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TD Ameritrade Holding Corp. (AMTD) filed Quarterly Report for the period ended 2011-12-31.
Td Ameritrade Holding Corp. has a market cap of $9.37 billion; its shares were traded at around $17.06 with a P/E ratio of 15.1 and P/S ratio of 3.4. The dividend yield of Td Ameritrade Holding Corp. stocks is 1.4%. Td Ameritrade Holding Corp. had an annual average earning growth of 17.3% over the past 10 years.
This is the annual revenues and earnings per share of AMTD over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of AMTD.
Highlight of Business Operations:
Our largest sources of revenues are asset-based revenues and transaction-based revenues. For the three months ended December 31, 2011, asset-based revenues and transaction-based revenues accounted for 55% and 42% of our net revenues, respectively. Asset-based revenues consist of (1) net interest revenue, (2) insured deposit account fees and (3) investment product fees. The primary factors driving our asset-based revenues are average balances and average rates. Average balances consist primarily of average client margin balances, average segregated cash balances, average client credit balances, average client insured deposit account balances, average fee-based investment balances and average securities borrowing and lending balances. Average rates consist of the average interest rates and fees earned and paid on such balances. The primary factors driving our transaction-based revenues are total client trades and average commissions and transaction fees per trade. We also consider client account and client asset metrics, although we believe they are generally of less significance to our results of operations for any particular period than our metrics for asset-based and transaction-based revenues.Commissions and transaction fees decreased 7% to $273.4 million, primarily due to lower average commissions and transaction fees per trade and decreased client trading activity. Average commissions and transaction fees per trade decreased to $11.90 per trade for the first quarter of fiscal 2012 from $12.39 for the first quarter of fiscal 2011, primarily due to (1) decreased trading activity from our long-term investor clients, while our active trader clients, many of whom have negotiated rates, continued to trade, (2) lower average contracts per trade on option trades and (3) increased futures and foreign exchange trades, which earn somewhat lower average commissions and transaction fees per trade and do not generate payment for order flow revenue. Total trades decreased 3%, as average client trades per day decreased 1% to 367,479 for the first quarter of fiscal 2012 compared to 371,916 for the first quarter of fiscal 2011, and there was one less trading day during the first quarter of fiscal 2012 compared to the first quarter of fiscal 2011. Average client trades per funded account (annualized) were 16.3 for the first quarter of fiscal 2012 compared to 17.2 for the first quarter of fiscal 2011.
Net interest revenue decreased 5% to $109.3 million, due primarily to a 5% decrease in average client margin balances, a decrease of 16 basis points in the average yield earned on client margin balances and a decrease of 9 basis points in the average yield earned on segregated cash, partially offset by a $2.2 million increase in net interest revenue from our securities borrowing/lending program for the first quarter of fiscal 2012 compared to the first quarter of fiscal 2011.
Insured deposit account fees increased 15% to $205.0 million, due primarily to a 31% increase in average client insured deposit account balances, partially offset by a decrease of 19 basis points in the average yield earned on the insured deposit account assets during the first quarter of fiscal 2012 compared to the first quarter of fiscal 2011. The increased insured deposit account balances are partly due to our success in attracting net new client assets over the past year and partly due to our strategy of migrating client cash held in client credit balances or swept to money market mutual funds to the insured deposit account offering. During the first quarter of fiscal 2012, we moved approximately $3 billion of client cash out of money market mutual funds, consisting of approximately $1 billion that was moved directly to insured deposit accounts and $2 billion that was moved to client credit balances and is expected to be moved to insured deposit accounts later in fiscal 2012. We expect our migration strategy to position the Company to earn higher net revenues, as we generally earn a higher yield on insured deposit account balances than on money market mutual fund or client credit balances.
Our effective income tax rate was 31.4% for the first quarter of fiscal 2012, compared to 35.0% for the first quarter of fiscal 2011. The effective tax rate for the first quarter of fiscal 2012 was lower than normal due to $13.8 million of favorable resolutions of state income tax matters. This favorably impacted the Company’s earnings for the three months ended December 31, 2011 by approximately 2.5 cents per share. The effective tax rate for the first quarter of fiscal 2011 was lower than normal due to $4.9 million of favorable resolutions of state income tax matters and $1.4 million of favorable deferred income tax adjustments resulting from state income tax law changes. These items favorably impacted the Company’s earnings for the three months ended December 31, 2010 by approximately one cent per share. We expect our effective income tax rate to approximate 38% for the remainder of fiscal 2012. However, we expect to experience some volatility in our quarterly and annual effective income tax rate because current accounting rules for uncertain tax positions require that any change in measurement of a tax position taken in a prior tax year be recognized as a discrete event in the period in which the change occurs.
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