Record Net New Client Assets of $19.5B
Record Average Client Trades per Day of
517,000
Net Revenues Top $900M
Record Total Client Assets of $847B
TD Ameritrade Holding Corporation (Nasdaq: AMTD) has released
results for the second quarter of fiscal 2017 and reaffirmed its
full-year earnings per share guidance of $1.50 to $1.80. The
Company gathered approximately $19.5 billion in net new client
assets for the quarter and reported 517,000 client trades per day,
on average, both reflecting strong year-over-year increases.
The Company’s results for the quarter ended March 31, 2017
include the following:(1)
- $0.40 in earnings per diluted share, up
5 percent year over year, on net income of $214 million
- Record net new client assets of
approximately $19.5 billion, an annualized growth rate of 10
percent
- Record average client trades per day of
approximately 517,000, up 2 percent year over year
- Record net revenues of $904 million, 58
percent of which were asset-based
- Pre-tax income of $344 million, or 38
percent of net revenues
- Interest rate-sensitive assets(2) of
$124 billion, up 11 percent year over year
- Record client assets of $847 billion,
up 19 percent year over year
“Our record-breaking results reflect the powerful combination of
strong investor engagement in the market within an improving
interest rate environment. Both factors served as tailwinds further
accelerating our continued organic growth and giving us the
flexibility to respond to the competitive environment with lower
pricing for all of our clients,” said Tim Hockey, president and
chief executive officer. “Client asset inflows hit an all-time high
as investors found value in our outstanding trading platforms,
innovative tools, and broad product selection. We’re capturing
money in motion and have plans firmly in place to help our
industry-leading organic growth continue.”
“We continued to build on our strong momentum from the December
quarter driving solid growth from net new client assets and new
accounts,” said Steve Boyle, executive vice president and chief
financial officer. “We expect the benefits from balance growth and
higher interest rates to more than offset the financial impact of
our lower commission price. Ongoing investments in cutting-edge
technology that drive automation and further enhance the client
experience will remain core to our strategy for the balance of the
fiscal year.”
Capital ManagementThe Company paid $95 million in its
second fiscal quarter, or $0.18 per share, in cash dividends.
The Company has declared an $0.18 per share quarterly cash
dividend, payable on May 16, 2017 to all holders of record of
common stock as of May 2, 2017.
Company Hosts Conference CallTD Ameritrade will host its
April Quarter conference call this morning, April 19, 2017, at 8:30
a.m. EDT (7:30 a.m. CDT). Participants may listen to the conference
call by dialing 877-648-7976. 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 855-859-2056 and entering the Conference ID
88024252 beginning at 11:30 a.m. EDT (10:30 a.m. CDT) on April 19,
2017. The replay will be available until 11:59 p.m. EDT (10:59 p.m.
CDT) on April 26, 2017. 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 Thursday, April 20, 2017.
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 CorporationMillions 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. 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 Fresh
Accounts.
Safe HarborThis 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, stock price or any projections or expectations regarding
the proposed business combination transaction between us and
Scottrade Financial Services, Inc., 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, the ability to obtain regulatory
approvals and meet other closing conditions to the proposed
transaction, including the completion of the merger between
Scottrade Bank and TD Bank, N.A., on the expected terms and
schedule; delay in closing the transaction; difficulties and delays
in integrating the TD Ameritrade and Scottrade businesses or fully
realizing cost savings and other benefits; business disruption
following the proposed transaction; changes in asset quality and
credit risk; the inability to sustain revenue and earnings growth;
changes in interest rates and capital markets; inflation; customer
borrowing, repayment, investment and deposit practices; customer
disintermediation; the introduction, withdrawal, success and timing
of business initiatives; competitive conditions; TD Ameritrade’s
and Scottrade’s businesses experiencing disruptions due to
transaction-related uncertainty or other factors making it more
difficult to maintain relationships with employees, customers,
other business partners or governmental entities; the inability to
realize synergies or to implement integration plans and other
consequences associated with mergers, acquisitions and
uncertainties and other risk factors described in our latest Annual
Report on Form 10-K, filed with the SEC on Nov. 18, 2016 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.
2 Interest rate-sensitive assets consist of spread-based assets
and money market mutual funds. Ending balances as of March 31,
2017.
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, 2017 Dec. 31, 2016 Mar. 31, 2016 Mar. 31,
2017 Mar. 31, 2016 Revenues: Transaction-based revenues:
Commissions and transaction fees $ 365 $ 355 $ 360 $ 719 $ 689
Asset-based revenues: Insured deposit account fees 269 245
235 514 462 Net interest revenue 154 151 147 305 300 Investment
product fees 103 94 88 197 181
Total asset-based revenues 526 490 470 1,016 943 Other
revenues 13 14 16 27 27 Net
revenues 904 859 846 1,762 1,659
Operating expenses: Employee compensation and benefits 229
214 208 443 408 Clearing and execution costs 37 36 37 73 67
Communications 29 35 33 64 66 Occupancy and equipment costs 45 44
43 89 85 Depreciation and amortization 25 24 22 49 44 Amortization
of acquired intangible assets 19 19 22 38 45 Professional services
59 53 37 111 74 Advertising 80 57 81 137 143 Other 23
24 20 47 40 Total operating expenses
546 506 503 1,051 972 Operating
income 358 353 343 711 687 Other expense: Interest on
borrowings 14 14 13 28 26 Total
other expense 14 14 13 28 26
Pre-tax income 344 339 330 683 661 Provision for income
taxes 130 123 125 253 244 Net
income $ 214 $ 216 $ 205 $ 430 $ 417 Earnings per share -
basic $ 0.41 $ 0.41 $ 0.38 $ 0.81 $ 0.78 Earnings per share -
diluted $ 0.40 $ 0.41 $ 0.38 $ 0.81 $ 0.78 Weighted average
shares outstanding - basic 528 527 533 528 535 Weighted average
shares outstanding - diluted 530 530 535 530 538 Dividends
declared per share $ 0.18 $ 0.18 $ 0.17 $ 0.36 $ 0.34
TD AMERITRADE HOLDING CORPORATION CONDENSED CONSOLIDATED
BALANCE SHEETS In millions (Unaudited)
Mar. 31, 2017 Sept. 30, 2016 Assets: Cash and
cash equivalents $ 2,231 $ 1,855 Segregated cash and investments
8,727 8,729 Broker/dealer receivables 1,101 1,190 Client
receivables, net 12,036 11,941 Investments available-for-sale, at
fair value 747 757 Goodwill and intangible assets 3,004 3,042 Other
1,319 1,304 Total assets $ 29,165 $ 28,818
Liabilities and stockholders' equity: Liabilities:
Broker/dealer payables $ 1,884 $ 2,040 Client payables 19,238
19,055 Long-term debt 1,765 1,817 Other 953 855 Total
liabilities 23,840 23,767 Stockholders' equity 5,325
5,051 Total liabilities and stockholders' equity $ 29,165 $ 28,818
TD AMERITRADE HOLDING CORPORATION SELECTED
OPERATING DATA (Unaudited)
Quarter Ended Six
Months Ended Mar. 31, 2017 Dec. 31, 2016 Mar.
31, 2016 Mar. 31, 2017 Mar. 31, 2016
Key
Metrics:
Net new assets (in billions) $ 19.5 $ 18.7 $ 14.1 $ 38.1 $ 31.6 Net
new asset growth rate (annualized) 10 % 10 % 8 % 10 % 10 % Average
client trades per day 516,994 486,801 509,120 501,837 473,041
Profitability
Metrics:
Operating margin 39.6 % 41.1 % 40.5 % 40.4 % 41.4 % Pre-tax margin
38.1 % 39.5 % 39.0 % 38.8 % 39.8 % Return on average stockholders'
equity (annualized) 16.3 % 16.9 % 16.6 % 16.6 % 16.9 % Net profit
margin 23.7 % 25.1 % 24.2 % 24.4 % 25.1 % EBITDA(1) as a percentage
of net revenues 44.5 % 46.1 % 45.7 % 45.3 % 46.8 %
Liquidity
Metrics:
Interest on borrowings (in millions) $ 14 $ 14 $ 13 $ 28 $ 26
Interest coverage ratio (EBITDA(1)/interest on borrowings) 28.7
28.3 29.8 28.5 29.8 Cash and cash equivalents (in billions) $ 2.2 $
1.7 $ 2.5 $ 2.2 $ 2.5
Liquid assets available for corporate
investing and financing activities(1)(2) (in billions)
$ 1.0 $ 0.8 $ 0.5 $ 1.0 $ 0.5
Transaction-Based
Revenue Metrics:
Total trades (in millions) 32.1 30.4 31.1 62.5 58.7 Average
commissions and transaction fees per trade $ 11.38 $ 11.65 $ 11.60
$ 11.51 $ 11.74 Trading days 62.0 62.5 61.0 124.5 124.0 Order
routing revenue (in millions) $ 83 $ 79 $ 76 $ 162 $ 147
Spread-Based
Asset Metrics:
Average insured deposit account balances (in billions) $ 95.1 $
93.3 $ 84.0 $ 94.2 $ 82.2 Average interest-earning assets (in
billions) 24.6 24.4 21.8
24.5 22.0 Average spread-based balances
(in billions) $ 119.7 $ 117.7 $ 105.8 $ 118.7
$ 104.2 Insured deposit account fee revenue
(in millions) $ 269 $ 245 $ 235 $ 514 $ 462 Net interest revenue
(in millions) 154 151 147
305 300 Spread-based revenue (in
millions) $ 423 $ 396 $ 382 $ 819 $ 762
Avg. annualized yield - insured deposit account fees
1.13 % 1.03 % 1.11 % 1.08 % 1.11 % Avg. annualized yield -
interest-earning assets 2.50 % 2.42 % 2.66 % 2.46 % 2.69 % Net
interest margin (NIM) 1.41 % 1.32 % 1.43 % 1.36 % 1.44 %
Fee-Based
Investment Metrics:
Money market mutual
fund fees:
Average balance (in billions) $ 3.5 $ 3.7 $ 5.8 $ 3.6 $ 5.8 Average
annualized yield 0.44 % 0.38 % 0.18 %
0.41 % 0.12 % Fee revenue (in millions) $ 4 $ 3
$ 2 $ 8 $ 4
Market fee-based
investment balances:
Average balance (in billions) $ 176.9 $ 166.7 $ 147.3 $ 171.8 $
150.1 Average annualized yield 0.22 % 0.21 %
0.23 % 0.22 % 0.23 % Fee revenue (in millions) $ 99
$ 91 $ 86 $ 189 $ 177
Average fee-based investment balances (in billions) $ 180.4 $ 170.4
$ 153.1 $ 175.4 $ 155.9 Average annualized yield 0.23 %
0.22 % 0.23 % 0.22 % 0.23 % Investment
product fee revenue (in millions) $ 103 $ 94 $ 88
$ 197 $ 181 (1) See attached
reconciliation of non-GAAP financial measures.
(2) Effective in March 2017, the liquid
assets available for corporate investing and financing activities
metric was revised. Prior periods have been updated to conform to
the current presentation.
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, 2017
Dec. 31, 2016 Mar. 31, 2016
Mar. 31, 2017 Mar. 31, 2016
Client Account
and Client Asset Metrics:
Funded accounts (beginning of period) 7,046,000 6,950,000 6,686,000
6,950,000 6,621,000 Funded accounts (end of period) 7,189,000
7,046,000 6,777,000 7,189,000 6,777,000 Percentage change during
period 2 % 1 % 1 % 3 % 2 % Client assets (beginning of
period, in billions) $ 797.0 $ 773.8 $ 695.3 $ 773.8 $ 667.4 Client
assets (end of period, in billions) $ 846.7 $ 797.0 $ 711.2 $ 846.7
$ 711.2 Percentage change during period 6 % 3 % 2 % 9 % 7 %
Net Interest
Revenue:
Segregated
cash:
Average balance (in billions) $ 8.7 $ 8.7 $ 6.5 $ 8.7 $ 6.4 Average
annualized yield 0.46 % 0.30 % 0.19 %
0.38 % 0.14 % Interest revenue (in millions) $ 10 $ 7
$ 3 $ 17 $ 4
Client margin
balances:
Average balance (in billions) $ 11.9 $ 11.9 $ 11.6 $ 11.9 $ 11.9
Average annualized yield 3.67 % 3.56 % 3.79 %
3.61 % 3.66 % Interest revenue (in millions) $ 109
$ 108 $ 111 $ 217 $ 222
Securities
borrowing/lending:
Average securities borrowing balance (in billions) $ 0.9 $ 0.9 $
0.7 $ 0.9 $ 0.7 Average securities lending balance (in billions) $
1.7 $ 1.9 $ 1.9 $ 1.8 $ 2.2 Net
interest revenue - securities borrowing/lending (in millions) $ 31
$ 33 $ 32 $ 65 $ 73
Other cash and
interest-earning investments:
Average balance (in billions) $ 3.1 $ 2.9 $ 3.0 $ 3.0 $ 3.0 Average
annualized yield 0.54 % 0.44 % 0.17 %
0.49 % 0.11 % Interest revenue - net (in millions) $ 4
$ 3 $ 1 $ 7 $ 2
Client credit
balances:
Average balance (in billions) $ 16.1 $ 16.1 $ 14.4 $ 16.1 $ 14.2
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) $ 24.6 $ 24.4 $ 21.8
$ 24.5 $ 22.0 Average annualized yield 2.50 % 2.42 %
2.66 % 2.46 % 2.69 % Net interest revenue (in
millions) $ 154 $ 151 $ 147 $ 305 $ 300
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,
2017 Dec. 31, 2016 Mar. 31, 2016 Mar. 31,
2017 Mar. 31, 2016 $ % of Net Rev.
$ % of Net Rev. $ % of Net Rev.
$ % of Net Rev. $ % of Net Rev.
EBITDA
(1)
Net income - GAAP $ 214 23.7 % $ 216 25.1 % $ 205 24.2 % $ 430 24.4
% $ 417 25.1 % Add: Depreciation and amortization 25 2.8 % 24 2.8 %
22 2.6 % 49 2.8 % 44 2.7 % Amortization of acquired intangible
assets 19 2.1 % 19 2.2 % 22 2.6 % 38 2.2 % 45 2.7 % Interest on
borrowings 14 1.5 % 14 1.6 % 13 1.5 % 28 1.6 % 26 1.6 % Provision
for income taxes 130 14.4 % 123 14.3 %
125 14.8 % 253 14.4 % 244 14.7 % EBITDA
- non-GAAP $ 402 44.5 % $ 396 46.1 % $ 387
45.7 % $ 798 45.3 % $ 776 46.8 %
As of Mar.
31, Dec. 31, Sept. 30, June 30, Mar.
31, 2017 2016 2016 2016 2016
Liquid Assets
Available for Corporate Investing and Financing Activities
(2)
Cash and cash equivalents - GAAP $ 2,231 $ 1,662 $ 1,855 $ 1,917 $
2,476 Less: Non-corporate cash and cash equivalents (1,286 )
(1,203 ) (1,363 ) (1,067 ) (1,416 )
Corporate cash and cash equivalents 945 459 492 850 1,060 Corporate
investments 747 747 757 400 - Less: Corporate liquidity maintained
for operational contingencies (723 ) (773 ) (773 ) (764 ) (764 )
Amounts maintained for corporate working capital (87 ) (87 ) (87 )
(87 ) (87 ) Amounts held as collateral for derivative contracts
(40 ) (32 ) (93 ) (94 ) (89 )
Excess corporate cash and cash equivalents and investments 842 314
296 305 120 Excess regulatory net capital over management targets
122 478 357 242
404 Liquid assets available for corporate investing
and financing activities - non-GAAP $ 964 $ 792 $ 653
$ 547 $ 524 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 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, GAAP 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 regulated subsidiaries in the
calculation of liquid assets available for corporate investing and
financing activities, rather than simply including the regulated
subsidiaries' cash and cash equivalents, because capital
requirements may limit the amount of cash available for dividend
from the regulated subsidiaries to the parent company. Excess
capital, as defined below, is generally available for dividend from
the regulated 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 GAAP cash and cash equivalents. We
define liquid assets available for corporate investing and
financing activities as the sum of (a) excess corporate cash and
cash equivalents and investments and (b) our regulated subsidiaries
net capital in excess of minimum operational targets established by
management. Excess corporate cash and cash equivalents and
investments includes cash and cash equivalents from our investment
advisory subsidiaries and excludes (i) amounts being maintained to
provide liquidity for operational contingencies, including lending
to our broker-dealer and FCM/FDM subsidiaries under intercompany
credit agreements, (ii) amounts maintained for corporate working
capital and (iii) amounts held as collateral for derivative
contracts. Liquid assets available for corporate investing and
financing activities is based on more conservative measures of net
capital than regulatory requirements because we generally manage to
higher levels of net capital at our regulated subsidiaries than the
regulatory thresholds require.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170419005260/en/
TD Ameritrade Holding CorporationKim Hillyer,
402-574-6523Director,
Communicationskim.hillyer@tdameritrade.comorJeff Goeser,
402-597-8464Director, Investor
Relationsjeffrey.goeser@tdameritrade.com
TD Ameritrade (NASDAQ:AMTD)
Historical Stock Chart
From Mar 2024 to Apr 2024
TD Ameritrade (NASDAQ:AMTD)
Historical Stock Chart
From Apr 2023 to Apr 2024