Good day, everyone, and welcome to the TD Ameritrade Holding Corporation's September Quarter Earnings Results Conference Call. This call is being recorded. With us today from the company is President and Chief Executive Officer, Tim Hockey; and Chief Financial Officer, Steve Boyle. At this time, I would like to turn the call over to Jeff Goeser, Director of Investor Relations. Please go ahead, sir.

Good morning, everyone, and welcome to our fourth quarter and year end fiscal 2017 conference call. You can find everything related to this morning's announcement on our corporate website amtd.com including our press release, fiscal 2018 outlook statement and the related presentation slides, just click on Investor Relations. The outlook statement and slides include our Safe Harbor statement and the reconciliation of certain non-GAAP financial measures to our most comparable GAAP financial measures. Information about relevant risk factors can be found in our Forms 10-Q and 10-K, which are also available online. This call is intended for investors and analysts, questions from reporters can be directed to our media relations team or you can follow our Twitter handle @TDAmeritradePR which will be live twitting this morning's call. We have a large number of covering analysts, so for those of you planning to participate in the Q&A, we ask that you limit your questions to two, so that we can get to as many of you as possible. And now, I'd like to turn the call over to TD Ameritrade President and CEO, Tim Hockey. Tim?

Thanks, Jeff. Well, good morning, everyone. What a year; we started last October on this very call revealing our plans to acquire Scottrade, and we told you while the deal was quite large, we weren't going to let get in the way of the other things we needed to take care off in the year. And here we are 12 months later, and when we look at our core operating metrics, we see strength with records across the board; trading, asset gathering, financial results, it was a good year. New business was particularly strong in both retail and institutional. New accounts, asset inflows and other key indicators were the highest we've seen since the financial crisis. This is a credit to efficient and effective marketing, and ever improving planned experience that resonates with people and an investor base that remains engaged throughout the year despite persistently low volatility. We made a commitment last October to increase our investment in technology, improve our agility and increase our throughput. We made improvements in each quarter moving a record number of deliverables through to completion. Many of those efforts were intended to ready us to welcome our new Scottrade family. The deal closed in mid-September and now the integration is well underway. This is where we want to be as we begin 2018. We have strong momentum, increasing operational efficiencies and financial strength including a recent debt rating upgrade from Moody's taking us from A3 to A2. And while we're proud of these results we know that there were still a great deal of work left to do including a very large integration. So let's start with a quick review of the fourth quarter on Slide 6. We're reporting $0.39 in EPS and $0.49 in non-GAAP earnings per share, a new metric we…

Thank you, Tim, and good morning, everyone. Closing the Scottrade acquisition was no doubt the highlight of the quarter but overall quarter results remain strong as we exited the fiscal year. Since we are incurring significant acquisition related expenses, we have introduced a non-GAAP EPS view which excludes this cost to enhance comparability. The reconciliation is in the appendix of the materials; both GAAP and non-GAAP results were strong for the quarter and the year. We have significant business momentum right now but we will remain focused on delivering a successful integration. Our game plan is sound and we expect that the deal will ultimately prove to yield even better results than we originally anticipated [ph]. With that, let's begin with the year-over-year comparisons on Slide 15. Year-over-year GAAP EPS increased 4% and non-GAAP EPS increased 10% on strong revenue. Despite the pricing pressures on trading, transaction based revenue overall was essentially flat, up $12 million as increased volume more than offset pricing cuts. Commission rate per trade which excludes order routing revenue was $8.33 per trade for the year, down $0.87. The September quarter averaged $7.72 per trade. Asset-based revenue was up $325 million, or 17% due to balance growth and higher net rates. Operating expense was up $201 million or 10% but this included 12 days of Scottrade operating expenses and an increase in acquisition related expenses of $81 million. Let's move to the next slide. The new classification bank deposit account fees is simply the IDA program with TD plus the banks related to Scottrade cash. Revenue was up 20% year-over-year. The net rate for bank deposits increased by 7 basis points year-over-year as we experienced three consecutive quarters of growth driven by three fed moves with low corresponding betas [ph]. The September quarter increased three basis…

Thanks, Steve. We're incredibly proud of our people at the conclusion of what has been a very busy eventful year; growth is strong, we're making progress on many core initiatives and clients and associates are like remain engaged. We'll be sharing some of that success with our shareholders by increasing our quarterly cash dividend by 17% or $0.03 per share in 2018. Over the next 12 months we'll keep you apprised of our work on the Scottrade integration and other key elements of our long-term growth strategy. You can also expect us to focus not just on what we think will drive growth today or 12 months from now but I'm positioning this firm to adopt the transformational change it will need to remain an industry leader years down the road. More specifically, we are aligning our teams to continue efforts to build out superior client experience. We are evaluating and acting on ways to accelerate and diversify our risk. We're going to invest in associate development helping our people find fulfillment in careers that make an impact. We'll also invest in ongoing efficiency and throughput. I've said before that speed and scale will be key to our future growth, it remains a priority and likely will be for the foreseeable future. And of course, all of that work will result in continued innovation that will help us drive long-term growth and value for our clients, associates and our shareholders. We've got a lot on our plate but we're energized and ready to take it on. There is a lot to feel good about but there is even more to do. So with that, I'll turn the call over for Q&A. Operator, over to you.

[Operator Instructions] And your first question comes from the line of Conor Fitzgerald with Goldman Sachs. Your line is open.

Good morning. First, I just wanted to kind of talk about maybe the longer term trajectory from some of the expenses; I know there is some variability just based on the revenue environment and our core expenses are going to track but it looks like for 2018 you guys are talking about core expenses of somewhere in the 27 [ph] range. Should I think about that just from 2019 as growing at some sort of pace for organic growth and then you get another benefit of call it, $270 million of core expense saves in 2019. Is that a fair way to think about the pace of the expense build?

Yes. So I think Conor – this is Steve, I think we talked about 4% to 8% core expense growth for 2018, I think that's a reasonable assumption. Going forward, we talked about achieving 40% of the ultimate $450 million expense synergy, so I think the other 60% you could expect in 2019 and that will obviously reduce our expense rate from 2018 to 2019.

Got it, that's helpful, thanks. And then, to maybe just one for you, just curious of what you're seeing in the retail channel; it looks like net new asset growth there was pretty consistent in 2017 [ph] versus 2016, it's quite obvious the institutional channel being a lot better, are you seeing markedly different behavior in that part kind of over the last year? And how is just trading activity tracked in that part of the business, maybe versus the institutional? Thanks.

Fair. So as had in the call, fairly broad based retail engagement overall commensurate with literally everybody seems like new highs on the markets but at the same time relatively low volatility which again seems counterintuitive to the level of trading we're getting. So I would say from an asset gathering point of view, strong in terms of net new account growth and we're getting broad based assets in. We had a bit of an elevated outflow issue in the first half of the year that seems to have dissipated somewhat, might be relative to the pricing activity it was happening in the marketplace but energy save, it's – we've had a great year overall but it remains the institutional channel that continues to have that long-term trend and great growth with great success by the business.

Alright, thanks for taking my questions.

Your next question comes from the line of Rich Repetto with Sandler O'Neill. Your line is open.

Good morning, Tim, good morning, Steve. I guess the first question is on the expense synergies for fiscal year '18. I know you've talked about higher level Steve; what about -- your guidance backs into the midpoint of about $500 million, would that be -- I guess that's a target and could that increase going into '19 as well? Or the $500 million is the midpoint of the range that you have out there?

No, Rich. I think we can go over the math with you later but the -- we had talked about in the call, 40% of the $450 million, so that's really the number that we're talking about for 2018, so smaller than the $500 million. We're expecting still the $450 million ultimate synergies.

Okay. Because I've looked at your -- on Slide 22, you've got synergies of $175 million to $225 million which is the midpoint being $200 million and that being 40% of $500 million. But that's okay…

That's fine.

Yes, you've stucked with the $450 million. And I guess the other question; Tim, you just mentioned a little bit about outflows at the beginning of the year and one of your larger competitors talked about keyways the transfer accounts, keyway the asset ratio; can you talk about your keyways, you mentioned the outflows, if that considerably went down and what your keyways look like on a summary of the year I guess?

Yes, we don't normally talk about that as a key metric but if you look back over the last number of years, it's been fairly consistently over to and it remains there.

Okay, thank you very much.

Rich, we did the math so we're accruing the low end of the range of 40% to 50%, so your math is good but I think ultimately we're still targeting the $450 million in synergies.

Understood. Thank you.

Your next question comes from the line of Bill Katz with Citigroup. Your line is open.

Okay, thank you very much for taking the questions. First one, maybe a step back from the big picture perspective and just -- it's been a long time talking about technology and new products, Tim, I just wanted you to sort of talk through what you think about over the next couple of years, what it might mean for volumes, margins or even expense lift as you continue to sort of migrate to more tech centric type of solutions?

Yes. So first of all, there is some of the transformation that we're talking about, I think everybody is feeling it and seeing it. In fact, just yesterday I bought 100 shares of Apple on Facebook Messenger and I don't think anybody would have thought that was going to be possible a few years ago. And so that type of innovation obviously from a client point of view is fantastic but I think there is just as much excellent opportunity to really revolutionize the way we do business, the technology that are now coming onboard quickly that we've all read and heard about can be deployed relatively quickly into our associate and our client base and they allow for pretty significant cost synergies and reduction at the same time as client experienced improvement. So I think that's quite transformational for all industries, frankly, but I -- and I want to make sure that we're at the forefront of that.

Okay. And just sort of a big picture question as well, and I certainly appreciate that you have the bulk of the integration in front of you. Could you just give us an update on where you stand in terms of capital management, in terms of priorities and dividend growth, repurchasing and maybe further industry opportunities to consolidate?

Hi Bill. So we're – I think are going to be pretty consistent with our 35% to 45% dividend as a percentage of non-GAAP EPS going forward, we like that level. We'll continue to be opportunistic in the future with share repurchases, obviously we used most of our excess capital to buy Scottrade, we think that that was a great use of capital. And as we start to build our excess capital back up as we see the significant accretion from Scottrade and we get through the integration period and the one-time expenses start to tail-off, we'll revisit how we wanted to deploy our capital going forward. But I think you will see a pretty consistent dividend payout ratio from us going forward.

Okay, thank you.

Your next question comes from the line of Mike Carrier with Bank of America Merrill Lynch. Your line is open.

Thanks. Maybe just a question on kind of the competitive environment in the industry, and I guess both on the trading side; and then on the -- like on the fee-based or the investment products. Just -- given what you guys are focused on, both in terms of enhancing the value proposition versus some of the competitive dynamics in the industry, how do you see that playing out over the next couple of years? I think on the fee-based, just -- especially with the announcement, recently with the upgrade on the number of ETFs on the platform, like how does that also plan to fees?

So let me just start in terms of the general trends overall. On the trading side, as we say, we continue to rollout both platforms and technologies that -- and service improvements that allows our client to engage with us over multiple channels and we expect if you ever do get any volatility back in these markets that those -- that have even broader base client engagement we've seen over this past year plus our new Scottrade clients should see a multiple increase in this sort of trading levels that we're at today. On the asset gathering side, we're pleased that where we've come over the last year, not only with the launch of Robo [ph] now a full year, our investment management solution, this thing increased by about 27% I think, year-over-year, which is not a bad start. And as you mentioned, the ETF market center we just launched; let's face it, it's a very popular product with clients with the move to passive and we took our ETF market center and refreshed it and tripled the number of funds available for clients and operate a brand new selection of very low cost ETFs, even lower than the market leader. So I think there is continued pressure on those types of revenue for the asset managers but it's a good way to distribute much cheaper product for index tracking for our clients.

Okay, thanks. And then just a quick follow-up, on Scottrade, maybe on the revenue opportunities for longer term, as you have more time to look at the client base, the branches; and then when you look at Ameritrade's offering, both on the trading and on the investing side, any more -- maybe granularity on what that potential is over the next few years as you introduce those client base to the broader Ameritrade offering?

Yes, we started out a year ago saying we believe that the clients at Ameritrade would benefit from our platforms and offerings and there has been nothing other than confirmation of that over the last year. Through our integration planning of course, we got a good chance to take a deeper dive into the products and capabilities that we have and then compare them to the Scottrade capabilities. As you know it is a lifted shift, largely of the Scottrade clients onto the TD Ameritrade platforms but some of their capabilities that we've taken a look at and we've re-prioritized some of our client enhancements over the next little while to make sure that we're maximizing the value for the Scottrade. But generally we still think there is some good revenue uplift but we're -- it's not a huge number relative to the overall value of this deal, we just know that it will be accretive but we also know that you have to get through the integration itself in the short-term and then let that build overtime as your clients get exposed to our capabilities.

Okay, thanks a lot.

Your next question comes from the line of Chris Harris with Wells Fargo. Your line is open.

Thanks. I think your guidance here for '18 is assuming higher interest rates going forward. I was wondering what the guidance for NIM in particular would look like if we assume just rate stay flat?

Hi Chris, it's Steve. So we use a variety of interest rate scenarios, you can see them in the appendix and effectively the low end of the range is taking into account what might happen if we had a scenario like that, the GI low. The midpoint is roughly similar to the forward curve, and the high end is taking into account what the GI base might look like as opposed to the GI high. So that's how we formulated the ranges for next year.

Alright. And then just a clarifying question on the synergies; you guys are assuming lower branches or you're going to have fewer branches and you stop before but the synergy guidance is being affirmed to you. So I'm wondering what's the offset to that because I assume there is some nice savings associated with that?

Actually the savings aren't probably as large as you thought they might be for two reasons; one is, these are relatively low cost short lease locations that we will be closing in addition to what we originally thought, number one. And number two, as we said, client experience is job one, so many of the associates that would have been at those branches will be relocated to other branches nearby because there tend to be more mergers of location as opposed to outer exposures, number one; and number two, we'll be making sure we ramp up the staffing in the service centers as always we go through the transition, our clients are well served. So the actual additional synergies from the additional branch closures are relatively small.

Okay, thanks for clarifying.

Your next question comes from the line of Devin Ryan with JMP Securities. Your line is open.

Good morning. Congratulations on Scottrade closing. Just several for me; I guess first on order routing fees and just the trajectory, you know, it's been coming up again for several reasons. So I'm just curious if you see any risk that some in the industry move away from accepting payment or rebate here and just if this is anything that could be competed on similar to some of the other pricing actions or in the year is it just not something that kind of is front facing enough?

There is a little bit of competitive action on that obviously but best execution is our number one driver as you well know and this is a long-standing former revenue in our industry and we continue to believe it will have a place, different business models for different competitors as to whether they want to have an order routing revenue stream or whether they want to charge their clients for those additional services and fees. We think this is a particular business model that works for us and works for our clients as well resulting in a better client experience and a better execution.

Okay, thank you. And then with respect to these active traders, can you talk about deposit betas with that group; you know, is there any kind of historical theme of them negotiating for better rates? You have so many industry that are -- it seems like more recently trying to take a more aggressive move on what they are doing with customer cash pass-through; so I'm just curious is that a group that -- it all negotiates on that rate?

Yes, Dev. And you have individual client that can be price shoppers. But in general, active traders are on our platform because they like the tools that we have and they tend not to be extremely focused on the cash rate.

Okay, thank you.

Your next question comes from the line of Chris Shutler with William Blair. Your line is open.

Good morning. Tim, in the press release you talk about a line to diversify and accelerate revenue growth; I know you're doing a bunch of things on advisory solutions and ETF but it feels pleased to me like those are very long-term efforts, not going to materially change the mix really anytime and then the next several years. So I'm wondering what else you're thinking about in terms of revenue diversification and if there is anything that could materially change the mix in the next five years?

I actually believe those things will start to change the mix in the next five years. It's more of a statement of purpose in terms of where we're going. And obviously, one of the first things I was told when I got here was that I needed to make sure that we were not as reliant on commission cost and market structure has changed some of that this past year but also rising interest rates. My general philosophy is look for opportunities with adjacent abilities [ph] to create wide -- or to fill in wide spaces for our clients and so that will be a theme over the next little while and I believe you will start to see some momentum increase certainly inside the five years.

Okay. And then looking at the metrics, it looks like Scottrade since the acquisition announcement a year ago may have grew their number of accounts by a couple of hundred thousand or so in the last year, NNA maybe up a few billion; are those numbers in the right ballpark?

I think that's right, we're just looking for what [indiscernible] I'm just trying to remember but we're not really talking about -- they have grown, certainly they've done well over the last year, better than we would have expected at the time of closure.

Okay.

I think we're not going to give those numbers out.

Okay, but they are out. And then, just lastly on the Scottrade branches; Tim, can you just maybe talk about how the client experience in services offer that will change under TD Ameritrade ownership?

Sure. We're really pleased to be able to literally almost triple or almost quadruple our branch, we're all the way -- all across the country but generally the model will be moving to the existing TD Ameritrade service model as we announced our new leader, Peter deSilva comes from Scottrade, so as a result he will be the perfect person I think to lead us forward with the larger Scottrade team that joins us. They will be moving on to our products and services, so that will be a transition for Scottrade clients, not much will happen frankly, between now and the actual conversion date which we're targeting for early in the year but upon that date it will be quite a transition as they move to existing TD Ameritrade platforms and services. So, and from that we'll continue to -- from that base we'll continue to move to improving our client experience overall as we will allow new capabilities and features.

Alright, thank you.

Your next question comes from the line of Steven Chubak with Nomura. Your line is open.

Hi, I wanted to start-off with a question on the IDA yield and some of the deposit beta guidance. The IDA guide was actually a bit better than what we were contemplating, so certainly encouraging to see that for full year '18. I was hoping you could update us on what yield you're earning on new extensions today? And what deposit beta is contemplated as part of that guidance?

So we've given guidance in the past on our IDA agreement and you can go back and look at that but we really don't want to get into the details of what we're extending at today.

And in terms of the deposit beta that's contemplated.

That deposit beta we talked in the -- on the guidance about 15% to 25% which is what we think the right range is for the next 25 basis points, the last 25 were about 15 to 20, and so we think overtime probably see those numbers notch up pretty gradually and we're going to take a look at the competition; so far most of our direct competitors haven't been too aggressive on deposit betas but there are some folks out there in the market that are looking at things differently, so we continue to monitor that carefully.

Alright. And just in terms of what you're seeing across the different channels, I know that there was a question earlier about what you're seeing on the active side. I didn't know if you could speak to whether you're seeing any incremental upward pressure on deposit betas within the RIA channel? We have seen competition intensifying there a bit, and there was also some concern that the DOL might compel upward pressure on the level of payout that some of the clients need to see on their cash?

Yes, I think in theory we would expect overtime that the institutional channel will have higher betas than the retail channel. I think we're still at such low levels of interest rate that the institutional betas have been relatively low so far, probably below our expectations and so we'll continue to monitor that as we go forward.

Great, thanks for taking my questions and congrats on the deal.

Thanks.

Your next question comes from the line of Michael Cyprys with Morgan Stanley. Your line is now open.

Hi, good morning, thanks for taking the question. Just curious on Slide 30 in terms of the interest rate assumptions that you're using for the base case. It appears that it assumes that the yield is above the forward curve whereas in the past if I look at your earnings deck from last quarter, generally it's -- the base case has been in-line with the forward curve or below the forward curve. So just curious why the assumptions you're making for the base case are about 30 to 50 basis points above the forward curve?

Yes, we try to be consistent and/or at least the last couple of years using the GI low and the GI base, and so that's really just a function of where those numbers came out and some of the anomalous [ph] things that are in the market right now.

Okay. And then just maybe shifting over the synergies that you're expecting an integration; I think you mentioned earlier that culture has been an area of focus, just curious how you're thinking about mitigating risk of the synergies and what you're assuming in terms of revenue to synergies and how you plan to mitigate that?

The assumption that we've made so far and the deal model was that we'd have about 5% attrition of clients, we've got every indication that that's certainly not starting yet but to be honest, obviously there hasn't been a high degree of -- and anywhere an impact on Scottrade client so far. We believe that as I said in the speech that focusing on making sure that we're doing a lot of hand-holding for clients, both in the branches and in the calls and using technology on the impact to -- on them as we go through this clearing conversion data in the spring that we'll make sure that we mitigate whatever sort of attrition levels that we would get otherwise.

Yes, I think too we're really focused on retaining the critical Scottrade associates, making sure that we're communicating well with them and so far to-date we had really great engagement from those associates, we'd expect that to continue.

Okay, thank you.

Your next question comes from the line of Chris Allen with Rosenblatt. Your line is open.

Good morning, congrats on the deal closing. I guess just following up on that question a little bit, I mean there had been some [indiscernible] about some of your competitors pursuing Scottrade clients over the past year, particularly the highly active clients here -- the accounts and assets for Scottrade have held up better than we would have expected. So any color -- I mean, any color just in terms of have you seen any bifurcation in terms of active segment of Scottrade, does that held in well so far too [ph]?

Yes, I'd say it's held in well. It looks in over my career having had multiple deals, this is a time when you would expect competitive behavior would intensify as you believe that the deal itself disrupts clients and it's the right time to put offers and other things. In part, we've some of that activity, my general sense in history is that they tend to be great ideas at the time but they pay off with less client movement as you might expect and that's what we've seen as well.

Got it. And then just -- I mean, quickly, just thinking more about some of the longer term opportunities, I mean any kind of color you can give us in terms of utilization of kind of the -- some of the investment product services and capabilities you guys provide to the Scottrade customer base, whether they are utilizing similar products within or outside of Scottrade and how you're thinking about that opportunity longer term?

Well, so for example on the asset management side, there is Scottrade investment management product will be mapped over into our IMS and we will continue to build out those sorts of advisory services. We've got a great advisor direct program through our much larger institutional business that will be available obviously to Scottrade clients. And probably the biggest opportunity is that we just have more active trader capabilities and platforms, option capabilities and tools available and now as we just talked about a greater education offering that allow Scottrade clients to become much more comfortable with those offerings and how to use them. So again, we tend to think that there is going to be great revenue upside in the longer term but we'll just make sure that it's done in a way that it's in our Scottrade clients and a comfortable way for them in transition to utilizing those platforms and tools.

Thanks.

Your next question comes from the line of Brian Bedell with Deutsche Bank. Your line is open.

Great, thanks. Good morning. If you can parse out the organic growth assumptions of the 79%, a little bit more in terms of obviously the attrition level has been much better than you thought but maybe what are your assumptions in the attrition level and that 79% outlook, or you -- is the lower end still incorporating a 5% attrition level? And then maybe, if you can just also parse out your view of that organic growth in the institutional channel versus the retail channel between, and if not specific number, just sort of a flavor of whether they are -- it still looks like the RIA side to be a faster growth than the retail?

Yes, it's Tim. So we're not going to go into detail and parsing out between retail institution or even Scottrade or not. But I guess to give you a little bit of color, certainly at the low end of that range, we would expect some of the attrition at Scottrade to be obviously little higher, that's just math. And on the -- in terms of the mix, institutional growth continues to be very, very strong so far in the early stage and more to come. So -- and there is very little institutional impact as a result of the Scottrade deal, so all of the year of transition we talk about is going to be going on for Scottrade retail clients and so that's where we sort of -- and, as we said, with $1.1 trillion in assets now it's little tougher to continue to grow at 10% plus given this year of betting down our Scottrade client base.

Alright, that makes sense. And then maybe just Tim, also your view on trading in general, the trade capture range is a little bit lower than -- well, actually I guess it's right around the current level but what are your sort of assumptions in terms of how client mix will change this as you convert the business a little bit more towards derivative and also act of traders? And then, just layering in on that, what is your view if there is another competitor price cut over the next 12 months; do you think you can hold up [indiscernible] capture revenue better than any industry price cut differential [ph]?

Yes, so from general themes, they are the -- certainly we're seeing the active trader segment continues to be heartedly contested and they like what we have to offer and they continue to be engage. We saw an uptick in trading across all segments by the way, not just active trader year-over-year. So that would be the first thing I would say. On the pricing, certainly it feels like the pricing activity has calmed down over the last few while [ph] but in our view that there were to be another round of price cuts in the industry then obviously we would make sure that we would be competitive. We think currently that there is an opportunity for us to have a price premium given the quality of our platforms and services but we would obviously readjust based on whatever action gets taken at that time.

So Brian, I'd maybe some -- to add on the earlier part of your question. So trends per account [ph] -- I think overtime we would hope that those would increase that as we move clients on to the [indiscernible] platform, historically we've seen higher trading levels as our clients start to adopt our mobile platforms which are best-in-class, we've tended to see higher trading levels and so we would expect those overtime to ramp up.

Okay, great. Thanks very much.

Your next question comes from the line of Dan Fannon with Jefferies. Your line is open.

Thanks, good morning. Steve, you just talked about the biggest swing factor and kind of hitting the low end or the upper end of the expense synergies for this year, you talked about the platform conversion but if there are other things that would be kind of important in hitting that high end?

Yes. So I think really the date of the conversion is going to be the most critical thing. So right now we're targeting conversion in the March quarter, so if that would slip for some reason that would be a big change in our synergy assumptions. Beyond that I think it's how quickly the Scottrade customers adapt to our self-service platform, so there is a lot of things that happen today in the Scottrade world via a phone call to an IC in a branch or to a call center that TD Ameritrade customers tend to do online, and so that will be a process of moving those customers and getting them comfortable that it's easier for them to do it themselves digitally and depending on the adoption there I think we will see how fast our synergies kick in.

Great. And then Tim, just a follow-up on some of the revenue diversification questions earlier; I guess, can you talk about your appetite for M&A obviously under the context, we know you're just starting the integration of Scottrade but just kind of thinking about diversifying revenue longer term, is it -- how does M&A play into that?

It would be a factor that we would take into consideration. Obviously, we're always looking for opportunities that are obviously financial but also strategic. With now all eyes are on making sure we take care of our Scottrade clients and associates over the next little while but obviously with a purpose to include the diversification of those revenue streams, then we would take a look at other opportunities to do; whether it be -- as I said earlier, adjacent business lines but maybe adjacent capabilities that we can then layer on to the offerings we have for our clients.

Great, thank you.

Next question comes from of Patrick O'Shaughnessy from Raymond James. Please go ahead.

Good morning. So the RIA channel is sort of -- your golden goose right now, and there appears to be at least some RIA consternation about your recent decision to eliminate commission free trading on some of the more popular ETFs. How comfortable are you that that transition won't be disruptive for your asset gathering?

Well, we think that the initial bumps were really almost the day of the transition, there is a couple of reasons for that. The major provider at the core funds which was our straight street offering, they not only renamed but they also lowered the price of their funds such that they were actually lower than the traditional core funds that were another offering. So -- and those announcements, both of our expanded offering and that price change came out commensurate from two different sources at the same time; so I think we think there is a little bit of initial 24 hours of clarification we needed. Having said that, we think as we said earlier in the call that just yesterday or two days ago we announced that we are going to extend out the transition period from 30 days to 90 days for our advisors to really take a look at their models and say how do they adjust. The other funds that they might have invested in the ETF are still readily available but now they are three times the number of fund through eight different advisors at a lower cost and those same funds track to this or there was new funds at lower cost tracked to the same index. So we're very comfortable that this was a great offering for advisors once they get upto speed on the real price differential and we'll give them more time to assess it.

Got it, thank you. And then a quick question on order routing revenue; it did look like it slipped a fair amount per trade on a quarter-over-quarter basis. How much of that slippage was Scottrade related? And is there a potential upside post-integration and post-conversion?

Yes, I know that's really a legacy item. We update those contracts each quarter and they tend to move with the market for those services and so you see some ups and downs. And we've included in our guidance that they will stay at these lower levels but obviously there is an opportunity for to bounce back if market circumstances change.

Alright, thank you.

Your next question comes from Kyle Voigt from KBW. Your line is open.

Hi, good morning. Sorry, just one follow-up for Steve on the bank deposit account yield. It looks like in that GI base forecast there is three set hikes in fiscal 2018; I know you said you're using a 15% to 25% deposit beta on the first 25 basis point move but are you assuming a similar beta on the next two hikes as well?

Yes. So you're right, there are three hikes assumed there. We've said we're not going to give guidance on those next two hikes. I think in general we've said that you'd expect to move up very gradual -- betas to move up very gradually overtime, but really we're focused on the next increase and we will talk after that call about what our expectations for the next increase after that.

And is there any change to the -- I guess, the terminal deposit beta that you talked about before which I think is in the 35% or 40% range?

No, we haven't changed our overall asset liability management guidance which was the 40% we talked about.

And then lastly for me, just wondering if the legacy TD IDA yield is similar to the yield on the Scottrade cash not held with TD currently, I'm assuming that's the change in the name I guess for the bank deposit account yield? And if you could just explain some of the dynamics of migrating all of that Scottrade cash in the TD overtime?

Sure. So at conversion, essentially the deposits that were termed out at other banks moved over to TD in the IDA, so that's already occurred. The amount of deposits that are in TD aren't significant really to the total, so around $10 billion, and I think the best way to model that going forward is just assuming that approximates the IDA yields.

Okay, thank you.

Your next question comes from Brennan Hawken from UBS. Your line is open.

Hi, good morning, thanks for taking the question. Could you please break down the $0.25 that you have excluded from your non-GAAP guidance that's tied to amortization? I think that in your prepared remarks you said that some of it's tied to trade name and tag which is accelerated to your amortization schedule; how much of that $0.25 is tied to those items?

So in '17 it would all be customer intangibles. In '18 I think the number we said long-term was $50 million or so related to the customer intangible, so the rest would be related to the tech and the trade name.

Okay, great. And then, when we think about the cash yields here and I know it's been hit on from a few different angles and I'm going to try another one here. And I guess the reason why there is so much attention is, it's part of your guide; so we're trying to square how much a bit is from the range. I noticed that in your -- on Slide 30, it's not until September where you get above the forward curve from your low end which is I think what's getting a decent amount of attention and raising a little bit of questions around that. But given it's in the last quarter of your fiscal guide, like -- how much of an impact is there really from that line?

I'm not sure I quite got the question.

Okay, sorry, I'll try and restate it. So the five-year swap and the seven-year swap on -- by September 2018 is above the forward curve at your low end guide. Given that that's happening in the final quarter of your fiscal, how much of an impact does that higher yield than the forward curve would suggest actually have on your guidance that you've provided which includes IDA yield?

So very little of the incremental NII in 2018 really relates to the long end of the curve. The most impactful item really is when we're going to see the increases on the short end of the curve, I think that's really where you ought to be focused.

Okay, thanks very much.

Next question comes from Doug Mewhirter from SunTrust. Your line is open.

Hi, good morning. I just had one; it's actually a clarification. Steve, when you talked about the core expense growth guidance, I guess 4% to 8%, that is exclusive of synergies, is that correct? So basically you would just increase your core expenses and then you would back out the synergies, am I reading that correctly?

Yes.

And then -- thanks for that. And just as a quick follow-up, and I would assume because a lot of the synergies are predicated on the clearing conversion that they would be backend loaded for fiscal 2018?

Yes, that's absolutely correct.

Thanks, that's all my questions.

At this time, I will turn the call over to Tim Hockey for closing remarks.

Well, great, thanks very much. We appreciate everybody's efforts to get a little more clarity; obviously, it's a bit noisy with the close happening, as well as the guidance going forward into 2018 but I just wanted to close by saying we're thrilled, we're all one company now, we can move forward, we've got lots of things to do. We think it's so far great momentum and we're looking forward to a fabulous 2018 and beyond. We'll talk next quarter. Take care.

This concludes today's conference call. You may now disconnect.