• Asset purchase expands TD’s existing presence in North American cards
• Transaction is financially attractive and consistent with TD’s risk
  appetite
• Opportunity to work with a top U.S. retailer

TORONTO, Oct. 23, 2012 /PRNewswire/ – TD Bank Group (TD) (TSX and NYSE: TD)
today announced an agreement with Target Corporation (Target) (NYSE:
TGT) under which TD will acquire Target’s existing U.S. Visa and
private label card portfolio, with a current gross outstanding balance
of US$5.9 billion. In addition, the two companies have entered into a
seven-year program agreement under which TD will become the exclusive
issuer of Target-branded Visa and private label consumer credit cards
to Target’s U.S. customers.

“Our agreement with Target will significantly expand our presence in the
North American credit card business,” said Ed Clark, Group President
and CEO, TD Bank Group. “We’re excited to be working with Target’s
strong team and leading retail brand. This asset purchase aligns
perfectly with our risk profile and strategy, and will contribute to
achieving our stated adjusted earnings target of US$1.6 billion from
our U.S. P&C segment in 2013.”

This transaction provides TD with the opportunity to work with a top
retailing franchise with an established card program that includes an
industry leading rewards offering. Target’s REDcard Rewards program,
which has been experiencing strong growth in usage, offers U.S.
customers a 5% discount on Target purchases. 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.

“Target is very pleased to have reached this agreement with TD which is
the result of extensive efforts by teams at both companies,” said Gregg
Steinhafel, Chairman, President and Chief Executive Officer of Target
Corporation. “This transaction achieves all of Target’s strategic and
financial goals for a portfolio sale. We look forward to working with
this premier global financial institution to continue Target’s long
history of innovation in our guest-focused financial services
strategy.”

Under the terms of the program agreement, TD and Target will share in
the profits generated by the portfolios, with Target having the more
substantial interest. Target will be responsible for all elements of
operations and customer service and will bear most operating costs to
service the assets. TD will control risk management policies and
regulatory compliance and will bear all costs related to funding the
portfolio. In addition, TD will have a team on-site in Minneapolis to
work with existing Target staff in overseeing the program.

Additional details of the transaction

The acquired portfolio’s credit quality is comparable to industry
benchmarks. The REDcard value proposition is compelling and attracts
customers with above average credit characteristics. TD expects to
originate new private label accounts at a rate consistent with Target’s
recent experience. The new private label portfolio will have lower
average balances per account than the legacy Visa portfolio.

Subject to the receipt of regulatory approvals and satisfaction of other
customary closing conditions, this transaction is expected to close in
the first half of calendar 2013. TD expects its Tier 1 capital ratio to
decrease by approximately 20 bps on closing, on a pro forma basis as at
TD’s last quarter ending July 31, 2012, and its common equity tier 1
ratio to decrease by approximately 14 bps under Basel III on a fully
phased in basis. In addition, TD expects the portfolio to produce a
return on assets of approximately 100 bps in the first year. The
transaction will be funded with available resources.

About TD Bank Group

The Toronto-Dominion Bank and its subsidiaries are collectively known as
TD Bank Group (TD). TD is the sixth largest bank in North America by
branches and serves approximately 22 million customers in four key
businesses operating in a number of locations in key financial centres
around the globe: Canadian Personal and Commercial Banking, including
TD Canada Trust and TD Auto Finance Canada; Wealth and Insurance,
including TD Waterhouse, an investment in TD Ameritrade, and TD
Insurance; U.S. Personal and Commercial Banking, including TD Bank,
America’s Most Convenient Bank, and TD Auto Finance U.S.; and Wholesale
Banking, including TD Securities. TD also ranks among the world’s
leading online financial services firms, with approximately 8.5 million
online customers. TD had CDN$806 billion in assets on July 31, 2012.
The Toronto-Dominion Bank trades under the symbol “TD” on the Toronto
and New York Stock Exchanges.

Caution Regarding Forward Looking Information, and Other Matters

From time to time, TD makes written and/or oral forward-looking
statements, including in this press release, in other filings with
Canadian regulators or the U.S. Securities and Exchange Commission, and
in other communications. In addition, representatives of TD may make
forward-looking statements orally to analysts, investors, the media and
others. All such statements are made pursuant to the “safe harbour”
provisions of, and are intended to be forward-looking statements under,
applicable Canadian and U.S. securities legislation, including the U.S.
Private Securities Litigation Reform Act of 1995. Forward-looking
statements include, but are not limited to, statements regarding TD’s
objectives and priorities for 2012 and beyond and strategies to achieve
them, and TD’s anticipated financial performance. Forward-looking
statements are typically identified by words such as “will”, “should”,
“believe”, “expect”, “anticipate”, “intend”, “estimate”, “plan”, “may”,
and “could”.

By their very nature, these statements require TD to make assumptions
and are subject to inherent risks and uncertainties, general and
specific. Especially in light of the uncertainty related to the
financial, economic, political and regulatory environments, such risks
and uncertainties – many of which are beyond TD’s control and the
effects of which can be difficult to predict – may cause actual results
to differ materially from the expectations expressed in the
forward-looking statements. Risk factors that could cause such
differences include: credit, market (including equity, commodity,
foreign exchange, and interest rate), liquidity, operational (including
technology), reputational, insurance, strategic, regulatory, legal,
environmental, and other risks, all of which are discussed in the
Management’s Discussion and Analysis (“MD&A”) in TD’s 2011 Annual
Report and in the Third Quarter 2012 Report to Shareholders.

With regard to TD’s proposed acquisition of Target’s existing U.S. Visa
and private label credit card portfolio and the seven year program
agreement, there can be no assurance that TD will realize the
anticipated benefits or results due to a variety of factors, including:
inability to complete the acquisition in the timeframe anticipated,
obtain regulatory approvals of the transaction, or satisfy other
conditions to the transaction on the proposed terms and timeframe;
difficulties or delays in integrating the acquired credit card
portfolio or higher than anticipated costs to complete the integration;
lower than anticipated rates of card usage or new account origination;
lower than anticipated yields (finance charges/fees); interest rate
exposure risk; and higher than expected rates of provisions for credit
losses.

We caution that the preceding list is not exhaustive of all possible
risk factors and other factors could also adversely affect TD’s
results. For additional information, please see the “Risk Factors and
Management” section of the 2011 MD&A. TD’s material general economic
assumptions are set out in TD’s 2011 Annual Report under the heading
“Economic Summary and Outlook” and for each of the business segments
under the heading “Business Outlook and Focus for 2012” and in TD’s
Third Quarter 2012 Report to Shareholders under the headings “Business
Outlook.”

All such factors should be considered carefully, as well as other
uncertainties and potential events, and the inherent uncertainty of
forward-looking statements, when making decisions with respect to TD
and we caution readers not to place undue reliance on TD’s
forward-looking statements.

Any forward-looking statements contained in this press release represent
the views of management only as of the date hereof and are presented
for the purpose of assisting TD’s shareholders and analysts in
understanding TD’s financial position, objectives and priorities and
anticipated financial performance as at and for the periods ended on
the dates presented, and may not be appropriate for other purposes. TD
does not undertake to update any forward-looking statements, whether
written or oral, that may be made from time to time by or on its
behalf, except as required under applicable securities legislation.

Return on assets as used in this press release is not a defined term
under IFRS and, therefore, may not be comparable to similar terms used
by other issuers.

SOURCE TD Bank Group