Thursday June 1, 8:45 am Eastern Time
Company Press Release
SOURCE: Charles Schwab Corporation
Schwab and U.S. Trust Complete Merger
Close of Deal Launches New Model for Serving the Affluent Investor
SAN FRANCISCO, June 1 /PRNewswire/ -- The Charles Schwab Corporation (NYSE: SCH - news) today announced the completion of its merger with U.S. Trust Corporation, creating a new financial services firm with combined 1999 net revenues of $4.5 billion, combined client assets totaling $913 billion as of March 31, 2000 and the ability to serve the needs of investors at every stage of their financial lives.
U.S. Trust stockholders approved the merger, first announced by the two firms on January 13, at a special meeting in New York yesterday (May 31). The Federal Reserve Board had approved the deal on May 1, marking the first use of 1999's Financial Services Reform Act providing greater freedom for securities firms, banks and insurers to combine. All necessary regulatory approvals have also been obtained.
U.S. Trust, headquartered in New York City with 26 offices nationwide, will retain its name and operate as a subsidiary of The Charles Schwab Corporation and separate affiliate of Charles Schwab & Co., Inc.
``Our first priority is to preserve and support the highly respected wealth management expertise that U.S. Trust brings to our firm, building on the great business we already do with 5,900 independent investment managers,'' said Schwab Chairman and Co-CEO Charles R. Schwab. ``Together, with the application of Schwab's technological and marketing expertise, we can reach a larger share of the growing population of affluent investors in this country.''
U.S. Trust Chairman and CEO H. Marshall Schwarz praised the Schwab and U.S. Trust employees who have been part of the 18 ``synergy'' teams charged with handling various aspects of the merger, including plans for client referrals, technology enhancements and new product and service offerings.
``As we have gotten to know our new Schwab colleagues over the past four months, we have grown even more enthusiastic about the tremendous growth opportunities this partnership provides for our business and for our employees,'' said Mr. Schwarz. ``The close cooperation and mutual respect we've achieved with our Schwab colleagues positions U.S. Trust to achieve some wonderful innovations on behalf of our clients.''
With the merger completed, Schwab and U.S. Trust can begin to refer qualified clients to each other and kick off development of a number of new product and service offerings that leverage each other's strengths.
``We will begin immediately to focus our technological expertise on a variety of enhancements to U.S. Trust's web site; and for our investment manager and affluent clients at Schwab, we are working with U.S. Trust to develop a new research offering and planning the development of administrative trustee services,'' said Schwab Co-CEO and President David S. Pottruck. ``Moving forward, we will leverage the capabilities and strengths of both firms to create new service offerings for investment managers and for self-directed investors growing in affluence.''
Beginning June 15, Schwab clients and prospects who have expressed an interest in investment management, trust and private banking services can obtain a referral to U.S. Trust through Schwab's AdvisorSource program, a four-year-old service that provides referrals to investors of independent, fee-based investment advisors and financial planners doing business through Schwab Institutional. U.S. Trust will join Schwab AdvisorSource(TM) in states where it is registered to provide investment management services, with the ultimate goal of nationwide representation. Investors utilizing this service will continue to receive referrals to U.S. Trust and independent investment management firms based on their expressed needs.
Conversely, U.S. Trust clients who express an interest in Schwab's services will be eligible for a customized level of Schwab Retail's Signature Services, including a special service team dedicated to clients of U.S. Trust.
Effective with the close of the transaction, U.S. Trust's Mr. Schwarz and U.S. Trust President and COO Jeffrey S. Maurer have joined The Charles Schwab Corporation Board of Directors, expanding the Board to 14 members. Both Mr. Schwab and Mr. Pottruck have joined the U.S. Trust Board of Directors.
On May 3, Schwab's Board of Directors approved a three-for-two split of the Company's common stock, payable May 30. As a result of the split, stockholders in U.S. Trust common stock received 5.1405 shares of Schwab stock for each share of U.S. Trust common stock that they owned.
The Charles Schwab Corporation, through its principal brokerage subsidiary, Charles Schwab & Co., Inc. (member SIPC/NYSE), is one of the nation's largest financial services firms, serving investors through the Web, over 360 branch offices, four regional customer telephone service centers and automated telephonic channels. About 30 percent of Schwab's customer assets and 10 percent of its customer accounts are managed by the 5,900 independent, fee-based investment managers served through Schwab Institutional.
U.S. Trust provides investment management, fiduciary, financial planning and private banking services to affluent individuals, families and institutions nationwide. Headquartered in New York City, U.S. Trust has 26 offices in California, Connecticut, Delaware, Florida, New Jersey, North Carolina, Oregon, Pennsylvania, Texas and Washington, D.C. As of March 31, 2000 client assets under management totaled more than $90 billion. U.S. Trust is also the investment advisor to the $11 billion Excelsior mutual fund family of 34 no-load funds |
