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Schwab Reports Record Quarterly Net Income of $783 Million, Up 39%

The Charles Schwab Corporation announced today that its net income for the first quarter of 2018 was a record $783 million, up 31% from $597 million for the prior quarter, and up 39% from $564 million for the first quarter of 2017.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20180416005333/en/

Three Months Ended
March 31,
%
Financial Highlights 2018 2017 Change
Net revenues (in millions) $ 2,398 $ 2,081 15 %
Net income (in millions) $ 783 $ 564 39 %
Diluted earnings per common share $ .55 $ .39 41 %
Pre-tax profit margin 41.8 % 40.5 %

Return on average common stockholders’ equity (annualized)

18 % 15 %
Note: All per-share results are rounded to the nearest cent, based on weighted-average diluted common shares outstanding.

CEO Walt Bettinger said, “Our contemporary full-service model continues to build stronger client relationships and drive record growth, even during times of market uncertainty. In the first quarter, investors experienced sharp market swings after nine consecutive quarters of positive S&P 500® returns. Amidst the volatility, client interactions surged as we offered the insight and assistance they expect – call volumes and web logins from both our retail and independent advisor clients were up nearly 20% and 50% from their respective quarterly averages. Engagement remained strong during the quarter, with trading activity rising nearly 40% year-over-year to a new all-time high and clients continuing to be net buyers of securities. New accounts totaled 443,000 company-wide – the highest quarterly level in 18 years. In addition, households new to our Retail business rose 42% versus the first quarter of 2017. Excluding planned mutual fund clearing outflows of $84.4 billion, our clients entrusted us with record quarterly core net new assets of $65.6 billion, implying an annualized growth rate of 7.8% – a level not seen since 2008. This strength in asset gathering spanned our largest businesses, as Advisor Services and Retail both set new records, with inflows up 27% and 64%, respectively, from last year. Our outstanding organic growth helped to partially offset market declines, and we ended the quarter serving $3.31 trillion in client assets, up 13% from last year, across 11.0 million active brokerage accounts, 1.2 million banking accounts, and 1.6 million retirement plan participants.”

Mr. Bettinger continued, “Operating ‘through clients’ eyes’ remains central to serving our current clients and fueling growth. Every day we ask ourselves how we can better support our clients, improve the value we offer, and make it simpler and easier to do business with us. We were recently honored as the ‘Highest in Investor Satisfaction with Full Service Brokerage Firms’ by J.D. Power* for the third consecutive year, demonstrating the importance of our broad capabilities, which include an extensive array of advice solutions. Total assets receiving ongoing advice continued growing faster than client assets overall, totaling $1.72 trillion at March 31st. The first quarter marked three years since the launch of Schwab Intelligent Portfolios® and one year since the introduction of Schwab Intelligent Advisory® – which, combined with Institutional Intelligent Portfolios®, reached $30.6 billion in total digital advisory solution assets at quarter-end, up 92% year-over-year. Also this quarter, we passed an important milestone for Schwab ETF OneSource. Launched five years ago, this program, which offers Schwab clients online commission-free ETFs, has more than doubled in scope to 254 ETFs spanning 69 Morningstar categories and now has over $130 billion in assets. Additionally, we initiated a ‘Sweep Tower’ for uninvested cash, offering eligible clients extended FDIC insurance of up to $500,000**. This enhancement broadens Schwab’s range of cash solutions for our clients, which provide smart features, competitive yields, and transparency that helps investors make informed decisions. In early April, we improved our futures trading capabilities, which now include contingent orders, trade calculators, education, and research, all at a lower per contract cost of $1.50. We are better positioned than ever to attract and serve a growing share of U.S. investable wealth by offering a ‘no trade-offs’ combination of quality service, advice, and innovative products at a great value – all while leveraging our scale to operate efficiently and profitably.”

CFO Peter Crawford commented, “We’ve achieved another quarter of record financial performance, driven in part by sustained business momentum, higher interest rates, and lower corporate taxes. Net interest revenue grew 26% to a record $1.3 billion due to larger client cash sweep balances as well as the impact of the Fed’s 2017 and March 2018 rate hikes – our net interest margin expanded to 2.12%, up from 1.87% a year earlier. Asset management and administration fees increased 3% to $851 million due to growing balances in advised solutions, equity and bond funds, and ETFs, partially offset by lower money market fund revenue as a result of bulk transfers and 2017 fee cuts. Our clients’ record trading activity boosted Trading revenue 5% to $201 million, more than offsetting the commission pricing reductions announced in February of last year. On the expense front, our 13% first quarter spending increase reflected strong client metrics and activity, as well as recent market volatility. Compensation was 10% higher in the first quarter due to hiring to serve our expanding investor base and growth-related incentives. Professional services rose by 17%, largely from third-party fees tied to higher balances in our asset management business, and from our project spending. Lastly, Other expense grew by 44% mainly due to a $15 million charge associated with unsecured client margin losses in volatility-related products during early February. While these factors contributed to outlays that were a bit above our initial expectations, the expense scenario we shared at our Winter Business Update incorporated slightly elevated quarterly comparisons during the first half of 2018. Altogether, we achieved a 240 basis point gap between revenue and expense growth, which resulted in a 41.8% pre-tax profit margin; combined with a lower tax rate of 21.9%, we delivered record net income of $783 million, up 39% from a year ago.”

Mr. Crawford concluded, “During the first quarter, we actively utilized available capital to further our client cash strategy. As part of this process, we transferred approximately $25 billion from sweep money market funds to bank sweep and paid off $15 billion in Federal Home Loan Bank advances. The net effect of these moves and client activity lifted our consolidated balance sheet assets to $248 billion at quarter-end. We still anticipate crossing the $250 billion threshold in the first half of 2018. In keeping with the deployment of capital to support bulk transfers, our preliminary Tier 1 Leverage Ratio at quarter-end declined to 7.5%, remaining above our operating objective of 6.75%-7%. Our solid capital position enables Schwab to continue driving profitable growth while building long-term stockholder value – our first quarter return on equity reached 18%, the highest since 2009.”

Beginning with the first quarter of 2018, the Business Highlights section of the earnings release has been discontinued; selected balances are now located at: www.aboutschwab.com/investor-relations/.

Supporting schedules are either attached or located at: www.aboutschwab.com/investor-relations/financial-reports.

*Disclaimer: Charles Schwab received the highest numerical score in the J.D. Power 2016-2018 Full Service Investor Satisfaction Study. 2018 study based on 4,419 total responses from 18 firms measuring opinions of investors who used full service investment institutions, surveyed November-December 2017. Your experiences may vary. Visit jdpower.com.

**Bank Sweep deposits are held at one or more FDIC-insured banks that are affiliated with Charles Schwab & Co., Inc. (“Affiliated Banks”). Funds deposited at Affiliated Banks are insured, in aggregate, up to $250,000 per Affiliated Bank, per depositor, for each account ownership category, by the Federal Deposit Insurance Corporation (FDIC).

Commentary from the CFO

Periodically, our Chief Financial Officer provides insight and commentary regarding Schwab’s financial picture at: www.aboutschwab.com/investor-relations/cfo-commentary. The most recent commentary, which discusses mutual fund clearing, was posted on February 14, 2018.

Forward-Looking Statements

This press release contains forward-looking statements relating to the company’s record growth; growth in client base, accounts, and assets; expense scenario; crossing the $250 billion asset threshold; Tier 1 Leverage Ratio operating objective; profitable growth; and stockholder value. 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 include, but are not limited to, the company’s ability to attract and retain clients and registered investment advisors and grow those relationships and client assets; general market conditions, including the level of interest rates, equity valuations, and trading activity; competitive pressures on pricing, including deposit rates; the company’s ability to develop and launch new products, services, and capabilities in a timely and successful manner; client use of the company’s investment advisory services and other products and services; level of client assets, including cash balances; the company’s ability to manage expenses; the timing and amount of bulk transfers; client sensitivity to interest rates; regulatory guidance; and other factors set forth in the company’s most recent report on Form 10-K.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with more than 345 offices and 11.0 million active brokerage accounts, 1.6 million corporate retirement plan participants, 1.2 million banking accounts, and $3.31 trillion in client assets as of March 31, 2018. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, money management, custody, and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, www.sipc.org), and 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 banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at www.schwab.com and www.aboutschwab.com.

THE CHARLES SCHWAB CORPORATION

Consolidated Statements of Income

(In millions, except per share amounts)

(Unaudited)

Three Months Ended
March 31,
2018 2017
Net Revenues
Interest revenue $ 1,421 $ 1,055
Interest expense (158 ) (55 )
Net interest revenue 1,263 1,000
Asset management and administration fees 851 823
Trading revenue 201 192
Other 83 66
Total net revenues 2,398 2,081
Expenses Excluding Interest
Compensation and benefits 770 701
Professional services 156 133
Occupancy and equipment 122 105
Advertising and market development 73 71
Communications 62 57
Depreciation and amortization 73 65
Regulatory fees and assessments 51 44
Other 89 62
Total expenses excluding interest 1,396 1,238
Income before taxes on income 1,002 843
Taxes on income 219 279
Net Income 783 564
Preferred stock dividends and other (1) 37 39
Net Income Available to Common Stockholders $ 746 $ 525
Weighted-Average Common Shares Outstanding:
Basic 1,347 1,336
Diluted 1,362 1,351
Earnings Per Common Shares Outstanding:
Basic $ .55 $ .39
Diluted $ .55 $ .39
Dividends Declared Per Common Share $ .10 $ .08
(1) Includes preferred stock dividends and undistributed earnings and dividends allocated to non-vested restricted stock units.
THE CHARLES SCHWAB CORPORATION
Financial and Operating Highlights
(Unaudited)

Q1-18 % change

2018 2017
vs. vs. First Fourth Third Second First
(In millions, except per share amounts and as noted) Q1-17 Q4-17 Quarter Quarter Quarter Quarter Quarter
Net Revenues
Net interest revenue 26 % 10 % $ 1,263 $ 1,147 $ 1,082 $ 1,053 $ 1,000
Asset management and administration fees 3 % (1 )% 851 863 861 845 823
Trading revenue 5 % 31 % 201 154 151 157 192
Other 26 % 6 % 83 78 71 75 66
Total net revenues 15 % 7 % 2,398 2,242 2,165 2,130 2,081
Expenses Excluding Interest
Compensation and benefits 10 % 8 % 770 711 662 663 701
Professional services 17 % 3 % 156 151 152 144 133
Occupancy and equipment 16 % 8 % 122 113 111 107 105
Advertising and market development 3 % 16 % 73 63 63 71 71
Communications 9 % 3 % 62 60 56 58 57
Depreciation and amortization 12 % 6 % 73 69 69 66 65
Regulatory fees and assessments 16 % 11 % 51 46 43 46 44
Other 44 % 17 % 89 76 64 66 62
Total expenses excluding interest 13 % 8 % 1,396 1,289 1,220 1,221 1,238
Income before taxes on income 19 % 5 % 1,002 953 945 909 843
Taxes on income (22 )% (38 )% 219 356 327 334 279
Net Income 39 % 31 % $ 783 $ 597 $ 618 $ 575 $ 564
Preferred stock dividends and other (5 )% (21 )% 37 47 43 45 39
Net Income Available to Common Stockholders 42 % 36 % $ 746 $ 550 $ 575 $ 530 $ 525
Earnings per common share:
Basic 41 % 34 % $ .55 $ .41 $ .43 $ .40 $ .39
Diluted 41 % 34 % $ .55 $ .41 $ .42 $ .39 $ .39
Dividends declared per common share 25 % 25 % $ .10 $ .08 $ .08 $ .08 $ .08
Weighted-average common shares outstanding:
Basic 1 % 1,347 1,343 1,339 1,338 1,336
Diluted 1 % 1,362 1,358 1,353 1,351 1,351
Performance Measures
Pre-tax profit margin 41.8 % 42.5 % 43.6 % 42.7 % 40.5 %
Return on average common stockholders’ equity (annualized) (1) 18 % 14 % 15 % 15 % 15 %
Financial Condition (at quarter end, in billions)
Cash and investments segregated (40 )% (15 )% $ 12.8 $ 15.1 $ 15.9 $ 18.5 $ 21.2
Receivables from brokerage clients — net 27 % 3 % 21.2 20.6 18.5 18.0 16.7
Bank loans — net 6 % (1 )% 16.4 16.5 16.2 15.8 15.5
Total assets 9 % 2 % 248.3 243.3 230.7 220.6 227.1
Bank deposits 14 % 12 % 190.2 169.7 165.3 162.3 166.9
Payables to brokerage clients (9 )% 31.1 31.2 31.5 33.0 34.3
Short-term borrowings (100 )% (100 )% 15.0 5.0 .3 .6
Long-term debt 17 % (15 )% 4.1 4.8 3.3 3.5 3.5
Stockholders’ equity 14 % 4 % 19.3 18.5 18.0 17.5 17.0
Other
Full-time equivalent employees (at quarter end, in thousands) 10 % 3 % 18.2 17.6 17.3 16.9 16.5

Capital expenditures — purchases of equipment, office facilities, and property, net (in millions)

101 % (4 )% $ 135 $ 141 $ 118 $ 86 $ 67

Expenses excluding interest as a percentage of average client assets (annualized)

0.17 % 0.16 % 0.16 % 0.16 % 0.18 %
Clients’ Daily Average Trades (in thousands)
Revenue trades (2) 46 % 34 % 462 345 312 311 317
Asset-based trades (3) 35 % 16 % 139 120 137 103 103
Other trades (4) 28 % 29 % 211 163 184 175 165
Total 39 % 29 % 812 628 633 589 585
Average Revenue Per Revenue Trade (2) (26 )% (1 )% $ 7.24 $ 7.33 $ 7.74 $ 7.96 $ 9.84
(1)

Return on average common stockholders’ equity is calculated using net income available to common stockholders divided by average common stockholders’ equity.

(2) Includes all client trades that generate trading revenue (i.e., commission revenue or principal transaction revenue); also known as DART.
(3) Includes eligible trades executed by clients who participate in one or more of the Company’s asset-based pricing relationships.
(4) Includes all commission-free trades, including Schwab Mutual Fund OneSource® funds and ETFs, and other proprietary products.

THE CHARLES SCHWAB CORPORATION

Net Interest Revenue Information

(In millions)

(Unaudited)

Three Months Ended
March 31,
2018 2017
Average
Balance
Interest
Revenue/
Expense
Average
Yield/
Rate
Average
Balance
Interest
Revenue/
Expense
Average
Yield/
Rate
Interest-earning assets:
Cash and cash equivalents $ 17,084 $ 66 1.53 % $ 9,047 $ 17 0.76 %
Cash and investments segregated 13,969 48 1.37 % 21,820 35 0.65 %
Broker-related receivables (1) 287 1 1.32 % 388 0.55 %
Receivables from brokerage clients 18,872 179 3.79 % 15,245 126 3.35 %
Available for sale securities (2) 50,371 240 1.91 % 71,430 251 1.43 %
Held to maturity securities 121,412 721 2.38 % 83,368 485 2.36 %
Bank loans 16,456 130 3.19 % 15,527 110 2.87 %
Total interest-earning assets 238,451 1,385 2.33 % 216,825 1,024 1.92 %
Other interest revenue 36 31
Total interest-earning assets $ 238,451 $ 1,421 2.39 % $ 216,825 $ 1,055 1.97 %
Funding sources:
Bank deposits $ 176,988 $ 64 0.15 % $ 163,682 $ 19 0.05 %
Payables to brokerage clients 22,469 7 0.14 % 27,666 2 0.03 %
Short-term borrowings 12,170 47 1.55 % 1,332 2 0.61 %
Long-term debt 4,392 37 3.37 % 3,090 28 3.67 %
Total interest-bearing liabilities 216,019 155 0.29 % 195,770 51 0.11 %
Non-interest-bearing funding sources 22,432 21,055
Other interest expense 3 4
Total funding sources $ 238,451 $ 158 0.27 % $ 216,825 $ 55 0.10 %
Net interest revenue$1,2632.12%$1,0001.87%
(1) Interest revenue or expense was less than $500,000 in the period or the periods presented.
(2) Amounts have been calculated based on amortized cost.

THE CHARLES SCHWAB CORPORATION

Asset Management and Administration Fees Information

(In millions)

(Unaudited)

Three Months Ended March 31,
2018 2017
Average
Client
Assets
Revenue Average
Fee
Average
Client
Assets
Revenue Average
Fee
Schwab money market funds before fee waivers $ 156,362 $ 182 0.47 % $ 162,789 $ 231 0.58 %
Fee waivers (8 )
Schwab money market funds 156,362 182 0.47 % 162,789 223 0.56 %
Schwab equity and bond funds and ETFs 196,950 63 0.13 % 140,054 55 0.16 %
Mutual Fund OneSource ® and other non-transaction fee funds 222,669 178 0.32 % 202,416 170 0.34 %
Other third-party mutual funds and ETFs (1) 319,722 70 0.09 % 272,626 58 0.09 %
Total mutual funds and ETFs (2) $ 895,703 493 0.22 % $ 777,885 506 0.26 %
Advice solutions (2) :
Fee-based $ 224,760 282 0.51 % $ 191,775 244 0.52 %
Non-fee-based 59,762 42,722
Total advice solutions $ 284,522 282 0.40 % $ 234,497 244 0.42 %
Other balance-based fees (3) $ 426,012 66 0.06 % $ 388,739 61 0.06 %
Other (4) 10 12
Total asset management and administration fees$851$823
(1) Includes Schwab ETF OneSource.
(2) Advice solutions include managed portfolios, specialized strategies, and customized investment advice such as Schwab Private Client, Schwab Managed Portfolios, Managed Account Select®, Schwab Advisor Network®, Windhaven® Strategies, ThomasPartners® Strategies, Schwab Index Advantage® advised retirement plan balances, Schwab Intelligent Portfolios®, Institutional Intelligent Portfolios®, and Schwab Intelligent Advisory®, launched in March 2017; as well as legacy non-fee advice solutions including Schwab Advisor Source and certain retirement plan balances. Beginning the fourth quarter of 2017, a prospective change was made to add non-fee based average assets from managed portfolios. 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.
(3) Includes various asset-related fees, such as trust fees, 401(k) recordkeeping fees, and mutual fund clearing fees and other service fees.
(4) 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)

Q1-18 % Change

2018 2017
vs. vs. First Fourth Third Second First
(In billions, at quarter end, except as noted) Q1-17 Q4-17 Quarter Quarter Quarter Quarter Quarter
Assets in client accounts
Schwab One®, certain cash equivalents and bank deposits 10 % 10 % $ 219.4 $ 198.6 $ 195.0 $ 193.7 $ 199.6
Proprietary mutual funds (Schwab Funds® and Laudus Funds®):
Money market funds (1) (11 )% (11 )% 145.0 163.6 159.2 156.2 162.9
Equity and bond funds (2) 19 % 1 % 83.4 82.5 77.3 73.3 70.1
Total proprietary mutual funds (2 )% (7 )% 228.4 246.1 236.5 229.5 233.0
Mutual Fund Marketplace® (3)
Mutual Fund OneSource® and other non-transaction fee funds 8 % (2 )% 221.6 225.2 221.2 224.7 204.9
Mutual fund clearing services (10 )% (33 )% 178.3 265.4 236.5 226.4 197.5
Other third-party mutual funds 16 % 2 % 693.4 682.6 652.5 609.0 596.2
Total Mutual Fund Marketplace 9 % (7 )% 1,093.3 1,173.2 1,110.2 1,060.1 998.6
Total mutual fund assets 7 % (7 )% 1,321.7 1,419.3 1,346.7 1,289.6 1,231.6
Exchange-traded funds (ETFs)
Proprietary ETFs (2) 51 % 5 % 104.5 99.1 87.8 78.0 69.3
ETF OneSource™ (3) 29 % 4 % 29.8 28.7 26.6 24.9 23.1
Other third-party ETFs 22 % 2 % 314.7 308.8 286.7 270.2 257.0
Total ETF assets 29 % 3 % 449.0 436.6 401.1 373.1 349.4
Equity and other securities 14 %

1,075.9 1,080.0 1,016.9 971.4 939.7
Fixed income securities 19 % 5 % 258.8 245.6 238.4 229.3 217.5
Margin loans outstanding 27 % 6 % (19.4 ) (18.3 ) (16.9 ) (16.5 ) (15.3 )
Total client assets 13 % (2 )% $3,305.4$3,361.8$3,181.2$3,040.6$2,922.5
Client assets by business
Investor Services 11 % (4 )% $ 1,740.8 $ 1,810.9 $ 1,707.0 $ 1,634.1 $ 1,565.9
Advisor Services 15 % 1 % 1,564.6 1,550.9 1,474.2 1,406.5 1,356.6
Total client assets 13 % (2 )% $3,305.4$3,361.8$3,181.2$3,040.6$2,922.5
Net growth in assets in client accounts (for the quarter ended)
Net new assets by business
Investor Services (4) N/M N/M $ (50.8 ) $ 46.4 $ 23.4 $ 39.9 $ 14.0
Advisor Services 29 % 1 % 32.0 31.7 28.2 24.6 24.9
Total net new assets (148 )% (124 )% $(18.8)$78.1$51.6$64.5$38.9
Net market (losses) gains (136 )% (137 )% (37.6 ) 102.5 89.0 53.6 104.1
Net (decline) growth (139 )% (131 )% $(56.4)$180.6$140.6$118.1$143.0
New brokerage accounts (in thousands, for the quarter ended) 22 % 15 % 443 386 336 357 362
Clients (in thousands)
Active Brokerage Accounts 7 % 2 % 11,005 10,755 10,565 10,487 10,320
Banking Accounts 9 % 2 % 1,221 1,197 1,176 1,143 1,120
Corporate Retirement Plan Participants 3 % 2 % 1,594 1,568 1,552 1,540 1,545
(1)

Total client assets in purchased money market funds are located at: http://www.aboutschwab.com/investor-relations.

(2) Includes proprietary equity and bond funds and ETFs held on and off the Schwab platform. As of March 31, 2018, off-platform equity and bond funds and ETFs were $10.8 billion and $25.3 billion, respectively.
(3) Excludes all proprietary mutual funds and ETFs.
(4) First quarter of 2018 includes outflows of $84.4 billion from certain mutual fund clearing services clients. Fourth quarter of 2017 includes an inflow of $16.2 billion from a mutual fund clearing services client. Second quarter of 2017 includes inflows of $18.3 billion from a mutual fund clearing services client. First quarter of 2017 includes an outflow of $9.0 billion from a mutual fund clearing services client.
N/M Not meaningful.

The Charles Schwab Corporation Monthly Activity Report For March 2018

20172018

Change

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Mo.

Yr.

Market Indices (at month end)
Dow Jones Industrial Average 20,663 20,941 21,009 21,350 21,891 21,948 22,405 23,377 24,272 24,719 26,149 25,029 24,103 (4)% 17%
Nasdaq Composite 5,912 6,048 6,199 6,140 6,348 6,429 6,496 6,728 6,874 6,903 7,411 7,273 7,063 (3)% 19%
Standard & Poor’s 500 2,363 2,384 2,412 2,423 2,470 2,472 2,519 2,575 2,648 2,674 2,824 2,714 2,641 (3)% 12%
Client Assets (in billions of dollars)
Beginning Client Assets 2,895.2 2,922.5 2,948.8 2,995.8 3,040.6 3,099.9 3,122.3 3,181.2 3,256.5 3,318.8 3,361.8 3,480.5 3,328.8
Net New Assets (1) 21.2 2.8 24.0 37.7 15.8 18.0 17.8 35.4 15.7 27.0 11.5 (50.5 ) 20.2 140% (5)%
Net Market Gains (Losses) 6.1 23.5 23.0 7.1 43.5 4.4 41.1 39.9 46.6 16.0 107.2 (101.2 ) (43.6 )
Total Client Assets (at month end) 2,922.5 2,948.8 2,995.8 3,040.6 3,099.9 3,122.3 3,181.2 3,256.5 3,318.8 3,361.8 3,480.5 3,328.8 3,305.4 (1)% 13%
Core Net New Assets (2)21.22.821.322.115.818.017.819.215.727.018.721.325.6 20% 21%
Receiving Ongoing Advisory Services (at month end)
Investor Services 230.9 234.4 239.1 242.2 247.2 249.9 255.0 259.8 265.1 268.7 278.6 273.0 273.2 18%
Advisor Services (3) 1,250.9 1,262.7 1,283.4 1,297.6 1,323.8 1,333.1 1,358.6 1,382.6 1,410.8 1,431.1 1,483.7 1,449.5 1,444.4 15%
Client Accounts (at month end, in thousands)
Active Brokerage Accounts (4) 10,320 10,386 10,439 10,487 10,477 10,525 10,565 10,603 10,671 10,755 10,858 10,936 11,005 1% 7%
Banking Accounts 1,120 1,128 1,138 1,143 1,154 1,167 1,176 1,181 1,192 1,197 1,210 1,218 1,221 9%
Corporate Retirement Plan Participants 1,545 1,543 1,541 1,540 1,540 1,550 1,552 1,556 1,564 1,568 1,580 1,580 1,594 1% 3%
Client Activity
New Brokerage Accounts (in thousands) 138 125 115 117 107 123 106 117 122 147 165 138 140 1% 1%
Inbound Calls (in thousands) 2,111 1,788 1,727 1,736 1,683 1,823 1,709 1,988 1,804 2,046 2,303 2,005 2,145 7% 2%
Web Logins (in thousands) 45,441 39,750 44,024 43,790 42,236 47,290 39,639 51,454 50,583 54,486 64,488 60,830 58,906 (3)% 30%
Client Cash as a Percentage of Client Assets (5) 12.4 % 12.1 % 11.8 % 11.5 % 11.3 % 11.4 % 11.1 % 10.9 % 10.8 % 10.8 % 10.4 % 10.9 % 11.0 % 10 bp (140) bp
Mutual Fund and Exchange-Traded Fund
Net Buys (Sells) (6, 7) (in millions of dollars)
Large Capitalization Stock (125 ) 346 134 (63 ) (95 ) (1,683 ) (138 ) (51 ) 85 1,023 496 715 (158 )
Small / Mid Capitalization Stock (409 ) (797 ) (285 ) (322 ) (139 ) (293 ) 45 378 (144 ) 274 (125 ) (167 ) 130
International 1,703 2,410 3,610 3,631 2,675 1,705 1,549 1,913 2,627 1,852 4,306 2,685 1,546
Specialized 273 570 529 647 236 279 465 655 58 424 1,569 187 326
Hybrid 563 92 65 (340 ) 142 (272 ) 460 (118 ) (263 ) 307 978 (88 ) 529
Taxable Bond 3,876 2,060 3,618 3,499 3,064 3,481 3,809 3,466 2,389 2,561 3,284 155 2,117
Tax-Free Bond 300 155 290 507 453 715 494 452 371 341 1,247 211 247
Net Buy (Sell) Activity (in millions of dollars)
Mutual Funds (6) 2,368 1,116 3,837 2,980 3,201 1,048 3,002 2,401 882 775 4,843 (417 ) 1,976
Exchange-Traded Funds (7) 3,813 3,720 4,124 4,579 3,135 2,884 3,682 4,294 4,241 6,007 6,912 4,115 2,761
Money Market Funds 1,218 (4,434 ) (1,167 ) (1,260 ) 1,022 2,105 (374 ) 213 1,166 2,968 (5,730 ) (4,292 ) (9,100 )
Average Interest-Earning Assets (8)
(in millions of dollars) 218,554 217,407 215,252 214,709 212,108 214,458 216,472 219,658 223,292 228,540 234,619 239,922 241,049 10%
(1) March, February, and January 2018 include outflows of $5.4 billion, $71.8 billion, and $7.2 billion, respectively, from certain mutual fund clearing services clients. October and June 2017 include inflows of $16.2 billion and $15.6 billion, respectively, from certain mutual fund clearing services clients.
(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.
(3) Excludes Retirement Business Services.
(4) Periodically, the Company reviews its active account base. In July 2017, active brokerage accounts were reduced by approximately 48,000 as a result of low-balance closures.
(5) Schwab One®, certain cash equivalents, bank deposits, and money market fund balances as a percentage of total client assets.
(6) 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.
(7) Represents the principal value of client ETF transactions handled by Schwab, including transactions in proprietary ETFs.
(8) Represents average total interest-earning assets on the Company’s balance sheet.

Contacts:

Charles Schwab
MEDIA:
Mayura Hooper, 415-667-1525
or
INVESTORS/ANALYSTS:
Rich Fowler, 415-667-1841

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