TORONTO, Oct. 24, 2016 /CNW/ - TD Bank Group (TD) (TSX and
NYSE: TD) today announced an agreement to acquire Scottrade Bank, a
federal savings bank wholly owned by Scottrade Financial Services,
Inc. (Scottrade), for cash consideration equal to the tangible book
value of Scottrade Bank at closing, subject to certain adjustments.
Under the terms of the proposed acquisition, Scottrade Bank
will merge with TD Bank, N. A. As of September 30, 2016, Scottrade Bank's tangible
book value was approximately US$1.3
billion and it held approximately US$13 billion in cash and securities,
US$4 billion in loans and leases and
US$15 billion in sweep deposits from
Scottrade. TD currently estimates that it will recognize
US$175 million of goodwill related to
the acquisition of Scottrade Bank.
TD Ameritrade Holding Corporation (Nasdaq: AMTD) today announced
an agreement to acquire Scottrade for cash and TD Ameritrade
shares. Subject to completion of the acquisitions, TD and TD
Ameritrade have agreed that TD will accept sweep deposits from
Scottrade clients.
Pursuant to its preemptive rights and subject to any required
regulatory approval, TD intends to concurrently purchase
US$400 million in new common equity
(approximately 11 million shares) from TD Ameritrade. As a
result, TD's anticipated pro forma common stock ownership in TD
Ameritrade is expected to be approximately 41.4%.
TD intends to fund the transaction with internal resources and
expects its Common Equity Tier 1 ratio to decrease by approximately
30 basis points on a pro forma basis reflecting the acquisition and
investment. TD expects these transactions to be accretive to its
earnings in the first full year after closing.
"This announcement allows TD and TD Ameritrade to further
strengthen our relationship." said Bharat Masrani, Group President
and CEO, TD Bank Group. "We are pleased to see TD Ameritrade expand
its business and solidify its leadership position in the
market."
TD's purchase of Scottrade Bank is subject to the concurrent
closing of the TD Ameritrade/ Scottrade transaction as well as
receipt of regulatory approvals and satisfaction of other customary
closing conditions, and is expected to close in the second half of
fiscal 2017.
About TD Bank Group
The Toronto-Dominion Bank and its subsidiaries are collectively
known as TD Bank Group ("TD" or the "Bank"). TD is the sixth
largest bank in North America by
branches and serves approximately 25 million customers in three key
businesses operating in a number of locations in financial centres
around the globe: Canadian Retail, including TD Canada Trust, TD
Auto Finance Canada, TD Wealth (Canada), TD Direct Investing, and TD
Insurance; U.S. Retail, including TD Bank, America's Most
Convenient Bank, TD Auto Finance U.S., TD Wealth (U.S.), and an
investment in TD Ameritrade; and Wholesale Banking, including TD
Securities. TD also ranks among the world's leading online
financial services firms, with approximately 10.8 million active
online and mobile customers. TD had CDN$1.2
trillion in assets on July 31,
2016. The Toronto-Dominion Bank trades under the symbol "TD"
on the Toronto and New York Stock
Exchanges.
Caution Regarding Forward Looking Information
From time to time, TD makes written and/or oral forward-looking
statements, including in this press release, in other filings with
Canadian regulators or the U.S. Securities and Exchange Commission,
and in other communications. In addition, representatives of TD may
make forward-looking statements orally to analysts, investors, the
media and others. All such statements are made pursuant to the
"safe harbour" provisions of, and are intended to be
forward-looking statements under, applicable Canadian and U.S.
securities legislation, including the U.S. Private Securities
Litigation Reform Act of 1995. Forward-looking statements are
typically identified by words such as "will", "should", "believe",
"expect", "anticipate", "intend", "estimate", "plan", "may", "aim"
and "could".
By their very nature, these forward-looking statements require
TD to make assumptions and are subject to inherent risks and
uncertainties, general and specific. Especially in light of the
uncertainty related to the physical, financial, economic, political
and regulatory environments, such risks and uncertainties - many of
which are beyond TD's control and the effects of which can be
difficult to predict - may cause actual results to differ
materially from the expectations expressed in the forward-looking
statements. Risk factors that could cause, individually or in the
aggregate, such differences include: credit, market (including
equity, commodity, foreign exchange, and interest rate), liquidity,
operational (including technology and infrastructure),
reputational, insurance, strategic, regulatory, legal,
environmental, capital adequacy and other risks. Examples of such
risk factors include the general business and economic conditions
in the regions in which TD operates; the ability of TD to execute
on key priorities, including the successful completion of
acquisitions, business retention, and strategic plans and to
attract, develop and retain key executives; disruptions in or
attacks (including cyber-attacks) on TD's information technology,
internet, network access or other voice or data communications
systems or services; the evolution of various types of fraud or
other criminal behaviour to which TD is exposed; the failure of
third parties to comply with their obligations to TD or its
affiliates, including relating to the care and control of
information; the impact of new and changes to, or application of,
current laws and regulations, including without limitation tax
laws, risk-based capital guidelines and liquidity regulatory
guidance; the overall difficult litigation environment, including
in the U.S.; increased competition, including through internet and
mobile banking and non-traditional competitors; changes to TD's
credit ratings; changes in currency and interest rates (including
the possibility of negative interest rates); increased funding
costs and market volatility due to market illiquidity and
competition for funding; critical accounting estimates and changes
to accounting standards, policies, and methods used by TD; existing
and potential international debt crises; and the occurrence of
natural and unnatural catastrophic events and claims resulting from
such events. With regard to TD's proposed acquisition of Scottrade
Bank, there can be no assurance that TD will realize the
anticipated benefits or results of the acquisition due to a variety
of factors, including: inability to complete the acquisition in the
timeframe anticipated, obtain regulatory approvals of the
transaction, or satisfy other closing conditions to the transaction
on the proposed terms and timeframe. TD cautions that the preceding
list is not exhaustive of all possible risk factors and other
factors could also adversely affect TD's results. For more detailed
information, please refer to the "Risk Factors and Management"
section of TD's 2015 Management's Discussion and Analysis, as may
be updated in subsequently filed quarterly reports to shareholders
and news releases (as applicable) related to any transactions or
events discussed under the heading "Significant Events" in the
relevant MD&A, which applicable releases may be found on
www.td.com. All such factors should be considered carefully, as
well as other uncertainties and potential events, and the inherent
uncertainty of forward-looking statements, when making decisions
with respect to TD and TD cautions readers not to place undue
reliance on TD's forward-looking statements.
Material economic assumptions underlying the forward-looking
statements contained in this press release are set out in the 2015
MD&A under the headings "Economic Summary and Outlook", and for
each business segment, "Business Outlook and Focus for 2016", each
as may be updated in subsequently filed quarterly reports to
shareholders.
Any forward-looking statements contained in this press release
represent the views of management only as of the date hereof and
are presented for the purpose of assisting TD's shareholders and
analysts in understanding TD's financial position, objectives and
priorities and anticipated financial performance as at and for the
periods ended on the dates presented, and may not be appropriate
for other purposes. TD does not undertake to update any
forward-looking statements, whether written or oral, that may be
made from time to time by or on its behalf, except as required
under applicable securities legislation.
SOURCE TD Investor Relations