"We are very focused on finding ways to reduce our expense base so we can continue to invest in new initiatives to continue to build great franchises," president and chief executive Ed Clark said during the company's earnings call Thursday.
"So to that end, we are looking carefully at everything we do, and whether there are changes which will allow us to do it better for less. This includes continued consolidation of our facilities in Canada and the United States."
Clark said TD (TSX:TD) will be going through a "weeding and feeding" process, merging branches in areas where they are too concentrated in order to open new ones in other regions. He did not specify the total number of branches that will be closed.
Losses stemming from the Alberta floods hit TD's insurance business in the third quarter, but the bank still beat earnings expectations on the back of strong performance by its consumer banking segment.
TD reported a drop in earnings for the third quarter despite "very strong performances" by many of its banking sectors. The results beat analyst expectations on earnings per share but missed on revenue.
Canada's second-largest bank said it is boosting its quarterly dividend by four cents, or five per cent, to 85 cents per share.
TD said net income in the quarter was $1.53 billion or $1.58 per diluted share on revenue of $5.95 billion. That compared with $1.7 billion or $1.78 per share on $5.84 billion of revenue in the year-earlier period.
Adjusted diluted earnings were $1.59 billion or $1.65 per share, down 13 per cent from $1.82 billion or $1.91 per share in the same 2012 period.
Analysts on average expected $1.55 in adjusted earnings per share on revenue of $5.99 billion, according to a survey by Thomson Reuters.
Barclays analyst John Aiken said the strong results from TD's consumer banking operations both north and south of the border should take precedence over flood-related losses.
"We would anticipate that consensus earnings expectations will increase coming out of the quarter, based on strong Canadian and U.S. retail earnings," Aiken said in a note.
The earnings figures included charges of $24 million relating to the acquisition of the credit card portfolio of MBNA Canada and a loss of $48 million after tax due to the impact of the Alberta flood on the loan portfolio.
TD's personal and commercial banking section reported adjusted net income of $997 million in the third quarter, up 12 per cent compared with a year ago. The bank says this reflected continued good loan and deposit volume growth, favourable credit performance and effective expense management.
TD Insurance posted a third-quarter loss of $243 million after tax, as it booked $418 million in charges due to a combination of severe weather impacts and an increase in general insurance claims.
The loss was in line with expectations announced last month when the bank said it would book charges related to severe flooding in Alberta and the Toronto area.
The wealth and insurance division delivered net income of $7 million for the quarter, compared with $360 million in the third quarter last year. Higher earnings from wealth and TD Ameritrade were largely offset by losses in the insurance business.
Shares of TD closed up 2.6 per cent or $2.34 to $89.93 on the Toronto Stock Exchange Thursday.
Recently, the bank secured an agreement with Aeroplan rewards card operator Aimia Inc. (TSX:AIM) that will see it become the lead partner, taking over for longtime partner CIBC (TSX:CM).
Some of the details of the new agreement haven't been etched out, which means that CIBC could still retain at least part of its existing Aerogold customers who have other products with the bank, such as chequing accounts and mortgages.
TD Bank is one of North America's largest retail banks, with operations across Canada and in several parts of New England and the U.S. northeastern and mid-Atlantic states.
Last fall, the bank announced it was acquiring the U.S. credit card portfolio of Target Corp. under a seven-year agreement. The portfolio has about five million active accounts under both Visa and private-label brands.
Note to readers: This is a corrected story. A previous version wrongly stated the bank missed earnings estimates.Suggest a correction