Net New Client Assets of $14B, Record Total
Client Assets of $711B
Diluted Earnings per Share of $0.38
Record Net Revenues of $846M
TD Ameritrade Holding Corporation (Nasdaq:AMTD) has released
results for the second quarter of fiscal 2016. The Company gathered
approximately $14 billion in net new client assets, and reported
record client trading activity.
The Company’s results for the quarter ended Mar. 31, 2016
include the following: (1)
- $0.38 earnings per diluted share, on
net income of $205 million, up 9 percent year over year
- Net new client assets of approximately
$14 billion, an annualized growth rate of 8 percent
- Record average client trades per day of
approximately 509,000, an activity rate of 7.6 percent
- Record net revenues of $846 million, 56
percent of which were asset-based
- Investment product fee revenue of $88
million, up 4 percent year over year
- Pre-tax income of $330 million, or 39
percent of net revenues
- EBITDA(2) of $387 million, or 46
percent of net revenues
- Record interest rate-sensitive
assets(3) of $112 billion, up 11 percent year over year
- Record client assets of $711 billion,
up 2 percent year over year
“We continue to execute well, resulting in solid quarterly
performances for each of our major revenue streams,” said Fred
Tomczyk, chief executive officer. “Over what was a volatile quarter
for the markets, we gathered $14 billion in net new client assets
and helped our clients place a record 509,000 trades per day, on
average. Our focus for the rest of fiscal 2016 will be maintaining
our momentum, our CEO transition, aligning our business model with
the Department of Labor Fiduciary Rule, and of course continued
investments in our business.”
“Client cash balances grew again this quarter, driven by asset
gathering efforts and the ongoing shift in investor sentiment. As a
result, interest rate-sensitive assets increased to a record $112
billion,” said Steve Boyle, executive vice president and chief
financial officer. “Expenses remain in check, with operating
expenses declining 1 percent from last year, and we returned $322
million in capital to our shareholders through cash dividends and
share repurchases. We will continue to focus on what we can control
to grow our earnings power to the benefit of our clients,
associates and shareholders.”
Capital Management
The Company paid $91 million in its second fiscal quarter, or
$0.17 per share, in cash dividends. The Company also repurchased
approximately 8 million shares of its common stock.
The Company has declared a $0.17 per share quarterly cash
dividend, payable on May 17, 2016 to all holders of record of
common stock as of May 3, 2016.
Company Hosts Conference Call
TD Ameritrade will host its March Quarter conference call this
morning, Apr. 19, 2016, at 8:30 a.m. EDT (7:30 a.m. CDT).
Participants may listen to the conference call by dialing
855-238-2333. The Company will webcast the conference call through
www.amtd.com, via the “Presentations & Events” page of the web
site. A replay of the phone call will be available by dialing
877-344-7529 and entering the Conference ID 10081386 beginning at
10:30 a.m. EDT (9:30 a.m. CDT) on Apr. 19, 2016. The replay will be
available until 9:00 a.m. EDT (8:00 a.m. CDT) on Apr. 27, 2016. A
transcript of the call will be available on the Company’s corporate
web site, www.amtd.com, via either the “Investor Relations” page or
the “Presentations & Events” page beginning Wednesday, Apr. 20,
2016.
Interested parties can visit or subscribe to newsfeeds at
www.amtd.com for the most up-to-date corporate financial
information, presentation announcements, transcripts and archives.
The company also communicates this information via Twitter,
@TDAmeritradePR. Web site links, corporate titles and telephone
numbers provided in this release, although correct when published,
may change in the future.
Source: TD Ameritrade Holding Corporation
About TD Ameritrade Holding Corporation
Millions of investors and independent registered investment
advisors (RIAs) have turned to TD Ameritrade’s (Nasdaq: AMTD)
technology, people and education to help make investing and trading
easier to understand and do. Online or over the phone. In a branch
or with an independent RIA. First-timer or sophisticated trader.
Our clients want to take control, and we help them decide how -
bringing Wall Street to Main Street for more than 40 years. An
official sponsor of the 2016 U.S. Olympic and Paralympic Teams, as
well as an official sponsor of the National Football League,
TD Ameritrade has time and again been recognized as a leader
in investment services. Please visit TD Ameritrade's newsroom
or www.amtd.com for more information, or read our stories at
http://freshaccounts.amtd.com.
Safe Harbor
This document contains forward-looking statements within the
meaning of the federal securities laws. We intend these
forward-looking statements to be covered by the safe harbor
provisions of the federal securities laws. In particular, any
projections regarding our future revenues, expenses, earnings,
capital expenditures, effective tax rates, client trading activity,
accounts or stock price, as well as the assumptions on which such
expectations are based, are forward-looking statements. These
statements reflect only our current expectations and are not
guarantees of future performance or results. These statements
involve risks, uncertainties and assumptions that could cause
actual results or performance to differ materially from those
contained in the forward-looking statements. These risks,
uncertainties and assumptions include, but are not limited to:
general economic and political conditions and other securities
industry risks, fluctuations in interest rates, stock market
fluctuations and changes in client trading activity, credit risk
with clients and counterparties, increased competition, systems
failures, delays and capacity constraints, network security risks,
liquidity risks, new laws and regulations affecting our business,
regulatory and legal matters and uncertainties and other risk
factors described in our latest Annual Report on Form 10-K, filed
with the SEC on Nov. 20, 2015 and our latest Quarterly Report on
Form 10-Q filed thereafter. These forward-looking statements speak
only as of the date on which the statements were made. We undertake
no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise, except to the extent required by the federal
securities laws.
1 Please see the Glossary of Terms, located in “Investor”
section of www.amtd.com for more information on how these metrics
are calculated.
2See attached reconciliation of non-GAAP financial measures.
3Interest rate-sensitive assets consist of spread-based assets
and money market mutual funds. Ending balances as of Mar. 31,
2016.
Brokerage services provided by TD Ameritrade, Inc., member
FINRA (www.FINRA.org) /SIPC (www.SIPC.org).
TD AMERITRADE HOLDING CORPORATION CONSOLIDATED
STATEMENTS OF INCOME
In millions, except per share amounts
(Unaudited)
Quarter
Ended Six Months Ended Mar. 31, 2016 Dec. 31,
2015 Mar. 31, 2015 Mar. 31, 2016 Mar. 31,
2015 Revenues: Transaction-based revenues: Commissions and
transaction fees $ 360 $ 328 $ 350 $
689 $ 708 Asset-based revenues: Insured deposit
account fees 235 227 205 462 412 Net interest revenue 147 154 149
300 311 Investment product fees 88 92
85 181 168 Total
asset-based revenues 470 473 439 943 891 Other revenues
16 11 14 27
22 Net revenues 846 812
803 1,659 1,621
Operating expenses: Employee compensation and benefits 208 201 208
408 406 Clearing and execution costs 37 30 37 67 72 Communications
33 32 30 66 61 Occupancy and equipment costs 43 43 39 85 81
Depreciation and amortization 22 22 23 44 46 Amortization of
acquired intangible assets 22 22 22 45 45 Professional services 37
37 41 74 77 Advertising 81 62 82 143 145 Other 20
20 25 40 48
Total operating expenses 503 469
507 972 981 Operating
income 343 343 296 687 640 Other expense: Interest on
borrowings 13 12 9 26 17 Other - -
- - 1 Total other expense
13 12 9 26
18 Pre-tax income 330 331 287 661 622
Provision for income taxes 125 119
98 244 221 Net income $
205 $ 212 $ 189 $ 417 $ 401
Earnings per share - basic $ 0.38 $ 0.39 $ 0.35 $ 0.78 $
0.74 Earnings per share - diluted $ 0.38 $ 0.39 $ 0.35 $ 0.78 $
0.73 Weighted average shares outstanding - basic 533 537 544
535 544 Weighted average shares outstanding - diluted 535 540 547
538 547 Dividends declared per share $ 0.17 $ 0.17 $ 0.15 $
0.34 $ 0.30
TD AMERITRADE HOLDING CORPORATION CONDENSED
CONSOLIDATED BALANCE SHEETS In millions (Unaudited)
Mar. 31, 2016 Sept. 30, 2015 Assets: Cash and cash
equivalents $ 2,476 $ 1,978 Segregated
cash and investments 7,733 6,305 Broker/dealer receivables 1,307
862 Client receivables, net 11,396 12,770 Goodwill and intangible
assets 3,083 3,128 Other 1,159
1,332 Total assets $ 27,154 $
26,375 Liabilities and stockholders' equity: Liabilities:
Broker/dealer payables $ 2,362 $ 2,707 Client payables 17,094
16,035 Long-term debt 1,814 1,800 Other 1,012
930 Total liabilities 22,282 21,472
Stockholders' equity 4,872
4,903 Total liabilities and stockholders' equity $
27,154 $ 26,375
TD AMERITRADE
HOLDING CORPORATION SELECTED OPERATING DATA (Unaudited)
Quarter Ended
Six Months Ended
Mar. 31,
2016
Dec. 31,
2015
Mar. 31,
2015
Mar. 31,
2016
Mar. 31,
2015
Key
Metrics:
Net new assets (in billions) $14.1 $17.5 $16.3 $31.6 $35.1 Net new
asset growth rate (annualized) 8% 10% 10% 10% 11% Average client
trades per day 509,120 438,108 476,590 473,041 466,761
Profitability
Metrics:
Operating margin 40.5% 42.2% 36.9% 41.4% 39.5% Pre-tax margin 39.0%
40.8% 35.7% 39.8% 38.4% Return on average stockholders' equity
(annualized) 16.6% 17.1% 15.7% 16.9% 16.8% EBITDA(1) as a
percentage of net revenues 45.7% 47.7% 42.5% 46.8% 45.0%
Liquidity
Metrics:
Interest on borrowings (in millions) $13 $12 $9 $26 $17 Interest
coverage ratio (EBITDA(1)/interest on borrowings) 29.8 32.3 37.9
29.8 42.9
Liquid assets available for corporate
investing and financing activities(1) (in billions)
$0.7 $0.6 $0.7 $0.7 $0.7 Cash and cash equivalents (in billions)
$2.5 $1.7 $1.3 $2.5 $1.3
Transaction-Based
Revenue Metrics:
Total trades (in millions) 31.1 27.6 29.1 58.7 57.9 Average
commissions and transaction fees per trade $11.60 $11.90 $12.02
$11.74 $12.23 Average client trades per funded account (annualized)
19.1 16.6 18.6 17.8 18.4 Activity rate - funded accounts 7.6% 6.6%
7.4% 7.1% 7.3% Trading days 61.0 63.0 61.0 124.0 124.0 Order
routing revenue (in millions) $76 $70 $75 $147 $153
Spread-Based
Asset Metrics:
Average insured deposit account balances (in billions) $84.0 $80.3
$74.9 $82.2 $74.9 Average interest-earning assets (in billions)
21.8 22.2 19.4 22.0 19.4 Average spread-based balances (in
billions) $105.8 $102.5 $94.3 $104.2 $94.3 Insured deposit
account fee revenue (in millions) $235 $227 $205 $462 $412 Net
interest revenue (in millions) 147 154 149 300 311 Spread-based
revenue (in millions) $382 $381 $354 $762 $723 Avg.
annualized yield - insured deposit account fees 1.11% 1.10% 1.09%
1.11% 1.09% Avg. annualized yield - interest-earning assets 2.66%
2.71% 3.09% 2.69% 3.16% Net interest margin (NIM) 1.43% 1.45% 1.50%
1.44% 1.51%
Fee-Based
Investment Metrics:
Money market mutual
fund fees:
Average balance (in billions) $5.8 $5.7 $5.6 $5.8 $5.6 Average
annualized yield 0.18% 0.06% 0.00% 0.12% 0.00% Fee revenue (in
millions) $2 $1 $0 $4 $0
Market fee-based
investment balances:
Average balance (in billions) $147.3 $152.9 $149.5 $150.1 $147.3
Average annualized yield 0.23% 0.23% 0.23% 0.23% 0.23% Fee revenue
(in millions) $86 $91 $85 $177 $168 Average fee-based
investment balances (in billions) $153.1 $158.6 $155.1 $155.9
$152.9 Average annualized yield 0.23% 0.23% 0.22% 0.23% 0.22%
Investment product fee revenue (in millions) $88 $92 $85 $181 $168
(1) See attached reconciliation of non-GAAP financial
measures. NOTE: See Glossary of Terms on the Company's
website at www.amtd.com for definitions of the above metrics.
TD AMERITRADE HOLDING CORPORATION SELECTED
OPERATING DATA (Unaudited)
Quarter Ended Six Months Ended
Mar. 31, 2016 Dec. 31, 2015
Mar. 31, 2015 Mar. 31, 2016
Mar. 31, 2015
Client Account
and Client Asset Metrics:
Funded accounts (beginning of period) 6,686,000 6,621,000 6,371,000
6,621,000 6,301,000 Funded accounts (end of period) 6,777,000
6,686,000 6,467,000 6,777,000 6,467,000 Percentage change during
period 1% 1% 2% 2% 3% Client assets (beginning of period, in
billions) $695.3 $667.4 $672.4 $667.4 $653.1 Client assets (end of
period, in billions) $711.2 $695.3 $695.3 $711.2 $695.3 Percentage
change during period 2% 4% 3% 7% 6%
Net Interest
Revenue:
Segregated
cash:
Average balance (in billions) $6.5 $6.2 $4.4 $6.4 $4.8 Average
annualized yield 0.19% 0.09% 0.13% 0.14% 0.13% Interest revenue (in
millions) $3 $1 $1 $4 $3
Client margin
balances:
Average balance (in billions) $11.6 $12.3 $11.9 $11.9 $11.7 Average
annualized yield 3.79% 3.54% 3.60% 3.66% 3.65% Interest revenue (in
millions) $111 $111 $107 $222 $215
Securities
borrowing/lending:
Average securities borrowing balance (in billions) $0.7 $0.8 $1.0
$0.7 $0.9 Average securities lending balance (in billions) $1.9
$2.4 $2.2 $2.2 $2.2 Net interest revenue - securities
borrowing/lending (in millions) $32 $41 $41 $73 $93
Other cash and
interest-earning investments:
Average balance (in billions) $3.0 $2.9 $2.1 $3.0 $2.0 Average
annualized yield 0.17% 0.05% 0.04% 0.11% 0.05% Interest revenue -
net (in millions) $1 $1 $0 $2 $1
Client credit
balances:
Average balance (in billions) $14.4 $14.0 $12.0 $14.2 $12.1 Average
annualized cost 0.01% 0.01% 0.01% 0.01% 0.01% Interest expense (in
millions) ($0) ($0) ($0) ($1) ($1) Average interest-earning
assets (in billions) $21.8 $22.2 $19.4 $22.0 $19.4 Average
annualized yield 2.66% 2.71% 3.09% 2.69% 3.16% Net interest revenue
(in millions) $147 $154 $149 $300 $311 NOTE: See Glossary of
Terms on the Company's website at www.amtd.com for definitions of
the above metrics.
TD AMERITRADE HOLDING
CORPORATION RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES Dollars in millions (Unaudited)
Quarter
Ended Six Months Ended Mar. 31, 2016 Dec. 31,
2015 Mar. 31, 2015 Mar. 31, 2016 Mar. 31,
2015 $ % of Net Rev. $ % of Net
Rev. $ % of Net Rev. $ % of Net
Rev. $ % of Net Rev.
EBITDA
(1)
EBITDA $ 387 45.7 % $ 387 47.7 % $
341 42.5 % $ 776 46.8 % $
730 45.0 % Less: Depreciation and amortization (22 ) (2.6 %) (22 )
(2.7 %) (23 ) (2.9 %) (44 ) (2.7 %) (46 ) (2.8 %) Amortization of
acquired intangible assets (22 ) (2.6 %) (22 ) (2.7 %) (22 ) (2.7
%) (45 ) (2.7 %) (45 ) (2.8 %) Interest on borrowings (13 ) (1.5 %)
(12 ) (1.5 %) (9 ) (1.1 %) (26 ) (1.6 %) (17 ) (1.0 %) Provision
for income taxes (125 ) (14.8 %)
(119 ) (14.7 %) (98 ) (12.2 %)
(244 ) (14.7 %) (221 ) (13.6 %)
Net income $ 205 24.2 % $ 212
26.1 % $ 189 23.5 % $ 417
25.1 % $ 401 24.7 %
As
of Mar. 31, Dec. 31, Sept. 30, June
30, Mar. 31, 2016 2015 2015
2015 2015
Liquid Assets Available for Corporate Investing
andFinancing Activities
(2)
Liquid assets available for corporate investing and financing
activities $ 713 $ 584 $ 530 $ 581 $ 740 Plus: Non-corporate cash
and cash equivalents 1,430 934 909 1,116 662 Corporate liquidity
maintained for operational contingencies 764 764 750 750 750 Less:
Corporate short-term investments - (201 ) - - (501 ) Excess
broker-dealer regulatory net capital (431 )
(346 ) (211 ) (214 )
(371 ) Cash and cash equivalents $
2,476 $ 1,735 $ 1,978 $ 2,233
$ 1,280 Note: The term "GAAP" in the
following explanation refers to generally accepted accounting
principles in the United States. (1) EBITDA (earnings
before interest, taxes, depreciation and amortization) is
considered a non-GAAP financial measure as defined by SEC
Regulation G. We consider EBITDA an important measure of our
financial performance and of our ability to generate cash flows to
service debt, fund capital expenditures and fund other corporate
investing and financing activities. EBITDA is used as the
denominator in the consolidated leverage ratio calculation for
covenant purposes under our holding company's senior revolving
credit facility. EBITDA eliminates the non-cash effect of tangible
asset depreciation and amortization and intangible asset
amortization. EBITDA should be considered in addition to, rather
than as a substitute for, pre-tax income, net income and cash flows
from operating activities. (2) Liquid assets available for
corporate investing and financing activities is considered a
non-GAAP financial measure as defined by SEC Regulation G. We
consider "liquid assets available for corporate investing and
financing activities" to be an important measure of our liquidity.
We include the excess capital of our broker-dealer subsidiaries in
the calculation of liquid assets available for corporate investing
and financing activities, rather than simply including
broker-dealer cash and cash equivalents, because capital
requirements may limit the amount of cash available for dividend
from the broker-dealer subsidiaries to the parent company. Excess
capital, as defined below, is generally available for dividend from
the broker-dealer subsidiaries to the parent company. Liquid assets
available for corporate investing and financing activities should
be considered as a supplemental measure of liquidity, rather than
as a substitute for cash and cash equivalents. We define
liquid assets available for corporate investing and financing
activities as the sum of (a) corporate cash and cash equivalents
and short-term investments, excluding an amount that is being
maintained to provide liquidity for operational contingencies,
including lending to our broker-dealer, futures commission merchant
and forex dealer member subsidiaries under intercompany credit
agreements and (b) regulatory net capital of (i) our clearing
broker-dealer subsidiary in excess of 10% of aggregate debit items
and (ii) our introducing broker-dealer subsidiaries in excess of a
minimum operational target established by management ($50 million
in the case of our primary introducing broker-dealer, TD
Ameritrade, Inc.). Liquid assets available for corporate investing
and financing activities is based on more conservative measures of
broker-dealer net capital than regulatory requirements because we
generally manage to higher levels of net capital at the
broker-dealer subsidiaries than the regulatory thresholds require.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160419005490/en/
At the CompanyTD Ameritrade Holding
CorporationKim Hillyer, 402-574-6523Director,
Communicationskim.hillyer@tdameritrade.comorJeff Goeser,
402-597-8464Director, Investor Relations and
Financejeffrey.goeser@tdameritrade.com
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