TD Ameritrade Holding Corporation (Nasdaq: AMTD) has released results for the first quarter of fiscal 2016. The Company gathered approximately $17 billion in net new client assets, maintaining its double-digit net new client asset growth rate one quarter into its new year.
The Company’s results for the quarter ended Dec. 31, 2015 include the following: (1)
- $0.39 earnings per diluted share, on net income of $212 million, consistent with last year
- Net new client assets of approximately $17 billion, an annualized growth rate of 10 percent
- Average client trades per day of approximately 438,000, an activity rate of 6.6 percent
- Net revenues of $812 million, 58 percent of which were asset-based, consistent with last year
- Record investment product fee revenue of $92 million, up 11 percent year over year
- Pre-tax income of $331 million, or 41 percent of net revenues
- EBITDA(2) of $387 million, or 48 percent of net revenues
- Record interest rate-sensitive assets(3) of $110 billion, up 9 percent year over year
- Client assets of approximately $695 billion, up 3 percent year over year
“Our first quarter of fiscal 2016 was strong,” said Fred Tomczyk, chief executive officer. “Asset gathering is going particularly well, as we delivered our second best quarter ever – and a double-digit annualized growth rate. With the Federal Reserve raising interest rates for the first time in nine years and continued execution on our growth strategy going well, we are well-positioned for the current environment. We will continue along our path, investing thoughtfully in growth and building our long-term earnings power for the benefit of our clients, shareholders and associates.”
“Interest rate-sensitive assets ended the quarter at a record $110 billion, driven largely by growth in client cash balances – both as a result of strong organic growth and shifting investor sentiment in an uncertain market environment,” said Steve Boyle, executive vice president and chief financial officer. “We were pleased with our ability to keep expenses in check for the quarter, starting slow and maintaining our flexibility to ramp up prudently for both seasonal and opportunistic investment initiatives later in the year. We were able to return $129 million to our shareholders in the quarter through cash dividends and share repurchases and remain focused on executing a disciplined return of capital strategy throughout the rest of the year.”
Capital Management
The Company paid $91 million in its first
fiscal quarter, or $0.17 per share, in cash dividends. The Company also
repurchased approximately 1 million shares of its common stock.
The Company has declared a $0.17 per share quarterly cash dividend, payable on Feb. 17, 2016 to all holders of record of common stock as of Feb. 3, 2016.
Company Hosts Conference Call
TD Ameritrade will host its
December Quarter conference call this morning, Jan. 20, 2016, at 8:30
a.m. EST (7:30 a.m. CST). 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
10076515 beginning at 10:30 a.m. EST (9:30 a.m. CST) on Jan. 20, 2016.
The replay will be available until 9:00 a.m. EST (8:00 a.m. CST) on Jan.
28, 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 Thursday, Jan. 21, 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. 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 Dec. 31, 2015.
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 | ||||||||||||
| Dec. 31, 2015 | Sept. 30, 2015 | Dec. 31, 2014 | ||||||||||
| Revenues: | ||||||||||||
| Transaction-based revenues: | ||||||||||||
| Commissions and transaction fees | $ | 328 | $ | 364 | $ | 359 | ||||||
| Asset-based revenues: | ||||||||||||
| Insured deposit account fees | 227 | 218 | 207 | |||||||||
| Net interest revenue | 154 | 155 | 161 | |||||||||
| Investment product fees | 92 | 82 | 83 | |||||||||
| Total asset-based revenues | 473 | 455 | 451 | |||||||||
| Other revenues | 11 | 12 | 9 | |||||||||
| Net revenues | 812 | 831 | 819 | |||||||||
| Operating expenses: | ||||||||||||
| Employee compensation and benefits | 201 | 199 | 199 | |||||||||
| Clearing and execution costs | 30 | 39 | 35 | |||||||||
| Communications | 32 | 32 | 31 | |||||||||
| Occupancy and equipment costs | 43 | 42 | 41 | |||||||||
| Depreciation and amortization | 22 | 22 | 23 | |||||||||
| Amortization of acquired intangible assets | 22 | 23 | 23 | |||||||||
| Professional services | 37 | 39 | 37 | |||||||||
| Advertising | 62 | 49 | 64 | |||||||||
| Other | 20 | 26 | 22 | |||||||||
| Total operating expenses | 469 | 471 | 475 | |||||||||
| Operating income | 343 | 360 | 344 | |||||||||
| Other expense: | ||||||||||||
| Interest on borrowings | 12 | 13 | 9 | |||||||||
| Other | - | - | 1 | |||||||||
| Total other expense | 12 | 13 | 10 | |||||||||
| Pre-tax income | 331 | 347 | 334 | |||||||||
| Provision for income taxes | 119 | 131 | 123 | |||||||||
| Net income | $ | 212 | $ | 216 | $ | 211 | ||||||
| Earnings per share - basic | $ | 0.39 | $ | 0.40 | $ | 0.39 | ||||||
| Earnings per share - diluted | $ | 0.39 | $ | 0.40 | $ | 0.39 | ||||||
| Weighted average shares outstanding - basic | 537 | 541 | 544 | |||||||||
| Weighted average shares outstanding - diluted | 540 | 545 | 548 | |||||||||
| Dividends declared per share | $ | 0.17 | $ | 0.15 | $ | 0.15 | ||||||
| TD AMERITRADE HOLDING CORPORATION | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| In millions | ||||||||
| (Unaudited) | ||||||||
| Dec. 31, 2015 | Sept. 30, 2015 | |||||||
| Assets: | ||||||||
| Cash and cash equivalents | $ | 1,735 | $ | 1,978 | ||||
| Short-term investments | 204 | 4 | ||||||
| Segregated cash and investments | 6,040 | 6,305 | ||||||
| Broker/dealer receivables | 1,022 | 862 | ||||||
| Client receivables, net | 12,409 | 12,770 | ||||||
| Goodwill and intangible assets | 3,106 | 3,128 | ||||||
| Other | 1,250 | 1,328 | ||||||
| Total assets | $ | 25,766 | $ | 26,375 | ||||
| Liabilities and stockholders' equity: | ||||||||
| Liabilities: | ||||||||
| Broker/dealer payables | $ | 2,049 | $ | 2,707 | ||||
| Client payables | 16,105 | 16,035 | ||||||
| Long-term debt | 1,783 | 1,800 | ||||||
| Other | 855 | 930 | ||||||
| Total liabilities | 20,792 | 21,472 | ||||||
| Stockholders' equity | 4,974 | 4,903 | ||||||
| Total liabilities and stockholders' equity | $ | 25,766 | $ | 26,375 | ||||
| TD AMERITRADE HOLDING CORPORATION | ||||||||||||
| SELECTED OPERATING DATA | ||||||||||||
| (Unaudited) | ||||||||||||
| Quarter Ended | ||||||||||||
| Dec. 31, 2015 | Sept. 30, 2015 | Dec. 31, 2014 | ||||||||||
Key Metrics: | ||||||||||||
| Net new assets (in billions) | $17.5 | $16.2 | $18.8 | |||||||||
| Net new asset growth rate (annualized) | 10 | % | 9 | % | 11 | % | ||||||
| Average client trades per day | 438,108 | 478,776 | 457,243 | |||||||||
Profitability Metrics: | ||||||||||||
| Operating margin | 42.2 | % | 43.3 | % | 42.0 | % | ||||||
| Pre-tax margin | 40.8 | % | 41.8 | % | 40.8 | % | ||||||
| Return on average stockholders' equity (annualized) | 17.1 | % | 17.4 | % | 17.8 | % | ||||||
| EBITDA(1) as a percentage of net revenues | 47.7 | % | 48.7 | % | 47.5 | % | ||||||
Liquidity Metrics: | ||||||||||||
| Interest on borrowings (in millions) | $12 | $13 | $9 | |||||||||
| Interest coverage ratio (EBITDA(1)/interest on borrowings) | 32.3 | 31.2 | 43.2 | |||||||||
Liquid assets available for corporate investing and financing activities(1) (in billions) | $0.6 | $0.5 | $0.7 | |||||||||
| Cash and cash equivalents (in billions) | $1.7 | $2.0 | $1.9 | |||||||||
Transaction-Based Revenue Metrics: | ||||||||||||
| Total trades (in millions) | 27.6 | 30.6 | 28.8 | |||||||||
| Average commissions and transaction fees per trade | $11.90 | $11.89 | $12.45 | |||||||||
| Average client trades per funded account (annualized) | 16.6 | 18.2 | 18.1 | |||||||||
| Activity rate - funded accounts | 6.6 | % | 7.3 | % | 7.2 | % | ||||||
| Trading days | 63.0 | 64.0 | 63.0 | |||||||||
| Order routing revenue (in millions) | $70 | $76 | $77 | |||||||||
Spread-Based Asset Metrics: | ||||||||||||
| Average insured deposit account balances (in billions) | $80.3 | $78.2 | $75.0 | |||||||||
| Average interest-earning assets (in billions) | 22.2 | 21.6 | 19.5 | |||||||||
| Average spread-based balances (in billions) | $102.5 | $99.8 | $94.5 | |||||||||
| Insured deposit account fee revenue (in millions) | $227 | $218 | $207 | |||||||||
| Net interest revenue (in millions) | 154 | 155 | 161 | |||||||||
| Spread-based revenue (in millions) | $381 | $373 | $368 | |||||||||
| Avg. annualized yield - insured deposit account fees | 1.10 | % | 1.09 | % | 1.08 | % | ||||||
| Avg. annualized yield - interest-earning assets | 2.71 | % | 2.81 | % | 3.23 | % | ||||||
| Net interest margin (NIM) | 1.45 | % | 1.46 | % | 1.53 | % | ||||||
Fee-Based Investment Metrics: | ||||||||||||
Money market mutual fund fees: | ||||||||||||
| Average balance (in billions) | $5.7 | $5.7 | $5.6 | |||||||||
| Average annualized yield | 0.06 | % | 0.02 | % | 0.00 | % | ||||||
| Fee revenue (in millions) | $1 | $0 | $0 | |||||||||
Market fee-based investment balances: | ||||||||||||
| Average balance (in billions) | $152.9 | $151.4 | $145.1 | |||||||||
| Average annualized yield | 0.23 | % | 0.21 | % | 0.22 | % | ||||||
| Fee revenue (in millions) | $91 | $82 | $83 | |||||||||
| Average fee-based investment balances (in billions) | $158.6 | $157.1 | $150.7 | |||||||||
| Average annualized yield | 0.23 | % | 0.20 | % | 0.22 | % | ||||||
| Investment product fee revenue (in millions) | $92 | $82 | $83 | |||||||||
| (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 | ||||||||||||
| Dec. 31, 2015 | Sept. 30, 2015 | Dec. 31, 2014 | ||||||||||
Client Account and Client Asset Metrics: | ||||||||||||
| Funded accounts (beginning of period) | 6,621,000 | 6,551,000 | 6,301,000 | |||||||||
| Funded accounts (end of period) | 6,686,000 | 6,621,000 | 6,371,000 | |||||||||
| Percentage change during period | 1 | % | 1 | % | 1 | % | ||||||
| Client assets (beginning of period, in billions) | $667.4 | $702.3 | $653.1 | |||||||||
| Client assets (end of period, in billions) | $695.3 | $667.4 | $672.4 | |||||||||
| Percentage change during period | 4 | % | (5 | %) | 3 | % | ||||||
Net Interest Revenue: | ||||||||||||
Segregated cash: | ||||||||||||
| Average balance (in billions) | $6.2 | $5.1 | $5.3 | |||||||||
| Average annualized yield | 0.09 | % | 0.08 | % | 0.13 | % | ||||||
| Interest revenue (in millions) | $1 | $1 | $2 | |||||||||
Client margin balances: | ||||||||||||
| Average balance (in billions) | $12.3 | $12.6 | $11.5 | |||||||||
| Average annualized yield | 3.54 | % | 3.57 | % | 3.69 | % | ||||||
| Interest revenue (in millions) | $111 | $115 | $108 | |||||||||
Securities borrowing/lending: | ||||||||||||
| Average securities borrowing balance (in billions) | $0.8 | $0.9 | $0.9 | |||||||||
| Average securities lending balance (in billions) | $2.4 | $2.4 | $2.3 | |||||||||
| Net interest revenue - securities borrowing/lending (in millions) | $41 | $39 | $51 | |||||||||
Other cash and interest-earning investments: | ||||||||||||
| Average balance (in billions) | $2.9 | $3.0 | $1.8 | |||||||||
| Average annualized yield | 0.05 | % | 0.03 | % | 0.05 | % | ||||||
| Interest revenue - net (in millions) | $1 | $0 | $0 | |||||||||
Client credit balances: | ||||||||||||
| Average balance (in billions) | $14.0 | $13.3 | $12.2 | |||||||||
| Average annualized cost | 0.01 | % | 0.01 | % | 0.01 | % | ||||||
| Interest expense (in millions) | ($0 | ) | ($0 | ) | ($0 | ) | ||||||
| Average interest-earning assets (in billions) | $22.2 | $21.6 | $19.5 | |||||||||
| Average annualized yield | 2.71 | % | 2.81 | % | 3.23 | % | ||||||
| Net interest revenue (in millions) | $154 | $155 | $161 | |||||||||
| 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 | |||||||||||||||||||||||||||||
| Dec. 31, 2015 | Sept. 30, 2015 | Dec. 31, 2014 | |||||||||||||||||||||||||||
| $ | % of Net Rev. | $ | % of Net Rev. | $ | % of Net Rev. | ||||||||||||||||||||||||
EBITDA (1) | |||||||||||||||||||||||||||||
| EBITDA | $ | 387 | 47.7 | % | $ | 405 | 48.7 | % | $ | 389 | 47.5 | % | |||||||||||||||||
| Less: | |||||||||||||||||||||||||||||
| Depreciation and amortization | (22 | ) | (2.7 | %) | (22 | ) | (2.6 | %) | (23 | ) | (2.8 | %) | |||||||||||||||||
| Amortization of acquired intangible assets | (22 | ) | (2.7 | %) | (23 | ) | (2.8 | %) | (23 | ) | (2.8 | %) | |||||||||||||||||
| Interest on borrowings | (12 | ) | (1.5 | %) | (13 | ) | (1.6 | %) | (9 | ) | (1.1 | %) | |||||||||||||||||
| Provision for income taxes | (119 | ) | (14.7 | %) | (131 | ) | (15.8 | %) | (123 | ) | (15.0 | %) | |||||||||||||||||
| Net income | $ | 212 | 26.1 | % | $ | 216 | 26.0 | % | $ | 211 | 25.8 | % | |||||||||||||||||
| As of | |||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | Mar. 31, | Dec. 31, | |||||||||||||||||||||||||
| 2015 | 2015 | 2015 | 2015 | 2014 | |||||||||||||||||||||||||
Liquid Assets Available for Corporate Investing and Financing Activities (2) | |||||||||||||||||||||||||||||
| Liquid assets available for corporate investing and financing activities | $ | 571 | $ | 530 | $ | 581 | $ | 740 | $ | 731 | |||||||||||||||||||
Plus: Non-corporate cash and cash equivalents | 934 | 909 | 1,116 | 662 | 1,519 | ||||||||||||||||||||||||
| Corporate liquidity maintained for operational contingencies | 764 | 750 | 750 | 750 | - | ||||||||||||||||||||||||
Less: Corporate short-term investments | (201 | ) | - | - | (501 | ) | - | ||||||||||||||||||||||
| Excess broker-dealer regulatory net capital | (333 | ) | (211 | ) | (214 | ) | (371 | ) | (373 | ) | |||||||||||||||||||
| Cash and cash equivalents | $ | 1,735 | $ | 1,978 | $ | 2,233 | $ | 1,280 | $ | 1,877 | |||||||||||||||||||
| 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 and futures commission merchant 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/20160120005285/en/
Contacts:
Kim Hillyer, 402-574-6523
Director,
Communications
kim.hillyer@tdameritrade.com
or
Jeff
Goeser, 402-597-8464
Director, Investor Relations and Finance
jeffrey.goeser@tdameritrade.com
