The Toronto-based bank had a profit of $1.69 billion before adjustments, compared to $1.4 billion a year earlier. Earnings per share improved to $1.78 from $1.50, before adjustments.
After adjustments, the bank's net income was up 14 per cent to $1.73 billion. Adjusted earnings per diluted share was $1.82, four cents higher than analyst expected, according to a poll by Thomson Reuters.
TD chief executive Ed Clark said despite the earnings growth in the first half of the year, he expects slowing loan growth, persistently low interest rates and regulatory headwinds to continue to impact growth in the rest of the year.
The company has taken in adjusted earnings of $3.5 billion, or $3.68 in earnings per share (EPS) in the first six months of 2012.
"We expect similar adjusted earnings and EPS numbers in the second half, which implies a lower growth rate for the balance of the year," Clark told analysts on a conference call Thursday.
"We continue to work hard to stay in the seven to 10 per cent earnings growth increase range that we've indicated before, despite increasing headwinds."
The strength of Canadian banks' domestic operations have become a central focus for some analysts over concerns about the growth trajectory.
"The volume growth that we're seeing in the Canadian banking segment on a year-over-year basis just continues to be a little bit better than what I think is going to be a long-term trend," suggested Tom Lewandowski, financial services analyst with Edward Jones in St. Louis.
"They keep reporting results that surprise to the upside. I think that's good near-term, but looking out a little bit longer, 12 to 18 months, you're going to see that trend slow down. I don't think that growth is sustainable considering where consumer debt capacity stands currently.
TD Bank's Canadian banking operations contributed $838 million of the adjusted profit in the quarter, up from $733 million a year earlier.
Retail banking in the United States contributed $356 million of net income, up from $316 million in the second quarter of 2011.
TD's wealth and insurance operations contributed $365 million, up 16 per cent from $316 million in the second quarter of 2012.
Total revenues for the quarter increased to $5.75 billion from $5.16 billion a year ago.
TD's profit from wholesale banking was $197 million, up from $188 million a year before.
Clark said he expects the bank's wholesale operations to be hit by lower trading revenues due to market volatility as a result of uncertainty about the fallout from the eurozone debt crisis.
Barclays analyst John Aiken characterized the results as the strongest from the three big Canadian banks that have reported so far this earnings season.
"We believe that the focus will rightfully be on TD's retail banking results, which were strong relative to its peers," he wrote in a note.
"Contrary to the others that have reported to date, TD managed to significantly expand its domestic net interest margins, benefiting from the acquisition of the MBNA credit card portfolios."
TD Bank shares were 26 cents higher to $78.99 in morning trading on the Toronto Stock Exchange.