Charles Schwab Corporation (the) · NYSE:SCHW
Charles Schwab Corporation (the) — The Charles Schwab — Merger or Acquisition (November 2019)
18 slides from Charles Schwab Corporation (the)'s merger presentation, Nov 25, 2019
Slide 1: Announcing Schwab's Acquisition of TD Ameritrade
Announcing Schwab’s Acquisition of TD Ameritrade Building the Future of Modern Wealth Management November 25, 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include statements that refer to expectations, projections or other char
Slide 3: Additional Statements
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 Corporation (“TD Ameritrade”), Schwab and TD Ameritrade will file relevant materials with the
Slide 4: Management Attendees
Management Attendees Walt Bettinger Stephen Boyle Peter Crawford President and CEO, Interim President and CEO, EVP and CFO, Schwab TD Ameritrade Schwab 4 Charles Schwab Corporation
Slide 5: Agenda
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 Charles Schwab Corporation
Slide 6: Scale-enhancing transaction allows Schwab to further press its advantage on behalf of clients
Scale-enhancing transaction allows Schwab to further press its advantage on behalf of clients… Enhanced client experience Deeper resources for RIAs Increased operating efficiency SCALE Accelerate growth Financially compelling Combined organization is positioned to meet the needs of investors across
Slide 7: …while building the future of modern wealth management
…while building the future of modern wealth management.1 Founded in 1971, Schwab (SCHW) has been an advocate for Founded in 1975, TD Ameritrade (AMTD) aims to empower and individual investors and the financial professionals who serve self-directed investors, traders, and RIAs. serve them. 19,800 T
Slide 8: Transaction creates a large-scale, full-service investment firm
Transaction creates a large-scale, full-service investment firm with world class solutions… Schwab TD Ameritrade Combined1 Client Assets (trillions) $3.8 $1.3 $5.1 LTM NNA (billions) $201 $93 $294 3Q19 DATs (thousands) 718 1,055 1,773 Brokerage Accounts (millions) 12.1 12.0 24.1 Client Cash (% total
Slide 9: …which will benefit clients of both firms and build upon a shared heritage of innovation
…which will benefit clients of both firms and build upon a shared heritage of innovation. Robust suite of Sophisticated trading retail advisory platform for active traders solutions Incremental access to Largest custodial platform additional trading helping RIAs grow, capabilities and produc
Slide 10: AMTD stockholders receive attractive near-term value plus potential upside
AMTD stockholders receive attractive near-term value plus potential meaningful upside over time. Current AMTD Provides attractive stockholders gain value at a 17% ~31% ownership in premium to 30-day the combined VWAP exchange company ratio1 Individual clients and Preserves ability to RIAs gain acces
Slide 11: Transaction Summary and Key Assumptions
Transaction Summary and Key Assumptions Consideration 100% stock transaction at 1.0837x exchange ratio Transaction Structure & Timing Expected to close during 2H 2020 Merger: 43% 100% TD Bank AMTD $3.5–4.0 billion in total estimated synergies: primarily Shares Synergies derived from expense sa
Slide 12: Combination unlocks meaningful incremental financial benefits
Combination unlocks meaningful incremental financial benefits. Illustrative SCHW AMTD Combined1 Impacts View2 Net Revenues ($M) 9% 10% 19% 31% – Recent 35% commission Spread–based Revenue Gains from IDA Balance-based Revenue $2,711 $1,558 $4,269 reductions renegotiation 23% 58% $4,269 + IDA agreemen
Slide 13: Insured Deposit Account Cash Sweep Program
Insured Deposit Account Cash Sweep Program Overview and Objectives 10-year term starting in 2021, with Term of auto renewal (absent notice) Upon closing, Schwab will assume TD Ameritrade’s Agreement Upon expiration, IDA balances enter rights and obligations under existing IDA agreement into a
Slide 14: Combination creates opportunity for significant expense synergies and revenue lift
Combination creates opportunity for significant expense synergies and revenue lift. Potential Opportunities Illustrative Sources Potential cost savings of $1.8–2.0 billion Approximately 60-65% of AMTD’s expense Expense base or 18-20% of blended cost base Synergies Expected to achieve full run-
Slide 15: Other Considerations and Next Steps
Other Considerations and Next Steps Close transaction AMTD stockholders vote to approve transaction (majority of all holders and majority of minority1) Receive regulatory approvals File documents with SEC Schwab stockholders vote on stock issuance for transaction and creation of new class of
Slide 16: Combined firm is positioned to meet the needs of investors and advisors
Combined firm is positioned to meet the needs of investors and to support the independent advisors who serve them. Enhances scale and efficiency while helping to drive profitable growth Leverages merits of both platforms to further improve client experience 24M $5T+ Brokerage Accounts Total Client A
Slide 17: Q&A
Q&A Building the Future of Modern Wealth Management 17 Charles Schwab Corporation
Slide 18: Announcing Schwab's Acquisition of TD Ameritrade
Announcing Schwab’s Acquisition of TD Ameritrade Building the Future of Modern Wealth Management November 25, 2019
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