SCHW Charles Schwab Corporation

Total Client Assets Reached A Record $9.4 Trillion, Up 17% Year-Over-Year Core Net New Assets Rose 17% to $61.2 Billion, Highlighting Continued Momentum

The Charles Schwab Corporation reported net income for the second quarter totaling $1.3 billion, or $.66 diluted earnings per common share. Excluding $175 million of pre-tax transaction-related and restructuring costs, adjusted (1) net income and diluted common earnings per share equaled $1.5 billion and $.73, respectively.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240716776368/en/

Client Driven Growth

 

+17% Core Net New Asset Growth Versus 2Q23

“Schwab’s ‘no trade-offs’ value proposition continued to resonate with investors, as new brokerage accounts opened this year grew to over 2 million and second quarter core asset gathering equaled $61.2 billion – a year-over-year increase of 17%.” Co-Chairman and CEO Walt Bettinger

 

 

 

 

 

 

 

Modern Wealth Solutions

 

+56% YTD Inflows

to Managed Investing Solutions Versus 2023

“Client interest in our broad array of wealth solutions remained strong through June. Year-to-date enrollments are up ~30% versus the prior year period and net flows into Managed Investing solutions reached $25 billion – an increase of 56% versus the first 6 months of 2023.”

Co-Chairman and CEO Walt Bettinger

 

 

 

 

 

 

 

Diversified Operating Model

 

41.0% 2Q24 Adjusted

Pre-Tax Profit Margin (1)

“Record asset management and administration fees, along with our balanced approach to expense management, helped Schwab produce a second quarter pre-tax margin of 37.2% – 41.0% adjusted (1).” CFO Peter Crawford

 

 

 

 

 

 

 

Balance Sheet Management

 

9.4% Tier 1 Leverage Ratio

5.9% Adj. Tier 1

Leverage Ratio (1)

“Similar to prior years, our strong capital levels and all-weather model enabled us to successfully complete the 2024 Federal Reserve stress test, with Schwab notching the highest post-stress ratios among all major banks.”

CFO Peter Crawford

 

 

 

2Q24 Client and Business Highlights

• Sustained equity market strength and organic asset gathering pushed total client assets to a record $9.41 trillion
• Active brokerage accounts increased 4% year-over-year to 35.6 million
• Despite expected integration-related attrition, core net new assets grew 17% versus the prior year to $61.2 billion
• Client assets receiving ongoing advisory services are up 16% year-over-year, including year-to-date net flow increases into Schwab Wealth Advisory™ and Wasmer Schroeder™ Strategies of 40% and 53%, respectively
• Margin balances totaled $71.7 billion at quarter-end, up 15% since the end of 2023
• Second quarter trading activity remained robust versus 2023 levels as client engagement in the markets persisted
• Strong year-to-date client net buying of mutual and exchange-traded funds totaled $77 billion – the 2nd highest first half ever
• Schwab ranked #1 for mobile app customer experience by Corporate Insight for the second year in a row (2)

 

Three Months Ended June 30,

 

%

 

Six Months Ended June 30,

 

%

Financial Highlights (1)

2024

 

2023

 

Change

 

2024

 

2023

 

Change

 

 

 

 

 

 

 

Net revenues (in millions)

$

4,690

 

$

4,656

 

1

%

$

9,430

 

$

9,772

 

(3

)%

Net income (in millions)

 

 

 

 

 

 

GAAP

$

1,332

 

$

1,294

 

3

%

$

2,694

 

$

2,897

 

(7

)%

Adjusted (1)

$

1,465

 

$

1,494

 

(2

)%

$

2,934

 

$

3,274

 

(10

)%

Diluted earnings per common share

 

 

 

 

 

 

GAAP

$

.66

 

$

.64

 

3

%

$

1.34

 

$

1.48

 

(9

)%

Adjusted (1)

$

.73

 

$

.75

 

(3

)%

$

1.47

 

$

1.68

 

(13

)%

Pre-tax profit margin

 

 

 

 

 

 

GAAP

 

37.2

%

 

36.3

%

 

 

37.6

%

 

38.9

%

 

Adjusted (1)

 

41.0

%

 

42.0

%

 

 

40.9

%

 

44.0

%

 

Return on average common stockholders’ equity (annualized)

 

14

%

 

17

%

 

 

15

%

 

20

%

 

Return on tangible common equity (annualized) (1)

 

34

%

 

62

%

 

 

36

%

 

71

%

 

 

 

 

 

 

 

 

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

2Q24 Financial Commentary

• Total net revenue increased by 1% year-over-year led by sustained market strength
• Net interest margin expanded to 2.03%, up 1 basis point sequentially
• Client transactional sweep cash balances ended June at $374.8 billion, reflecting clients’ April tax disbursements, slowing client cash realignment activity, and continued net securities purchases by clients
• Supplemental funding (3) finished the second quarter at $73.7 billion, up from the first quarter as we redirected some client cash from the bank to the broker-dealer to support increased margin lending
• Asset management and administration fees totaled $1.4 billion, a new quarterly record
• GAAP expenses declined by 1% versus the prior year period and included $43 million in accruals in connection with an industry-wide regulatory review of off-channel communications
• Second quarter acquisition and integration-related costs, amortization of acquired intangibles, and restructuring costs totaled $175 million, down $89 million from 2Q23. Exclusive of these items, adjusted total expenses (1) grew by 2%
• Charles Schwab Bank, SSB (CSB) capital ratios continued to build, with preliminary Tier 1 Leverage and adjusted Tier 1 Leverage (1) reaching 10.9% and 6.2%, 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)

Charles Schwab leads in mobile in Corporate Insight’s 2024 Brokerage Experience Benchmarks (https://corporateinsight.com/the-2024-brokerage-experience-benchmarks-find-hybrids-still-offer-best-experiences/), which evaluate the individual investor experience offered by 20 leading brokerage websites and mobile apps. This research was independently conducted by Corporate Benchmarks’ analytical frameworks that are built on over 25 years of research and provide a clear view of how the nation’s top brokerage websites and mobile apps stack up against one another in terms of functionality, design, navigation, and usability. Schwab paid a licensing fee to Corporate Insight for use of the award and logos.

(3)

Supplemental funding includes repurchase agreements, Schwab Bank Certificates of Deposit (CDs), and Federal Home Loan Bank balances.

Summer Business Update

The company will host its Summer 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 the company’s value proposition and success with investors, Ameritrade integration-related attrition, expense management and capital levels. 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 35.6 million active brokerage accounts, 5.4 million workplace plan participant accounts, 1.9 million banking accounts, and $9.41 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 June 30,

 

Six Months Ended June 30,

 

 

2024

 

2023

 

2024

 

2023

Net Revenues

 

 

 

 

Interest revenue

$

3,817

 

$

4,104

 

$

7,758

 

$

8,120

 

Interest expense

 

(1,659

)

 

(1,814

)

 

(3,367

)

 

(3,060

)

Net interest revenue

 

2,158

 

 

2,290

 

 

4,391

 

 

5,060

 

Asset management and administration fees

 

1,383

 

 

1,173

 

 

2,731

 

 

2,291

 

Trading revenue

 

777

 

 

803

 

 

1,594

 

 

1,695

 

Bank deposit account fees

 

153

 

 

175

 

 

336

 

 

326

 

Other

 

219

 

 

215

 

 

378

 

 

400

 

Total net revenues

 

4,690

 

 

4,656

 

 

9,430

 

 

9,772

 

Expenses Excluding Interest

 

 

 

 

Compensation and benefits

 

1,450

 

 

1,498

 

 

2,988

 

 

3,136

 

Professional services

 

259

 

 

272

 

 

500

 

 

530

 

Occupancy and equipment

 

248

 

 

319

 

 

513

 

 

618

 

Advertising and market development

 

107

 

 

103

 

 

195

 

 

191

 

Communications

 

172

 

 

188

 

 

313

 

 

334

 

Depreciation and amortization

 

233

 

 

191

 

 

461

 

 

368

 

Amortization of acquired intangible assets

 

129

 

 

134

 

 

259

 

 

269

 

Regulatory fees and assessments

 

96

 

 

80

 

 

221

 

 

163

 

Other

 

249

 

 

180

 

 

435

 

 

362

 

Total expenses excluding interest

 

2,943

 

 

2,965

 

 

5,885

 

 

5,971

 

Income before taxes on income

 

1,747

 

 

1,691

 

 

3,545

 

 

3,801

 

Taxes on income

 

415

 

 

397

 

 

851

 

 

904

 

Net Income

 

1,332

 

 

1,294

 

 

2,694

 

 

2,897

 

Preferred stock dividends and other

 

121

 

 

121

 

 

232

 

 

191

 

Net Income Available to Common Stockholders

$

1,211

 

$

1,173

 

$

2,462

 

$

2,706

 

Weighted-Average Common Shares Outstanding:

 

 

 

 

Basic

 

1,828

 

 

1,820

 

 

1,827

 

 

1,827

 

Diluted

 

1,834

 

 

1,825

 

 

1,832

 

 

1,834

 

Earnings Per Common Shares Outstanding (1):

 

 

 

 

Basic

$

.66

 

$

.64

 

$

1.35

 

$

1.48

 

Diluted

$

.66

 

$

.64

 

$

1.34

 

$

1.48

 

(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.

 

THE CHARLES SCHWAB CORPORATION

Financial and Operating Highlights

(Unaudited)

 

 

Q2-24 % change

2024

 

2023

(In millions, except per share amounts and as noted)

vs. Q2-23

 

vs. Q1-24

 

Second Quarter

 

First Quarter

 

Fourth Quarter

 

Third Quarter

 

Second Quarter

Net Revenues

 

 

 

 

 

 

 

Net interest revenue

(6

)%

(3

)%

$

2,158

 

$

2,233

 

$

2,130

 

$

2,237

 

$

2,290

 

Asset management and administration fees

18

%

3

%

 

1,383

 

 

1,348

 

 

1,241

 

 

1,224

 

 

1,173

 

Trading revenue

(3

)%

(5

)%

 

777

 

 

817

 

 

767

 

 

768

 

 

803

 

Bank deposit account fees

(13

)%

(16

)%

 

153

 

 

183

 

 

174

 

 

205

 

 

175

 

Other

2

%

38

%

 

219

 

 

159

 

 

147

 

 

172

 

 

215

 

Total net revenues

1

%

(1

)%

 

4,690

 

 

4,740

 

 

4,459

 

 

4,606

 

 

4,656

 

Expenses Excluding Interest

 

 

 

 

 

 

 

Compensation and benefits (1)

(3

)%

(6

)%

 

1,450

 

 

1,538

 

 

1,409

 

 

1,770

 

 

1,498

 

Professional services

(5

)%

7

%

 

259

 

 

241

 

 

253

 

 

275

 

 

272

 

Occupancy and equipment

(22

)%

(6

)%

 

248

 

 

265

 

 

331

 

 

305

 

 

319

 

Advertising and market development

4

%

22

%

 

107

 

 

88

 

 

104

 

 

102

 

 

103

 

Communications

(9

)%

22

%

 

172

 

 

141

 

 

144

 

 

151

 

 

188

 

Depreciation and amortization

22

%

2

%

 

233

 

 

228

 

 

238

 

 

198

 

 

191

 

Amortization of acquired intangible assets

(4

)%

(1

)%

 

129

 

 

130

 

 

130

 

 

135

 

 

134

 

Regulatory fees and assessments

20

%

(23

)%

 

96

 

 

125

 

 

270

 

 

114

 

 

80

 

Other (2)

38

%

34

%

 

249

 

 

186

 

 

386

 

 

173

 

 

180

 

Total expenses excluding interest

(1

)%

—

 

 

2,943

 

 

2,942

 

 

3,265

 

 

3,223

 

 

2,965

 

Income before taxes on income

3

%

(3

)%

 

1,747

 

 

1,798

 

 

1,194

 

 

1,383

 

 

1,691

 

Taxes on income

5

%

(5

)%

 

415

 

 

436

 

 

149

 

 

258

 

 

397

 

Net Income

3

%

(2

)%

 

1,332

 

 

1,362

 

 

1,045

 

 

1,125

 

 

1,294

 

Preferred stock dividends and other

—

 

9

%

 

121

 

 

111

 

 

119

 

 

108

 

 

121

 

Net Income Available to Common Stockholders

3

%

(3

)%

$

1,211

 

$

1,251

 

$

926

 

$

1,017

 

$

1,173

 

Earnings per common share (3):

 

 

 

 

 

 

 

Basic

3

%

(4

)%

$

.66

 

$

.69

 

$

.51

 

$

.56

 

$

.64

 

Diluted

3

%

(3

)%

$

.66

 

$

.68

 

$

.51

 

$

.56

 

$

.64

 

Dividends declared per common share

—

 

—

 

$

.25

 

$

.25

 

$

.25

 

$

.25

 

$

.25

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

Basic

—

 

—

 

 

1,828

 

 

1,825

 

 

1,823

 

 

1,821

 

 

1,820

 

Diluted

—

 

—

 

 

1,834

 

 

1,831

 

 

1,828

 

 

1,827

 

 

1,825

 

Performance Measures

 

 

 

 

 

 

 

Pre-tax profit margin

 

 

 

37.2

%

 

37.9

%

 

26.8

%

 

30.0

%

 

36.3

%

Return on average common stockholders’ equity (annualized) (4)

 

 

 

14

%

 

15

%

 

12

%

 

14

%

 

17

%

Financial Condition (at quarter end, in billions)

 

 

 

 

 

 

 

Cash and cash equivalents

(47

)%

(20

)%

$

25.4

 

$

31.8

 

$

43.3

 

$

33.3

 

$

47.7

 

Cash and investments segregated

(14

)%

(16

)%

 

21.7

 

 

25.9

 

 

31.8

 

 

18.6

 

 

25.1

 

Receivables from brokerage clients — net

12

%

2

%

 

72.8

 

 

71.2

 

 

68.7

 

 

69.1

 

 

65.2

 

Available for sale securities

(26

)%

(7

)%

 

93.6

 

 

101.1

 

 

107.6

 

 

110.3

 

 

125.8

 

Held to maturity securities

(8

)%

(2

)%

 

153.2

 

 

156.4

 

 

159.5

 

 

162.5

 

 

166.3

 

Bank loans — net

5

%

3

%

 

42.2

 

 

40.8

 

 

40.4

 

 

40.3

 

 

40.1

 

Total assets

(12

)%

(4

)%

 

449.7

 

 

468.8

 

 

493.2

 

 

475.2

 

 

511.5

 

Bank deposits

(17

)%

(6

)%

 

252.4

 

 

269.5

 

 

290.0

 

 

284.4

 

 

304.4

 

Payables to brokerage clients

(6

)%

(5

)%

 

80.0

 

 

84.0

 

 

84.8

 

 

72.8

 

 

84.8

 

Other short-term borrowings

28

%

19

%

 

10.0

 

 

8.4

 

 

6.6

 

 

7.6

 

 

7.8

 

Federal Home Loan Bank borrowings

(40

)%

2

%

 

24.4

 

 

24.0

 

 

26.4

 

 

31.8

 

 

41.0

 

Long-term debt

—

 

(2

)%

 

22.4

 

 

22.9

 

 

26.1

 

 

24.8

 

 

22.5

 

Stockholders’ equity

19

%

4

%

 

44.0

 

 

42.4

 

 

41.0

 

 

37.8

 

 

37.1

 

Other

 

 

 

 

 

 

 

Full-time equivalent employees (at quarter end, in thousands)

(12

)%

(1

)%

 

32.3

 

 

32.6

 

 

33.0

 

 

35.9

 

 

36.6

 

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

(45

)%

(25

)%

$

92

 

$

122

 

$

199

 

$

250

 

$

168

 

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

 

 

 

0.13

%

 

0.14

%

 

0.16

%

 

0.16

%

 

0.15

%

Clients’ Daily Average Trades (DATs) (in thousands)

4

%

(8

)%

 

5,486

 

 

5,958

 

 

5,192

 

 

5,218

 

 

5,272

 

Number of Trading Days

2

%

3

%

 

63.0

 

 

61.0

 

 

62.5

 

 

62.5

 

 

62.0

 

Revenue Per Trade (5)

(9

)%

—

 

$

2.25

 

$

2.25

 

$

2.36

 

$

2.35

 

$

2.46

 

 

 

 

 

 

 

 

 

(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 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 June 30,

 

 

Six Months Ended June 30,

 

 

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

$

28,839

$

382

5.24

%

$

44,683

$

547

 

4.84

%

$

31,394

$

836

5.26

%

$

40,891

$

960

4.67

%

Cash and investments segregated

 

21,493

 

281

5.17

%

 

27,399

 

324

 

4.68

%

 

25,503

 

669

5.19

%

 

33,699

 

756

4.46

%

Receivables from brokerage clients

 

68,715

 

1,351

7.78

%

 

60,709

 

1,167

 

7.60

%

 

66,259

 

2,611

7.80

%

 

60,626

 

2,251

7.39

%

Available for sale securities (1)

 

104,045

 

555

2.13

%

 

145,032

 

791

 

2.18

%

 

107,956

 

1,149

2.12

%

 

150,382

 

1,616

2.15

%

Held to maturity securities

 

154,314

 

658

1.70

%

 

167,499

 

720

 

1.72

%

 

155,862

 

1,348

1.73

%

 

169,184

 

1,466

1.73

%

Bank loans

 

41,562

 

460

4.44

%

 

40,124

 

410

 

4.09

%

 

41,046

 

900

4.40

%

 

40,185

 

801

4.00

%

Total interest-earning assets

 

418,968

 

3,687

3.50

%

 

485,446

 

3,959

 

3.24

%

 

428,020

 

7,513

3.49

%

 

494,967

 

7,850

3.16

%

Securities lending revenue

 

 

95

 

 

 

124

 

 

 

 

171

 

 

 

236

 

Other interest revenue

 

 

35

 

 

 

21

 

 

 

 

74

 

 

 

34

 

Total interest-earning assets

$

418,968

$

3,817

3.62

%

$

485,446

$

4,104

 

3.36

%

$

428,020

$

7,758

3.60

%

$

494,967

$

8,120

3.27

%

Funding sources

 

 

 

 

 

 

 

 

 

 

 

 

Bank deposits

$

258,119

$

840

1.31

%

$

312,543

$

863

 

1.11

%

$

266,243

$

1,761

1.33

%

$

327,739

$

1,481

0.91

%

Payables to brokerage clients

 

67,680

 

77

0.45

%

 

64,892

 

64

 

0.40

%

 

68,011

 

150

0.44

%

 

70,997

 

139

0.40

%

Other short-term borrowings

 

9,268

 

129

5.59

%

 

7,622

 

97

 

5.08

%

 

8,327

 

232

5.60

%

 

7,272

 

183

5.06

%

Federal Home Loan Bank borrowings

 

25,582

 

348

5.42

%

 

46,813

 

606

 

5.13

%

 

25,220

 

678

5.35

%

 

35,697

 

910

5.07

%

Long-term debt

 

22,460

 

208

3.70

%

 

21,237

 

157

 

2.95

%

 

23,730

 

432

3.64

%

 

20,766

 

296

2.85

%

Total interest-bearing liabilities

 

383,109

 

1,602

1.68

%

 

453,107

 

1,787

 

1.57

%

 

391,531

 

3,253

1.66

%

 

462,471

 

3,009

1.31

%

Non-interest-bearing funding sources

 

35,859

 

 

 

32,339

 

 

 

36,489

 

 

 

32,496

 

 

Securities lending expense

 

 

57

 

 

 

28

 

 

 

 

112

 

 

 

50

 

Other interest expense

 

 

—

 

 

 

(1

)

 

 

 

2

 

 

 

1

 

Total funding sources

$

418,968

$

1,659

1.59

%

$

485,446

$

1,814

 

1.49

%

$

428,020

$

3,367

1.57

%

$

494,967

$

3,060

1.24

%

Net interest revenue

 

$

2,158

2.03

%

 

$

2,290

 

1.87

%

 

$

4,391

2.03

%

 

$

5,060

2.03

%

(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 June 30,

 

 

Six Months Ended June 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

$

523,665

 

$

357

 

0.27

%

 

 

$

375,898

 

$

252

 

0.27

%

 

 

$

511,776

 

$

693

 

0.27

%

 

 

$

346,145

 

$

465

 

0.27

%

Schwab equity and bond funds, exchange-traded funds (ETFs), and collective trust funds (CTFs)

 

565,848

 

 

112

 

0.08

%

 

 

 

465,079

 

 

94

 

0.08

%

 

 

 

552,755

 

 

219

 

0.08

%

 

 

 

457,830

 

 

185

 

0.08

%

Mutual Fund OneSource® and other no-transaction-

fee funds

 

338,198

 

 

214

 

0.25

%

 

 

 

229,207

 

 

151

 

0.26

%

 

 

 

326,387

 

 

423

 

0.26

%

 

 

 

225,822

 

 

299

 

0.27

%

Other third-party mutual funds and ETFs

 

600,902

 

 

102

 

0.07

%

 

 

 

681,486

 

 

133

 

0.08

%

 

 

 

603,263

 

 

208

 

0.07

%

 

 

 

678,915

 

 

266

 

0.08

%

Total mutual funds, ETFs, and CTFs (1)

$

2,028,613

 

 

785

 

0.16

%

 

 

$

1,751,670

 

 

630

 

0.14

%

 

 

$

1,994,181

 

 

1,543

 

0.16

%

 

 

$

1,708,712

 

 

1,215

 

0.14

%

Advice solutions (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee-based

$

525,689

 

 

510

 

0.39

%

 

 

$

455,859

 

 

464

 

0.41

%

 

 

$

515,911

 

 

1,013

 

0.39

%

 

 

$

449,443

 

 

917

 

0.41

%

Non-fee-based

 

110,234

 

 

—

 

—

 

 

 

 

95,427

 

 

—

 

—

 

 

 

 

108,133

 

 

—

 

—

 

 

 

 

94,948

 

 

—

 

—

 

Total advice solutions

$

635,923

 

 

510

 

0.32

%

 

 

$

551,286

 

 

464

 

0.34

%

 

 

$

624,044

 

 

1,013

 

0.33

%

 

 

$

544,391

 

 

917

 

0.34

%

Other balance-based fees (2)

 

763,750

 

 

69

 

0.04

%

 

 

 

594,528

 

 

63

 

0.04

%

 

 

 

741,599

 

 

138

 

0.04

%

 

 

 

578,158

 

 

125

 

0.04

%

Other (3)

 

 

 

19

 

 

 

 

 

 

 

16

 

 

 

 

 

 

 

37

 

 

 

 

 

 

 

34

 

 

Total asset management and administration fees

 

 

$

1,383

 

 

 

 

 

 

$

1,173

 

 

 

 

 

 

$

2,731

 

 

 

 

 

 

$

2,291

 

 

(1)

Advice solutions include managed portfolios, specialized strategies, and customized investment advice such as Schwab Wealth AdvisoryTM, Schwab Managed PortfoliosTM, 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)

 

 

Q2-24 % Change

 

 

2024

 

2023

(In billions, at quarter end, except as noted)

vs. Q2-23

 

vs. Q1-24

 

 

Second Quarter

 

First Quarter

 

Fourth Quarter

 

Third Quarter

 

Second Quarter

Assets in client accounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schwab One®, certain cash equivalents, and bank deposits

(14

)%

 

(5

)%

 

 

$

330.7

 

 

$

348.2

 

 

$

368.3

 

 

$

353.1

 

 

$

384.4

 

Bank deposit account balances

(18

)%

 

(6

)%

 

 

 

84.5

 

 

 

90.2

 

 

 

97.4

 

 

 

99.5

 

 

 

102.7

 

Proprietary mutual funds (Schwab Funds® and Laudus Funds®) and CTFs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds (1)

36

%

 

3

%

 

 

 

533.6

 

 

 

515.7

 

 

 

476.4

 

 

 

436.3

 

 

 

392.9

 

Equity and bond funds and CTFs (2)

24

%

 

4

%

 

 

 

214.4

 

 

 

206.0

 

 

 

186.7

 

 

 

167.9

 

 

 

172.6

 

Total proprietary mutual funds and CTFs

32

%

 

4

%

 

 

 

748.0

 

 

 

721.7

 

 

 

663.1

 

 

 

604.2

 

 

 

565.5

 

Mutual Fund Marketplace® (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual Fund OneSource® and other no-transaction-fee funds

35

%

 

5

%

 

 

 

344.8

 

 

 

329.2

 

 

 

306.2

 

 

 

288.0

 

 

 

254.6

 

Mutual fund clearing services

20

%

 

7

%

 

 

 

264.7

 

 

 

248.1

 

 

 

233.4

 

 

 

216.9

 

 

 

220.7

 

Other third-party mutual funds

2

%

 

—

 

 

 

 

1,177.5

 

 

 

1,182.9

 

 

 

1,126.5

 

 

 

1,055.3

 

 

 

1,150.8

 

Total Mutual Fund Marketplace

10

%

 

2

%

 

 

 

1,787.0

 

 

 

1,760.2

 

 

 

1,666.1

 

 

 

1,560.2

 

 

 

1,626.1

 

Total mutual fund assets

16

%

 

2

%

 

 

 

2,535.0

 

 

 

2,481.9

 

 

 

2,329.2

 

 

 

2,164.4

 

 

 

2,191.6

 

Exchange-traded funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proprietary ETFs (2)

19

%

 

2

%

 

 

 

349.6

 

 

 

342.9

 

 

 

319.4

 

 

 

286.2

 

 

 

293.2

 

Other third-party ETFs

26

%

 

4

%

 

 

 

1,738.6

 

 

 

1,676.6

 

 

 

1,521.7

 

 

 

1,352.6

 

 

 

1,381.4

 

Total ETF assets

25

%

 

3

%

 

 

 

2,088.2

 

 

 

2,019.5

 

 

 

1,841.1

 

 

 

1,638.8

 

 

 

1,674.6

 

Equity and other securities

22

%

 

5

%

 

 

 

3,648.8

 

 

 

3,467.7

 

 

 

3,163.5

 

 

 

2,886.4

 

 

 

3,002.7

 

Fixed income securities

10

%

 

2

%

 

 

 

792.0

 

 

 

779.0

 

 

 

779.7

 

 

 

747.4

 

 

 

722.6

 

Margin loans outstanding

14

%

 

5

%

 

 

 

(71.7

)

 

 

(68.1

)

 

 

(62.6

)

 

 

(65.1

)

 

 

(62.8

)

Total client assets

17

%

 

3

%

 

 

$

9,407.5

 

 

$

9,118.4

 

 

$

8,516.6

 

 

$

7,824.5

 

 

$

8,015.8

 

Client assets by business

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor Services

18

%

 

4

%

 

 

$

5,055.7

 

 

$

4,852.2

 

 

$

4,519.1

 

 

$

4,157.7

 

 

$

4,267.9

 

Advisor Services

16

%

 

2

%

 

 

 

4,351.8

 

 

 

4,266.2

 

 

 

3,997.5

 

 

 

3,666.8

 

 

 

3,747.9

 

Total client assets

17

%

 

3

%

 

 

$

9,407.5

 

 

$

9,118.4

 

 

$

8,516.6

 

 

$

7,824.5

 

 

$

8,015.8

 

Net growth in assets in client accounts (for the quarter ended)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net new assets by business

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor Services (4)

11

%

 

14

%

 

 

$

39.9

 

 

$

34.9

 

 

$

25.0

 

 

$

28.6

 

 

$

36.0

 

Advisor Services (5)

(5

)%

 

(36

)%

 

 

 

34.3

 

 

 

53.3

 

 

 

41.3

 

 

 

19.6

 

 

 

36.0

 

Total net new assets

3

%

 

(16

)%

 

 

$

74.2

 

 

$

88.2

 

 

$

66.3

 

 

$

48.2

 

 

$

72.0

 

Net market gains (losses)

 

 

 

 

 

 

214.9

 

 

 

513.6

 

 

 

625.8

 

 

 

(239.5

)

 

 

363.8

 

Net growth (decline)

 

 

 

 

 

$

289.1

 

 

$

601.8

 

 

$

692.1

 

 

$

(191.3

)

 

$

435.8

 

New brokerage accounts (in thousands, for the quarter ended)

3

%

 

(10

)%

 

 

 

985

 

 

 

1,094

 

 

 

910

 

 

 

894

 

 

 

960

 

Client accounts (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active brokerage accounts

4

%

 

1

%

 

 

 

35,612

 

 

 

35,301

 

 

 

34,838

 

 

 

34,540

 

 

 

34,382

 

Banking accounts

8

%

 

2

%

 

 

 

1,931

 

 

 

1,885

 

 

 

1,838

 

 

 

1,799

 

 

 

1,781

 

Workplace Plan Participant Accounts (6)

7

%

 

2

%

 

 

 

5,363

 

 

 

5,277

 

 

 

5,221

 

 

 

5,141

 

 

 

5,003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 June 30, 2024, off-platform equity and bond funds, CTFs, and ETFs were $31.6 billion, $3.7 billion, and $117.3 billion, respectively.

(3)

Excludes all proprietary mutual funds and ETFs.

(4)

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. 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.

(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. Prior periods have been recast to reflect this change.

 

The Charles Schwab Corporation Monthly Activity Report For June 2024

 

 

2023

 

 

 

 

 

 

2024

 

 

 

 

 

Change

 

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Mo.

Yr.

Market Indices (at month end)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dow Jones Industrial Average®

34,408

 

35,560

 

34,722

 

33,508

 

33,053

 

35,951

 

37,690

 

38,150

 

38,996

 

39,807

 

37,816

 

38,686

 

39,119

 

1

%

14

%

Nasdaq Composite®

13,788

 

14,346

 

14,035

 

13,219

 

12,851

 

14,226

 

15,011

 

15,164

 

16,092

 

16,379

 

15,658

 

16,735

 

17,733

 

6

%

29

%

Standard & Poor’s® 500

4,450

 

4,589

 

4,508

 

4,288

 

4,194

 

4,568

 

4,770

 

4,846

 

5,096

 

5,254

 

5,036

 

5,278

 

5,460

 

3

%

23

%

Client Assets (in billions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning Client Assets

7,650.2

 

8,015.8

 

8,241.0

 

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

 

 

 

Net New Assets (1)

33.8

 

12.9

 

8.1

 

27.2

 

5.0

 

19.2

 

42.1

 

14.8

 

31.7

 

41.7

 

10.0

 

31.0

 

33.2

 

7

%

(2

)%

Net Market Gains (Losses)

331.8

 

212.3

 

(154.4

)

(297.4

)

(176.1

)

508.0

 

293.9

 

26.7

 

289.7

 

197.2

 

(280.9

)

327.8

 

168.0

 

 

 

Total Client Assets (at month end)

8,015.8

 

8,241.0

 

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

 

2

%

17

%

Core Net New Assets (1,2)

33.8

 

13.7

 

4.9

 

27.1

 

11.3

 

21.7

 

43.1

 

17.2

 

33.4

 

45.0

 

1.0

 

31.1

 

29.1

 

(6

)%

(14

)%

Receiving Ongoing Advisory Services (at month end)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor Services

547.5

 

560.6

 

552.2

 

533.0

 

522.2

 

557.0

 

581.4

 

584.1

 

601.8

 

618.5

 

602.2

 

624.0

 

632.9

 

1

%

16

%

Advisor Services (3)

3,527.8

 

3,619.8

 

3,554.2

 

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

 

2

%

16

%

Client Accounts (at month end, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active Brokerage Accounts

34,382

 

34,434

 

34,440

 

34,540

 

34,571

 

34,672

 

34,838

 

35,017

 

35,127

 

35,301

 

35,426

 

35,524

 

35,612

 

—

 

4

%

Banking Accounts

1,781

 

1,792

 

1,798

 

1,799

 

1,812

 

1,825

 

1,838

 

1,856

 

1,871

 

1,885

 

1,901

 

1,916

 

1,931

 

1

%

8

%

Workplace Plan Participant Accounts (4)

5,003

 

5,030

 

5,037

 

5,141

 

5,212

 

5,212

 

5,221

 

5,226

 

5,268

 

5,277

 

5,282

 

5,345

 

5,363

 

—

 

7

%

Client Activity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Brokerage Accounts (in thousands)

315

 

303

 

311

 

280

 

284

 

286

 

340

 

366

 

345

 

383

 

361

 

314

 

310

 

(1

)%

(2

)%

Client Cash as a Percentage of Client Assets (5,6)

10.5

%

10.2

%

10.4

%

10.8

%

11.2

%

10.7

%

10.5

%

10.5

%

10.2

%

10.0

%

10.2

%

9.9

%

9.7

%

(20) bp

(80) bp

Derivative Trades as a Percentage of Total Trades

23.9

%

23.0

%

24.4

%

24.2

%

23.2

%

23.1

%

21.8

%

21.8

%

22.2

%

21.9

%

22.1

%

21.9

%

21.3

%

(60) bp

(260) bp

Selected Average Balances (in millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Interest-Earning Assets (7)

479,752

 

466,659

 

449,483

 

444,864

 

438,522

 

439,118

 

446,305

 

443,694

 

434,822

 

431,456

 

423,532

 

415,950

 

417,150

 

—

 

(13

)%

Average Margin Balances

61,543

 

63,040

 

64,226

 

64,014

 

63,946

 

61,502

 

62,309

 

61,368

 

63,600

 

66,425

 

68,827

 

67,614

 

69,730

 

3

%

13

%

Average Bank Deposit Account Balances (8)

102,917

 

102,566

 

101,928

 

100,404

 

97,893

 

94,991

 

95,518

 

95,553

 

92,075

 

90,774

 

88,819

 

86,844

 

85,195

 

(2

)%

(17

)%

Mutual Fund and Exchange-Traded Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Buys (Sells) (9,10) (in millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equities

9,190

 

7,423

 

(278

)

675

 

(3,039

)

6,099

 

7,903

 

8,182

 

7,624

 

10,379

 

3,472

 

5,734

 

3,379

 

 

 

Hybrid

(903

)

(407

)

(1,037

)

(828

)

(1,457

)

(1,466

)

(1,596

)

(501

)

(1,330

)

(439

)

(703

)

(558

)

(843

)

 

 

Bonds

3,302

 

2,515

 

4,696

 

2,723

 

1,094

 

255

 

6,104

 

7,510

 

9,883

 

7,561

 

5,949

 

5,854

 

6,346

 

 

 

Net Buy (Sell) Activity (in millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual Funds (9)

(4,485

)

(3,333

)

(6,476

)

(5,853

)

(12,245

)

(9,267

)

(7,406

)

(966

)

(1,348

)

(1,607

)

(4,818

)

(5,544

)

(4,254

)

 

 

Exchange-Traded Funds (10)

16,074

 

12,864

 

9,857

 

8,423

 

8,843

 

14,155

 

19,817

 

16,157

 

17,525

 

19,108

 

13,536

 

16,574

 

13,136

 

 

 

Money Market Funds

9,112

 

7,911

 

16,869

 

13,388

 

16,976

 

11,670

 

7,745

 

11,717

 

10,129

 

9,085

 

(2,357

)

9,790

 

3,858

 

 

 

  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 inflow of $10.3 billion from a mutual fund clearing services client in April, and 2023 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. Prior periods have 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.

(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.

(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.

 

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 second 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 March 31, 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 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 CHARLES SCHWAB CORPORATION Non-GAAP Financial Measures (In millions, except ratios and per share amounts) (Unaudited)

The tables below present reconciliations of GAAP measures to non-GAAP measures:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

2023

 

2024

2023

 

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)

$

2,943

 

$

1,332

 

$

2,965

 

$

1,294

 

 

$

5,885

 

$

2,694

 

$

5,971

 

$

2,897

 

Acquisition and integration-related costs (1)

 

(36

)

 

36

 

 

(130

)

 

130

 

 

 

(74

)

 

74

 

 

(228

)

 

228

 

Amortization of acquired intangible assets

 

(129

)

 

129

 

 

(134

)

 

134

 

 

 

(259

)

 

259

 

 

(269

)

 

269

 

Restructuring costs (2)

 

(10

)

 

10

 

 

—

 

 

—

 

 

 

18

 

 

(18

)

 

—

 

 

—

 

Income tax effects (3)

 

N/A

 

 

(42

)

 

N/A

 

 

(64

)

 

 

N/A

 

 

(75

)

 

N/A

 

 

(120

)

Adjusted total expenses (non-GAAP), Adjusted net income (non-GAAP)

$

2,768

 

$

1,465

 

$

2,701

 

$

1,494

 

 

$

5,570

 

$

2,934

 

$

5,474

 

$

3,274

 

 

(1)

Acquisition and integration-related costs for the three and six months ended June 30, 2024 primarily consist of $18 million and $35 million of compensation and benefits, $12 million and $29 million of professional services, and $5 million of depreciation and amortization. Acquisition and integration-related costs for the three and six months ended June 30, 2023 primarily consist of $48 million and $106 million of compensation and benefits, $41 million and $74 million of professional services, $10 million and $14 million of occupancy and equipment, and $20 million and $22 million of other.

(2)

Restructuring costs for the three and six months ended June 30, 2024 reflect a change in estimate of $3 million and $34 million in compensation and benefits, offset by $1 million and $3 million of occupancy and equipment and $12 million and $13 million of other expense for the periods. There were no restructuring costs for the three and six months ended June 30, 2023.

(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 June 30,

 

Six Months Ended June 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)

$

1,747

37.2

%

$

1,691

36.3

%

 

$

3,545

 

37.6

%

$

3,801

38.9

%

Acquisition and integration-related costs

 

36

0.8

%

 

130

2.8

%

 

 

74

 

0.8

%

 

228

2.3

%

Amortization of acquired intangible assets

 

129

2.8

%

 

134

2.9

%

 

 

259

 

2.7

%

 

269

2.8

%

Restructuring costs

 

10

0.2

%

 

—

—

 

 

 

(18

)

(0.2

%)

 

—

—

 

Adjusted income before taxes on income (non-GAAP), Adjusted pre-tax profit margin (non-GAAP)

$

1,922

41.0

%

$

1,955

42.0

%

 

$

3,860

 

40.9

%

$

4,298

44.0

%

 

 

Three Months Ended June 30,

 

Six Months Ended June 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)

$

1,211

 

$

.66

 

$

1,173

 

$

.64

 

 

$

2,462

 

$

1.34

 

$

2,706

 

$

1.48

 

Acquisition and integration-related costs

 

36

 

 

.02

 

 

130

 

 

.07

 

 

 

74

 

 

.04

 

 

228

 

 

.12

 

Amortization of acquired intangible assets

 

129

 

 

.07

 

 

134

 

 

.07

 

 

 

259

 

 

.14

 

 

269

 

 

.15

 

Restructuring costs

 

10

 

 

.01

 

 

—

 

 

—

 

 

 

(18

)

 

(.01

)

 

—

 

 

—

 

Income tax effects

 

(42

)

 

(.03

)

 

(64

)

 

(.03

)

 

 

(75

)

 

(.04

)

 

(120

)

 

(.07

)

Adjusted net income available to common stockholders (non-GAAP), Adjusted diluted EPS (non-GAAP)

$

1,344

 

$

.73

 

$

1,373

 

$

.75

 

 

$

2,702

 

$

1.47

 

$

3,083

 

$

1.68

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

2023

 

2024

2023

Return on average common stockholders’ equity (GAAP)

 

14

%

 

17

%

 

 

15

%

 

20

%

Average common stockholders’ equity

$

33,991

 

$

27,556

 

 

$

33,264

 

$

27,429

 

Less: Average goodwill

 

(11,951

)

 

(11,951

)

 

 

(11,951

)

 

(11,951

)

Less: Average acquired intangible assets — net

 

(8,067

)

 

(8,591

)

 

 

(8,132

)

 

(8,657

)

Plus: Average deferred tax liabilities related to goodwill

and acquired intangible assets — net

 

1,747

 

 

1,834

 

 

 

1,753

 

 

1,837

 

Average tangible common equity

$

15,720

 

$

8,848

 

 

$

14,934

 

$

8,658

 

Adjusted net income available to common stockholders (1)

$

1,344

 

$

1,373

 

 

$

2,702

 

$

3,083

 

Return on tangible common equity (non-GAAP)

 

34

%

 

62

%

 

 

36

%

 

71

%

(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)

 

June 30, 2024

 

CSC

CSB

Tier 1 Leverage Ratio (GAAP)

 

9.4

%

 

10.9

%

Tier 1 Capital

$

42,624

 

$

32,091

 

Plus: AOCI adjustment

 

(16,926

)

 

(14,755

)

Adjusted Tier 1 Capital

 

25,698

 

 

17,336

 

Average assets with regulatory adjustments

 

451,304

 

 

294,465

 

Plus: AOCI adjustment

 

(17,301

)

 

(15,251

)

Adjusted average assets with regulatory adjustments

$

434,003

 

$

279,214

 

Adjusted Tier 1 Leverage Ratio (non-GAAP)

 

5.9

%

 

6.2

%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240716776368/en/

MEDIA Mayura Hooper, 415-667-1525 public.relations@schwab.com INVESTORS/ANALYSTS Jeff Edwards, 415-667-1524 investor.relations@schwab.com