To ‘further strengthen’ a good relationship
TORONTO, Oct. 26, 2016 /PRNewswire/ – TD Bank Group today announced an agreement to acquire Scottrade Bank, a federal savings bank wholly owned by Scottrade Financial Services, Inc., 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.
To accept sweep-deposits from Scottrade clients
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.
To ‘further strengthen’ a good relationship
“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.
