Schwab Reports Third Quarter Results
WESTLAKE, Texas--(BUSINESS WIRE)--Oct 15, 2024--
The Charles Schwab Corporation reported net income for the third quarter totaling $1.4 billion, or $.71 diluted earnings per common share. Excluding $153 million of pre-tax transaction-related costs, adjusted (1) net income and diluted common earnings per share equaled $1.5 billion and $.77, respectively.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20241015717862/en/
Client Driven Growth |
| $95.3B 3Q24 Core Net New Assets | “Our momentum with clients continues to build following the successful completion of the Ameritrade conversion earlier this year. Third quarter net asset gathering of over $95 billion pushed year-to-date core net new assets to $252 billion – up 10% versus 2023 year-to-date.” Co-Chairman and CEO Walt Bettinger |
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Modern Wealth Solutions |
| $40B YTD Net Inflows to Schwab’s Managed Investing Solutions | “Record YTD flows into Schwab Wealth Advisory TM helped Managed Investing net flows reach $40 billion – an increase of 65% versus 2023 year-to-date. Converted Retail Ameritrade client interest in wealth solutions remains robust, accounting for approximately 35% of these flows.” Co-Chairman and CEO Walt Bettinger |
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Diversified Operating Model |
| 41.2% 3Q24 Adjusted Pre-Tax Profit Margin (1) | “Third quarter revenue increased 5% versus 3Q23, driven by sustained investor engagement and market performance. The combination of growing revenue and expense discipline yielded a 38.0% pre-tax profit margin – 41.2% adjusted (1).” CFO Mike Verdeschi |
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Balance Sheet Management |
| $8.9B 3Q24 Reduction in Bank Supplemental Funding (2) | “Client transactional sweep cash grew by $9 billion sequentially, including net inflows of $17 billion in September. This build in client cash on the balance sheet helped us reduce Bank Supplemental Funding by $8.9 billion sequentially.” CFO Mike Verdeschi |
3Q24 Client and Business Highlights
- Healthy net asset gathering and equity market resilience resulted in record total client assets of $9.92 trillion
- Active brokerage accounts reached 36.0 million, up 4% versus September 2023
- Core net new assets equaled $95.3 billion, bringing the year-to-date total to $252.1 billion – a 10% increase versus 2023 year-to-date
- Assets receiving ongoing advisory services are up 6% sequentially and up 26% versus September 2023, including record net flows into Schwab Wealth Advisory TM
- Margin balances grew sequentially by 2% to $73.0 billion, up 17% from year-end 2023
- Trading activity increased relative to the prior quarter as client engagement remained strong
- Schwab ranked #1 by J.D. Power in Participant Satisfaction with Retirement Plan Digital Experiences (3)
- Charles Schwab Bank rated #1 in Investor’s Business Daily Most Trusted Financial Companies survey (4)
| Three Months Ended September 30, |
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| Nine Months Ended September 30, |
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Financial Highlights |
| 2024 |
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| 2023 |
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| Change |
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| 2024 |
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| 2023 |
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| Change | ||
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Net revenues (in millions) | $ | 4,847 |
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| $ | 4,606 |
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| 5 | % |
| $ | 14,277 |
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| $ | 14,378 |
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| (1 | )% |
Net income (in millions) |
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GAAP | $ | 1,408 |
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| $ | 1,125 |
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| 25 | % |
| $ | 4,102 |
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| $ | 4,022 |
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| 2 | % |
Adjusted | $ | 1,525 |
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| $ | 1,518 |
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| — |
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| $ | 4,459 |
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| $ | 4,792 |
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| (7 | )% |
Diluted earnings per common share |
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GAAP | $ | .71 |
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| $ | .56 |
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| 27 | % |
| $ | 2.05 |
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| $ | 2.03 |
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| 1 | % |
Adjusted | $ | .77 |
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| $ | .77 |
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| — |
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| $ | 2.25 |
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| $ | 2.45 |
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| (8 | )% |
Pre-tax profit margin |
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GAAP |
| 38.0 | % |
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| 30.0 | % |
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| 37.7 | % |
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| 36.1 | % |
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Adjusted |
| 41.2 | % |
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| 41.3 | % |
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| 41.0 | % |
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| 43.1 | % |
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Return on average common stockholders’ equity (annualized) |
| 14 | % |
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| 14 | % |
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| 14 | % |
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| 18 | % |
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Return on tangible common equity (annualized) (1) |
| 31 | % |
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| 58 | % |
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| 33 | % |
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| 66 | % |
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Note: Items labeled “adjusted” are non-GAAP financial measures; further details on non-GAAP financial measures and a reconciliation of such measures to GAAP reported results are included on pages 10-12 of this release. All per-share results are rounded to the nearest cent, based on weighted-average diluted common shares outstanding. |
3Q24 Financial Commentary
- Net revenues grew on both a year-over-year and sequential basis, up 5% and 3%, respectively
- Sequential net interest margin expanded modestly to 2.08%
- Client transactional sweep cash balances finished September at $384.0 billion, a sequential increase of $9.2 billion
- Bank Supplemental Funding (2) declined sequentially by $8.9 billion to $64.8 billion at September month-end
- Asset management and administration fees achieved a new quarterly record of $1.5 billion
- Trading revenue increased 4% versus 3Q23 as a result of higher volumes and changes in trading mix
- GAAP expenses for the quarter declined 7% versus 3Q23
- Third quarter acquisition and integration-related costs, amortization of acquired intangibles, and restructuring costs equaled $153 million, or a decline of $367 million versus 3Q23; exclusive of these items, adjusted total expenses (1) increased by 6%
- Capital ratios across the firm continue to build – including preliminary consolidated Tier 1 Leverage and adjusted Tier 1 Leverage (1) reaching 9.7% and 6.7%, respectively
(1) | Further details on non-GAAP financial measures and a reconciliation of such measures to GAAP reported results are included on pages 10-12 of this release. |
(2) | Bank Supplemental Funding includes repurchase agreements at the banks, Schwab Bank Certificates of Deposit (CDs), and Federal Home Loan Bank balances. |
(3) | Charles Schwab received the highest score in the J.D. Power 2021-2022, and 2024 U.S. Retirement Plan Digital Satisfaction Studies, which measures group retirement plan participant satisfaction with plan provider digital experiences. Visit https://www.jdpower.com/business/awards for more details. Use of study results in promotional materials is subject to a license fee. |
(4) | The Investor’s Business Daily Most Trusted Bank accolade/recognition was published by Investor’s Business Daily on September 20, 2024, and is licensed for a 15-month timeframe. The criteria, evaluation, and ranking were determined by Investor’s Business Daily in conjunction with its research partner, TechnoMetrica Market Intelligence, and were based on consumer surveys conducted May-July 2024. ( https://www.investors.com/news/most-trusted-financial-companies-top-30-list-2024/ ) Schwab paid a licensing fee to York Graphic Services, LLC. for uses of the award and logos through January 4, 2026. |
Fall Business Update
The company will host its Fall Business Update for institutional investors this morning from 7:30 a.m. - 8:30 a.m. CT, 8:30 a.m. - 9:30 a.m. ET.
Registration for this Update webcast is accessible at https://www.aboutschwab.com/schwabevents.
Forward-Looking Statements
This press release contains forward-looking statements relating to asset gathering and the company’s momentum with clients; client interest in wealth solutions; the company’s diversified operating model; and capital ratios. These forward-looking statements reflect management’s expectations as of the date hereof. Achievement of these expectations and objectives is subject to risks and uncertainties that could cause actual results to differ materially from the expressed expectations. Important factors that may cause such differences are described in the company’s most recent reports on Form 10-K and Form 10-Q, which have been filed with the Securities and Exchange Commission and are available on the company’s website ( https://www.aboutschwab.com/financial-reports ) and on the Securities and Exchange Commission’s website ( https://www.sec.gov ). The company makes no commitment to update any forward-looking statements.
About Charles Schwab
The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with 36.0 million active brokerage accounts, 5.4 million workplace plan participant accounts, 2.0 million banking accounts, and $9.92 trillion in client assets. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, asset management, custody, and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, https://www.sipc.org ), and its affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent, fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its primary banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at https://www.aboutschwab.com.
THE CHARLES SCHWAB CORPORATION Consolidated Statements of Income (In millions, except per share amounts) (Unaudited) | |||||||||||||||
| Three Months Ended |
| Nine Months Ended | ||||||||||||
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| 2024 |
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| 2023 |
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| 2024 |
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| 2023 |
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Net Revenues |
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Interest revenue | $ | 3,928 |
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| $ | 4,028 |
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| $ | 11,686 |
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| $ | 12,148 |
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Interest expense |
| (1,706 | ) |
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| (1,791 | ) |
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| (5,073 | ) |
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| (4,851 | ) |
Net interest revenue |
| 2,222 |
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| 2,237 |
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| 6,613 |
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| 7,297 |
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Asset management and administration fees |
| 1,476 |
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| 1,224 |
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| 4,207 |
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| 3,515 |
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Trading revenue |
| 797 |
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| 768 |
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| 2,391 |
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| 2,463 |
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Bank deposit account fees |
| 152 |
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| 205 |
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| 488 |
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| 531 |
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Other |
| 200 |
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| 172 |
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| 578 |
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| 572 |
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Total net revenues |
| 4,847 |
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| 4,606 |
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| 14,277 |
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| 14,378 |
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Expenses Excluding Interest |
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Compensation and benefits |
| 1,522 |
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| 1,770 |
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| 4,510 |
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| 4,906 |
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Professional services |
| 256 |
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| 275 |
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| 756 |
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| 805 |
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Occupancy and equipment |
| 271 |
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| 305 |
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| 784 |
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| 923 |
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Advertising and market development |
| 101 |
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| 102 |
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| 296 |
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| 293 |
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Communications |
| 147 |
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| 151 |
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| 460 |
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| 485 |
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Depreciation and amortization |
| 231 |
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| 198 |
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| 692 |
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| 566 |
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Amortization of acquired intangible assets |
| 130 |
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| 135 |
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| 389 |
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| 404 |
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Regulatory fees and assessments |
| 88 |
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| 114 |
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| 309 |
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| 277 |
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Other |
| 259 |
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| 173 |
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| 694 |
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| 535 |
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Total expenses excluding interest |
| 3,005 |
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| 3,223 |
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| 8,890 |
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| 9,194 |
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Income before taxes on income |
| 1,842 |
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| 1,383 |
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| 5,387 |
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| 5,184 |
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Taxes on income |
| 434 |
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| 258 |
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| 1,285 |
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| 1,162 |
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Net Income |
| 1,408 |
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|
| 1,125 |
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| 4,102 |
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| 4,022 |
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Preferred stock dividends and other |
| 109 |
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| 108 |
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| 341 |
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| 299 |
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Net Income Available to Common Stockholders | $ | 1,299 |
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| $ | 1,017 |
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| $ | 3,761 |
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| $ | 3,723 |
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Weighted-Average Common Shares Outstanding: |
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Basic |
| 1,829 |
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| 1,821 |
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| 1,827 |
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| 1,825 |
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Diluted |
| 1,834 |
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| 1,827 |
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| 1,833 |
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| 1,832 |
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Earnings Per Common Shares Outstanding(1): |
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Basic | $ | .71 |
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| $ | .56 |
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| $ | 2.06 |
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| $ | 2.04 |
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Diluted | $ | .71 |
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| $ | .56 |
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| $ | 2.05 |
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| $ | 2.03 |
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(1) | The Company has voting and nonvoting common stock outstanding. As the participation rights, including dividend and liquidation rights, are identical between the voting and nonvoting stock classes, basic and diluted earnings per share are the same for each class. |
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THE CHARLES SCHWAB CORPORATION Financial and Operating Highlights (Unaudited) | ||||||||||||||||||||||||||
| Q3-24 % change |
| 2024 |
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| 2023 |
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| vs. | vs. |
| Third |
| Second |
| First |
| Fourth |
| Third | ||||||||||||||
(In millions, except per share amounts and as noted) | Q3-23 | Q2-24 |
| Quarter |
| Quarter |
| Quarter |
| Quarter |
| Quarter | ||||||||||||||
Net Revenues |
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Net interest revenue | (1 | )% |
| 3 | % |
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| $ | 2,222 |
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| $ | 2,158 |
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| $ | 2,233 |
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| $ | 2,130 |
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| $ | 2,237 |
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Asset management and administration fees | 21 | % |
| 7 | % |
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|
| 1,476 |
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|
| 1,383 |
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|
| 1,348 |
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|
| 1,241 |
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| 1,224 |
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Trading revenue | 4 | % |
| 3 | % |
|
|
| 797 |
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| 777 |
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|
| 817 |
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|
| 767 |
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| 768 |
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Bank deposit account fees | (26 | )% |
| (1 | )% |
|
|
| 152 |
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|
| 153 |
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|
| 183 |
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|
| 174 |
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|
| 205 |
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Other | 16 | % |
| (9 | )% |
|
|
| 200 |
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|
| 219 |
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|
| 159 |
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|
| 147 |
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|
| 172 |
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Total net revenues | 5 | % |
| 3 | % |
|
|
| 4,847 |
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| 4,690 |
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| 4,740 |
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| 4,459 |
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| 4,606 |
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Expenses Excluding Interest |
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Compensation and benefits (1) | (14 | )% |
| 5 | % |
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|
| 1,522 |
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| 1,450 |
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|
| 1,538 |
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|
| 1,409 |
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| 1,770 |
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Professional services | (7 | )% |
| (1 | )% |
|
|
| 256 |
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|
| 259 |
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|
| 241 |
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|
| 253 |
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|
| 275 |
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Occupancy and equipment | (11 | )% |
| 9 | % |
|
|
| 271 |
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|
| 248 |
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|
| 265 |
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|
| 331 |
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|
| 305 |
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Advertising and market development | (1 | )% |
| (6 | )% |
|
|
| 101 |
|
|
| 107 |
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|
| 88 |
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|
| 104 |
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|
| 102 |
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Communications | (3 | )% |
| (15 | )% |
|
|
| 147 |
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|
| 172 |
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|
| 141 |
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|
| 144 |
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|
| 151 |
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Depreciation and amortization | 17 | % |
| (1 | )% |
|
|
| 231 |
|
|
| 233 |
|
|
| 228 |
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|
| 238 |
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|
| 198 |
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Amortization of acquired intangible assets | (4 | )% |
| 1 | % |
|
|
| 130 |
|
|
| 129 |
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|
| 130 |
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|
| 130 |
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|
| 135 |
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Regulatory fees and assessments | (23 | )% |
| (8 | )% |
|
|
| 88 |
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|
| 96 |
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|
| 125 |
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|
| 270 |
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|
| 114 |
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Other (2) | 50 | % |
| 4 | % |
|
|
| 259 |
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|
| 249 |
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|
| 186 |
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|
| 386 |
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|
| 173 |
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Total expenses excluding interest | (7 | )% |
| 2 | % |
|
|
| 3,005 |
|
|
| 2,943 |
|
|
| 2,942 |
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| 3,265 |
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|
| 3,223 |
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Income before taxes on income | 33 | % |
| 5 | % |
|
|
| 1,842 |
|
|
| 1,747 |
|
|
| 1,798 |
|
|
| 1,194 |
|
|
| 1,383 |
|
Taxes on income | 68 | % |
| 5 | % |
|
|
| 434 |
|
|
| 415 |
|
|
| 436 |
|
|
| 149 |
|
|
| 258 |
|
Net Income | 25 | % |
| 6 | % |
|
|
| 1,408 |
|
|
| 1,332 |
|
|
| 1,362 |
|
|
| 1,045 |
|
|
| 1,125 |
|
Preferred stock dividends and other | 1 | % |
| (10 | )% |
|
|
| 109 |
|
|
| 121 |
|
|
| 111 |
|
|
| 119 |
|
|
| 108 |
|
Net Income Available to Common Stockholders | 28 | % |
| 7 | % |
|
| $ | 1,299 |
|
| $ | 1,211 |
|
| $ | 1,251 |
|
| $ | 926 |
|
| $ | 1,017 |
|
Earnings per common share (3): |
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Basic | 27 | % |
| 8 | % |
|
| $ | .71 |
|
| $ | .66 |
|
| $ | .69 |
|
| $ | .51 |
|
| $ | .56 |
|
Diluted | 27 | % |
| 8 | % |
|
| $ | .71 |
|
| $ | .66 |
|
| $ | .68 |
|
| $ | .51 |
|
| $ | .56 |
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Dividends declared per common share | — |
|
| — |
|
|
| $ | .25 |
|
| $ | .25 |
|
| $ | .25 |
|
| $ | .25 |
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| $ | .25 |
|
Weighted-average common shares outstanding: |
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Basic | — |
|
| — |
|
|
|
| 1,829 |
|
|
| 1,828 |
|
|
| 1,825 |
|
|
| 1,823 |
|
|
| 1,821 |
|
Diluted | — |
|
| — |
|
|
|
| 1,834 |
|
|
| 1,834 |
|
|
| 1,831 |
|
|
| 1,828 |
|
|
| 1,827 |
|
Performance Measures |
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Pre-tax profit margin |
|
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| 38.0 | % |
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| 37.2 | % |
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| 37.9 | % |
|
| 26.8 | % |
|
| 30.0 | % | ||
Return on average common stockholders’ equity (annualized) (4) |
|
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|
|
| 14 | % |
|
| 14 | % |
|
| 15 | % |
|
| 12 | % |
|
| 14 | % | ||
Financial Condition (at quarter end, in billions) |
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Cash and cash equivalents | 5 | % |
| 37 | % |
|
| $ | 34.9 |
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| $ | 25.4 |
|
| $ | 31.8 |
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| $ | 43.3 |
|
| $ | 33.3 |
|
Cash and investments segregated | 81 | % |
| 55 | % |
|
|
| 33.7 |
|
|
| 21.7 |
|
|
| 25.9 |
|
|
| 31.8 |
|
|
| 18.6 |
|
Receivables from brokerage clients — net | 7 | % |
| 2 | % |
|
|
| 74.0 |
|
|
| 72.8 |
|
|
| 71.2 |
|
|
| 68.7 |
|
|
| 69.1 |
|
Available for sale securities | (18 | )% |
| (4 | )% |
|
|
| 90.0 |
|
|
| 93.6 |
|
|
| 101.1 |
|
|
| 107.6 |
|
|
| 110.3 |
|
Held to maturity securities | (8 | )% |
| (2 | )% |
|
|
| 149.9 |
|
|
| 153.2 |
|
|
| 156.4 |
|
|
| 159.5 |
|
|
| 162.5 |
|
Bank loans — net | 7 | % |
| 3 | % |
|
|
| 43.3 |
|
|
| 42.2 |
|
|
| 40.8 |
|
|
| 40.4 |
|
|
| 40.3 |
|
Total assets | (2 | )% |
| 4 | % |
|
|
| 466.1 |
|
|
| 449.7 |
|
|
| 468.8 |
|
|
| 493.2 |
|
|
| 475.2 |
|
Bank deposits | (13 | )% |
| (2 | )% |
|
|
| 246.5 |
|
|
| 252.4 |
|
|
| 269.5 |
|
|
| 290.0 |
|
|
| 284.4 |
|
Payables to brokerage clients | 23 | % |
| 12 | % |
|
|
| 89.2 |
|
|
| 80.0 |
|
|
| 84.0 |
|
|
| 84.8 |
|
|
| 72.8 |
|
Other short-term borrowings | 39 | % |
| 6 | % |
|
|
| 10.6 |
|
|
| 10.0 |
|
|
| 8.4 |
|
|
| 6.6 |
|
|
| 7.6 |
|
Federal Home Loan Bank borrowings | (29 | )% |
| (7 | )% |
|
|
| 22.6 |
|
|
| 24.4 |
|
|
| 24.0 |
|
|
| 26.4 |
|
|
| 31.8 |
|
Long-term debt | (10 | )% |
| — |
|
|
|
| 22.4 |
|
|
| 22.4 |
|
|
| 22.9 |
|
|
| 26.1 |
|
|
| 24.8 |
|
Stockholders’ equity | 25 | % |
| 7 | % |
|
|
| 47.2 |
|
|
| 44.0 |
|
|
| 42.4 |
|
|
| 41.0 |
|
|
| 37.8 |
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Full-time equivalent employees (at quarter end, in thousands) | (11 | )% |
| (1 | )% |
|
|
| 32.1 |
|
|
| 32.3 |
|
|
| 32.6 |
|
|
| 33.0 |
|
|
| 35.9 |
|
Capital expenditures — purchases of equipment, office facilities, and property, net (in millions) | (46 | )% |
| 47 | % |
|
| $ | 135 |
|
| $ | 92 |
|
| $ | 122 |
|
| $ | 199 |
|
| $ | 250 |
|
Expenses excluding interest as a percentage of average client assets (annualized) |
|
|
|
|
|
| 0.12 | % |
|
| 0.13 | % |
|
| 0.14 | % |
|
| 0.16 | % |
|
| 0.16 | % | ||
Clients’ Daily Average Trades (DATs) (in thousands) | 9 | % |
| 4 | % |
|
|
| 5,697 |
|
|
| 5,486 |
|
|
| 5,958 |
|
|
| 5,192 |
|
|
| 5,218 |
|
Number of Trading Days | 2 | % |
| 1 | % |
|
|
| 63.5 |
|
|
| 63.0 |
|
|
| 61.0 |
|
|
| 62.5 |
|
|
| 62.5 |
|
Revenue Per Trade(5) | (6 | )% |
| (2 | )% |
|
| $ | 2.20 |
|
| $ | 2.25 |
|
| $ | 2.25 |
|
| $ | 2.36 |
|
| $ | 2.35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Fourth quarter of 2023 includes $16 million in restructuring costs. Third quarter of 2023 includes $276 million in restructuring costs. |
(2) | Fourth quarter of 2023 includes $181 million in restructuring costs. |
(3) | The Company has voting and nonvoting common stock outstanding. As the participation rights, including dividend and liquidation rights, are identical between the voting and nonvoting stock classes, basic and diluted earnings per share are the same for each class. |
(4) | Return on average common stockholders’ equity is calculated using net income available to common stockholders divided by average common stockholders’ equity. |
(5) | Revenue per trade is calculated as trading revenue divided by the product of DATs multiplied by the number of trading days. |
THE CHARLES SCHWAB CORPORATION Net Interest Revenue Information (In millions, except ratios or as noted) (Unaudited) | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended |
|
| Nine Months Ended | ||||||||||||||||||||||||||||||||||
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 | ||||||||||||||||||||||||||||
| Average Balance |
| Interest Revenue/ Expense |
| Average Yield/ Rate |
|
| Average Balance |
| Interest Revenue/ Expense |
| Average Yield/ Rate |
|
| Average Balance |
| Interest Revenue/ Expense |
| Average Yield/ Rate |
|
| Average Balance |
| Interest Revenue/ Expense |
| Average Yield/ Rate | ||||||||||||
Interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Cash and cash equivalents | $ | 27,623 |
| $ | 369 |
| 5.24 | % |
|
| $ | 34,391 |
| $ | 459 |
| 5.22 | % |
|
| $ | 30,128 |
| $ | 1,205 |
| 5.26 | % |
|
| $ | 38,700 |
| $ | 1,419 |
| 4.83 | % |
Cash and investments segregated |
| 26,220 |
|
| 345 |
| 5.15 | % |
|
|
| 21,987 |
|
| 285 |
| 5.08 | % |
|
|
| 25,744 |
|
| 1,014 |
| 5.18 | % |
|
|
| 29,752 |
|
| 1,041 |
| 4.61 | % |
Receivables from brokerage clients |
| 73,102 |
|
| 1,431 |
| 7.66 | % |
|
|
| 63,760 |
|
| 1,282 |
| 7.87 | % |
|
|
| 68,557 |
|
| 4,042 |
| 7.75 | % |
|
|
| 61,682 |
|
| 3,533 |
| 7.55 | % |
Available for sale securities (1) |
| 98,645 |
|
| 531 |
| 2.14 | % |
|
|
| 129,545 |
|
| 724 |
| 2.22 | % |
|
|
| 104,830 |
|
| 1,680 |
| 2.13 | % |
|
|
| 143,360 |
|
| 2,340 |
| 2.17 | % |
Held to maturity securities |
| 151,004 |
|
| 650 |
| 1.71 | % |
|
|
| 163,904 |
|
| 706 |
| 1.72 | % |
|
|
| 154,231 |
|
| 1,998 |
| 1.72 | % |
|
|
| 167,405 |
|
| 2,172 |
| 1.73 | % |
Bank loans |
| 42,653 |
|
| 484 |
| 4.52 | % |
|
|
| 40,177 |
|
| 426 |
| 4.23 | % |
|
|
| 41,585 |
|
| 1,384 |
| 4.44 | % |
|
|
| 40,183 |
|
| 1,227 |
| 4.08 | % |
Total interest-earning assets |
| 419,247 |
|
| 3,810 |
| 3.58 | % |
|
|
| 453,764 |
|
| 3,882 |
| 3.37 | % |
|
|
| 425,075 |
|
| 11,323 |
| 3.52 | % |
|
|
| 481,082 |
|
| 11,732 |
| 3.23 | % |
Securities lending revenue |
|
|
| 87 |
|
|
|
|
|
|
| 105 |
|
|
|
|
|
|
| 258 |
|
|
|
|
|
|
| 341 |
|
| ||||||||
Other interest revenue |
|
|
| 31 |
|
|
|
|
|
|
| 41 |
|
|
|
|
|
|
| 105 |
|
|
|
|
|
|
| 75 |
|
| ||||||||
Total interest-earning assets | $ | 419,247 |
| $ | 3,928 |
| 3.69 | % |
|
| $ | 453,764 |
| $ | 4,028 |
| 3.50 | % |
|
| $ | 425,075 |
| $ | 11,686 |
| 3.63 | % |
|
| $ | 481,082 |
| $ | 12,148 |
| 3.35 | % |
Funding sources |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Bank deposits | $ | 248,405 |
| $ | 841 |
| 1.35 | % |
|
| $ | 290,853 |
| $ | 911 |
| 1.24 | % |
|
| $ | 260,254 |
| $ | 2,602 |
| 1.34 | % |
|
| $ | 315,309 |
| $ | 2,392 |
| 1.01 | % |
Payables to brokerage clients |
| 72,700 |
|
| 79 |
| 0.43 | % |
|
|
| 63,731 |
|
| 66 |
| 0.41 | % |
|
|
| 69,586 |
|
| 229 |
| 0.44 | % |
|
|
| 68,548 |
|
| 205 |
| 0.40 | % |
Other short-term borrowings |
| 10,821 |
|
| 150 |
| 5.52 | % |
|
|
| 7,315 |
|
| 97 |
| 5.26 | % |
|
|
| 9,164 |
|
| 382 |
| 5.57 | % |
|
|
| 7,286 |
|
| 280 |
| 5.13 | % |
Federal Home Loan Bank borrowings |
| 22,621 |
|
| 310 |
| 5.38 | % |
|
|
| 36,287 |
|
| 477 |
| 5.18 | % |
|
|
| 24,347 |
|
| 988 |
| 5.36 | % |
|
|
| 35,896 |
|
| 1,387 |
| 5.11 | % |
Long-term debt |
| 22,446 |
|
| 208 |
| 3.71 | % |
|
|
| 23,492 |
|
| 193 |
| 3.30 | % |
|
|
| 23,299 |
|
| 640 |
| 3.66 | % |
|
|
| 21,685 |
|
| 489 |
| 3.01 | % |
Total interest-bearing liabilities |
| 376,993 |
|
| 1,588 |
| 1.67 | % |
|
|
| 421,678 |
|
| 1,744 |
| 1.64 | % |
|
|
| 386,650 |
|
| 4,841 |
| 1.67 | % |
|
|
| 448,724 |
|
| 4,753 |
| 1.41 | % |
Non-interest-bearing funding sources |
| 42,254 |
|
|
|
|
|
|
| 32,086 |
|
|
|
|
|
|
| 38,425 |
|
|
|
|
|
|
| 32,358 |
|
|
|
| ||||||||
Securities lending expense |
|
|
| 118 |
|
|
|
|
|
|
| 46 |
|
|
|
|
|
|
| 230 |
|
|
|
|
|
|
| 96 |
|
| ||||||||
Other interest expense |
|
|
| — |
|
|
|
|
|
|
| 1 |
|
|
|
|
|
|
| 2 |
|
|
|
|
|
|
| 2 |
|
| ||||||||
Total funding sources | $ | 419,247 |
| $ | 1,706 |
| 1.61 | % |
|
| $ | 453,764 |
| $ | 1,791 |
| 1.56 | % |
|
| $ | 425,075 |
| $ | 5,073 |
| 1.59 | % |
|
| $ | 481,082 |
| $ | 4,851 |
| 1.35 | % |
Net interest revenue |
|
| $ | 2,222 |
| 2.08 | % |
|
|
|
| $ | 2,237 |
| 1.94 | % |
|
|
|
| $ | 6,613 |
| 2.04 | % |
|
|
|
| $ | 7,297 |
| 2.00 | % |
(1) | Amounts have been calculated based on amortized cost. |
THE CHARLES SCHWAB CORPORATION Asset Management and Administration Fees Information (In millions, except ratios or as noted) (Unaudited) | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 | ||||||||||||||||||||||||||||
| Average Client Assets |
| Revenue |
| Average Fee |
|
| Average Client Assets |
| Revenue |
| Average Fee |
|
| Average Client Assets |
| Revenue |
| Average Fee |
|
| Average Client Assets |
| Revenue |
| Average Fee | ||||||||||||
Schwab money market funds | $ | 551,945 |
| $ | 379 |
| 0.27 | % |
|
| $ | 414,074 |
| $ | 270 |
| 0.26 | % |
|
| $ | 525,166 |
| $ | 1,072 |
| 0.27 | % |
|
| $ | 368,788 |
| $ | 735 |
| 0.27 | % |
Schwab equity and bond funds, exchange-traded funds (ETFs), and collective trust funds (CTFs) |
| 603,314 |
|
| 118 |
| 0.08 | % |
|
|
| 485,326 |
|
| 99 |
| 0.08 | % |
|
|
| 569,608 |
|
| 337 |
| 0.08 | % |
|
|
| 466,995 |
|
| 284 |
| 0.08 | % |
Mutual Fund OneSource ® and other no-transaction- fee funds |
| 354,664 |
|
| 224 |
| 0.25 | % |
|
|
| 255,039 |
|
| 170 |
| 0.26 | % |
|
|
| 335,813 |
|
| 647 |
| 0.26 | % |
|
|
| 235,561 |
|
| 469 |
| 0.27 | % |
Other third-party mutual funds and ETFs |
| 611,555 |
|
| 106 |
| 0.07 | % |
|
|
| 632,902 |
|
| 127 |
| 0.08 | % |
|
|
| 606,026 |
|
| 314 |
| 0.07 | % |
|
|
| 663,577 |
|
| 393 |
| 0.08 | % |
Total mutual funds, ETFs, and CTFs (1) | $ | 2,121,478 |
| $ | 827 |
| 0.16 | % |
|
| $ | 1,787,341 |
| $ | 666 |
| 0.15 | % |
|
| $ | 2,036,613 |
| $ | 2,370 |
| 0.16 | % |
|
| $ | 1,734,921 |
| $ | 1,881 |
| 0.14 | % |
Advice solutions (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Fee-based | $ | 554,726 |
| $ | 559 |
| 0.40 | % |
|
| $ | 468,305 |
| $ | 476 |
| 0.40 | % |
|
| $ | 528,850 |
| $ | 1,572 |
| 0.40 | % |
|
| $ | 455,730 |
| $ | 1,393 |
| 0.41 | % |
Non-fee-based |
| 114,307 |
|
| — |
| — |
|
|
|
| 97,957 |
|
| — |
| — |
|
|
|
| 110,191 |
|
| — |
| — |
|
|
|
| 95,951 |
|
| — |
| — |
|
Total advice solutions | $ | 669,033 |
| $ | 559 |
| 0.33 | % |
|
| $ | 566,262 |
| $ | 476 |
| 0.33 | % |
|
| $ | 639,041 |
| $ | 1,572 |
| 0.33 | % |
|
| $ | 551,681 |
| $ | 1,393 |
| 0.34 | % |
Other balance-based fees (2) |
| 795,737 |
|
| 72 |
| 0.04 | % |
|
|
| 610,450 |
|
| 64 |
| 0.04 | % |
|
|
| 759,645 |
|
| 210 |
| 0.04 | % |
|
|
| 588,922 |
|
| 189 |
| 0.04 | % |
Other (3) |
|
|
| 18 |
|
|
|
|
|
|
| 18 |
|
|
|
|
|
|
| 55 |
|
|
|
|
|
|
| 52 |
|
| ||||||||
Total asset management and administration fees |
|
| $ | 1,476 |
|
|
|
|
|
| $ | 1,224 |
|
|
|
|
|
| $ | 4,207 |
|
|
|
|
|
| $ | 3,515 |
|
|
(1) | Advice solutions include managed portfolios, specialized strategies, and customized investment advice such as Schwab Wealth Advisory TM, Schwab Managed Portfolios TM, Managed Account Select ®, Schwab Advisor Network ®, Windhaven Strategies ®, ThomasPartners ® Strategies, Schwab Index Advantage advised retirement plan balances, Schwab Intelligent Portfolios ®, Institutional Intelligent Portfolios ®, Schwab Intelligent Portfolios Premium ®, AdvisorDirect ®, Essential Portfolios, Selective Portfolios, and Personalized Portfolios; as well as legacy non-fee advice solutions including Schwab Advisor Source and certain retirement plan balances. Average client assets for advice solutions may also include the asset balances contained in the mutual fund and/or ETF categories listed above. For the total end of period view, please see the Monthly Activity Report. |
(2) | Includes various asset-related fees, such as trust fees, 401(k) recordkeeping fees, and mutual fund clearing fees and other service fees. |
(3) | Includes miscellaneous service and transaction fees relating to mutual funds and ETFs that are not balance-based. |
THE CHARLES SCHWAB CORPORATION Growth in Client Assets and Accounts (Unaudited) | ||||||||||||||||||||||||||
| Q3-24 % Change |
| 2024 |
|
| 2023 |
| |||||||||||||||||||
| vs. | vs. |
| Third |
| Second |
| First |
| Fourth |
| Third | ||||||||||||||
(In billions, at quarter end, except as noted) | Q3-23 | Q2-24 |
| Quarter |
| Quarter |
| Quarter |
| Quarter |
| Quarter | ||||||||||||||
Assets in client accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Schwab One ®, certain cash equivalents, and bank deposits | (5 | )% |
| 1 | % |
|
| $ | 334.1 |
|
| $ | 330.7 |
|
| $ | 348.2 |
|
| $ | 368.3 |
|
| $ | 353.1 |
|
Bank deposit account balances | (16 | )% |
| (1 | )% |
|
|
| 84.0 |
|
|
| 84.5 |
|
|
| 90.2 |
|
|
| 97.4 |
|
|
| 99.5 |
|
Proprietary mutual funds (Schwab Funds ® and Laudus Funds ® ) and CTFs |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Money market funds (1) | 29 | % |
| 5 | % |
|
|
| 562.1 |
|
|
| 533.6 |
|
|
| 515.7 |
|
|
| 476.4 |
|
|
| 436.3 |
|
Equity and bond funds and CTFs (2) | 36 | % |
| 7 | % |
|
|
| 228.9 |
|
|
| 214.4 |
|
|
| 206.0 |
|
|
| 186.7 |
|
|
| 167.9 |
|
Total proprietary mutual funds and CTFs | 31 | % |
| 6 | % |
|
|
| 791.0 |
|
|
| 748.0 |
|
|
| 721.7 |
|
|
| 663.1 |
|
|
| 604.2 |
|
Mutual Fund Marketplace ® (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Mutual Fund OneSource ® and other no-transaction-fee funds | 24 | % |
| 4 | % |
|
|
| 358.0 |
|
|
| 344.8 |
|
|
| 329.2 |
|
|
| 306.2 |
|
|
| 288.0 |
|
Mutual fund clearing services | 29 | % |
| 6 | % |
|
|
| 280.8 |
|
|
| 264.7 |
|
|
| 248.1 |
|
|
| 233.4 |
|
|
| 216.9 |
|
Other third-party mutual funds | 17 | % |
| 5 | % |
|
|
| 1,236.5 |
|
|
| 1,177.5 |
|
|
| 1,182.9 |
|
|
| 1,126.5 |
|
|
| 1,055.3 |
|
Total Mutual Fund Marketplace | 20 | % |
| 5 | % |
|
|
| 1,875.3 |
|
|
| 1,787.0 |
|
|
| 1,760.2 |
|
|
| 1,666.1 |
|
|
| 1,560.2 |
|
Total mutual fund assets | 23 | % |
| 5 | % |
|
|
| 2,666.3 |
|
|
| 2,535.0 |
|
|
| 2,481.9 |
|
|
| 2,329.2 |
|
|
| 2,164.4 |
|
Exchange-traded funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Proprietary ETFs (2) | 35 | % |
| 10 | % |
|
|
| 385.9 |
|
|
| 349.6 |
|
|
| 342.9 |
|
|
| 319.4 |
|
|
| 286.2 |
|
Other third-party ETFs | 40 | % |
| 9 | % |
|
|
| 1,888.2 |
|
|
| 1,738.6 |
|
|
| 1,676.6 |
|
|
| 1,521.7 |
|
|
| 1,352.6 |
|
Total ETF assets | 39 | % |
| 9 | % |
|
|
| 2,274.1 |
|
|
| 2,088.2 |
|
|
| 2,019.5 |
|
|
| 1,841.1 |
|
|
| 1,638.8 |
|
Equity and other securities | 33 | % |
| 5 | % |
|
|
| 3,839.6 |
|
|
| 3,648.8 |
|
|
| 3,467.7 |
|
|
| 3,163.5 |
|
|
| 2,886.4 |
|
Fixed income securities | 6 | % |
| — |
|
|
|
| 795.4 |
|
|
| 792.0 |
|
|
| 779.0 |
|
|
| 779.7 |
|
|
| 747.4 |
|
Margin loans outstanding | 12 | % |
| 2 | % |
|
|
| (73.0 | ) |
|
| (71.7 | ) |
|
| (68.1 | ) |
|
| (62.6 | ) |
|
| (65.1 | ) |
Total client assets | 27 | % |
| 5 | % |
|
| $ | 9,920.5 |
|
| $ | 9,407.5 |
|
| $ | 9,118.4 |
|
| $ | 8,516.6 |
|
| $ | 7,824.5 |
|
Client assets by business |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Investor Services | 28 | % |
| 5 | % |
|
| $ | 5,305.9 |
|
| $ | 5,055.7 |
|
| $ | 4,852.2 |
|
| $ | 4,519.1 |
|
| $ | 4,157.7 |
|
Advisor Services | 26 | % |
| 6 | % |
|
|
| 4,614.6 |
|
|
| 4,351.8 |
|
|
| 4,266.2 |
|
|
| 3,997.5 |
|
|
| 3,666.8 |
|
Total client assets | 27 | % |
| 5 | % |
|
| $ | 9,920.5 |
|
| $ | 9,407.5 |
|
| $ | 9,118.4 |
|
| $ | 8,516.6 |
|
| $ | 7,824.5 |
|
Net growth in assets in client accounts (for the quarter ended) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Net new assets by business |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Investor Services (4) | 28 | % |
| (8 | )% |
|
| $ | 36.7 |
|
| $ | 39.9 |
|
| $ | 34.9 |
|
| $ | 25.0 |
|
| $ | 28.6 |
|
Advisor Services (5) | 176 | % |
| 58 | % |
|
|
| 54.1 |
|
|
| 34.3 |
|
|
| 53.3 |
|
|
| 41.3 |
|
|
| 19.6 |
|
Total net new assets | 88 | % |
| 22 | % |
|
| $ | 90.8 |
|
| $ | 74.2 |
|
| $ | 88.2 |
|
| $ | 66.3 |
|
| $ | 48.2 |
|
Net market gains (losses) |
|
|
|
|
|
| 422.2 |
|
|
| 214.9 |
|
|
| 513.6 |
|
|
| 625.8 |
|
|
| (239.5 | ) | ||
Net growth (decline) |
|
|
|
|
| $ | 513.0 |
|
| $ | 289.1 |
|
| $ | 601.8 |
|
| $ | 692.1 |
|
| $ | (191.3 | ) | ||
New brokerage accounts (in thousands, for the quarter ended) | 9 | % |
| (1 | )% |
|
|
| 972 |
|
|
| 985 |
|
|
| 1,094 |
|
|
| 910 |
|
|
| 894 |
|
Client accounts (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Active brokerage accounts | 4 | % |
| 1 | % |
|
|
| 35,982 |
|
|
| 35,612 |
|
|
| 35,301 |
|
|
| 34,838 |
|
|
| 34,540 |
|
Banking accounts | 9 | % |
| 1 | % |
|
|
| 1,954 |
|
|
| 1,931 |
|
|
| 1,885 |
|
|
| 1,838 |
|
|
| 1,799 |
|
Workplace Plan Participant Accounts (6) | 5 | % |
| — |
|
|
|
| 5,388 |
|
|
| 5,363 |
|
|
| 5,277 |
|
|
| 5,221 |
|
|
| 5,141 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Total client assets in purchased money market funds are located at: https://www.aboutschwab.com/investor-relations. |
| (2) | Includes balances held on and off the Schwab platform. As of September 30, 2024, off-platform equity and bond funds, CTFs, and ETFs were $34.4 billion, $4.1 billion, and $129.3 billion, respectively. |
(3) | Excludes all proprietary mutual funds and ETFs. |
(4) | Third quarter of 2024 includes net outflows of $4.4 billion from off-platform Schwab Bank Retail CDs and an outflow of $0.1 billion from an international relationship. Second quarter of 2024 includes net inflows of $2.7 billion from off-platform Schwab Bank Retail CDs and an inflow of $10.3 billion from a mutual fund clearing services client. First quarter of 2024 includes net outflows of $7.4 billion from off-platform Schwab Bank Retail CDs. Fourth quarter of 2023 includes net inflows of $2.4 billion from off-platform Schwab Bank Retail CDs and outflows of $5.8 billion from an international relationship. Third quarter of 2023 includes net inflows of $3.3 billion from off-platform Schwab Bank Retail CDs. |
(5) | Fourth quarter of 2023 includes outflows of $6.4 billion from an international relationship. Third quarter of 2023 includes an outflow of $0.8 billion from an international relationship. |
(6) | Beginning in the fourth quarter 2023, Retirement Plan Participants was expanded to include accounts in Stock Plan Services, Designated Brokerage Services, and Retirement Business Services. Participants may be enrolled in services in more than one Workplace business. Third quarter 2023 has been recast to reflect this change. |
The Charles Schwab Corporation Monthly Activity Report For September 2024 | ||||||||||||||||||||||||||||||
| 2023 |
|
|
| 2024 |
|
|
|
|
|
|
|
| Change | ||||||||||||||||
| Sep | Oct | Nov | Dec | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Mo. | Yr. | |||||||||||||||
Market Indices (at month end) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Dow Jones Industrial Average ® | 33,508 |
| 33,053 |
| 35,951 |
| 37,690 |
| 38,150 |
| 38,996 |
| 39,807 |
| 37,816 |
| 38,686 |
| 39,119 |
| 40,843 |
| 41,563 |
| 42,330 |
| 2 | % | 26 | % |
Nasdaq Composite ® | 13,219 |
| 12,851 |
| 14,226 |
| 15,011 |
| 15,164 |
| 16,092 |
| 16,379 |
| 15,658 |
| 16,735 |
| 17,733 |
| 17,599 |
| 17,714 |
| 18,189 |
| 3 | % | 38 | % |
Standard & Poor’s ® 500 | 4,288 |
| 4,194 |
| 4,568 |
| 4,770 |
| 4,846 |
| 5,096 |
| 5,254 |
| 5,036 |
| 5,278 |
| 5,460 |
| 5,522 |
| 5,648 |
| 5,762 |
| 2 | % | 34 | % |
Client Assets (in billions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Beginning Client Assets | 8,094.7 |
| 7,824.5 |
| 7,653.4 |
| 8,180.6 |
| 8,516.6 |
| 8,558.1 |
| 8,879.5 |
| 9,118.4 |
| 8,847.5 |
| 9,206.3 |
| 9,407.5 |
| 9,572.1 |
| 9,737.7 |
|
|
| ||
Net New Assets (1) | 27.2 |
| 5.0 |
| 19.2 |
| 42.1 |
| 14.8 |
| 31.7 |
| 41.7 |
| 10.0 |
| 31.0 |
| 33.2 |
| 29.0 |
| 31.5 |
| 30.3 |
| (4 | )% | 11 | % |
Net Market Gains (Losses) | (297.4 | ) | (176.1 | ) | 508.0 |
| 293.9 |
| 26.7 |
| 289.7 |
| 197.2 |
| (280.9 | ) | 327.8 |
| 168.0 |
| 135.6 |
| 134.1 |
| 152.5 |
|
|
| ||
Total Client Assets (at month end) | 7,824.5 |
| 7,653.4 |
| 8,180.6 |
| 8,516.6 |
| 8,558.1 |
| 8,879.5 |
| 9,118.4 |
| 8,847.5 |
| 9,206.3 |
| 9,407.5 |
| 9,572.1 |
| 9,737.7 |
| 9,920.5 |
| 2 | % | 27 | % |
Core Net New Assets (1,2) | 27.1 |
| 11.3 |
| 21.7 |
| 43.1 |
| 17.2 |
| 33.4 |
| 45.0 |
| 1.0 |
| 31.1 |
| 29.1 |
| 29.0 |
| 32.8 |
| 33.5 |
| 2 | % | 24 | % |
Receiving Ongoing Advisory Services (at month end) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Investor Services | 533.0 |
| 522.2 |
| 557.0 |
| 581.4 |
| 584.1 |
| 601.8 |
| 618.5 |
| 602.2 |
| 624.0 |
| 632.9 |
| 649.1 |
| 663.7 |
| 675.1 |
| 2 | % | 27 | % |
Advisor Services (3) | 3,448.0 |
| 3,380.3 |
| 3,604.4 |
| 3,757.4 |
| 3,780.4 |
| 3,902.5 |
| 4,009.5 |
| 3,893.9 |
| 4,027.3 |
| 4,090.0 |
| 4,185.4 |
| 4,268.1 |
| 4,343.8 |
| 2 | % | 26 | % |
Client Accounts (at month end, in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Active Brokerage Accounts | 34,540 |
| 34,571 |
| 34,672 |
| 34,838 |
| 35,017 |
| 35,127 |
| 35,301 |
| 35,426 |
| 35,524 |
| 35,612 |
| 35,743 |
| 35,859 |
| 35,982 |
| — |
| 4 | % |
Banking Accounts | 1,799 |
| 1,812 |
| 1,825 |
| 1,838 |
| 1,856 |
| 1,871 |
| 1,885 |
| 1,901 |
| 1,916 |
| 1,931 |
| 1,937 |
| 1,940 |
| 1,954 |
| 1 | % | 9 | % |
Workplace Plan Participant Accounts (4) | 5,141 |
| 5,212 |
| 5,212 |
| 5,221 |
| 5,226 |
| 5,268 |
| 5,277 |
| 5,282 |
| 5,345 |
| 5,363 |
| 5,382 |
| 5,373 |
| 5,388 |
| — |
| 5 | % |
Client Activity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
New Brokerage Accounts (in thousands) | 280 |
| 284 |
| 286 |
| 340 |
| 366 |
| 345 |
| 383 |
| 361 |
| 314 |
| 310 |
| 327 |
| 324 |
| 321 |
| (1 | )% | 15 | % |
Client Cash as a Percentage of Client Assets (5) | 10.8 | % | 11.2 | % | 10.7 | % | 10.5 | % | 10.5 | % | 10.2 | % | 10.0 | % | 10.2 | % | 9.9 | % | 9.7 | % | 9.6 | % | 9.5 | % | 9.5 | % | — |
| (130) bp | |
Derivative Trades as a Percentage of Total Trades | 24.2 | % | 23.2 | % | 23.1 | % | 21.8 | % | 21.8 | % | 22.2 | % | 21.9 | % | 22.1 | % | 21.9 | % | 21.3 | % | 21.2 | % | 20.8 | % | 21.5 | % | 70 bp | (270) bp | ||
Selected Average Balances (in millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Average Interest-Earning Assets (6) | 444,864 |
| 438,522 |
| 439,118 |
| 446,305 |
| 443,694 |
| 434,822 |
| 431,456 |
| 423,532 |
| 415,950 |
| 417,150 |
| 417,379 |
| 420,191 |
| 420,203 |
| — |
| (6 | )% |
Average Margin Balances | 64,014 |
| 63,946 |
| 61,502 |
| 62,309 |
| 61,368 |
| 63,600 |
| 66,425 |
| 68,827 |
| 67,614 |
| 69,730 |
| 73,206 |
| 73,326 |
| 72,755 |
| (1 | )% | 14 | % |
Average Bank Deposit Account Balances (7) | 100,404 |
| 97,893 |
| 94,991 |
| 95,518 |
| 95,553 |
| 92,075 |
| 90,774 |
| 88,819 |
| 86,844 |
| 85,195 |
| 83,979 |
| 82,806 |
| 82,336 |
| (1 | )% | (18 | )% |
Mutual Fund and Exchange-Traded Fund |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Net Buys (Sells) (8,9) (in millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Equities | 675 |
| (3,039 | ) | 6,099 |
| 7,903 |
| 8,182 |
| 7,624 |
| 10,379 |
| 3,472 |
| 5,734 |
| 3,379 |
| 10,908 |
| 5,609 |
| 5,217 |
|
|
| ||
Hybrid | (828 | ) | (1,457 | ) | (1,466 | ) | (1,596 | ) | (501 | ) | (1,330 | ) | (439 | ) | (703 | ) | (558 | ) | (843 | ) | (1,155 | ) | (1,377 | ) | (432 | ) |
|
| ||
Bonds | 2,723 |
| 1,094 |
| 255 |
| 6,104 |
| 7,510 |
| 9,883 |
| 7,561 |
| 5,949 |
| 5,854 |
| 6,346 |
| 8,651 |
| 10,919 |
| 11,015 |
|
|
| ||
Net Buy (Sell) Activity (in millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Mutual Funds (8) | (5,853 | ) | (12,245 | ) | (9,267 | ) | (7,406 | ) | (966 | ) | (1,348 | ) | (1,607 | ) | (4,818 | ) | (5,544 | ) | (4,254 | ) | (4,679 | ) | (4,003 | ) | (1,261 | ) |
|
| ||
Exchange-Traded Funds (9) | 8,423 |
| 8,843 |
| 14,155 |
| 19,817 |
| 16,157 |
| 17,525 |
| 19,108 |
| 13,536 |
| 16,574 |
| 13,136 |
| 23,083 |
| 19,154 |
| 17,061 |
|
|
| ||
Money Market Funds | 13,388 |
| 16,976 |
| 11,670 |
| 7,745 |
| 11,717 |
| 10,129 |
| 9,085 |
| (2,357 | ) | 9,790 |
| 3,858 |
| 9,110 |
| 8,048 |
| 9,672 |
|
|
|
Note: Certain supplemental details related to the information above can be found at: https://www.aboutschwab.com/financial-reports. | |
(1) | Unless otherwise noted, differences between net new assets and core net new assets are net flows from off-platform Schwab Bank Retail CDs. Additionally, 2024 includes an outflow from a large international relationship of $0.1 billion in August and an inflow of $10.3 billion from a mutual fund clearing services client in April. 2023 also includes outflows from a large international relationship of $0.8 billion in September, $6.2 billion in October, $5.4 billion in November, and $0.6 billion in December. |
(2) | Net new assets before significant one-time inflows or outflows, such as acquisitions/divestitures or extraordinary flows (generally greater than $10 billion) relating to a specific client, and activity from off-platform Schwab Bank Retail CDs. These flows may span multiple reporting periods. |
(3) | Excludes Retirement Business Services. |
(4) | Beginning October 2023, Retirement Plan Participants was expanded to include accounts in Stock Plan Services, Designated Brokerage Services, and Retirement Business Services. Participants may be enrolled in services in more than one Workplace business. September 2023 has been recast to reflect this change. |
(5) | Schwab One ®, certain cash equivalents, bank deposits, third-party bank deposit accounts, and money market fund balances as a percentage of total client assets; client cash excludes brokered CDs issued by Charles Schwab Bank. |
(6) | Represents average total interest-earning assets on the Company’s balance sheet. |
(7) | Represents average clients’ uninvested cash sweep account balances held in deposit accounts at third-party financial institutions. |
(8) | Represents the principal value of client mutual fund transactions handled by Schwab, including transactions in proprietary funds. Includes institutional funds available only to Investment Managers. Excludes money market fund transactions. |
(9) | Represents the principal value of client ETF transactions handled by Schwab, including transactions in proprietary ETFs. |
THE CHARLES SCHWAB CORPORATION
Non-GAAP Financial Measures
(In millions, except ratios and per share amounts)
(Unaudited)
In addition to disclosing financial results in accordance with generally accepted accounting principles in the U.S. (GAAP), Schwab’s third quarter earnings release contains references to the non-GAAP financial measures described below. We believe these non-GAAP financial measures provide useful supplemental information about the financial performance of the Company, and facilitate meaningful comparison of Schwab’s results in the current period to both historic and future results. These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may not be comparable to non-GAAP financial measures presented by other companies.
Schwab’s use of non-GAAP measures is reflective of certain adjustments made to GAAP financial measures as described below. Beginning in the third quarter of 2023, these adjustments also include restructuring costs, which the Company began incurring in connection with its previously announced plans to streamline its operations to prepare for post-integration of Ameritrade. See Part I – Item 1 – Note 10 of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 for additional information.
Non-GAAP Adjustment or Measure | Definition | Usefulness to Investors and Uses by Management |
Acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs | Schwab adjusts certain GAAP financial measures to exclude the impact of acquisition and integration-related costs incurred as a result of the Company’s acquisitions, amortization of acquired intangible assets, restructuring costs, and, where applicable, the income tax effect of these expenses.
Adjustments made to exclude amortization of acquired intangible assets are reflective of all acquired intangible assets, which were recorded as part of purchase accounting. These acquired intangible assets contribute to the Company’s revenue generation. Amortization of acquired intangible assets will continue in future periods over their remaining useful lives. | We exclude acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs for the purpose of calculating certain non-GAAP measures because we believe doing so provides additional transparency of Schwab’s ongoing operations, and is useful in both evaluating the operating performance of the business and facilitating comparison of results with prior and future periods.
Costs related to acquisition and integration or restructuring fluctuate based on the timing of acquisitions, integration and restructuring activities, thereby limiting comparability of results among periods, and are not representative of the costs of running the Company’s ongoing business. Amortization of acquired intangible assets is excluded because management does not believe it is indicative of the Company’s underlying operating performance. |
Return on tangible common equity | Return on tangible common equity represents annualized adjusted net income available to common stockholders as a percentage of average tangible common equity. Tangible common equity represents common equity less goodwill, acquired intangible assets — net, and related deferred tax liabilities. | Acquisitions typically result in the recognition of significant amounts of goodwill and acquired intangible assets. We believe return on tangible common equity may be useful to investors as a supplemental measure to facilitate assessing capital efficiency and returns relative to the composition of Schwab’s balance sheet. |
Adjusted Tier 1 Leverage Ratio | Adjusted Tier 1 Leverage Ratio represents the Tier 1 Leverage Ratio as prescribed by bank regulatory guidance for the consolidated company and for Charles Schwab Bank, SSB (CSB), adjusted to reflect the inclusion of accumulated other comprehensive income (AOCI) in the ratio. | Inclusion of the impacts of AOCI in the Company’s Tier 1 Leverage Ratio provides additional information regarding the Company’s current capital position. We believe Adjusted Tier 1 Leverage Ratio may be useful to investors as a supplemental measure of the Company’s capital levels. |
The Company also uses adjusted diluted EPS and return on tangible common equity as components of performance criteria for employee bonus and certain executive management incentive compensation arrangements. The Compensation Committee of CSC’s Board of Directors maintains discretion in evaluating performance against these criteria. Additionally, the Company uses adjusted Tier 1 Leverage Ratio in managing capital, including its use of the measure as its long-term operating objective.
The tables below present reconciliations of GAAP measures to non-GAAP measures:
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| 2024 | 2023 |
| 2024 | 2023 | ||||||||||||||||||||||||||
| Total | Net Income | Total | Net Income |
| Total | Net Income | Total | Net Income | ||||||||||||||||||||||
Total expenses excluding interest (GAAP), Net income (GAAP) | $ | 3,005 |
| $ | 1,408 |
| $ | 3,223 |
| $ | 1,125 |
|
| $ | 8,890 |
| $ | 4,102 |
| $ | 9,194 |
| $ | 4,022 |
| ||||||
Acquisition and integration-related costs (1) |
| (23 | ) |
| 23 |
|
| (106 | ) |
| 106 |
|
|
| (97 | ) |
| 97 |
|
| (334 | ) |
| 334 |
| ||||||
Amortization of acquired intangible assets |
| (130 | ) |
| 130 |
|
| (135 | ) |
| 135 |
|
|
| (389 | ) |
| 389 |
|
| (404 | ) |
| 404 |
| ||||||
Restructuring costs (2) |
| — |
|
| — |
|
| (279 | ) |
| 279 |
|
|
| 18 |
|
| (18 | ) |
| (279 | ) |
| 279 |
| ||||||
Income tax effects (3) |
| N/A |
|
| (36 | ) |
| N/A |
|
| (127 | ) |
|
| N/A |
|
| (111 | ) |
| N/A |
|
| (247 | ) | ||||||
Adjusted total expenses (non-GAAP), Adjusted net income (non-GAAP) | $ | 2,852 |
| $ | 1,525 |
| $ | 2,703 |
| $ | 1,518 |
|
| $ | 8,422 |
| $ | 4,459 |
| $ | 8,177 |
| $ | 4,792 |
|
(1) | Acquisition and integration-related costs for the three and nine months ended September 30, 2024 primarily consist of $9 million and $44 million of compensation and benefits, $3 million and $32 million of professional services, and $8 million and $13 million of depreciation and amortization. Acquisition and integration-related costs for the three and nine months ended September 30, 2023 primarily consist of $52 million and $158 million of compensation and benefits, $37 million and $111 million of professional services, $7 million and $21 million of occupancy and equipment, and $4 million and $26 million of other. |
(2) | Restructuring costs for the nine months ended September 30, 2024 reflect a change in estimate of $34 million in compensation and benefits, offset by $3 million of occupancy and equipment and $13 million of other. Restructuring costs for the three and nine months ended September 30, 2023 primarily consist of $276 million of compensation and benefits. |
(3) | The income tax effects of the non-GAAP adjustments are determined using an effective tax rate reflecting the exclusion of non-deductible acquisition costs and are used to present the acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs on an after-tax basis. |
N/A Not applicable. |
| Three Months Ended September 30, |
| Nine Months Ended September 30, | |||||||||||||||||||
| 2024 | 2023 |
| 2024 | 2023 | |||||||||||||||||
| Amount | % of Total Net Revenues | Amount | % of Total Net Revenues |
| Amount | % of Total Net Revenues | Amount | % of Total Net Revenues | |||||||||||||
Income before taxes on income (GAAP), Pre-tax profit margin (GAAP) | $ | 1,842 | 38.0 | % | $ | 1,383 | 30.0 | % |
| $ | 5,387 |
| 37.7 | % | $ | 5,184 | 36.1 | % | ||||
Acquisition and integration-related costs |
| 23 | 0.5 | % |
| 106 | 2.3 | % |
|
| 97 |
| 0.7 | % |
| 334 | 2.3 | % | ||||
Amortization of acquired intangible assets |
| 130 | 2.7 | % |
| 135 | 2.9 | % |
|
| 389 |
| 2.7 | % |
| 404 | 2.8 | % | ||||
Restructuring costs |
| — | — |
|
| 279 | 6.1 | % |
|
| (18 | ) | (0.1 | )% |
| 279 | 1.9 | % | ||||
Adjusted income before taxes on income (non-GAAP), Adjusted pre-tax profit margin (non-GAAP) | $ | 1,995 | 41.2 | % | $ | 1,903 | 41.3 | % |
| $ | 5,855 |
| 41.0 | % | $ | 6,201 | 43.1 | % |
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| 2024 | 2023 |
| 2024 | 2023 | ||||||||||||||||||||||||||
| Amount | Diluted EPS | Amount | Diluted EPS |
| Amount | Diluted EPS | Amount | Diluted EPS | ||||||||||||||||||||||
Net income available to common stockholders (GAAP), Earnings per common share — diluted (GAAP) | $ | 1,299 |
| $ | .71 |
| $ | 1,017 |
| $ | .56 |
|
| $ | 3,761 |
| $ | 2.05 |
| $ | 3,723 |
| $ | 2.03 |
| ||||||
Acquisition and integration-related costs |
| 23 |
|
| .01 |
|
| 106 |
|
| .06 |
|
|
| 97 |
|
| .05 |
|
| 334 |
|
| .18 |
| ||||||
Amortization of acquired intangible assets |
| 130 |
|
| .07 |
|
| 135 |
|
| .07 |
|
|
| 389 |
|
| .21 |
|
| 404 |
|
| .22 |
| ||||||
Restructuring costs |
| — |
|
| — |
|
| 279 |
|
| .15 |
|
|
| (18 | ) |
| (.01 | ) |
| 279 |
|
| .15 |
| ||||||
Income tax effects |
| (36 | ) |
| (.02 | ) |
| (127 | ) |
| (.07 | ) |
|
| (111 | ) |
| (.05 | ) |
| (247 | ) |
| (.13 | ) | ||||||
Adjusted net income available to common stockholders (non-GAAP), Adjusted diluted EPS (non-GAAP) | $ | 1,416 |
| $ | .77 |
| $ | 1,410 |
| $ | .77 |
|
| $ | 4,118 |
| $ | 2.25 |
| $ | 4,493 |
| $ | 2.45 |
|
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||||
|
| 2024 |
|
| 2023 |
|
|
| 2024 |
|
| 2023 |
| ||
Return on average common stockholders’ equity (GAAP) |
| 14 | % |
| 14 | % |
|
| 14 | % |
| 18 | % | ||
Average common stockholders’ equity | $ | 36,393 |
| $ | 28,274 |
|
| $ | 34,895 |
| $ | 27,747 |
| ||
Less: Average goodwill |
| (11,951 | ) |
| (11,951 | ) |
|
| (11,951 | ) |
| (11,951 | ) | ||
Less: Average acquired intangible assets — net |
| (7,938 | ) |
| (8,457 | ) |
|
| (8,067 | ) |
| (8,589 | ) | ||
Plus: Average deferred tax liabilities related to goodwill and acquired intangible assets — net |
| 1,735 |
|
| 1,822 |
|
|
| 1,747 |
|
| 1,830 |
| ||
Average tangible common equity | $ | 18,239 |
| $ | 9,688 |
|
| $ | 16,624 |
| $ | 9,037 |
| ||
Adjusted net income available to common stockholders (1) | $ | 1,416 |
| $ | 1,410 |
|
| $ | 4,118 |
| $ | 4,493 |
| ||
Return on tangible common equity (non-GAAP) |
| 31 | % |
| 58 | % |
|
| 33 | % |
| 66 | % |
(1) | See table above for the reconciliation of net income available to common stockholders to adjusted net income available to common stockholders (non-GAAP). |
| (Preliminary) | ||||||
| September 30, 2024 | ||||||
| CSC | CSB | |||||
Tier 1 Leverage Ratio (GAAP) |
| 9.7 | % |
| 11.2 | % | |
Tier 1 Capital | $ | 43,692 |
| $ | 32,225 |
| |
Plus: AOCI adjustment |
| (14,620 | ) |
| (12,669 | ) | |
Adjusted Tier 1 Capital |
| 29,072 |
|
| 19,556 |
| |
Average assets with regulatory adjustments |
| 450,752 |
|
| 287,924 |
| |
Plus: AOCI adjustment |
| (15,353 | ) |
| (13,480 | ) | |
Adjusted average assets with regulatory adjustments | $ | 435,399 |
| $ | 274,444 |
| |
Adjusted Tier 1 Leverage Ratio (non-GAAP) |
| 6.7 | % |
| 7.1 | % |
View source version on businesswire.com:https://www.businesswire.com/news/home/20241015717862/en/
CONTACT: MEDIA
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public.relations@schwab.comINVESTORS/ANALYSTS
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KEYWORD: TEXAS UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: PERSONAL FINANCE FINANCE BANKING PROFESSIONAL SERVICES ASSET MANAGEMENT
SOURCE: The Charles Schwab Corporation
Copyright Business Wire 2024.
