TD Ameritrade Holding Corporation
TD Ameritrade — Merger or Acquisition (November 2019)
18 slides from TD Ameritrade's merger presentation, Nov 25, 2019
Slide 1: Announcing Schwab's Acquisition of TD Ameritrade
Announcing Schwab’s Acquisition of TD Ameritrade November 25, 2019 Building the Future of Modern Wealth Management
Slide 2: Forward-Looking Statements
Charles Schwab Corporation Forward - Looking Statements This presentation contains forward - looking statements within the meaning of Section 27A of the Securities Act of 1933 and Sectio n 21E of the Securities Exchange Act of 1934. Forward - looking statements include statements that refer to expec
Slide 3: Additional Statements
Charles Schwab Corporation Additional Statements Important Information About the Transaction and Where to Find it In connection with the proposed transaction between The Charles Schwab Corporation (“Schwab”) and TD Ameritrade Holding Corporat ion (“TD Ameritrade”), Schwab and TD Ameritrade will file
Slide 4: Management Attendees
Charles Schwab Corporation Management Attendees Walt Bettinger President and CEO, Schwab Peter Crawford EVP and CFO, Schwab Stephen Boyle Interim President and CEO, TD Ameritrade 4
Slide 5: Agenda
Charles Schwab Corporation Agenda Introduction and Strategic Rationale Transaction Summary and Pro Forma Profile Preliminary View on Synergies, Integration Planning, Other Considerations, and Next Steps Q&A 5
Slide 6: Scale-enhancing transaction allows Schwab to further press its advantage on behalf of clients
Charles Schwab Corporation S cale - enhancing transaction allows Schwab to further press its advantage on behalf of clients… Combined organization is positioned to meet the needs of investors across every phase of their financial journey and to support the independent advisors who serve them SCALE E
Slide 7: ...while building the future of modern wealth management
Charles Schwab Corporation …while building the future of modern wealth management. 1 $6.4 $7.5 $8.1 YTD '17 YTD '18 YTD '19 Revenue ($B) 42.3% 44.9% 46.0% YTD '17 YTD '18 YTD '19 PTPM (%) $1.8 $2.6 $2.9 YTD '17 YTD '18 YTD '19 Net Income ($B) $2.8 $4.2 $4.5 YTD '17 YTD '18 YTD '19 Revenue ($B) 37.4%
Slide 8: Combined transaction creates a large-scale, full-service investment firm
Charles Schwab Corporation Combined 1 Transaction creates a large - scale, full - service investment firm with world class solutions… Client Assets (trillions) LTM NNA (billions) 3Q19 DATs (thousands) Brokerage Accounts (millions) Client Cash (% total assets) Schwab TD Ameritrade $3.8 $201 718 12.1
Slide 9: ...which will benefit clients of both firms and build upon a shared heritage of innovation
Charles Schwab Corporation …which will benefit clients of both firms and build upon a shared heritage of innovation. ▪ Largest custodial platform helping RIAs grow, compete, and succeed ▪ Access to proprietary, low cost products (e.g., CSIM funds and ETFs) ▪ Leading omni - channel client service, in
Slide 10: AMTD stockholders receive attractive near-term value plus potential upside
Charles Schwab Corporation AMTD stockholders receive attractive near - term value plus potential meaningful upside over time. Note: VWAP = volume - weighted average price. (1) Exchange ratio based on closing prices as of November 20, 2019. Current AMTD stockholders gain ~31% ownership in the combine
Slide 11: Transaction Summary and Key Assumptions
Charles Schwab Corporation Transaction Summary and Key Assumptions Note: IDA = Insured Deposit Account. EPS = earnings per share. (1) Pro forma ownership includes <10% voting common stock, with the remainder issued as nonvoting common, as long as it is held by TD Bank. (2) Allocation to intangibles
Slide 12: Combination unlocks meaningful incremental financial benefits
Charles Schwab Corporation 44% 16% 10% 30% AMTD 9% 60% 31% SCHW 35% 55% 10% Combination unlocks meaningful incremental financial benefits. Note: Spread - based revenue = Net interest and related revenue. Balance - based revenue = asset management and other fee - based revenue. EOCA = Expense on Aver
Slide 13: Insured Deposit Account Cash Sweep Program Overview and Objectives
Charles Schwab Corporation Insured Deposit Account Cash Sweep Program Overview and Objectives ▪ Upon closing, Schwab will assume TD Ameritrade’s rights and obligations under existing IDA agreement ▪ Intent is to minimize disruption to existing clients while providing a stable funding source for Schw
Slide 14: Combination creates opportunity for significant expense synergies and revenue lift
Charles Schwab Corporation Combination creates opportunity for significant expense synergies and revenue lift. Expense Synergies Revenue Synergies Illustrative Sources ▪ Potential cost savings of $1.8 – 2.0 billion ▪ Approximately 60 - 65% of AMTD’s expense base or 18 - 20% of blended cost base ▪ Ex
Slide 15: Other Considerations and Next Steps
Charles Schwab Corporation Other Considerations and Next Steps x Schwab stockholders vote on stock issuance for transaction and creation of new class of nonvoting common stock x AMTD stockholders vote to approve transaction (majority of all holders and majority of minority 1 ) Close transactio n x R
Slide 16: Combined firm is positioned to meet the needs of investors and advisors
Charles Schwab Corporation Combined firm is positioned to meet the needs of investors and to support the independent advisors who serve them. Unlocks attractive long - term stockholder value via potential synergy opportunities Leverages merits of both platforms to further improve client experience E
Slide 17: Q&A
Charles Schwab Corporation Q&A Building the Future of Modern Wealth Management 17
Slide 18: Announcing Schwab's Acquisition of TD Ameritrade
Announcing Schwab’s Acquisition of TD Ameritrade November 25, 2019 Building the Future of Modern Wealth Management
TD Ameritrade Holding — Merger or Acquisition (November 2019) on 6ix