Toronto-Dominion Bank, which earlier this week announced a $13.4 billion acquisition to expand in the U.S., got a lift from loan growth at home.

Total revenue for the bank’s Canadian retail unit rose to C$6.72 billion ($5.32 billion) in the fiscal first quarter, up 5.9% from a year earlier, the Toronto-based company said Thursday. Overall profit topped analysts’ estimates. 

Toronto-Dominion has staked much of its future on expanding its U.S. retail-banking business. On Monday, it announced an agreement to buy First Horizon Corp. -- its largest acquisition ever -- to fill in its footprint in the Southeast. The deal was struck as Toronto-Dominion benefits from stronger borrowing trends among domestic consumers and businesses, with total average personal loans rising 7.8% in the three months through January while business loans increased 14%.

“We’re seeing strong activity,” Chief Financial Officer Kelvin Tran said in an interview. “Customers’ confidence is back, and we’ve been seeing that momentum building for a few quarters now.”

Toronto-Dominion’s performance in the U.S. last quarter was more muted. Total revenue for the U.S. unit rose 5.5% from a year earlier to $2.2 billion, held back by an 11% decline in business loans. Commercial lending in the U.S. was restrained by the continued repayment of Paycheck Protection Program loans, Tran said.

“There’s still a lot of liquidity inside the U.S. and, as the liquidity subsides, you would expect to have loan growth,” Tran said.

Toronto-Dominion shares fell 2.7% to C$98.71 at 2:05 p.m. in Toronto. The shares have risen 1.8% this year, compared with a 4.7% gain for the S&P/TSX Commercial Banks index.

One bright spot was U.S. credit-card balances, which rose 5.6% from the fourth quarter. That was the strongest quarter-over-quarter growth since the first three months of fiscal 2020, before the pandemic spread in North America. Total personal loans gained 0.1% from a year earlier.

With the First Horizon purchase, Toronto-Dominion will be adding 412 branches and more than 1.1 million individual and business customers across 12 states. The Memphis, Tennessee-based lender has a large presence in its home state and Louisiana, along with locations in Florida, the Carolinas and Virginia, and “footholds” in Atlanta, Dallas and Houston, Toronto-Dominion said Monday.

The deal, which still needs regulatory approval, would move Toronto-Dominion beyond its current U.S. East Coast footprint and would make its U.S. franchise into one of the nation’s top six banks, with about $614 billion in assets.

This article was provided by Bloomberg News.