Successfully Completed Largest Brokerage
Conversion Event in History September Core Net New Assets Exceeded
$27 Billion Bank Sweep Deposits Grew During September
The Charles Schwab Corporation announced today that its net
income for the third quarter of 2023 was $1.1 billion compared with
$2.0 billion for the third quarter of 2022. Net income for the nine
months ended September 30, 2023 was $4.0 billion, compared with
$5.2 billion for the year-earlier period.
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Three Months Ended September
30,
%
Nine Months Ended September
30,
%
Financial Highlights (1)
2023
2022
Change
2023
2022
Change
Net revenues (in millions)
$
4,606
$
5,500
(16
)%
$
14,378
$
15,265
(6
)%
Net income (in millions)
GAAP
$
1,125
$
2,020
(44
)%
$
4,022
$
5,215
(23
)%
Adjusted (1)
$
1,518
$
2,211
(31
)%
$
4,792
$
5,783
(17
)%
Diluted earnings per common share
GAAP
$
.56
$
.99
(43
)%
$
2.03
$
2.53
(20
)%
Adjusted (1)
$
.77
$
1.10
(30
)%
$
2.45
$
2.83
(13
)%
Pre-tax profit margin
GAAP
30.0
%
48.7
%
36.1
%
44.5
%
Adjusted (1)
41.3
%
53.3
%
43.1
%
49.4
%
Return on average common stockholders’
equity (annualized)
14
%
25
%
18
%
18
%
Return on tangible common equity
(annualized) (1)
58
%
74
%
66
%
42
%
Note: All per-share results are rounded to the nearest cent, based
on weighted-average diluted common shares outstanding.
(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.
Co-Chairman and CEO Walt Bettinger stated, “Against a very
challenging economic and geopolitical backdrop, investors continued
turning to Schwab as a trusted partner and a wealth management
leader. It is truly humbling to see our clients award us with
near-record Client Promoter Scores and allow us the privilege to
help them move toward their financial goals – particularly during a
period where the U.S. government narrowly avoided a shutdown, major
equity markets posted a quarterly loss, and long-term interest
rates touched levels not seen in many years. Third parties also
continue to recognize the firm, with Investor’s Business Daily
naming us one of its most trusted financial services firms and
Charles Schwab Bank as its most trusted bank for 2023.”
“By seeing ‘through clients’ eyes’ for the last 50 years, we
have earned consistent confidence from investors that helps power
our strong organic growth,” continued Mr. Bettinger. “During the
third quarter, we gathered $46 billion in core net new assets,
including $27 billion in September following the completion of our
latest Ameritrade client conversion cohort. While expected
deal-related attrition has temporarily weighed on net new asset
flows, our underlying growth recipe remains very much intact.
Year-to-date, we have attracted $248 billion of core net new assets
from accounts originally opened at Schwab – an annualized Schwab
originated organic growth rate of over 6%. As of September 30,
investors have entrusted us with a total of $7.82 trillion in
client assets across 34.5 million accounts.”
Mr. Bettinger added, “Over Labor Day Weekend, we successfully
completed the single largest conversion event in our industry’s
history. During those three days, we transitioned $1.3 trillion in
client assets – including more than 7,000 Registered Investment
Advisors (RIA) served by the Ameritrade Institutional business and
3.6 million retail accounts. The thoughtful planning and relentless
dedication of our employees helped ensure there were no significant
disruptions to the client experience and overall service levels
remained strong – including answering client calls in under 1
minute. We have now converted approximately 80% of Ameritrade
client assets and accounts, with deal-related attrition tracking
markedly better than our initial expectations. In addition to these
favorable retention trends, engagement levels across recently
converted clients has also picked up – including positive new
account formation and net asset flows across both Retail and RIA
clients.”
Mr. Bettinger concluded, “Concurrent with progressing the
Ameritrade integration, we remain focused on further enhancing
Schwab’s modern wealth platform by advancing our key strategic
initiatives of scale and efficiency, win-win monetization, and
segmentation. We have identified a number of opportunities for
increased efficiency, including capturing the remaining deal
expense synergies, streamlining our operational design, aligning
our geographic footprint to match our hybrid workforce, and
harnessing the benefits of increased automation. Once fully
implemented, we expect these actions to deliver at least $1 billion
of incremental annual expense savings. Even as we seek to improve
upon our industry leading cost structure, we are continuing to
enhance our segmented offering for the broad range of clients we
serve. For clients seeking assistance with their portfolios, our
wealth management solutions attracted year-to-date net flows of $24
billion – including record flows into Schwab Wealth Advisory™,
Wasmer Schroeder™ Strategies, and Schwab Personalized Indexing®. At
the same time, Schwab is expanding the suite of tools and resources
available to self-directed investors to help them achieve better
financial outcomes. Today we announced the launch of our new
end-to-end trader experience that combines access to thinkorswim®
with curated education for all levels and specialized service and
support. This offer is tailored to meet the specific needs of a
highly engaged client group that on average maintains approximately
4x more assets at the firm relative to other retail households
while also utilizing a broad array of other products offered across
Schwab. Continuing to invest in our platform allows us to meet the
evolving needs of investors, while keeping us positioned for
sustained growth over time.”
CFO Peter Crawford noted, “Our continued success with clients
and diversified model helped produce third quarter net revenues of
$4.6 billion. This result represents a 16% decline from last year’s
record period, primarily driven by the temporary utilization of
higher cost funding, lower interest-earning assets, and softer
trading volumes. Net interest revenue was down 24% year-over-year
to $2.2 billion, reflecting the impact of client allocation
decisions within a higher interest rate environment. However, cash
realignment activity decelerated further during the quarter – even
with the brief uptick in August and an increase in long-term
interest rates. September was particularly strong as net outflows
from transactional cash were lower than any prior monthly period
this cycle and bank sweep deposits increased month-over-month for
the first time since March 2022. Additionally, the combination of
ongoing interest in Schwab’s proprietary fund products, growth in
no-transaction fee platform balances, and strong flows into our
advised solutions pushed asset management and administration fees
to a quarterly record of $1.2 billion, up 17% versus the prior
year.”
“We maintained Schwab’s balanced approach to expense management
while successfully reaching another key checkpoint in the
Ameritrade integration effort,” added Mr. Crawford. “GAAP expenses
were up 14% to $3.2 billion, including $106 million in acquisition
and integration-related costs, $135 million in amortization of
acquired intangibles, and $279 million in costs related to our
previously announced restructuring. Exclusive of those items,
adjusted total expenses (1) equaled $2.7 billion, or a
year-over-year increase of 5%. Pre-tax profit margins finished the
quarter at 30.0%, or 41.3% on an adjusted (1) basis – the 12th
consecutive quarter above 40%.”
Mr. Crawford concluded, “During the quarter, our balance sheet
management continued to prioritize flexibility in support of our
growing client base. In late August, we issued approximately $2.4
billion of senior notes across two tranches due in 2026 and 2034,
further bolstering our diversified liquidity profile. Schwab’s
consolidated balance sheet totaled $475 billion at quarter-end,
down 7% sequentially, as available net cash flows from our
investment portfolio were used to pay down supplemental borrowings.
Our capital levels also continued to build during the quarter as
our consolidated Tier 1 Leverage ratio increased to 8.2% and our
Adjusted Tier 1 Leverage Ratio (1) expanded by more than 40 basis
points to 4.1%. Ratios at Charles Schwab Bank, SSB (CSB) followed a
similar trajectory with CSB Tier 1 Leverage increasing to 9.6%, or
4.4% on an adjusted (1) basis. As we move towards a new year, our
consistent strategy, key competitive advantages, and ‘through the
cycle’ financial model keep us well-positioned to deliver long-term
value to all of our stakeholders.”
(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.
Commentary from the CFO
Periodically, our Chief Financial Officer provides insight and
commentary regarding Schwab’s financial picture at:
https://www.aboutschwab.com/cfo-commentary. The most recent
commentary, which provides perspective on client cash realignment
trends and second quarter revenue expectations, was posted on June
14, 2023.
Fall Business Update
The company will host its Fall Business Update for institutional
investors this morning from 8:00 a.m. - 9:00 a.m. CT, 9:00 a.m. -
10:00 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 the company’s strategy and approach; growth in the client base,
client accounts, and assets; Ameritrade integration and
deal-related attrition; opportunities for increased efficiency and
resulting incremental annual expense savings; positioning; success
with clients; model; competitive advantages; and stakeholder value.
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 include, but
are not limited to, the company’s ability to attract and retain
clients and independent investment advisors and grow those
relationships and client assets; develop and launch new and
enhanced products, services, and capabilities, as well as enhance
its infrastructure and capacity, in a timely and successful manner;
hire and retain talent; support client activity levels;
successfully implement integration strategies and plans; capture
Ameritrade deal expense synergies, streamline its operational
design, align its real estate footprint, and harness the benefits
of automation in order to deliver expected incremental annual
expense savings, and the costs incurred in connection with such
actions; manage expenses; and monetize client assets. Other
important factors include client use of the company’s advisory
solutions and other products and services; general market
conditions, including the level of interest rates and equity
valuations; asset attrition from clients originating at Ameritrade
is higher than expected; client cash allocation decisions; client
sensitivity to rates; level of client assets, including cash
balances; competitive pressures on pricing; the level and mix of
client trading activity; market volatility; capital and liquidity
needs and management; balance sheet positioning relative to changes
in interest rates; interest earning asset mix and growth; new or
changed legislation, regulation or regulatory expectations; and
other factors set forth in the company’s most recent reports on
Form 10-K and Form 10-Q.
About Charles Schwab
The Charles Schwab Corporation (NYSE: SCHW) is a leading
provider of financial services, with 34.5 million active brokerage
accounts, 2.5 million corporate retirement plan participants, 1.8
million banking accounts, and $7.82 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
subsidiaries, Charles Schwab & Co., Inc., TD Ameritrade, Inc.,
and TD Ameritrade Clearing, Inc., (members SIPC,
https://www.sipc.org), and their 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. TD Ameritrade, Inc. and TD Ameritrade
Clearing, Inc. are separate but affiliated companies and
subsidiaries of TD Ameritrade Holding Corporation. TD Ameritrade
Holding Corporation is a wholly owned subsidiary of The Charles
Schwab Corporation. TD Ameritrade is a trademark jointly owned by
TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank.
THE CHARLES SCHWAB
CORPORATION
Consolidated Statements of
Income
(In millions, except per share
amounts)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Net Revenues
Interest revenue
$
4,028
$
3,357
$
12,148
$
8,386
Interest expense
(1,791
)
(431
)
(4,851
)
(733
)
Net interest revenue
2,237
2,926
7,297
7,653
Asset management and administration fees
(1)
1,224
1,047
3,515
3,167
Trading revenue
768
930
2,463
2,778
Bank deposit account fees
205
413
531
1,059
Other
172
184
572
608
Total net revenues
4,606
5,500
14,378
15,265
Expenses Excluding Interest
Compensation and benefits
1,770
1,476
4,906
4,448
Professional services
275
264
805
766
Occupancy and equipment
305
292
923
855
Advertising and market development
102
89
293
296
Communications
151
131
485
444
Depreciation and amortization
198
167
566
476
Amortization of acquired intangible
assets
135
152
404
460
Regulatory fees and assessments
114
65
277
200
Other
173
187
535
530
Total expenses excluding interest
3,223
2,823
9,194
8,475
Income before taxes on income
1,383
2,677
5,184
6,790
Taxes on income
258
657
1,162
1,575
Net Income
1,125
2,020
4,022
5,215
Preferred stock dividends and other
108
136
299
401
Net Income Available to Common
Stockholders
$
1,017
$
1,884
$
3,723
$
4,814
Weighted-Average Common Shares
Outstanding:
Basic
1,821
1,887
1,825
1,892
Diluted
1,827
1,895
1,832
1,901
Earnings Per Common Shares
Outstanding (2):
Basic
$
.56
$
1.00
$
2.04
$
2.54
Diluted
$
.56
$
.99
$
2.03
$
2.53
(1)
No fee waivers were recognized
for the three and nine months ended September 30, 2023, or for the
three months ended September 30, 2022. Includes fee waivers of $57
million for the nine months ended September 30, 2022.
(2)
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.
THE CHARLES SCHWAB
CORPORATION
Financial and Operating
Highlights
(Unaudited)
Q3-23 %
change
2023
2022
vs.
vs.
Third
Second
First
Fourth
Third
(In millions, except per share amounts and
as noted)
Q3-22
Q2-23
Quarter
Quarter
Quarter
Quarter
Quarter
Net Revenues
Net interest revenue
(24
)%
(2
)%
$
2,237
$
2,290
$
2,770
$
3,029
$
2,926
Asset management and administration
fees
17
%
4
%
1,224
1,173
1,118
1,049
1,047
Trading revenue
(17
)%
(4
)%
768
803
892
895
930
Bank deposit account fees
(50
)%
17
%
205
175
151
350
413
Other
(7
)%
(20
)%
172
215
185
174
184
Total net revenues
(16
)%
(1
)%
4,606
4,656
5,116
5,497
5,500
Expenses Excluding Interest
Compensation and benefits (1)
20
%
18
%
1,770
1,498
1,638
1,488
1,476
Professional services
4
%
1
%
275
272
258
266
264
Occupancy and equipment
4
%
(4
)%
305
319
299
320
292
Advertising and market development
15
%
(1
)%
102
103
88
123
89
Communications
15
%
(20
)%
151
188
146
144
131
Depreciation and amortization
19
%
4
%
198
191
177
176
167
Amortization of acquired intangible
assets
(11
)%
1
%
135
134
135
136
152
Regulatory fees and assessments
75
%
43
%
114
80
83
62
65
Other
(7
)%
(4
)%
173
180
182
184
187
Total expenses excluding interest
14
%
9
%
3,223
2,965
3,006
2,899
2,823
Income before taxes on income
(48
)%
(18
)%
1,383
1,691
2,110
2,598
2,677
Taxes on income
(61
)%
(35
)%
258
397
507
630
657
Net Income
(44
)%
(13
)%
1,125
1,294
1,603
1,968
2,020
Preferred stock dividends and other
(21
)%
(11
)%
108
121
70
147
136
Net Income Available to Common
Stockholders
(46
)%
(13
)%
$
1,017
$
1,173
$
1,533
$
1,821
$
1,884
Earnings per common share (2):
Basic
(44
)%
(13
)%
$
.56
$
.64
$
.84
$
.98
$
1.00
Diluted
(43
)%
(13
)%
$
.56
$
.64
$
.83
$
.97
$
.99
Dividends declared per common share
14
%
—
$
.25
$
.25
$
.25
$
.22
$
.22
Weighted-average common shares
outstanding:
Basic
(3
)%
—
1,821
1,820
1,834
1,864
1,887
Diluted
(4
)%
—
1,827
1,825
1,842
1,873
1,895
Performance Measures
Pre-tax profit margin
30.0
%
36.3
%
41.2
%
47.3
%
48.7
%
Return on average common stockholders’
equity (annualized) (3)
14
%
17
%
23
%
27
%
25
%
Financial Condition (at quarter
end, in billions)
Cash and cash equivalents
(28
)%
(30
)%
$
33.3
$
47.7
$
49.2
$
40.2
$
46.5
Cash and investments segregated
(58
)%
(26
)%
18.6
25.1
31.0
43.0
44.1
Receivables from brokerage clients —
net
(6
)%
6
%
69.1
65.2
63.2
66.6
73.9
Available for sale securities
(53
)%
(12
)%
110.3
125.8
141.3
147.9
236.5
Held to maturity securities
69
%
(2
)%
162.5
166.3
169.9
173.1
96.3
Bank loans — net
—
—
40.3
40.1
40.0
40.5
40.4
Total assets
(18
)%
(7
)%
475.2
511.5
535.6
551.8
577.6
Bank deposits
(28
)%
(7
)%
284.4
304.4
325.7
366.7
395.7
Payables to brokerage clients
(34
)%
(14
)%
72.8
84.8
87.6
97.4
110.0
Other short-term borrowings (4)
N/M
(3
)%
7.6
7.8
7.1
4.7
0.5
Federal Home Loan Bank borrowings (4)
N/M
(22
)%
31.8
41.0
45.6
12.4
—
Long-term debt
19
%
10
%
24.8
22.5
20.0
20.8
20.8
Stockholders’ equity
2
%
2
%
37.8
37.1
36.3
36.6
37.0
Other
Full-time equivalent employees (at quarter
end, in thousands)
2
%
(2
)%
35.9
36.6
36.0
35.3
35.2
Capital expenditures — purchases of
equipment, office facilities, and property,
net (in millions)
30
%
49
%
$
250
$
168
$
187
$
211
$
193
Expenses excluding interest as a
percentage of average client assets (annualized)
0.16
%
0.15
%
0.17
%
0.16
%
0.16
%
Clients’ Daily Average Trades
(DATs) (in thousands)
(6
)%
(1
)%
5,218
5,272
5,895
5,389
5,523
Number of Trading Days
(2
)%
1
%
62.5
62.0
62.0
62.5
64.0
Revenue Per Trade (5)
(11
)%
(4
)%
$
2.35
$
2.46
$
2.44
$
2.66
$
2.63
(1)
Third quarter of 2023 includes
$276 million in restructuring costs.
(2)
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.
(3)
Return on average common
stockholders’ equity is calculated using net income available to
common stockholders divided by average common stockholders’
equity.
(4)
Beginning in the first quarter of
2023, Federal Home Loan Bank borrowings are presented separately
from other short-term borrowings. Prior period amounts have been
reclassified to reflect this change.
(5)
Revenue per trade is calculated
as trading revenue divided by DATs multiplied by the number of
trading days.
N/M Not meaningful. Percentage changes greater than 200% are
presented as not meaningful.
THE CHARLES SCHWAB
CORPORATION
Net Interest Revenue
Information
(In millions, except ratios or as
noted)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
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
$
34,391
$
459
5.22
%
$
53,127
$
294
2.16
%
$
38,700
$
1,419
4.83
%
$
63,598
$
461
0.95
%
Cash and investments segregated
21,987
285
5.08
%
49,554
214
1.69
%
29,752
1,041
4.61
%
50,891
308
0.80
%
Receivables from brokerage clients
63,760
1,282
7.87
%
72,751
912
4.91
%
61,682
3,533
7.55
%
78,630
2,244
3.76
%
Available for sale securities (1,2)
129,545
724
2.22
%
273,968
1,161
1.69
%
143,360
2,340
2.17
%
281,897
3,196
1.51
%
Held to maturity securities
163,904
706
1.72
%
97,568
345
1.41
%
167,405
2,172
1.73
%
100,890
1,062
1.40
%
Bank loans
40,177
426
4.23
%
39,984
300
2.99
%
40,183
1,227
4.08
%
38,238
717
2.50
%
Total interest-earning assets
453,764
3,882
3.37
%
586,952
3,226
2.17
%
481,082
11,732
3.23
%
614,144
7,988
1.73
%
Securities lending revenue
105
124
341
383
Other interest revenue
41
7
75
15
Total interest-earning assets
$
453,764
$
4,028
3.50
%
$
586,952
$
3,357
2.26
%
$
481,082
$
12,148
3.35
%
$
614,144
$
8,386
1.81
%
Funding sources
Bank deposits
$
290,853
$
911
1.24
%
$
420,132
$
241
0.23
%
$
315,309
$
2,392
1.01
%
$
440,801
$
285
0.09
%
Payables to brokerage clients
63,731
66
0.41
%
96,802
41
0.17
%
68,548
205
0.40
%
101,472
47
0.06
%
Other short-term borrowings (3)
7,315
97
5.26
%
708
4
1.95
%
7,286
280
5.13
%
2,656
12
0.60
%
Federal Home Loan Bank borrowings
(3,4)
36,287
477
5.18
%
—
—
—
35,896
1,387
5.11
%
—
—
—
Long-term debt
23,492
193
3.30
%
21,024
131
2.49
%
21,685
489
3.01
%
20,673
363
2.34
%
Total interest-bearing liabilities
421,678
1,744
1.64
%
538,666
417
0.31
%
448,724
4,753
1.41
%
565,602
707
0.17
%
Non-interest-bearing funding sources
32,086
48,286
32,358
48,542
Securities lending expense
46
13
96
28
Other interest expense
1
1
2
(2
)
Total funding sources
$
453,764
$
1,791
1.56
%
$
586,952
$
431
0.29
%
$
481,082
$
4,851
1.35
%
$
614,144
$
733
0.16
%
Net interest revenue
$
2,237
1.94
%
$
2,926
1.97
%
$
7,297
2.00
%
$
7,653
1.65
%
(1)
Amounts have been calculated
based on amortized cost.
(2)
Beginning in the first quarter of
2023, amounts include the impact of derivative financial
instruments and the related hedge accounting on our available for
sale securities.
(3)
Beginning in the first quarter of
2023, Federal Home Loan Bank borrowings are presented separately
from other short-term borrowings. Prior period amounts have been
reclassified to reflect this change.
(4)
Average balance and interest
expense was less than $500 thousand in the prior period.
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,
2023
2022
2023
2022
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 before fee
waivers
$
414,074
$
270
0.26
%
$
184,834
$
132
0.28
%
$
368,788
$
735
0.27
%
$
158,525
$
340
0.29
%
Fee waivers
—
—
—
(57
)
Schwab money market funds
414,074
270
0.26
%
184,834
132
0.28
%
368,788
735
0.27
%
158,525
283
0.24
%
Schwab equity and bond funds,
exchange-traded funds (ETFs), and collective trust funds (CTFs)
485,326
99
0.08
%
422,711
89
0.08
%
466,995
284
0.08
%
436,928
278
0.09
%
Mutual Fund OneSource® and other
no-transaction-fee funds
255,039
170
0.26
%
183,019
139
0.30
%
235,561
469
0.27
%
196,032
453
0.31
%
Other third-party mutual funds and
ETFs
632,902
127
0.08
%
747,676
160
0.08
%
663,577
393
0.08
%
805,204
510
0.08
%
Total mutual funds, ETFs, and CTFs (1)
$
1,787,341
666
0.15
%
$
1,538,240
520
0.13
%
$
1,734,921
1,881
0.14
%
$
1,596,689
1,524
0.13
%
Advice solutions (1)
Fee-based
$
468,305
476
0.40
%
$
431,276
452
0.42
%
$
455,730
1,393
0.41
%
$
446,979
1,409
0.42
%
Non-fee-based
97,957
—
—
85,567
—
—
95,951
—
—
87,528
—
—
Total advice solutions
$
566,262
476
0.33
%
$
516,843
452
0.35
%
$
551,681
1,393
0.34
%
$
534,507
1,409
0.35
%
Other balance-based fees (2)
610,450
64
0.04
%
537,809
58
0.04
%
588,922
189
0.04
%
573,733
186
0.04
%
Other (3)
18
17
52
48
Total asset management and
administration fees
$
1,224
$
1,047
$
3,515
$
3,167
(1)
Advice solutions include managed
portfolios, specialized strategies, and customized investment
advice such as Schwab Wealth Advisory™, 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®, Schwab Intelligent
Portfolios Premium®, TD Ameritrade 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)
Q3-23 %
Change
2023
2022
vs.
vs.
Third
Second
First
Fourth
Third
(In billions, at quarter end, except as
noted)
Q3-22
Q2-23
Quarter
Quarter
Quarter
Quarter
Quarter
Assets in client accounts
Schwab One®, certain cash equivalents and
bank deposits
(30
)%
(8
)%
$
353.1
$
384.4
$
408.5
$
459.4
$
501.4
Bank deposit account balances
(29
)%
(3
)%
99.5
102.7
106.5
126.6
139.6
Proprietary mutual funds (Schwab Funds®
and Laudus Funds®) and CTFs
Money market funds (1)
107
%
11
%
436.3
392.9
357.8
278.9
211.1
Equity and bond funds and CTFs (2)
19
%
(3
)%
167.9
172.6
163.1
153.6
141.5
Total proprietary mutual funds and
CTFs
71
%
7
%
604.2
565.5
520.9
432.5
352.6
Mutual Fund Marketplace® (3)
Mutual Fund OneSource® and other
no-transaction-fee funds
59
%
13
%
288.0
254.6
244.3
235.7
181.5
Mutual fund clearing services
24
%
(2
)%
216.9
220.7
201.7
191.1
175.3
Other third-party mutual funds (4)
(5
)%
(8
)%
1,055.3
1,150.8
1,123.6
1,077.1
1,105.7
Total Mutual Fund Marketplace
7
%
(4
)%
1,560.2
1,626.1
1,569.6
1,503.9
1,462.5
Total mutual fund assets
19
%
(1
)%
2,164.4
2,191.6
2,090.5
1,936.4
1,815.1
Exchange-traded funds
Proprietary ETFs (2)
23
%
(2
)%
286.2
293.2
280.6
259.3
232.2
Other third-party ETFs
24
%
(2
)%
1,352.6
1,381.4
1,297.5
1,208.4
1,094.6
Total ETF assets
24
%
(2
)%
1,638.8
1,674.6
1,578.1
1,467.7
1,326.8
Equity and other securities
18
%
(4
)%
2,886.4
3,002.7
2,772.2
2,529.4
2,451.3
Fixed income securities
55
%
3
%
747.4
722.6
684.7
593.4
481.5
Margin loans outstanding
(9
)%
4
%
(65.1
)
(62.8
)
(60.5
)
(63.1
)
(71.5
)
Total client assets
18
%
(2
)%
$
7,824.5
$
8,015.8
$
7,580.0
$
7,049.8
$
6,644.2
Client assets by business
Investor Services
19
%
(3
)%
$
4,157.7
$
4,267.9
$
4,001.9
$
3,682.1
$
3,508.1
Advisor Services
17
%
(2
)%
3,666.8
3,747.9
3,578.1
3,367.7
3,136.1
Total client assets
18
%
(2
)%
$
7,824.5
$
8,015.8
$
7,580.0
$
7,049.8
$
6,644.2
Net growth in assets in client
accounts (for the quarter ended)
Net new assets by business
Investor Services (5)
(48
)%
(21
)%
$
28.6
$
36.0
$
79.4
$
64.3
$
55.1
Advisor Services (6)
(67
)%
(46
)%
19.6
36.0
71.3
64.1
59.5
Total net new assets
(58
)%
(33
)%
$
48.2
$
72.0
$
150.7
$
128.4
$
114.6
Net market gains (losses)
(239.5
)
363.8
379.5
277.2
(302.9
)
Net growth (decline)
$
(191.3
)
$
435.8
$
530.2
$
405.6
$
(188.3
)
New brokerage accounts (in
thousands, for the quarter ended)
—
(7
)%
894
960
1,042
931
897
Client accounts (in thousands)
Active brokerage accounts (7)
2
%
—
34,540
34,382
34,120
33,758
33,875
Banking accounts
6
%
1
%
1,799
1,781
1,746
1,716
1,696
Corporate retirement plan participants
7
%
1
%
2,463
2,443
2,379
2,351
2,305
(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, 2023, off-platform equity
and bond funds, CTFs, and ETFs were $24.3 billion, $3.4 billion,
and $95.2 billion, respectively.
(3)
Excludes all proprietary mutual
funds and ETFs.
(4)
As of September 30, 2023,
third-party money funds were $1.0 billion.
(5)
Third quarter of 2023 includes
net inflows of $3.3 billion from off-platform Schwab Bank Retail
Certificates of Deposit (CDs). Second quarter of 2023 includes an
inflow of $12.0 billion from a mutual fund clearing services client
and inflows of $7.8 billion from off-platform Schwab Bank Retail
CDs. First quarter of 2023 includes inflows of $19.0 billion from
off-platform Schwab Bank Retail CDs.
(6)
Third quarter of 2023 includes an
outflow of $0.8 billion from an international relationship.
(7)
Fourth quarter of 2022 includes
the Company-initiated closure of approximately 350 thousand
low-balance accounts. Third quarter of 2022 includes the
Company-initiated closure of approximately 152 thousand low-balance
accounts.
The Charles Schwab Corporation
Monthly Activity Report For September 2023
2022
2023
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®
28,726
32,733
34,590
33,147
34,086
32,657
33,274
34,098
32,908
34,408
35,560
34,722
33,508
(3
)%
17
%
Nasdaq Composite®
10,576
10,988
11,468
10,466
11,585
11,456
12,222
12,227
12,935
13,788
14,346
14,035
13,219
(6
)%
25
%
Standard & Poor’s® 500
3,586
3,872
4,080
3,840
4,077
3,970
4,109
4,169
4,180
4,450
4,589
4,508
4,288
(5
)%
20
%
Client Assets (in billions of
dollars)
Beginning Client Assets
7,127.6
6,644.2
7,004.6
7,320.6
7,049.8
7,480.6
7,380.2
7,580.0
7,631.5
7,650.2
8,015.8
8,241.0
8,094.7
Net New Assets (1)
39.8
42.0
33.1
53.3
36.1
41.7
72.9
13.6
24.6
33.8
12.9
8.1
27.2
N/M
(32
)%
Net Market Gains (Losses)
(523.2
)
318.4
282.9
(324.1
)
394.7
(142.1
)
126.9
37.9
(5.9
)
331.8
212.3
(154.4
)
(297.4
)
Total Client Assets (at month end)
6,644.2
7,004.6
7,320.6
7,049.8
7,480.6
7,380.2
7,580.0
7,631.5
7,650.2
8,015.8
8,241.0
8,094.7
7,824.5
(3
)%
18
%
Core Net New Assets (2)
39.8
42.0
33.1
53.3
36.1
41.7
53.9
(2.3
)
20.7
33.8
13.7
4.9
27.1
N/M
(32
)%
Receiving Ongoing Advisory Services (at
month end)
Investor Services
466.6
487.3
514.0
499.8
524.6
515.5
526.2
530.7
526.3
547.5
560.6
552.2
533.0
(3
)%
14
%
Advisor Services (3)
2,950.9
3,106.0
3,270.5
3,173.4
3,345.4
3,289.6
3,369.3
3,394.9
3,377.8
3,527.8
3,619.8
3,554.2
3,448.0
(3
)%
17
%
Client Accounts (at month end, in
thousands)
Active Brokerage Accounts (4)
33,875
33,896
33,636
33,758
33,878
34,010
34,120
34,248
34,311
34,382
34,434
34,440
34,540
—
2
%
Banking Accounts
1,696
1,706
1,705
1,716
1,729
1,733
1,746
1,757
1,768
1,781
1,792
1,798
1,799
—
6
%
Corporate Retirement Plan Participants
2,305
2,322
2,336
2,351
2,369
2,384
2,379
2,391
2,401
2,443
2,458
2,458
2,463
—
7
%
Client Activity
New Brokerage Accounts (in thousands)
287
298
303
330
344
320
378
331
314
315
303
311
280
(10
)%
(2
)%
Client Cash as a Percentage of Client
Assets (5,6)
12.9
%
12.2
%
11.5
%
12.2
%
11.5
%
11.6
%
11.2
%
10.8
%
10.9
%
10.5
%
10.2
%
10.4
%
10.8
%
40 bp
(210) bp
Derivative Trades as a Percentage of Total
Trades
23.6
%
24.1
%
24.6
%
23.2
%
23.0
%
23.5
%
22.8
%
23.4
%
23.5
%
23.9
%
23.0
%
24.4
%
24.2
%
(20) bp
60 bp
Selected Average Balances (in millions
of dollars)
Average Interest-Earning Assets (7)
568,351
552,631
527,019
520,100
512,893
503,122
497,627
493,215
483,438
479,752
466,659
449,483
444,864
(1
)%
(22
)%
Average Margin Balances
73,224
69,188
66,011
64,759
60,211
60,575
60,848
60,338
60,250
61,543
63,040
64,226
64,014
—
(13
)%
Average Bank Deposit Account Balances
(8)
141,198
136,036
130,479
126,953
122,387
115,816
109,392
104,775
103,149
102,917
102,566
101,928
100,404
(1
)%
(29
)%
Mutual Fund and Exchange-Traded
Fund
Net Buys (Sells) (9,10) (in millions of
dollars)
Equities
(2,662
)
3,984
3,777
(1,837
)
7,236
5,850
(3,234
)
1,126
(1,366
)
9,190
7,423
(278
)
675
Hybrid
(938
)
(1,380
)
(2,052
)
(1,595
)
(433
)
47
(1,641
)
(462
)
(889
)
(903
)
(407
)
(1,037
)
(828
)
Bonds
(5,801
)
(7,218
)
(3,721
)
(3,260
)
5,646
4,281
6,158
2,575
2,029
3,302
2,515
4,696
2,723
Net Buy (Sell) Activity (in millions of
dollars)
Mutual Funds (9)
(15,200
)
(18,473
)
(17,143
)
(21,851
)
552
(2,338
)
(7,423
)
(4,904
)
(7,157
)
(4,485
)
(3,333
)
(6,476
)
(5,853
)
Exchange-Traded Funds (10)
5,799
13,859
15,147
15,159
11,897
12,516
8,706
8,143
6,931
16,074
12,864
9,857
8,423
Money Market Funds
17,018
21,542
16,929
27,778
24,285
23,347
27,106
6,291
15,256
9,112
7,911
16,869
13,388
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 – including March
2023 which reflects inflows of $19.0 billion from off-platform
Schwab Bank Retail CDs issued year-to-date through March 31, 2023.
September 2023 also includes an outflow of $0.8 billion from an
international relationship. April 2023 also includes an inflow of
$12.0 billion from a mutual fund clearing services client.
(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)
November 2022 includes the
Company-initiated closure of approximately 350 thousand low-balance
accounts. September 2022 includes the Company-initiated closure of
152 thousand low-balance accounts.
(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.
(6)
Beginning July 2023, client cash
as a percentage of client assets excludes brokered CDs issued by
Charles Schwab Bank. Prior periods have been recast to reflect this
change.
(7)
Represents average total
interest-earning assets on the Company’s balance sheet. November
2022 includes the impact of transferring certain investment
securities from the available for sale category to the
held-to-maturity category.
(8)
Represents average clients’
uninvested cash sweep account balances held in deposit accounts at
third-party financial institutions.
(9)
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.
(10)
Represents the principal value of
client ETF transactions handled by Schwab, including transactions
in proprietary ETFs.
N/M - Not meaningful. Percentage changes greater than 200% are
presented as not meaningful.
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 TD Ameritrade. See
Part I – Item 1 – Note 10 of our Quarterly Report on Form 10-Q for
the quarter ended June 30, 2023 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 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.
The tables below present reconciliations of GAAP measures to
non-GAAP measures:
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Total Expenses Excluding
Interest
Net Income
Total Expenses Excluding
Interest
Net Income
Total Expenses Excluding
Interest
Net Income
Total Expenses Excluding
Interest
Net Income
Total expenses excluding interest
(GAAP), Net income (GAAP)
$
3,223
$
1,125
$
2,823
$
2,020
$
9,194
$
4,022
$
8,475
$
5,215
Acquisition and integration-related costs
(1)
(106
)
106
(101
)
101
(334
)
334
(291
)
291
Amortization of acquired intangible
assets
(135
)
135
(152
)
152
(404
)
404
(460
)
460
Restructuring costs (2)
(279
)
279
—
—
(279
)
279
—
—
Income tax effects (3)
N/A
(127
)
N/A
(62
)
N/A
(247
)
N/A
(183
)
Adjusted total expenses (non-GAAP),
Adjusted net income (non-GAAP)
$
2,703
$
1,518
$
2,570
$
2,211
$
8,177
$
4,792
$
7,724
$
5,783
(1)
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. Acquisition
and integration-related costs for the three and nine months ended
September 30, 2022 primarily consist of $57 million and $166
million of compensation and benefits, $36 million and $102 million
of professional services, and $6 million and $14 million of
occupancy and equipment.
(2)
Restructuring costs for the three
and nine months ended September 30, 2023 primarily consist of $276
million of compensation and benefits. There were no restructuring
costs for the three and nine months ended September 30, 2022.
(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,
2023
2022
2023
2022
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)
$
1,383
30.0
%
$
2,677
48.7
%
$
5,184
36.1
%
$
6,790
44.5
%
Acquisition and integration-related
costs
106
2.3
%
101
1.8
%
334
2.3
%
291
1.9
%
Amortization of acquired intangible
assets
135
2.9
%
152
2.8
%
404
2.8
%
460
3.0
%
Restructuring costs
279
6.1
%
—
—
279
1.9
%
—
—
Adjusted income before taxes on income
(non-GAAP), Adjusted pre-tax profit margin
(non-GAAP)
$
1,903
41.3
%
$
2,930
53.3
%
$
6,201
43.1
%
$
7,541
49.4
%
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
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)
$
1,017
$
.56
$
1,884
$
.99
$
3,723
$
2.03
$
4,814
$
2.53
Acquisition and integration-related
costs
106
.06
101
.05
334
.18
291
.15
Amortization of acquired intangible
assets
135
.07
152
.08
404
.22
460
.24
Restructuring costs
279
.15
—
—
279
.15
—
—
Income tax effects
(127
)
(.07
)
(62
)
(.02
)
(247
)
(.13
)
(183
)
(.09
)
Adjusted net income available to common
stockholders (non-GAAP), Adjusted diluted EPS
(non-GAAP)
$
1,410
$
.77
$
2,075
$
1.10
$
4,493
$
2.45
$
5,382
$
2.83
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Return on average common stockholders’
equity (GAAP)
14
%
25
%
18
%
18
%
Average common stockholders’ equity
$
28,274
$
30,282
$
27,747
$
36,526
Less: Average goodwill
(11,951
)
(11,951
)
(11,951
)
(11,952
)
Less: Average acquired intangible assets —
net
(8,457
)
(8,999
)
(8,589
)
(9,151
)
Plus: Average deferred tax liabilities
related to goodwill
and acquired intangible assets — net
1,822
1,848
1,830
1,867
Average tangible common equity
$
9,688
$
11,180
$
9,037
$
17,290
Adjusted net income available to common
stockholders (1)
$
1,410
$
2,075
$
4,493
$
5,382
Return on tangible common equity
(non-GAAP)
58
%
74
%
66
%
42
%
(1)
See table above for the
reconciliation of net income available to common stockholders to
adjusted net income available to common stockholders
(non-GAAP).
September 30, 2023
CSC
CSB
Tier 1 Leverage Ratio (GAAP)
8.2
%
9.6
%
Tier 1 Capital
$
39,971
$
31,764
Plus: AOCI adjustment
(20,752
)
(18,143
)
Adjusted Tier 1 Capital
19,219
13,621
Average assets with regulatory
adjustments
488,627
330,908
Plus: AOCI adjustment
(20,033
)
(17,950
)
Adjusted average assets with regulatory
adjustments
$
468,594
$
312,958
Adjusted Tier 1 Leverage Ratio
(non-GAAP)
4.1
%
4.4
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231016043490/en/
MEDIA: Mayura Hooper Charles Schwab Phone: 415-667-1525
INVESTORS/ANALYSTS: Jeff Edwards Charles Schwab Phone:
415-667-1524
Charles Schwab (NYSE:SCHW)
過去 株価チャート
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Charles Schwab (NYSE:SCHW)
過去 株価チャート
から 5 2023 まで 5 2024