All participants, please stand by. Your conference is ready to begin. Good morning, everyone, and welcome to the TD Bank Group conference call. I would now like to turn the meeting over to Ms. Brooke Hales. Please go ahead, Ms. Hales. Good morning, and welcome to TD Bank Group's conference call concerning TD's acquisition of Cowen. My name is Brooke Hales, and I'm the head of investor relations at the bank. We will begin today's presentation with strategic remarks from Bharat Masrani, the bank's CEO. Next, Riaz Ahmed, President and CEO, TD Securities, will provide more detailed commentary on the transaction. He will also ask Jeffrey Solomon, the Chair and CEO of Cowen, to share a few thoughts. Kelvin Tran, the bank's CFO, will then present the key financial details. Finally, Bharat Masrani will offer concluding remarks. We will then open the call for questions from pre-qualified analysts and investors. Also present on the call to take questions today is Ajai Bambawale, the bank's Chief Risk Officer. Please turn to slide two. At this time, I would like to caution our listeners that this presentation contains forward-looking statements, that there are risks that actual results could differ materially from what is discussed, and that certain material factors or assumptions were applied in making these forward-looking statements. Any forward-looking statements contained in this presentation represent the views of management and are presented for the purpose of assisting the bank's shareholders and analysts in understanding the bank's financial position, objectives and priorities, and anticipated financial performance. Forward-looking statements may not be appropriate for other purposes. Please consult our news release and IR deck for additional information regarding material factors and assumptions that may impact our forward-looking statements. I would also like to remind listeners that the bank uses non-GAAP financial measures, such as adjusted results, to assess each of its businesses and to measure overall bank performance. The bank believes that adjusted results provide a better understanding of how management views the bank's performance, but we caution that non-GAAP measures and ratios are not defined terms under IFRS, and therefore, may not be comparable to similar terms used by other issuers. Additional information about our use of non-GAAP measures is on slide two of the deck. Please turn to slide three, and I will turn the presentation over to Bharat Masrani. Thank you, Brooke, and good morning, everyone, and thank you for joining us on short notice. I'm incredibly proud of the franchise we've built in TD Securities over the years. We've grown our business organically and via acquisitions in close partnership with the bank, leveraging TD's brand, broad customer base, and balance sheet. TD Securities has grown from a traditional Canadian dealer to a client-focused North American dealer through purposeful investments and execution of our U.S. dollar growth strategy, consistently deploying our one TD approach to serving clients across industries and regions. Today, TD Securities is a leading full-service investment bank, offering a wide range of capital markets and corporate and investment banking services to clients in key financial centers. You've heard us talk often about our aspiration to build an integrated North American franchise with global reach. Today marks an important milestone in that journey. This morning, we announced an agreement to acquire Cowen in a $1.3 billion all-cash transaction. As we have communicated frequently and demonstrated through our past acquisitions, our M&A strategy includes pursuing growth opportunities to add capabilities where we identify needs in our own businesses. The acquisition of Cowen will add key capabilities to our growing global markets platform in U.S. equity, sales and trading, and in U.S. equity research. It will also add scale and industry expertise across U.S. capital markets and M&A advisory. We have been deliberate in choosing to partner with Cowen at this time. As you know, a few months ago, we announced TD's agreement to acquire First Horizon. Given the highly complementary nature of Cowen's businesses and the limited impact for TD Bank, America's Most Convenient Bank, we are confident that we can execute this transaction without any impact on the pending integration of First Horizon. Like the First Horizon transaction, this acquisition is about accelerating growth, both for TD and for our new partners. This transaction is financially attractive. The acquisition is expected to generate an approximately 14% adjusted return on invested capital on a fully synergized run rate basis, and is expected to be modestly accretive to fiscal 2023 fully synergized Adjusted EPS. Adding further diversification and scale, the Cowen acquisition will build upon TD's proven business model. Importantly, in Cowen, we are acquiring an organization that is culturally aligned with TD, supported by a disciplined risk culture. We're confident that this transaction will accelerate the growth of the combined organization, delivering strong returns for TD, Cowen, and all of our stakeholders. I will now turn the call over to Riaz to provide more details on the transaction. Riaz? Thank you, Bharat. Good morning, everybody, and please turn to slide four. For those of you who are less familiar with Cowen, let me take the opportunity to introduce you to the franchise. Based in New York, Cowen is an independent U.S. investment bank serving clients from 29 cities around the globe. Cowen's strengths are highly complementary to TD Securities' existing businesses with minimal overlap. The acquisition will add new capabilities in U.S. equities, including a strong sales, trading, and execution platform. The acquisition will also add a renowned global research platform covering 985 securities, which represents about 45% of the S&P 500, which is a very exciting opportunity given TD Securities confidence in the value of our research resources. In addition, Cowen will add scale and expertise in industry coverage, middle market sponsors coverage, M&A advisory, and public and private capital markets. These capabilities, when combined with our strong franchise, will round out our product and services suite to help serve our clients better and to accelerate our growth. As is true of TD and TD Securities, Cowen's greatest assets is its people. Upon the closing of this transaction, TD Securities will welcome talented colleagues with deep client relationships from across the Cowen team. I'm delighted to welcome Jeff Solomon, Chair and CEO of Cowen, Dan Charney, Cowen Head of Markets, and Larry Wieseneck, Cowen Head of Investment Banking, along with 1,700 talented Cowen colleagues to TD Securities. I'm also pleased to announce that Jeff, Dan, and Larry will join the TD Securities leadership team, reporting to me upon closing. Jeff will lead parts of our combined businesses, which will be known as TD Cowen. Jeff has joined us for this morning's call and would like to share a few thoughts. Jeff, welcome, and over to you. Thank you, Riaz, and good morning, everyone. As Bharat said of TD Securities at the start of the call, I am also very proud of the franchise we built at Cowen. Over the past decade, we've grown our revenues from $288 million to $1.5 billion today. We have leading, you know, industry research and strength in key growth industry verticals, as well as a top-tier algorithmic trading and equities execution platform. The combination with TD Securities will allow us to better serve our existing clients by providing access to an expanded range of products and services, and by leveraging TD Securities' strong balance sheet and transaction banking capabilities. Clients will also benefit from our combined expertise and talent, and I've been incredibly impressed with the TD Securities leadership team. This transaction combines two winning teams that really can accelerate the growth of the combined organization for the benefit of our colleagues, our clients, and our communities. I wanna extend my thanks to everyone at Cowen who delivers every day for our clients and for each other. In TD, we know we found a partner that shares our commitment to clients, to teamwork, and our culture, collectively, as well as to sustainability and ESG leadership. We share TD's view for the future of the combined organization and cannot be more excited to take this next step in our journey. As we join TD to build an even stronger franchise together, we couldn't be more excited. With that, I will pass it back to Riaz. Thank you, Jeff. Please turn to slide five. T D Securities has built a strong foundation to support future growth. The combination with Cowen is the next phase in our evolution as we continue to build a leading integrated North American investment bank. On a pro forma basis, this transaction would increase TD Securities revenue by over a third, bringing global revenues to just under $7 billion and more than doubling our U.S. revenues. The team will also expand significantly. The combined organization will have more than 6,500 colleagues, including almost 600 managing directors. We will have a leading North American equity research platform with nearly 1,300 companies under coverage and over 90 publishing analysts. To leverage the strength of Cowen brand, as I mentioned, parts of our businesses will be known as TD Cowen, a division of TD Securities. The integration of these two powerful teams and platforms will drive significant revenue synergy opportunities, and we have not modeled any expense synergies. Please turn to slide six. Our clients tell us regularly that given their trust in TD and the value that we add, they would like TD Securities to support them across a broader range of products and markets. This transaction allows us to do exactly that. The acquisition will add U.S. capabilities to TD Securities' global equity sales, trading, and execution platform, and Cowen's extensive research footprint will provide opportunities for the combined businesses to seek new areas of growth. In capital markets and advisory, we will be better positioned to support issuers across borders and markets with broader industry, geographic, and sector expertise. We will have an integrated platform to drive meaningful revenue synergies. Cowen acquisition will add a private credit advisory solution that will enhance our ability to support clients of TD Bank, America's Most Convenient Bank. Cowen's clients will gain access to a broader range of fixed income, currency, and commodities products and services to support their growth and benefit as we leverage TD Securities' strong balance sheet and transaction banking capabilities. This transaction combines two leading investment banks with complementary capabilities, which will enhance our ability to serve our existing clients and to win new clients together. Please turn to slide seven. As we grow the TD Securities and Cowen franchises, our success will be underpinned by a shared vision for the future and strong cultural alignment. Both organizations prioritize teamwork and collaboration and create an entrepreneurial and diverse and inclusive environment where colleagues thrive. This transaction brings together fantastic talent from both organizations. The highly complementary nature of our businesses will create meaningful opportunities for TD Securities and Cowen colleagues alike, both immediately upon closing and well into the future. Transactions in investment banking are always about the people, and as Jeff said, we're combining two winning teams, and we are keenly focused on maintaining our winning cultures while helping our clients outperform and achieve their growth aspirations. With that, I'll turn it over to Kelvin to discuss the financial aspects of the transaction. Thank you, Riaz. Good morning, everyone. Please turn to slide eight. The purchase price is $39 per share, or $1.3 billion in the aggregate, paid for in cash consideration. This represents 1.7 x Cowen's tangible book value and 8.1 x Cowen's estimated 2023 earnings of $156 million. To provide the capital required for the transaction, TD has sold approximately 28.4 million non-voting common shares of Schwab for proceeds of approximately $1.9 billion, reducing TD's ownership interest from 13.4% to 12%. When combined with this share sale, the acquisition of Cowen pro forma for the closing of TD's acquisition of First Horizon is expected to be neutral to TD's common equity tier one ratio, which is expected to be comfortably above 11% at closing. As part of our ongoing capital management activities, and in light of heightened volatility in interest rates and continued uncertainty in the macroeconomic environment, earlier this quarter, we established an accounting hedge against the CET1 ratio impact of further rate changes on goodwill in connection with the First Horizon acquisition. We are pleased that TD is in a position to close two strategic acquisitions that add meaningful earnings growth while remaining strongly capitalized. The Cowen transaction is expected to be modestly accretive to estimated 2023 Adjusted EPS on a fully synergized basis. As Bharat mentioned, the transaction is expected to generate an approximately 14% adjusted return on invested capital on a fully synergized run rate basis. In his remarks, Riaz provided details on the substantial revenue synergy opportunities identified in this transaction. Revenue synergies of approximately $300 million-$350 million, resulting in an increase of net income after tax of approximately $100 million, are expected to be achieved by year three. We anticipate that the organizational structure and integrated client coverage model will be in place at closing, with the systems integration following thereafter. We expect pre-tax integration and retention costs of approximately $450 million and no impact on the pending integration of First Horizon. We anticipate closing the transaction in the first calendar quarter of 2023, subject to Cowen shareholder approval and customary regulatory approvals. With that, I will turn the call back over to Bharat Masrani. Thank you, Kelvin. Please turn to slide nine. Before I turn the call over to take your questions, I want to emphasize a few points made in today's presentation. This acquisition will further accelerate our growth in the U.S. and positions TD Securities as a North American dealer with global reach and a full suite of cross-border capabilities. As Riaz noted, the Cowen and TD Securities platforms are highly complementary, and the combination will create an expanded platform with significant growth potential, enabling us to better serve our clients. There are meaningful revenue synergy opportunities driven by the combination of these two terrific franchises. Kelvin mentioned that to provide the capital for this transaction, TD has sold a portion of its shares in Schwab. It is important to note that this sale does not represent a change in our strategy with respect to our investment in Schwab. We have maintained our voting interest, preserved our governance rights, and have no current intention to sell additional shares. Finally, we're looking forward to working with the Cowen team, whose winning culture and deep client relationships are well aligned with TD's strategy and vision. I will now open the call up for Q&A, operator. Thank you. We will now take questions from the telephone lines. If you have a question and you're using the speakerphone, please lift your handset before making your selection. If you have a question, please press star one on your device's keypad. You may cancel your question at any time by pressing star two. Please press star one at this time if you have a question. There will be a brief pause while you register, and we thank you for your patience. The first question is from Doug Young from Desjardins Capital Markets. Please go ahead. Hi. Good morning. Riaz, I think you mentioned people as the most important part of this transaction. Just wanted to get a little bit more detail of how you've locked up key employees, over what time frame have you locked people up in, and how many people are included in that kind of retention program? Yeah. Thank you for that, Doug. You know, as we started our conversations that Jeff and I have spent a huge amount of time on this to make sure that both Cowen as well as TD Securities team felt comfortable with the transaction and understand that overall that this is a transaction in which there are minimal overlaps and it is a capability additive transaction. So In the $450 million number that Kelvin noted, $200 million of that is attributed to retention, which includes the key leadership team as well as the key individuals that Jeff has identified as having importance to maintaining the transaction momentum and the culture at both Cowen as well as TD Securities. Beyond that, Doug, I think, for the appropriateness out of respect to our employees, I won't go into additional details at this time. Okay. Kelvin, I did some math, and I've got the sale of the Schwab stake adding about 33 basis points to CET1 and the Cowen deal consuming about 14 basis points. Just hoping, am I in the ballpark, or do you have, like, the specific numbers around each of those two? As we've noted, the transaction is expected to be CET1 capital neutral. The proceeds of $1.9 billion is approximately the capital that would be required, and that's about 40 basis points. Remember that, on the Schwab shares, you sell, it's not only the gain on sale that adds to capital, but also, the book value of the capital and since it's, the investment is above the basket threshold, it is actually a one-to-one capital release. Okay, my numbers are a little bit off. Okay, maybe I'll take a look at that. Just lastly, just what date did you establish the rate hedge for the First Horizon interest rate exposure? Yeah, we did it during the quarter. You can't provide a date. I'm just trying to get a sense of where we should put the pin in, but I don't know if you can provide any other color around that or. No, I think it's important to note that we are, you know, actively managing our capital position and with the actions we've taken and to take. We're comfortably above 11%. Okay. Thank you. Thank you. Next question is from Ebrahim Poonawala from Bank of America. Please go ahead. Hey, good morning. I had a question, I guess, for—I would love to hear a response from both, including Jeff Solomon. On paper, it feels like the combination provides a ton of synergies with TD's balance sheet, with Cowen's capabilities. If we could, Jeff, would appreciate your perspective on just give us a sense of what TD's balance sheet behind what you have in terms of products and capabilities does for Cowen as we think about the next few years. Riaz Ahmed, question for you and maybe Bharat Masrani, what are we aspiring for, right? I I mean, I think it seems like you have everything it takes or will post the deal. Do you see yourselves as being a top five player in the U.S. when you think about league tables, et cetera? Would love to hear just sort of the mid to long-term ambitions that you have in this business as we think post deal. Thank you. As Jeff thinks about the answer there and Riaz as well, I can tell you our aspiration is to be a top dealer, and make sure that we have all the capabilities that our clients require. This is not about a particular league table positioning. We just want to make sure we have the right capabilities in the right markets for the clients we serve. We are a growing franchise. This is an important part of TD Bank Group. You know, I've said this over the last few years, and it's great to see that we are now in a position to make this acquisition. As you heard, you know, in our comments, you know, this is strategically compelling, financially attractive within our risk appetite, and as importantly, culturally well aligned. Like the First Horizon transaction, it was important that we meet our requirements for any acquisitions, and this fits perfectly. Really excited about it, Ebrahim. Perhaps I pass it back to Riaz and Jeff to answer your specific question. Yeah. Go ahead, Jeff. Well, first of all, thanks for the question. Well, this is for us, you know, and we look at the growth trajectory that we've been on. As I've mentioned to Riaz and to Bharat when we've talked, you know, this is the first time probably in the history of Cowen, at least over the last decade, where we have felt constrained by the size of our balance sheet. We put over half a billion dollars in retained earnings on the balance sheet in the last two years, and we still feel that there's our business is calling, our clients are calling for more access to that capital, both in the markets business as well as in the sponsors business. You know, when we set out to look at our strategic objectives over the course of the year was to be in a position where we could bolster our balance sheet so that we could provide more products and services. When Riaz and team approached our team with this idea, it just made logical sense because it was very much in tune and in sync with the strategy that we were looking to pursue anyway. When you look at our business, whether it's in the banking side or in the market side, having access to that capital or having access to a double A rating, even if we're not utilizing that capital, puts us in a very different position to serve our clients' needs as they continue to grow. As you all know, we focus on growth and growth industries. As those growth industries mature, they require different products and services. We've seen that as they've migrated from equity to debt, and ultimately to bank debt as they become creditworthy. Those are gonna be important parts of our continuing to extend our client franchise, as our clients mature. This opportunity with TD really provides us with the chance to continue to be there for our clients in a meaningful way. Thank you, Jeff and Ebrahim. I think between Bharat and Jeff, they covered off the question of capabilities. If you're good with that, I'm good. I think that was good. Thank you. Just one follow-up, Bharat, on First Horizon. It's been about six months since the deal. Any reason you have to believe or why the deal may not close as per the original timeline, be it regulatory or other issues that may delay the deal at this point? No, I have no reason to believe that, Ebrahim. You know, just following its normal process, you know, within the U.S. regulatory requirements. You know, we obviously cannot talk about our conversations with our regulators, but feel comfortable that it's proceeding at the pace we expected, and we are hoping that we can close it within the timeline we have stipulated. Got it. Thanks for taking my questions. Thank you. Our next question is from Meny Grauman from Scotiabank. Please go ahead. Hi, good morning. Hi, Bharat. Historically, we've seen, you know, banks build out their U.S. capital markets franchises in a more organic fashion due to the less risky option. Why not continue to build organically and hire teams that you need to fill in any gaps? Especially at this stage in the capital market cycle. Curious your thoughts on that. It's good question, Meny. We think hard as to what capabilities we can build organically and where it might make sense for us to acquire. We have seen in many of our businesses where we've had the opportunity to accelerate our growth aspirations, we have not been shy to acquire. I mean, at TD Asset Management, Greystone comes to mind. Epoch also comes to mind. Frankly, there are countless others where we felt that an acquisition adds to our capabilities and accelerates our growth. As Riaz mentioned, this was a unique situation for us. Jeff and his team have developed and built a terrific business, and we felt very comfortable that this was the time to do it. Frankly, this is an opportunity that doesn't come every day and felt that this was, you know, critical for our growth aspirations. You know, I'll let Riaz talk about, you know, some of the details around it, but, you know, we're very, very excited on the timing of it. Frankly, this accelerates, you know, our aspirations by many, many years. Yeah. Thanks, Bharat. Meny, I would just add that from the time that we met Jeff and his leadership team, it became very quickly apparent to us that this was a fabulous franchise with great people and ones that culturally would be very aligned with TD Securities, and I think Jeff and his team felt similarly. When you look at those capabilities in brokerage, in M&A, in world-class research to get all that assembled in one place and to have the opportunity to bring it together with TD Securities in order to accelerate our growth easily by five if not 10 years was just a fabulous opportunity. We decided to advance it on that basis, Meny. Just in terms of how you're thinking about the Schwab stake, Bharat, you talked about not losing your voting rights or governance rights. How low does that holding of Schwab go before you lose those rights? Is there a trigger there that you can give us? 10%. Okay. Just related to that is, you know, so you used Schwab to buy Cowen. Are there any other capabilities, any other acquisitions that you would contemplate taking down your Schwab stake for? Not at the current time, Manny. Thank you. Thank you. Next question is from Gabriel Dechaine, National Bank Financial. Please go ahead. Good morning and congrats on the deal. Just wanna clarify a couple of capital related items. One, I guess similar to Doug's question earlier, I'm surprised that you're describing the deal as neutral to CET1 because you're raising more, you know, capital from the Schwab sale than what it cost to buy this thing. Your deduction goes down and you have for significant investments in other financial institutions. Then the gain on sale, I would have assumed a more positive impact on core CET1. Maybe you can clarify what I might be missing. Gabriel, I'll let Kelvin comment in a moment, but look, I think while the purchase price is $1.3 billion, what we do is you have to go through line items for everything that is on the Cowen’s balance sheet. The risk-weighted assets will be close to $9 billion, $8 billion-$9 billion. Then there’s about $700 million of goodwill. The invested capital is closer to the proceeds than it is to the purchase price. Got it. Okay. I guess, I mean, the comfortably above 11% language that you're using to describe your pro forma position, the First Horizon deal, that's a bit more bullish, I guess, than what you were stating when you announced the deal five, six months ago. Is that mainly because of the hedge? It's, you know, pretty obvious here, but. Yeah, there are a few reasons for that. I mean, you know, we've raised capital for the Cowen transaction, so there's certainty around that. We've done the accounting hedge. You know, passage of time gives more clarity as well. A lot of those factors combined. Okay. When did you approach Cowen? I mean, I'm not a you know. Yeah, I'm sure that'll all come out in the proxy circular, but it was early this year when I reached out to Jeff and Robbie Pryde and went to visit with him, and we shared some lovely stories about Jeff has Canadian roots and closely associated with the community in Pittsburgh. It was... That's how this all started, right, Jeff? That is correct. Yes. My grandmother was born and raised in Saskatchewan. Okay. That was the first thing we actually talked about. We sat in my conference room, which is an homage to my hometown, Pittsburgh. We had a lot of great conversations, got to know each other as people, and I think that's an important part of this. All the conversations with Riaz and Robbie and their team, with Bharat, it's these transactions are much more about the people than I think investors give us credit for. You know, we couldn't be doing this if we didn't feel strongly about the interpersonal connections we've made over the past few months. It had started right in the very first conversation before we even got into numbers or opportunity sets. It was really just getting to know each other better, and that's what I think gave us the comfort to know that we found great partners, collectively, and so we're excited. Okay. Well, thanks and congrats. Thank you. Next question is from Scott Chan, Canaccord Genuity. Please go ahead. Good morning. My first question is for Jeff. You talked about the solid revenue trajectory at Cowen over the past decade, and I think it's 2 x over peers, U.S. peers. Has Cowen engaged in any M&A over the past 10 years to help contribute to that, Jeff? We've made some acquisitions in both the markets business as well as in our banking business. Probably the biggest and most transformative acquisitions was, you know, Convergex, which doubled the size of our equities trading platform. Actually, it was one of the few I think acquisitions where 1+1 equaled probably almost three, which is a pretty incredible feat when you know anything about the equities trading business. We've done a number of acquisitions along the way, and we've integrated some great teams and they're very much a part of our culture on the banking side. More recently, we've been focusing on buying advisory businesses. You know, our acquisition of Cowen a few years ago, our acquisition of MHT Partners both gave us sponsor coverage as well as industry coverage. Then, more recently, we added this great team from Portico Capital, who have been integrating really nicely over the course of the year, focused on verticalized software. You know, this has been both organic as well as inorganic. I think as an acquirer of teams, I think we understand very clearly the need for culture to be upfront. I said it before, I'll say it, you know, many times over, the success of these transactions has been the fact that we've been able to find great partners. Being able to do this with Riaz and team, you know, we're looking forward to being able to do more, and be able to be smart about how we do that. Jeff, on your asset management and investment management segment that you've built up, is there any room, from a combined basis to further grow that business? Yeah, I think we'll continue to look. Sorry, Riaz, you wanna answer that? Go ahead, Jeff. Go ahead. Go ahead. Yeah. I think we'll look at ways to do that. I think we've been very selective with the businesses that we've chosen to scale in asset management, and those are ones we think are highly unique, and differentiated. And we've pivoted to private equity style investing in areas like sustainability and healthcare, where we have a really strong culture and strong industry knowledge. You know, we'll see how things progress, but we're very proud of that business and recognize there's a tremendous amount of value there. Right. Lastly, maybe for Riaz, on the revenue synergies, or by year three, can you maybe describe where you think the best opportunities are there or buckets within the capital markets segment? Yeah. Sure, Scott. Thank you. Look, there's a number of different places that you can seek synergies in here. First of all, just adding the new capabilities from Cowen in U.S. equity, sales trading, as well as research, would be a tremendous expertise that we could bring to our existing client base, both in Canada as well as in the United States and including extending those to our TD Bank Group, our commercial clients both in Canada and the United States. We expect a wider coverage capabilities. And then, of course, Jeff mentioned the scale and expertise in corporate and sponsor advisory coverage, again, continuing to help expand our client base. We talked a little bit about bringing the TD Securities balance sheet and capital markets expertise to Cowen client base. I think the ability to deliver this on a full service basis to our combined client base is just very, very exciting. I think that the revenue synergies that we've laid out will be well enhanced. Okay. Riaz, can I just add one thing to that? Sure. If that's okay. I also think, you know, one of the things we do at Cowen, for those that aren't aware, we have an outstanding healthcare and biotech franchise. It's really been the linchpin of a lot of the success that we've built around. You know, it's been around for decades. I think when we look at the maturity of that business and our clients beginning to look at debt opportunities, certainly in the royalty space, there's a number of ways in, as these companies mature and have approved pharmaceuticals, there's gonna be great growth for us to be able to be in that business, with a balance sheet on a selective basis, but also just to help advise. I think, you know, when we look at the maturing part of that business for us, we do bring a lot of equity capital markets expertise. We are a leading underwriter and book runner in healthcare and in biotech tools and diagnostics in particular. But those businesses as they continue to grow and be successful, will definitely avail themselves of the products and services and capabilities at TD. And that's gonna be a big part of our growth, I think collectively over the next decade. Great. Thanks, Jeff. Thank you. Our next question is from Paul Holden from CIBC. Please go ahead. Thanks. Good morning. Just a quick one for clarification to start. When you say that the accretion is on a fully synergized basis, is that saying that $ 100 million of revenue synergies by year three, or the net income associated with the revenue synergies by year three, is that included? Is that what you mean? Yes, that's what we mean. Yep. Okay, that's good. Bigger picture question for you is why do you feel the timing on the Cowen transaction is right today? What makes you approach them now? Yeah, I think, Paul, thank you for that. You know, as you know, in M&A, you basically, it's difficult to time things exactly, to where the markets are. When you're of the practice that TD Bank Group is, and you look at a very long view of the business and the environment, then really what you're looking for is, you know, can you find a party that is got complementary skills and that is willing, and then you worry less about the timing of that. From our perspective, if you just look at how well Cowen has built its businesses through coming into the COVID period, through the COVID period, and how they're being able to continue to sustain that in the, if I can call it, quote-unquote, post-COVID land, although I know we're not completely there. If you look at the Q1 results, you can see the momentum that Jeff and his team have built with their businesses and the acquisition integration of the acquisitions that he talked about. Really, the big macro environment right now doesn't really matter in terms of adding these capabilities. What matters is what is important in the long term interests of TD Securities and Cowen. Okay. That makes sense. I wanna ask a question in terms of how this complicates or increases resources required with respect to just integrations overall, given that you have First Horizon ongoing around the same time. Like, so you've made it very clear on why you're comfortable on the capital. I guess my question is more, is the management team gonna be stretched? Like how do you have the integration resources to pull off both of these deals when they're expected to close around the same time? Paul, this is Bharat. You know, this and I'll let Riaz talk about you know how he plans to integrate you know Cowen and TD Securities. These are different businesses. You know, we thought very hard and did a lot of work to make sure there is no impact on TD Bank, America's Most Convenient Bank with respect to the First Horizon transaction. Different type of businesses altogether. You know, this is more you know people, as you heard, this is more about capabilities that are additive. This is not about you know taking synergies out or you know building out different types of platforms, et cetera. Riaz can talk about, you know, the TD Securities side of it, but we feel very comfortable that the impact on TD Bank, America's Most Convenient Bank or the First Horizon transaction is just not there and feel comfortable to proceed on the basis we well planned. Thanks, Bharat. Paul, I just add that, Jeff, and I and our teams have spent a lot of time on this and feel that the, client coverage, as well as the, product, execution, models are going to be relatively, intact and, ready to go, by the time we get to, legal day one on closing. We've been spending a lot of time, talking about, the fact that Cowen is a strong, independent investment bank and, of course, becoming, regulated under prudential standards with the bank, requires a certain degree of, uplift. There's been really an amazing set of conversations with Jeff's business operations teams as they have been looking to talk with us what that would mean and how they can help accomplish that rapidly. We will have a joint team that we will set up with between Cowen and TD Securities to address all the points and make sure that for closing, we're ready to go on both the client-facing side as well as business operations. Okay. I have no other questions this morning. Thank you. Thank you. Next question is from Lemar Persaud from Cormark Securities. Please go ahead. Thanks for taking the questions. Are there any potential expense synergies that you guys identified, or should we be thinking about them as being kind of minor? I guess the reason why I'm drawn to this is because looking at your client slide four and five, there seems to be opportunities to consolidate offices and maybe some overlap in certain areas, so like, M&A, leverage finance and, prime services. Any thoughts here would be helpful. Yeah, it's Kelvin here. There will be opportunities, like you said, on whether it's, you know, on the corporate, you know, sourcing side and the like, but as Riaz mentioned earlier, that would be offset by additional costs to uplift certain businesses to TD's bank regulatory standards. I'll just add to that, Lemar. This combination is really about revenue synergies and, yes, real estate sourcing, those kinds of the addition of those scales to scale buying scale to Cowen’s operations will be hugely beneficial. By and large, we expect that we're going to need all the people and that we're going to look to increase our capabilities, as I mentioned earlier, on the business operations side to meet our bank uplift standards. Great. Thanks. My next question is just continuing along the lines of a previous answer provided, Bharat. TD has been talking about building out its capital markets capabilities in the U.S. for some time now, so this is not new to me. Would it be fair to say that TD now has all the pieces in place from a U.S. capital markets capabilities perspective, and now it's just a matter of executing it and building it up? I would agree with that, Lemar. I think there's you know we will have added a world-class equity and research platform, as well as widening our M&A and private advisory capabilities in the various verticals. I think we will have all the tools and capabilities that we need. Jeff and I and our teams are really looking forward to crush it here. This Lemar. Just to add, you said, you know, we've been talking, you know, for a long time on adding to our wholesale capabilities in the U.S. Just to reiterate that, you know, we are patient. We wanna make sure that when we do acquire, it's important that, you know, culturally and strategically and financially, that we are aligned. If it takes time for us to find the right partner, well, so be it. We will not rush into transactions just because, you know, we may have flexibility from a capital perspective or the like. This is very much in keeping with, you know, what you would expect from TD. Okay. That's it for me. Thanks, guys. Lamar. Thank you. Next question is from Nigel D'Souza, Veritas Investment Research. Please go ahead. Thank you. Good morning. I just wanted to go over some numbers here to make sure I understand it correctly. When I look at Cowen's 2023 earnings of, it's about $150 million or so based on consensus. When I compare that to the expectation for Schwab earnings in 2023, you know, sale of, you know, the stake that you sold about 1.5%, that would imply a reduction in your annual run rate of earnings from Schwab of about $100 million-$150 million. Taken together, does that, for the most part, offset the benefit from the increase to Cowen earnings? You add on top of that the integration and retention costs and your expectations for achieving about a third of the revenue synergies you've highlighted by year three. Altogether, does that imply that this transaction is going to be incrementally negative to internal capital generation book value and CET1? I think, Nigel, when you take into account the conversion costs and the retention costs and, you know, that would be right, that it'd be close to a break even and. I think largely, when Kelvin has been referring to the accretion is on an adjusted basis, as you know, that we talk both on a reported as well as adjusted basis. You know, I think that the long-term capability add here and the opportunity to grow the firm and to serve our clients more strongly will outpace those concerns that you have after the initial integration period. Okay, that makes sense. If I could just finish off, I'm trying to understand when you highlighted that your strategic outlook for Schwab hasn't changed, you've taken some action to hedge interest rate volatility, you're well above the 11% CET1 target, and your portfolio is positively levered to rising rates, which benefits the top line through higher net interest income. When I take all of that into consideration, why was there a need or why did you decide to sell part of your equity interest in Schwab? Did you look at options where you could complete this acquisition without reducing your Schwab ownership stake, and why did you decide not to pursue that avenue? You know, Nigel, you know, we are prudent. You know, we manage capital conservatively. Yes, you know, when we get to the end of this particular volatile cycle, perhaps, you know, you might look back and say, "You know, maybe TD had more flexibility." But we are prudent, and we want to make sure based on what the volatility we see, that this was the right decision for the bank, and very happy with, you know, how we came about making that. Okay, appreciate it. Thank you. Thank you. Our next question is from Mike Rizvanovic from KBW. Please go ahead. Thanks. Good morning. A question for Kelvin. I wanted to go back to the synergy, the revenue synergy target. What I'm trying to understand better is what are you seeing in your current activities with the clients? Like, are you seeing clients wanting more business and you just can't provide it, so they have to walk to a competitor? Or, is this something that you'll have to win in terms of, you know, just having the capabilities doesn't mean you'll win that business. I'm trying to get a sense of, is this low-hanging fruit and obvious wins on the revenue side, or do you really have to compete for it? Yeah. Mike, let me address it from a TD Securities perspective, and then I'll just repeat what Jeff mentioned to you earlier, which is that from a TD Securities perspective, as you know, we just do not have as mature a U.S. equity brokerage or capital markets capability that Cowen adds, and therefore our ability to bring to provide that additional service to our existing clients is hugely important. Number two, the depth and attractiveness of the research coverage that Cowen brings, not only from a 985, which is about 40% of the S&P that we talked about earlier, but also from a policy perspective, a sustainability perspective, ESG, thematic research. It is really a very attractive research platform that should be very. One of the most highly read research coverage that we feel will be very attractive to our clients. Therefore, yes, I think it brings capabilities that we're not able to monetize today and at TD Securities, and that's a big part of this in terms of providing complete coverage to our clients. As Jeff mentioned, you know, in various verticals that they're providing M&A advisory and capital market services to be able to bring the strength of a balance sheet and a wider capital market product suite to their clients as they grow, should become very, very attractive to Cowen clients as well. I think there's a very mutual synergistic opportunity here. Okay. Thanks for that. It does sound like mostly low-hanging fruit that you should expect to win. Secondly, if you could just clarify one thing. I'm not sure what the regulatory differences might be between Canada and the U.S., but I do know Cowen has some exposure to areas such as cannabis and cryptocurrency. Does anything change for Cowen post-transaction just given the ownership structure being different? I think, Mike, we've done some very significant diligence in all the business areas at Cowen, including the ones that you mentioned. You'd think that there'll be some areas where we will have opportunities. We haven't made any final decisions on that front. The platform will be very attractive for us in terms of the development and research work they've done on all those fronts. Got it. Okay. Thanks for the color. Thank you. Our next question is from Darko Mihelic from RBC Capital Markets. Please go ahead. Hi. Thank you. Good morning. Just a couple of numbers questions for Kelvin, I believe. With the sale of Schwab on August first, I'm assuming there's a gain. Can you just give us the gain for Q4 that would be backed out of adjusted earnings? Yeah. It's about in the high $ 700 million. Thank you. What is the new carrying value of the Schwab stake? It should be about $37 +, I think, Darko, because this doesn't require revaluation of the whole stake. Right. It does not. Okay. That was my third question. Okay, thank you for that. The question surrounds what Kelvin sort of touched on earlier, which is we know that this sort of exceeds the threshold and requires the deduction for capital purposes. Barry, you mentioned at 10% there's a trigger in terms of change in your board seats and so on with respect to governance of Schwab. The question is, if you were to sell down your Schwab stake to 9.9%, precisely to 9.9%, would you get under the threshold? Meaning, you know, we lose our governance rights and all that? No, meaning that the deduction in capital. I don't think so. I make sure I want to understand your question, Darko, and maybe Kelvin can pick it up, you know, offline with you. Nothing changes here. You know, we continue to own 12% of the company. 10% is, you know, our governance rights, et cetera. This is a strategic investment for the bank and it's an important relationship for us as we have talked about previously, and that has not changed. Okay. It was more of a theoretical question. I can pick it up with Kelvin afterwards. Yeah. It just has to do with the basket and the thresholds and the capital treatment of the Schwab stake. I guess another question along a different line of questioning is with respect to the risk-weighted assets that you're getting from Cowen. Can you please give me a quick breakdown? Is that mostly credit RWA or is it actually market risk? It's going to be a little bit of both, Darko. If you have a look at Cowen's Q1 reports and you look at the balance sheet, it's about an $8.5 billion balance sheet, and it's mostly in the way that we would think about it. It is a typical brokerage balance sheet with securities sold and bought and clients' receivables and payables. There is virtually no lending credit on the balance sheet because Cowen has just not had that is not the basis on which they've built their franchise. I think the total balance sheet just, unless I've got it wrong, is about $8.5 billion. No, that's correct. It's, you know, again, a lot of our balance sheet is in securities finance, so it's a matched book, which, you know, it can easily be taken up and down, but there's not a lot of risk in that. It's a pretty straightforward spread business. This is Kelvin. Just to add on the capital side, you also have to take into account operational risk capital, as well, in addition to market and credit. Okay, there's no impact here of thinking about for potentially moving to more advanced modeling under Basel III. This is a straightforward kind of. It sounds like it's mostly market risk, but where I'm a little confused on is the sponsors business, the equity holdings that you have there. I'm presuming that that's pretty straightforward standardized application of RWA, or am I missing something? No, I think that's right, Darko. There will be some data uplift and conversions on measuring market risk on the VAR side, but that's probably the most significant thing that is relevant here. Okay, great. Thank you very much. Thank you. Our last question is from Joo- Ho Kim, the Credit Suisse. Please go ahead. Hi. Good morning. Thanks for taking my question. Just wanted to ask on revenue synergies, the timing over the course of the three years mentioned, how should we think about that in terms of, you know, whether that's front-end loaded or back-end loaded potentially? Yeah, I think, Joo, thank you for asking. Look, as we work towards closing, from now to closing, obviously, the two firms will continue to operate appropriately, as they should independently. There will be lots of opportunities to have early dialogue with clients about what the future could hold. I think that for modeling purposes, you can just assume that it'll develop ratably over three years. Got it. That's helpful. Just last one for me, just a quick one on hedging those put in place during the quarter I mentioned earlier. Earlier in the call to mitigate the fair value movement, I'm wondering what has changed since the last kind of quarterly call for the bank to put in these hedges. I mean, a lot has changed in terms of the macro kind of economic outlook, but I'm wondering if there was any trigger for the bank to review putting in these hedges at this time. Thanks. Yeah. Hi, it's Kelvin. I'll take that. Just as background to remind everyone the reason for that we're talking about this is when rates rise, there would be a fair value decrement on the loans, which would then increase goodwill on closing. For TD, we've talked about having our natural hedge because we do have a large net interest income sensitivity. Back in Q1, the net interest income sensitivity that we disclosed was about $ 2 billion. As you know, with hedging activity and the beta, every time rates increases, you would expect that the NIS would decline. That happened in Q2 to $ 1.5 billion, and then more rates increased in Q3. That would mean that the natural hedge would be less effective on the next 100 basis point move given all the rate increases from the time of First Horizon announcement to now. Also, interest rate volatility has doubled since the start of the year. For these combined reasons, we put on the accounting hedge. I wanna make sure that we understand that there's no, we haven't changed any economic positions here. It's really an accounting hedge, and we would expect this mark to market through P&L to be treated as item of note and excluded out of adjusted earnings. Okay, thanks. That's it from me. Thank you. There are no further questions. I'll return the meeting back over to you, Mr. Masrani. Thank you, operator. As you've heard, loud and clear, I hope this acquisition is strategically compelling, financially attractive, fits within TD's risk appetite, and TD and Cowen are culturally aligned. As such, we couldn't be more excited about the opportunity to work with the Cowen team as we deliver on our shared vision for the future of the combined organization. Thank you all for joining us today, and we'll see you, or at least talk to you in a few weeks with our Q3 earnings call. Thanks very much. Thank you. Your conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.