.6% in the quarter. On a Basel III basis, TD's common equity Tier 1 ratio was 8.2%, which exceeds the new 7% requirement on a fully phased-in basis.

Conclusion
"TD had a strong year in 2012. Our success was again based on the strength of our customer-focused, retail-driven business model. We are confident in our ability to deliver sustainable earnings growth in the future, but we remain concerned about the low interest rate environment as well as a weak global economic recovery and ongoing regulatory uncertainty," said Clark. "We will continue to strategically invest in our businesses and manage our expense growth while continually seeking ways to exceed expectations. As always, our employees and their dedication to our customers and clients were the driving force behind our success and I want to thank them for their tremendous contribution."

The foregoing contains forward-looking statements.

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

How the Bank Reports
The Bank prepares its Consolidated Financial Statements in accordance with generally accepted accounting principles (GAAP) under IFRS and refers to results prepared in accordance with IFRS as "reported" results. The Bank also utilizes non-GAAP financial measures to arrive at "adjusted" results to assess each of its businesses and to measure overall Bank performance. To arrive at adjusted results, the Bank removes "items of note", net of income taxes, 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 listed in the table on the following page. As explained, adjusted results are different 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.

Adoption of IFRS
The Canadian Accounting Standards Board previously announced that for fiscal years beginning on or after January 1, 2011, all publicly accountable enterprises will be required to report financial results in accordance with IFRS. Accordingly, for the Bank, IFRS was effective for the interim and annual periods beginning in the first quarter of 2012. The fiscal 2012 Interim and Annual Consolidated Financial Statements include comparative fiscal 2011 financial results under IFRS.

The adoption of IFRS did not require significant changes to the Bank's disclosure controls and procedures.

Information about the IFRS transition impact to the Bank's reported financial position, equity, and financial performance is provided in Note 38 of the Bank's Annual Consolidated Financial Statements for the period ended October 31, 2012, which includes a discussion of the transitional elections and exemptions under IFRS 1 and detailed reconciliations of the Bank's Consolidated Financial Statements previously prepared under Canadian GAAP to those under IFRS.

For details of the Bank's significant accounting policies under IFRS, see Note 2 of the Bank's Annual Consolidated Financial Statements for the period ended October 31, 2012.

The following table provides the operating results - reported for the Bank.

ECONOMIC PROFIT AND RETURN ON COMMON EQUITY
Effective the first quarter of 2012, the Bank revised its methodology for allocating capital to its business segments to align with the future common equity capital requirements under Basel III at a 7% Common Equity Tier 1 ratio. The return measures for business segments now reflect a return on common equity methodology and not return on invested capital which was reported previously. These changes have been applied prospectively.

The Bank utilizes economic profit as a tool to measure shareholder value creation. Economic profit is adjusted net income available to common shareholders less a charge for average common equity. The rate used in the charge for average common equity is the equity cost of capital calculated using the capital asset pricing model. The charge represents an assumed minimum return required by common shareholders on the Bank's common equity. The Bank's goal is to achieve positive and growing economic profit.

Adjusted return on common equity (ROE) is adjusted net income available to common shareholders as a percentage of average common equity. ROE is a percentage rate and is a variation of economic profit which is a dollar measure. When ROE exceeds the equity cost of capital, economic profit is positive. The Bank's goal is to maximize economic profit by achieving ROE that exceeds the equity cost of capital.

Economic profit and adjusted ROE are non-GAAP financial measures as these 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 2012

Acquisition of Credit Card Portfolio of MBNA Canada
On December 1, 2011, the Bank acquired substantially all of the credit card portfolio of MBNA Canada (MBNA), a wholly-owned subsidiary of Bank of America Corporation, as well as certain other assets and liabilities for cash consideration of $6,839 million. The acquisition was accounted for by the purchase method. The results of the acquisition from the acquisition date to October 31, 2012 have been consolidated with the Bank's results and are reported primarily in the Canadian Personal and Commercial Banking and Wealth and Insurance segments. As at December 1, 2011, the acquisition contributed $7,361 million of loans, $275 million of other assets, and $1,348 million of liabilities. The estimated fair value of loans reflects the expected credit losses at the acquisition date. The excess of consideration over the fair value of the acquired net assets of approximately $551 million has been allocated to $458 million of intangible assets and $93 million of goodwill.

Acquisition of Target's U.S. Credit Card Portfolio
On October 23, 2012, the Bank announced that it entered into an agreement with Target Corporation (Target) under which the Bank will acquire Target's existing U.S. Visa and private label credit card portfolio, which totals approximately US$5.9 billion. TD also entered into a seven-year program agreement under which it will become the exclusive issuer of Target-branded Visa and private label consumer credit cards to Target's U.S. customers. TD will acquire over 5 million active Visa and private label accounts and will fund the receivables for existing Target Visa accounts and all existing and newly issued Target private label accounts in the U.S. Subject to the receipt of regulatory approvals and satisfaction of other customary closing conditions, this transaction is expected to be completed in the first half of fiscal 2013.

Investment in TMX Group Limited
On October 30, 2011, TMX Group Inc. (TMX) and Maple Group Acquisition Corporation (now TMX Group Limited) (Maple) announced that they had entered into a support agreement in respect of Maple's proposed acquisition of all of the outstanding shares of TMX pursuant to an integrated two-step transaction valued at approximately $3,800 million.

Maple is a corporation whose investors comprise twelve of Canada's leading financial institutions and pension funds, including TD Securities Inc., a wholly owned subsidiary of the Bank. Maple completed the acquisition of 80% of the outstanding TMX shares on August 10, 2012, in accordance with the terms and conditions of the offer. The transaction also provided for the acquisition of Alpha Trading Systems Inc. and Alpha Trading Systems Limited Partnership (collectively Alpha) and The Canadian Depository for Securities Limited (CDSL). Maple completed the acquisition of Alpha and CDSL on August 1, 2012, with existing CDSL and Alpha shareholders receiving cash payments in exchange for their equity interests.

Pursuant to a court-approved arrangement, the remainder of the outstanding TMX shares held by TMX shareholders (other than Maple) were exchanged for Maple shares on a one-for-one basis with a closing date of September 14, 2012. As an investor in Maple, the Bank provided equity funding to Maple in the amount of approximately $194 million to fund the purchase of TMX, Alpha and CDSL.

U.S. Legislative Developments
On July 21, 2010 the President of the United States signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act" or "the Act") that provides for widespread changes to the U.S. financial industry. At over 2,300 pages in length, the Dodd-Frank Act will ultimately affect every financial institution operating in the United States, including the Bank, and, due to certain extraterritorial aspects of the Act, will impact the Bank's operations outside the United States, including in Canada. The Dodd-Frank Act makes significant changes in areas such as banking and bank supervision, the resolution of, and enhanced prudential standards applicable to, systemically important financial companies, proprietary trading and certain fund investments, consumer protection, securities, over-the-counter derivatives, and executive compensation, among others. The Dodd-Frank Act also calls for the issuance of over 240 regulatory rulemakings as well as numerous studies and ongoing reports as part of its implementation. Accordingly, while the Act will have an effect on the business of the Bank, especially its business operations in the United States, the full impact on the Bank will not be known until such time as the implementing regulations are fully released and finalized.

On November 10, 2011, the Department of the Treasury, the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation and the Securities and Exchange Commission jointly released a proposed rule implementing Section 619 of the Dodd-Frank Act (the "Volcker Rule" or "the Rule"). The U.S. Commodity Futures Trading Commission (CFTC) issued a substantially similar proposal on January 13, 2012. The Bank is in the process of analyzing and planning for the implementation of the proposed Volcker Rule. The Rule broadly prohibits proprietary trading and places limitations on other permitted trading activities, limits investments in and the sponsorship of hedge and private equity funds and requires robust compliance and reporting regimes surrounding permitted activities. The Rule is also expected to have an effect on certain of the funds the Bank sponsors and advises in its asset management business as well as private equity investments it currently holds. Under the current proposal, the provisions of the Rule are applicable to banking entities, including non-U.S. banks such as the Bank which control insured depository institutions in the United States or are treated as bank holding companies by virtue of maintaining a branch or agency in the U.S. The proposed Rule applies to affiliates or subsidiaries of the Bank: the terms "affiliate" and "subsidiary" are defined by the rule to include those entities controlled by or under common control with the Bank. As currently proposed, the Rule requires the implementation of a comprehensive compliance program and monitoring of certain quantitative risk metrics as well as compliance monitoring and reporting programs. On April 19, 2012, the FRB, on behalf of itself and the other agencies, issued guidance stating that full conformance with the Rule will not be required until July 21, 2014, unless that period is extended by the FRB. The agencies have not indicated when the final Rule will be published. While the Rule is expected to have an adverse effect on certain of the Bank's businesses, the extent of the impact will not be known until such time as the current proposal is finalized. At the current time, the impact is not expected to be material to the Bank.

The Durbin Amendment contained in the Dodd-Frank Act authorizes the FRB to issue regulations that set interchange fees which are "reasonable and proportional" to the costs of processing such transactions. In June 2011, the FRB issued final rules limiting debit card interchange fees with a required implementation date of October 1, 2011 and capped the fee at 21 cents per transaction plus small amounts to cover fraud related expenses. The Durbin Amendment has impacted gross revenue by approximately US$50 - 60 million pre-tax per quarter, in line with expectations. For more detail on the impact of the Durbin Amendment, see the U.S. Personal and Commercial Banking segment disclosure in the "How Our Businesses Performed" section of this document.

As a result of the Bank's participation in the U.S. derivatives markets, the Bank will be required to register as a swap dealer with the CFTC on or before December 31, 2012. Upon registration, and when the rules come into effect, swap dealers will become subject to additional requirements, including, but not limited to, measures that require clearing and exchange trading of certain derivatives, new capital and margin requirements for certain market participants, new reporting requirements and new business conduct requirements for derivatives under the jurisdiction of CFTC. The ultimate impact of these regulations, including cross border implications, continues to remain uncertain but is not expected to be material to the Bank.

The FRB has proposed for comment a rulemaking that would implement enhanced prudential standards and early remediation provisions on systemically important financial institutions in the U.S. The rule would establish new requirements for risk-based capital, liquidity and liquidity standards, leverage limits, risk management and credit exposure reporting. If implemented as proposed, the rule would apply to the Bank's U.S. bank holding company but not to the Bank.

The Bank continues to monitor closely these and other legislative developments and will analyze the impact such regulatory and legislative changes may have on its businesses.

HOW OUR BUSINESSES PERFORMED

For management reporting purposes, the Bank's operations and activities are organized around four key business segments operating in a number of locations in key financial centres around the globe: Canadian Personal and Commercial Banking, Wealth and Insurance, U.S. Personal and Commercial Banking, and Wholesale Banking. The Bank's other activities are grouped into the Corporate segment. Effective December 1, 2011, results of the acquisition of the MBNA Canada credit card portfolio are reported primarily in the Canadian Personal and Commercial Banking and Wealth and Insurance segments. Integration charges and direct transaction costs relating to the acquisition of the MBNA Canada credit card portfolio are reported in Canadian Personal and Commercial Banking. The results of TD Auto Finance Canada are reported in Canadian Personal and Commercial Banking. The results of TD Auto Finance U.S. are reported in U.S. Personal and Commercial Banking. Integration charges, direct transaction costs, and changes in fair value of contingent consideration related to the Chrysler Financial acquisition are reported in the Corporate segment.

Effective the first quarter of 2012, executive responsibilities for the TD Insurance business were moved from Group Head, Canadian Banking, Auto Finance, and Credit Cards to the Group Head, Wealth Management, Insurance, and Corporate Shared Services. The Bank has updated the corresponding segment reporting results retroactively for 2011.

Effective November 1, 2011, the Bank revised its methodology for allocating capital to its business segments to align with the future common equity capital requirements under Basel III at a 7% Common Equity Tier 1 ratio. The return measures for business segments now reflect a return on common equity methodology and not return on invested capital which was reported previously. These changes have been applied prospectively.

Results of each business segment reflect revenue, expenses, assets, and liabilities generated by the businesses in that segment. The Bank measures and evaluates the performance of each segment based on adjusted results where applicable, and for those segments the Bank notes that the measure is adjusted. Net income for the operating business segments is presented before any items of note not attributed to the operating segments. For further details, see the "How the Bank Reports" section, the "Business Focus" section in the 2012 MD&A, and Note 28 to the 2012 Consolidated Financial Statements. For information concerning the Bank's measures of economic profit and adjusted return on common equity, which are non-GAAP financial measures, see the "How We Performed" section of this document.

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 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 results is reversed in the Corporate segment. The TEB adjustment for the quarter was $112 million, compared with $94 million in the fourth quarter last year, and $71 million in the prior quarter.

The Bank continues to securitize retail loans and receivables, however under IFRS, the majority of these loans and receivables remain on-balance sheet.

Quarterly comparison - Q4 2012 vs. Q4 2011
Canadian Personal and Commercial Banking reported net income for the quarter was $806 million, an increase of $52 million, or 7%, compared with the fourth quarter last year. Adjusted net income for the quarter was $831 million, an increase of $77 million, or 10%, compared with the fourth quarter last year. The increase in adjusted earnings was primarily driven by good loan and deposit volume growth, and the addition of MBNA. The reported annualized return on common equity for the quarter was 41.9%, while the adjusted annualized return on common equity was 43.1%. 

Canadian Personal and Commercial Banking revenue is derived from personal and business banking, auto lending and credit cards. Revenue for the quarter was $2,749 million, an increase of $288 million, or 12%, compared with the fourth quarter last year. The acquisition of MBNA contributed 10 percentage points to year over year revenue growth. Net interest income growth was driven by the inclusion of MBNA and portfolio volume growth, partially offset by lower margin on average earning assets. Net interest income included an elevated contribution from MBNA due to better credit performance on acquired loans. The retail business continued to generate good, but slowing lending volume growth, while business lending volume growth remained strong. Personal lending growth was impacted by a slowing housing market and continuing consumer deleveraging. Compared with the fourth quarter last year, average real estate secured lending volume increased $11.4 billion, or 6%. Auto lending average volume increased $0.4 billion, or 3%, while all other personal lending average volumes, excluding MBNA, declined $0.4 billion or 2%. Business loans and acceptances average volume increased $5.5 billion, or 15%. Average personal deposit volumes increased $13.2 billion, or 10%, while average business deposit volumes increased $6.4 billion, or 10%. Excluding the impact of MBNA, margin on average earning assets decreased 11 bps to 2.60%. The decrease was due to the impact of the low interest rate environment, competitive pricing and portfolio mix. Non-interest income growth of 9% was primarily due to volume fee growth and MBNA.

PCL for the quarter was $306 million, an increase of $94 million, or 44%, compared with the fourth quarter last year. The increase in PCL was due primarily to the addition of MBNA. Personal banking PCL was $289 million, or $198 million excluding MBNA, an increase of $2 million, or 1%. Personal PCL for the quarter was elevated due to adjustments related to past due accounts. Business banking PCL was stable at $17 million, an increase of $1 million, compared with the fourth quarter last year. Annualized PCL as a percentage of credit volume was 0.41%, or 0.29% excluding MBNA, a decrease of 1 bp, compared with the fourth quarter last year. Net impaired loans were $1,000 million, an increase of $108 million, or 12%, compared with the fourth quarter last year. Net impaired loans as a percentage of total loans were 0.33 %, compared with 0.32% as at October 31, 2011.

Reported non-interest expenses for the quarter were $1,343 million, an increase of $150 million, or 13%, compared with the fourth quarter last year. Adjusted non-interest expenses for the quarter were $1,310 million, an increase of $117 million, or 10%, compared with the fourth quarter last year. Excluding MBNA, expenses increased $26 million, or 2%, driven by volume growth and investment in business initiatives.

The average full-time equivalent (FTE) staffing levels decreased by 1,616, or 5%, compared with the fourth quarter last year, due to a transfer of FTEs to the Corporate segment, and volume related FTE productivity gains, partially offset by the addition of MBNA. The reported efficiency ratio for the quarter worsened to 48.9%, while the adjusted efficiency ratio improved to 47.7%, compared with 48.4%, on both a reported and adjusted basis, in the fourth quarter last year.

Quarterly comparison - Q4 2012 vs. Q3 2012
Canadian Personal and Commercial Banking reported net income for the quarter decreased $58 million, or 7%, compared with the prior quarter. Adjusted net income for the quarter decreased $58 million, or 7%, compared with the prior quarter. The decrease in earnings was primarily due to an increase in non-interest expenses. The reported annualized return on common equity for the quarter was 41.9%, while the adjusted annualized return on common equity was 43.1%, compared with 44.1% and 45.4% respectively, in the prior quarter.

Revenue for the quarter increased $19 million, or 1%, compared with the prior quarter primarily due to higher net interest income driven by volume growth, partially offset by lower margins. Compared with the prior quarter, average real estate secured lending volume increased $3.9 billion, or 2%. Auto lending average volume increased $0.1 billion, or 1%, while all other personal lending average volumes declined $0.2 billion, or 1%. Business loans and acceptances average volumes increased $1.4 billion, or 3%. Average personal deposit volumes increased $2.8 billion, or 2%, while average business deposit volumes increased $1.8 billion, or 3%. Margin on average earning assets decreased 3 bps to 2.83%, mainly driven by lower deposit margins. Non-interest income was relatively flat compared to the prior quarter.

PCL for the quarter increased $18 million, or 6%, compared with the prior quarter. Personal banking PCL for the quarter increased $17 million, or 6%, compared with the prior quarter due to adjustments related to past due accounts. Business banking PCL was stable with an increase of $1 million. Net impaired loans increased $137 million, or 16%, compared with the prior quarter. Net impaired loans as a percentage of total loans were 0.33%, compared with 0.29% as at July 31, 2012.

Reported non-interest expenses for the quarter increased $84 million, or 7%, compared with the prior quarter. Adjusted non-interest expenses for the quarter increased $86 million, or 7%, compared with the prior quarter largely due to the timing of business investments, marketing initiatives, and employee-related costs.

The average FTE staffing levels decreased by 2,821, or 9%, compared with the prior quarter primarily due to a transfer of FTEs to the Corporate segment. The reported efficiency ratio for the quarter worsened to 48.9%, compared with 46.1% in the prior quarter, while the adjusted efficiency ratio worsened to 47.7%, compared with 44.8% in the prior quarter.

Quarterly comparison - Q4 2012 vs. Q4 2011
Wealth and Insurance net income for the quarter was $293 million, a decrease of $50 million, or 15%, compared with the fourth quarter last year. The decrease in earnings was mostly due to unfavourable prior years claims development, weather-related events and lower trading volume, partially offset by higher growth in premiums and client assets and the inclusion of MBNA. Wealth and Insurance net income excluding TD Ameritrade was $242 million, a decrease of $47 million, or 16%, compared with the fourth quarter last year. The Bank's reported investment in TD Ameritrade generated net income for the quarter of $51 million, a decrease of $3 million, or 6%, compared with the fourth quarter last year, driven by lower TD Ameritrade earnings, partially offset by increased economic ownership from stock repurchases and a weaker Canadian dollar. For its fourth quarter ended September 30, 2012, TD Ameritrade reported net income was US$143 million, a decrease of US$21 million, or 13%, compared with the fourth quarter last year, primarily driven by lower trading revenue, partially offset by lower expenses. The annualized return on common equity for the quarter was 17.9%.

Wealth and Insurance revenue is derived from direct investing, advice-based business, asset management services, life and health insurance, and property and casualty insurance. Revenue for the quarter was $963 million, a decrease of $76 million, or 7%, compared to the fourth quarter last year. In the Insurance business, revenue decreased from unfavourable prior years claims development in the Ontario auto market and weather-related events, partially offset by premium growth and the inclusion of MBNA. During the latter part of 2012, the business experienced an increase in prior years claims development in the Ontario auto insurance market primarily related to pre-2011 accident years. Frequency and severity of claims related to these accident years were worse than anticipated for certain insurance coverage, translating into higher claims costs. In the Wealth business, higher fee-based revenue from asset growth in the advice-based and asset management businesses and higher net interest income driven by improved net interest margins were partially offset by lower trading revenue in the direct investing business.

Non-interest expenses for the quarter were $676 million, an increase of $7 million, or 1%, compared with the fourth quarter last year, primarily due to higher expenses in the Insurance business to support business growth.

Assets under administration of $258 billion as at October 31, 2012, increased $21 billion, or 9%, compared with October 31, 2011. Assets under management of $207 billion as at October 31, 2012 increased $18 billion, or 10%, compared with October 31, 2011. These increases were mainly driven by net new client assets.

Gross originated insurance premiums were $943 million, an increase of $70 million, or 8%, compared with the fourth quarter last year. The increase was primarily due to organic business growth.

The average FTE staffing levels remained relatively flat compared with the fourth quarter last year. The efficiency ratio for the current quarter worsened to 70.2%, compared with 64.4% in the fourth quarter last year, due primarily to higher claims and related expenses in the Insurance business.

Quarterly comparison - Q4 2012 vs. Q3 2012
Wealth and Insurance net income for the quarter decreased $67 million, or 19%, compared with the prior quarter. The decrease in earnings was due to unfavourable prior years claims development and increased project and employee-related expenses, partially offset by higher trading revenue and growth in client assets. Wealth and Insurance net income excluding TD Ameritrade was $242 million, a decrease of $62 million, or 20%. The Bank's reported investment in TD Ameritrade reflected a decrease in net income of $5 million, or 9%, compared with the prior quarter, mainly due to lower earnings at TD Ameritrade. For its fourth quarter ended September 30, 2012, TD Ameritrade reported net income decreased US$11 million, or 7%, compared with the prior quarter, primarily driven by lower trading revenue. The annualized return on common equity for the quarter was 17.9%, compared with 20.9% in the prior quarter.

Revenue for the quarter decreased $46 million, or 5%, compared with the prior quarter. In the Insurance business, revenue decreased from unfavourable prior years claims development in the Ontario auto market. During the latter part of 2012, the business experienced an increase in prior years claims development in the Ontario auto insurance market primarily related to pre-2011 accident years. Frequency and severity of claims related to these accident years were worse than anticipated for certain insurance coverage, translating into higher claims costs. In the Wealth business, revenue increased mainly due to higher fee-based revenue from asset growth in the advice-based and asset management businesses and higher trading revenue mainly from new securities issues in the advice-based business.

Non-interest expenses for the quarter increased $44 million, or 7%, compared to the prior quarter, primarily due to higher project expenses and employee-related costs.

Assets under administration of $258 billion as at October 31, 2012 increased by $9 billion, or 4%, compared with July 31, 2012. Assets under management of $207 billion as at October 31, 2012 increased $3 billion, or 1%, compared with July 31, 2012. The increases were driven by an increase in market value of assets and net new client assets.

Gross originated insurance premiums decreased $46 million, or 5%, compared with the prior quarter due largely to a seasonal decline.

The average FTE staffing levels for the current quarter decreased by 142, or 1%, compared with prior quarter, primarily from lower support required due to a decrease in trading volume in the Wealth direct investing business and the sale of the U.S. Insurance business. The efficiency ratio for the current quarter worsened to 70.2 %, compared with 62.6 % in the prior quarter due to higher expenses.

Quarterly comparison - Q4 2012 vs. Q4 2011
U.S. Personal and Commercial Banking reported net income, in Canadian dollar terms, for the quarter was $316 million, an increase of $21 million, or 7%, compared with the fourth quarter last year. Adjusted net income for the quarter was $353 million, an increase of $59 million, or 20%, compared with the fourth quarter last year. In U.S. dollar terms, reported net income for the quarter was US$321 million, an increase of US$29 million, or 10%, and adjusted net income was US$358 million, an increase of US$67 million, or 23%, compared with the fourth quarter last year. The increase in adjusted earnings was primarily due to strong organic growth, a lower effective tax rate and gains on sales of securities, partially offset by the impact of the Durbin Amendment. Fourth quarter reported results reflected estimated losses from Superstorm Sandy of US$62 million (US$37 million after tax) primarily related to an increase in provision for credit losses on U.S. commercial and retail loans and impairment of stores and related fixed assets which are included in items of note. The reported annualized return on common equity for the quarter was 7.2%, while the adjusted annualized return on common equity was 8.1%.

U.S. Personal and Commercial Banking revenue is derived from personal banking, business banking, investments, auto lending and credit cards. In U.S. dollar terms, the adjusted revenue for the quarter was US$1,545 million, an increase of US$87 million, or 6%, primarily due to strong organic growth and gains on sales of securities, partially offset by the impact of the Durbin Amendment and anticipated run-off in legacy Chrysler Financial revenue. Average loans increased by US$13 billion, or 16%, compared with the fourth quarter last year. Average personal loans increased US$9 billion, or 25% and average business loans increased US$4 billion, or 10%. Average deposits increased US$13 billion, or 8%, compared with the fourth quarter last year, including a US$6 billion increase in average deposits of TD Ameritrade IDAs. Excluding the impact of TD Ameritrade IDAs and Government deposits, average deposit volume increased by $7 billion, or 7%, driven by 10% growth in personal deposit volume and 3% growth in business deposit volume. Margin on average earning assets decreased by 12 bps to 3.48%, compared with the fourth quarter last year. The decrease was primarily due to the low interest rate environment and unfavourable loan mix.

Reported PCL for the quarter was US$257 million, an increase of US$127 million, or 98%, compared with the fourth quarter last year. Reported PCL for the quarter includes US$54 million related to Superstorm Sandy. Adjusted PCL for the quarter was US$202 million, an increase of US$72 million, or 55%, compared with the fourth quarter last year. The increase in adjusted PCL was due primarily to the impact of new regulatory guidance on loans discharged in bankruptcies and timing of the acquired credit-impaired portfolio PCL. Personal banking PCL, excluding debt securities classified as loans was US$128 million, an increase of US$85 million, or 198%, from the fourth quarter last year. Business banking PCL, excluding debt securities classified as loans was US$71 million, a decrease of US$13 million, or 15%, compared with the fourth quarter last year. The underlying credit quality of the loan portfolio continues to improve. The performance of acquired credit-impaired loans (which includes the loans from South Financial and the FDIC-assisted acquisitions as well as acquired credit-impaired loans from Chrysler Financial) continues to be stable and in line with our expectations. Adjusted PCL on loans excluding acquired credit-impaired loans and debt securities classified as loans increased by US$36 million, or 25%, to $179 million, due primarily to organic loan growth, partially offset by improved asset quality. Annualized adjusted PCL as a percentage of credit volume for loans excluding debt securities classified as loans was 0.88%, an increase of 23 bps, compared with the fourth quarter last year. Net impaired loans, excluding acquired credit-impaired loans and debt securities classified as loans, were US$1,059 million, a decrease of US$84 million, or 7%, compared with the fourth quarter last year. Net impaired loans, excluding acquired credit-impaired loans and debt securities classified as loans, as a percentage of total loans were 1.2%, compared with 1.6% as at October 31, 2011. Net impaired debt securities classified as loans were US$1,343 million, a decrease of US$85 million, or 6%, compared with the fourth quarter last year.

Reported non-interest expenses for the quarter were US$941 million, a decrease of US$37 million, or 4%, compared to the fourth quarter last year. Adjusted non-interest expenses were US$934 million, a decrease of US$34 million, or 4%, compared with the fourth quarter last year due to elevated legal expenses in the prior year.

The average FTE staffing levels decreased by 83 compared with the fourth quarter last year, due primarily to lower staffing levels in the store network. The reported efficiency ratio for the quarter improved to 61.0% on a reported basis, and 60.5% on an adjusted basis, compared with 67.0% on a reported basis, and 66.3% on an adjusted basis, in the fourth quarter last year due to strong core growth and lower expenses.

Quarterly comparison - Q4 2012 vs. Q3 2012
U.S. Personal and Commercial Banking reported net income, in Canadian dollar terms, for the quarter increased $32 million, or 11%, compared with the prior quarter. Adjusted net income for the quarter decreased $8 million, or 2%, compared with the prior quarter. In U.S. dollar terms, reported net income for the quarter increased US$42 million, or 15%, and adjusted net income for the quarter increased US$3 million, or 1%, compared with the prior quarter. The increase in adjusted net income was primarily due to strong organic growth and gains on sales of securities, partially offset by lower product margins and higher PCL. The reported annualized return on common equity for the quarter was 7.2%, while the adjusted annualized return on common equity was 8.1%, compared with 6.4% and 8.1% respectively, in the prior quarter.

In U.S. dollar terms, adjusted revenue for the quarter increased US$45 million, or 3%, compared with the prior quarter, due primarily to strong organic growth and gains on sales of securities, partially offset by deposit margin compression. Average loans increased by US$4 billion, or 4%, compared with the prior quarter with an increase of US$2 billion, or 6% in average personal loans and an increase of US$1 billion, or 2% in average business loans. Average deposits increased US$4 billion, or 2%, compared with the prior quarter, including a US$2 billion increase in average deposits of TD Ameritrade. Excluding the impact of TD Ameritrade IDAs, average deposit volume increased by US$2 billion, or 1%. Margin on average earning assets decreased by 11 bps to 3.48%, compared with the prior quarter primarily due to continued margin pressure.

Reported PCL for the quarter increased US$84 million, or 49%, compared with the prior quarter. The change in total reported PCL included provisions of US$54 million related to Superstorm Sandy and US$30 million related to the impact of new regulatory guidance on loans discharged in bankruptcies. Adjusted PCL for the quarter increased US$29 million, or 17%, compared with the prior quarter. Personal banking PCL, excluding debt securities classified as loans increased US$24 million, or 23%, from the prior quarter. Business banking PCL, excluding debt securities classified as loans increased US$5 million, or 8%, compared with prior quarter. Adjusted PCL on loans excluding acquired credit-impaired loans and debt securities classified as loans increased by US$31 million, or 21%, to US$179 million, due primarily to organic loan growth, partially offset by improved asset quality. Annualized adjusted PCL as a percentage of credit volume for loans excluding debt securities classified as loans was 0.88%, an increase of 10 bps, compared with the prior quarter. Net impaired loans, excluding acquired credit-impaired loans and debt securities classified as loans, were US$1,059 million, a decrease of US$2 million compared with the prior quarter. Net impaired loans, excluding acquired credit-impaired and debt securities classified as loans, as a percentage of total loans were 1.2%, compared with 1.3% as at July 31, 2012. Net impaired debt securities classified as loans were US$1,343 million, an increase of US$46 million, or 4%, compared with the prior quarter.

Reported non-interest expenses for the quarter decreased US$100 million, or 10%, compared with the prior quarter, due primarily to the litigation reserve taken in the prior quarter. Adjusted non-interest expenses increased US$19 million, or 2%, compared with the prior quarter due primarily to timing of growth initiatives and new stores.

The average FTE staffing levels increased by 332, or 1%, compared with the prior quarter due primarily to seasonality. The reported efficiency ratio for the quarter improved to 61.0%, compared with 69.3% in the prior quarter, driven by the litigation reserve taken in the prior quarter, while the adjusted efficiency ratio improved to 60.5 %, compared with 60.9% in the prior quarter.

Quarterly comparison - Q4 2012 vs. Q4 2011
Wholesale Banking net income for the quarter was $309 million, an increase of $29 million, or 10%, compared with the fourth quarter last year. The increase in earnings was due to higher revenue and reduced expenses in core businesses and a lower effective tax rate, partially offset by lower securities gains in the investment portfolio. The annualized return on common equity for the quarter was 30.3%.

Wholesale Banking revenue is derived primarily from capital markets services and corporate lending. The capital markets businesses generate revenue from advisory, underwriting, trading, facilitation, and trade execution services. Revenue for the quarter was $725 million, consistent with the fourth quarter last year. In the trading businesses, client flows improved in fixed income and credit trading and asset values increased due to tightening credit spreads. These increases were offset by declines in equity trading and equity underwriting due to industry-wide volume declines, and reduced securities gains in the investment portfolio. The investment banking business saw strong results in both quarters.

PCL for the quarter was $8 million, an increase of $5 million, compared to the fourth quarter last year. The increase in PCL was due to the inclusion of a single name in the investment portfolio in the current quarter. PCL was limited to the accrual cost of credit protection in the same period last year. Net impaired loans were $42 million, an increase of $10 million, or 31%, compared with the fourth quarter last year.

Non-interest expenses for the quarter were $374 million, a decrease of $21 million, or 5%, compared with the fourth quarter last year due to lower infrastructure costs and legal provisions.

Risk-weighted assets were $43 billion as at October 31, 2012, an increase of $8 billion, or 23%, compared with October 31, 2011. The increase was due to the implementation of the revised Basel II market risk framework.

The average FTE staffing levels decreased by 81, or 2%, compared with the fourth quarter last year primarily due to lower support FTE.

Quarterly comparison - Q4 2012 vs. Q3 2012
Wholesale Banking net income for the quarter increased by $129 million, or 72%, compared with the prior quarter. The increase in earnings was due to increased securities gains, lower non-interest expenses and lower PCL. The annualized return on common equity for the quarter was 30.3%, compared with 16.7% in the prior quarter.

Revenue for the quarter increased $87 million, or 14%, compared with the prior quarter, primarily due to higher securities gains in the investment portfolio and improved equity underwriting fees. These increases were partially offset by lower fixed income and credit trading revenue and decreased mergers and acquisitions (M&A) and advisory fees reflecting a decline in industry-wide activity as compared with the prior quarter.

PCL for the quarter decreased $13 million, or 62%, compared with the prior quarter. The decrease in PCL was primarily due to the inclusion of a single name in the corporate lending portfolio in the prior quarter. Net impaired loans decreased $6 million, or 13%, compared with the prior quarter.

Non-interest expenses for the quarter decreased by $32 million, or 8%, compared with the prior quarter, due to lower legal provisions.

Risk-weighted assets as at October 31, 2012 decreased by $5 billion, or 10%, compared with July 31, 2012, primarily due to reduced exposures. 

The average FTE staffing levels decreased by 43, or 1%, compared with the prior quarter.

Quarterly comparison - Q4 2012 vs. Q4 2011
Corporate segment's reported net loss for the quarter was $127 million, compared with a reported net loss of $83 million in the fourth quarter last year. Adjusted net loss was $29 million, compared with an adjusted net loss of $15 million in the fourth quarter last year. The increased loss was due to higher net corporate expenses largely offset by the favourable impact of other items. The increase in expenses was due in part to increases in strategic and cost reduction initiatives and the timing of charges to the segments. Other items were favourable largely due to preferred capital redemption costs and a loss related to Symcor's divestiture of its U.S. business in the prior year combined with the impact of more positive tax items this year.

Quarterly comparison - Q4 2012 vs. Q3 2012
Corporate segment's reported net loss for the quarter was $127 million, compared with a reported net income of $15 million in the prior quarter. Adjusted net loss was $29 million, compared with an adjusted net income of $30 million in the prior quarter. The increased loss was due to higher net corporate expenses largely offset by the favourable impact of other items. The increase in expenses, as anticipated in the prior quarter outlook, was due to increases in strategic and cost reduction initiatives and the timing of charges to the segments. Other items were favourable due to treasury and other hedging activities contributing to more positive results than anticipated.

Certain comparative amounts have been reclassified to conform with the presentation adopted in the current year.