EX-99.1 2 schw-20150415ex991008cae.htm EX-99.1 Exhibit 991

 

 

 

EXHIBIT 99.1

 

 

 

 

News Release

 

 

Picture 2

Contacts:

 

Media:

Greg Gable

Charles Schwab

Phone: 415-667-0473

 

 

Investors/Analysts:

Rich Fowler

Charles Schwab

Phone: 415-667-1841

 

 

SCHWAB REPORTS FIRST QUARTER RESULTS

Client Assets Total $2.52 Trillion, up $216 Billion Year-over-Year

 

SAN FRANCISCO, April 15, 2015 – The Charles Schwab Corporation announced today that its net income for the first quarter of 2015 was $302 million, down 14% from $350 million for the fourth quarter of 2014, and down 7% from $326 million for the first quarter of 2014.  These results lag the outlook expressed in the company’s press release dated March 13, 2015, primarily due to the earlier timing of certain compensation expenses.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

March 31,

 

%

Financial Highlights

 

2015

 

2014

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues (in millions)

 

$
1,526 

 

 

$
1,478 

 

 
3 

%

Net income (in millions)

 

$
302 

 

 

$
326 

 

 
(7)

%

Diluted earnings per common share

 

$

.22 

 

 

$

.24 

 

 
(8)

%

Pre-tax profit margin

 

 
31.7 

%

 

 
35.3 

%

 

 

 

Return on average common

 

 

 

 

 

 

 

 

 

 

 

stockholders’ equity (annualized)

 

 
10 

%

 

 
13 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CEO Walt Bettinger said, “Our strong client momentum continued in the first quarter of 2015, as our innovative, full-service model continued to resonate with investors.  We gathered $34.2 billion of core net new assets during the first quarter, a 6% annualized organic growth rate.  Net new assets from retail investors were the highest since the first quarter of 2008, totaling $12.5 billion, up 16% sequentially and 28% year-over-year.  Clients have now entrusted us with assets totaling $2.52 trillion – 9% above the March 2014 level.  In addition, clients opened 274,000 new brokerage accounts, up 6% year-over-year.  As March ended, we were serving 9.5 million active brokerage accounts, 986,000 banking accounts, and 1.5 million retirement plan participants, up 3%, 6% and 10%, respectively, from year-earlier levels.”

 

“We continued to build awareness of our wealth management capabilities during the first quarter, and client balances receiving ongoing advisory services kept growing faster than assets overall,” Mr. Bettinger continued.  “At quarter-end, $1.06 trillion was under the guidance of a registered independent advisor and $188.4 billion was enrolled in one of our retail or other advisory solutions, up 9% and 18%, respectively, over the first quarter of 2014.  Significantly, while our Client Promoter Score from retail investors reached a record 52 in the first quarter, the score from those clients enrolled in one of our advisory services averaged 6 points higher at 58.”

 

Mr. Bettinger added, “We launched Schwab Intelligent Portfolios™ on March 9th, continuing our tradition of innovation on behalf of investors.  Intelligent Portfolios is the only fully automated investment advisory service using sophisticated computer algorithms to build, monitor, and rebalance diversified portfolios based on an investor’s stated goals, time horizon and risk tolerance without charging any advisory fees, commissions, or account service fees;

-  1 -

 

24/7/365 live professional assistance is included.  Thus far, individual investor enrollments are running well ahead of our initial expectations, and we look forward to launching Institutional Intelligent Portfolios™ for our RIA clients in the second quarter of 2015.  Also during the first quarter, we expanded Schwab ETF OneSource™, the largest commission-free ETF platform, to offer 18 more ETFs.  Investors can now trade 198 ETFs covering 64 Morningstar Categories for $0 online trade commissions.  Schwab ETF OneSource balances reached $47.1 billion as of quarter-end, up 65% from a year ago.  Within that total, our proprietary ETF balances reached $31.0 billion by quarter-end.  Total ETF balances at Schwab were $252.4 billion at month-end March, up 19% year-over-year.  We also launched Trade Source™ for our more actively trading clients, bringing them the information they need to make investing decisions via a more efficient, powerful tool that is accessible on a browser or tablet.  Trade Source provides a customized set of relevant updates for traders based on their own holdings and watch lists, enables them to select preferences for viewing information, and remembers those preferences for future sessions.”

 

CFO Joe Martinetto commented, “Even as our business growth remained strong, environmental factors contributed to a disappointing rate of revenue growth for the first quarter.  Our revenue picture was shaped by an environment that included volatile equity market performance, largely flat-to-lower interest rates, and client trading activity that slowed as the quarter progressed.  While that trading slowdown resulted in an 8% decline in trading revenue from the first quarter of 2014, our continued strength in gathering client assets helped asset management and administration fees and net interest revenue increase by 5% and 6%, respectively, resulting in 3% overall revenue growth for the quarter.  Our 2015 expense planning included increased first quarter spending on both a sequential and year-over-year basis driven by strong business growth and a fully-funded project list, including the development and launch of Schwab Intelligent Portfolios.  Our plans also incorporated seasonal effects such as payroll tax resets, our annual health savings account contribution, typical salary adjustments and higher marketing outlays relating to Intelligent Portfolios, as mentioned in our March 13th SMART report.  Closing out the quarter, actual expenses for the period also reflected an accelerated 401(k) match as more employees chose to fund their contributions from annual bonuses paid in March and the company moved to match contributions by pay period instead of annually, as well as the earlier recognition of certain equity-based incentives due to plan changes.”

 

“These additional items increased our first quarter expenses by $13 million relative to our March 13th commentary,” Mr. Martinetto said.  “Between the effects of the environment on our revenue and our overall spending, the company’s pre-tax profit margin was 31.7% for the first quarter.  While we will continue to monitor our spending levels in view of our developing revenue picture, our expected overall expense growth remains at a modest pace of approximately 4% for 2015 and we are well positioned to translate business growth into improving financial performance as the year continues.”

 

Mr. Martinetto noted, “We bolstered our balance sheet liquidity during the first quarter by issuing $1 billion in long term debt comprised of $625 million in 1.50% senior notes due in three years, and $375 million in 3.00% senior notes due in ten years; the majority of the proceeds were invested in term Treasury Notes.  Also during the quarter, we completed a $2 billion bulk transfer of sweep balances from broker/dealer Schwab One® accounts to Schwab Bank.  Average interest-earning assets were $149.4 billion for the first quarter of 2015, up 9% from a year ago.  With quarter-end stockholders equity of $12.2 billion and a preliminary consolidated Tier 1 Leverage Ratio of 6.8%, we continue to maintain a healthy balance sheet capable of supporting the company’s ongoing growth.”

 

Business highlights for the first quarter (data as of quarter-end unless otherwise noted):

 

Investor Services

·

New retail brokerage accounts for the quarter totaled approximately 178,000, up 9% from the year-earlier period; total accounts were 6.7 million as of March 31, 2015, up 2% year-over-year.

·

Held planning conversations with approximately 25,000 clients.

·

Schwab Trading Services™ hosted the company’s first-ever Google Hangout, titled Schwab Live: After the Bell.  The forum allowed traders of all experience levels to ask Schwab’s industry professionals about the day’s market activity.

·

Launched Trade Source, a simplified, one-stop destination for trading on Schwab.com that allows Trading Services clients to easily monitor the markets, manage accounts, access fundamental and technical data, and place trades.

 

-  2  -

 

Advisor Services

·

Schwab Intelligent Technologies® announced that Orion Advisor Services and Redtail Technology will participate in Schwab OpenView Gateway™, the open-architecture platform enabling data integration between Schwab systems and those of technology providers used by advisors.

·

Hosted a webcast attended by nearly 1,800 advisor clients, announcing the details of Institutional Intelligent Portfolios, Schwab’s automated investment management solution for independent registered investment advisors.

·

Launched ETF trading services for advisors managing portfolios within corporate retirement plans.  The new capability, offered by Retirement Business Services, broadens investment options by allowing fractional share trading and next day settlement of ETFs, similar to traditional mutual funds.

 

Products and Infrastructure

·

For Charles Schwab Bank:

o

Balance sheet assets = $118.6 billion, up 15% year-over-year.

o

Outstanding mortgage and home equity loans = $11.0 billion.

o

First mortgage originations through its loan program during the quarter = $900 million.

o

Pledged Asset Line® balances = $2.5 billion. Pledged Asset Lines can now be integrated into Schwab Private Client™ relationships.

o

Delinquency, nonaccrual, and loss reserve ratios for Schwab Bank’s loan portfolio = 0.24%, 0.23% and 0.28%, respectively, at month-end March.

o

Schwab Bank High Yield Investor Checking® accounts = 795,000, with $12.7 billion in balances.

o

Schwab Bank went live with Apple Pay™.  Clients can add their Schwab Bank debit card to Apple Pay on iPhone® 6 or iPhone 6 Plus, then make convenient purchases at over 220,000 retailers and in many apps.

·

Client assets managed by Windhaven® totaled $15.6 billion, down 16% from the first quarter of 2014.

·

Client assets managed by ThomasPartners® totaled $7.1 billion, up 42% from the first quarter of 2014.

·

Launched Schwab Intelligent Portfolios, a fully automated investment advisory service that charges no advisory fees, commissions, or account service fees.

·

Expanded Schwab ETF OneSource to offer 18 more ETFs; investors can now trade 198 ETFs covering 64 Morningstar Categories for $0 online trade commissions.

·

Charles Schwab Investment Management reached $31.0 billion in ETF assets under management and is now the 7th largest ETF provider in the U.S.

 

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

 

Commentary from the CFO

Joe Martinetto, Executive Vice President and Chief Financial Officer, provides insight and commentary regarding Schwab’s financial picture at: http://aboutschwab.com/investor-relations/cfo-commentary.  The most recent commentary was posted on January 16, 2015.

 

Forward Looking Statements

This press release contains forward-looking statements relating to the launch of Institutional Intelligent Portfolios; expense growth; translating business growth into improving financial performance; and maintaining a healthy balance sheet capable of supporting the company’s ongoing growth.  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 develop and launch new products, services and capabilities in a timely and successful manner, including Institutional Intelligent Portfolios; the company’s ability to manage expenses; general market conditions, including the level of interest rates, equity valuations and trading activity; the company’s ability to attract and retain clients and grow client assets/relationships; competitive pressures on rates and fees; the level of client assets, including cash balances; the company’s ability to monetize client assets; capital needs and management; the impact of changes in market conditions on money fund fee waivers, revenues, expenses and pre-tax margin; client use of the company’s investment advisory services and other products and services; the timing and amount of severance and other costs related to reducing the company’s San Francisco footprint; regulatory guidance; the level of field sales activity and related incentive compensation; acquisition integration costs; net interest margin; client trading activity; the effect of adverse developments in litigation or regulatory matters and the extent of any charges associated with legal matters; any adverse

-  3  -

 

impact of financial reform legislation and related regulations; and other factors set forth in the company’s Form 10-K for the period ended December 31, 2014.

 

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with more than 325 offices and 9.5 million active brokerage accounts, 1.5 million corporate retirement plan participants, 986,000 banking accounts, and $2.52 trillion in client assets as of March 31, 2015.  Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors.  Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, http://www.sipc.org), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services.  Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and lending services and products.  More information is available at www.schwab.com and www.aboutschwab.com.

###

 

-  4  -

 

THE  CHARLES  SCHWAB  CORPORATION

Consolidated Statements of Income

(In millions, except per share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

March 31,

 

 

 

 

2015

 

2014

Net Revenues

  

 

 

 

 

 

Asset management and administration fees

  

$
644 

 

$
611 

Interest revenue

  

 
617 

 

 
579 

Interest expense

  

 
(29)

 

 
(26)

Net interest revenue

  

 
588 

 

 
553 

Trading revenue

  

 
227 

 

 
247 

Other

  

 
63 

 

 
68 

Provision for loan losses

  

 
4 

 

 
(1)

Total net revenues

  

 
1,526 

 

 
1,478 

Expenses Excluding Interest

  

 

 

 

 

 

Compensation and benefits

  

 
581 

 

 
528 

Professional services

  

 
114 

 

 
106 

Occupancy and equipment

  

 
83 

 

 
80 

Advertising and market development

  

 
69 

 

 
63 

Communications

  

 
58 

 

 
56 

Depreciation and amortization

  

 
54 

 

 
48 

Other

  

 
83 

 

 
75 

Total expenses excluding interest

  

 
1,042 

 

 
956 

Income before taxes on income

  

 
484 

 

 
522 

Taxes on income

  

 
182 

 

 
196 

Net Income

  

 
302 

 

 
326 

Preferred stock dividends and other

  

 
11 

 

 
8 

Net Income Available to Common Stockholders

  

$
291 

 

$
318 

Weighted-Average Common Shares Outstanding — Diluted

  

 
1,323 

 

 
1,311 

Earnings Per Common Share — Basic

  

$

.22

 

$

.24

Earnings Per Common Share — Diluted

  

$

.22

 

$

.24

 

 

 

 

 

See Note to Consolidated Statements of Income, Financial and Operating Highlights, and Net Interest Revenue Information.

 

-  5  -

 

THE  CHARLES  SCHWAB  CORPORATION

Financial and Operating Highlights

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1-15 % change

 

 

2015

 

2014

 

 

 

 

vs.

 

vs.

 

 

First

 

Fourth

 

Third

 

Second

 

 

First

 

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

 

Q1-14

 

Q4-14

 

 

Quarter

 

Quarter

 

Quarter

 

Quarter

 

 

Quarter

 

Net Revenues 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset management and administration fees

 
5% 

 

 -

 

 

$
644 

 

 

$
641 

 

 

$
649 

 

 

$
632 

 

 

$
611 

 

Net interest revenue 

 
6% 

 
1% 

 

 

 
588 

 

 

 
584 

 

 

 
573 

 

 

 
562 

 

 

 
553 

 

Trading revenue

 
(8%)

 
(5%)

 

 

 
227 

 

 

 
239 

 

 

 
209 

 

 

 
212 

 

 

 
247 

 

Other (1)

 
(7%)

 
(30%)

 

 

 
63 

 

 

 
90 

 

 

 
119 

 

 

 
65 

 

 

 
68 

 

Provision for loan losses

 

N/M

 

N/M

 

 

 
4 

 

 

 
(3)

 

 

 
1 

 

 

 
7 

 

 

 
(1)

 

Total net revenues

 
3% 

 
(2%)

 

 

 
1,526 

 

 

 
1,551 

 

 

 
1,551 

 

 

 
1,478 

 

 

 
1,478 

 

Expenses Excluding Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 
10% 

 
7% 

 

 

 
581 

 

 

 
543 

 

 

 
593 

 

 

 
520 

 

 

 
528 

 

Professional services

 
8% 

 
(7%)

 

 

 
114 

 

 

 
122 

 

 

 
117 

 

 

 
112 

 

 

 
106 

 

Occupancy and equipment

 
4% 

 
1% 

 

 

 
83 

 

 

 
82 

 

 

 
82 

 

 

 
80 

 

 

 
80 

 

Advertising and market development

 
10% 

 
19% 

 

 

 
69 

 

 

 
58 

 

 

 
59 

 

 

 
65 

 

 

 
63 

 

Communications

 
4% 

 
5% 

 

 

 
58 

 

 

 
55 

 

 

 
55 

 

 

 
57 

 

 

 
56 

 

Depreciation and amortization

 
13% 

 

 -

 

 

 
54 

 

 

 
54 

 

 

 
49 

 

 

 
48 

 

 

 
48 

 

Other

 
11% 

 

 -

 

 

 
83 

 

 

 
83 

 

 

 
78 

 

 

 
75 

 

 

 
75 

 

Total expenses excluding interest

 
9% 

 
5% 

 

 

 
1,042 

 

 

 
997 

 

 

 
1,033 

 

 

 
957 

 

 

 
956 

 

Income before taxes on income

 
(7%)

 
(13%)

 

 

 
484 

 

 

 
554 

 

 

 
518 

 

 

 
521 

 

 

 
522 

 

Taxes on income

 
(7%)

 
(11%)

 

 

 
182 

 

 

 
204 

 

 

 
197 

 

 

 
197 

 

 

 
196 

 

Net Income

 
(7%)

 
(14%)

 

 

$
302 

 

 

$
350 

 

 

$
321 

 

 

$
324 

 

 

$
326 

 

Preferred stock dividends and other

 
38% 

 
(48%)

 

 

 
11 

 

 

 
21 

 

 

 
9 

 

 

 
22 

 

 

 
8 

 

Net Income Available to Common Stockholders

 
(8%)

 
(12%)

 

 

$
291 

 

 

$
329 

 

 

$
312 

 

 

$
302 

 

 

$
318 

 

Basic earnings per common share

 
(8%)

 
(12%)

 

 

$

.22 

 

 

$

.25 

 

 

$

.24 

 

 

$

.23 

 

 

$

.24 

 

Diluted earnings per common share

 
(8%)

 
(12%)

 

 

$

.22 

 

 

$

.25 

 

 

$

.24 

 

 

$

.23 

 

 

$

.24 

 

Dividends declared per common share

 

 -

 

 -

 

 

$

.06 

 

 

$

.06 

 

 

$

.06 

 

 

$

.06 

 

 

$

.06 

 

Weighted-average common shares outstanding - diluted

 
1% 

 

 -

 

 

 
1,323 

 

 

 
1,320 

 

 

 
1,316 

 

 

 
1,313 

 

 

 
1,311 

 

Performance Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax profit margin

 

 

 

 

 

 

 
31.7 

%

 

 
35.7 

%

 

 
33.4 

%

 

 
35.3 

%

 

 
35.3 

%

Return on average common stockholders’ equity (annualized) (2)

 

 

 

 

 

 

 
10 

%

 

 
12 

%

 

 
12 

%

 

 
12 

%

 

 
13 

%

Financial Condition (at quarter end, in billions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and investments segregated

 
(5%)

 
(7%)

 

 

$
19.4 

 

 

$
20.8 

 

 

$
19.9 

 

 

$
19.1 

 

 

$
20.5 

 

Receivables from brokerage clients

 
10% 

 
2% 

 

 

$
16.0 

 

 

$
15.7 

 

 

$
15.4 

 

 

$
14.7 

 

 

$
14.6 

 

Loans to banking clients 

 
8% 

 
1% 

 

 

$
13.6 

 

 

$
13.4 

 

 

$
13.1 

 

 

$
12.9 

 

 

$
12.6 

 

Total assets

 
11% 

 
4% 

 

 

$
160.2 

 

 

$
154.6 

 

 

$
147.4 

 

 

$
143.4 

 

 

$
144.1 

 

Deposits from banking clients 

 
15% 

 
7% 

 

 

$
109.5 

 

 

$
102.8 

 

 

$
97.3 

 

 

$
95.7 

 

 

$
95.6 

 

Payables to brokerage clients

 
(2%)

 
(8%)

 

 

$
31.6 

 

 

$
34.3 

 

 

$
33.1 

 

 

$
31.5 

 

 

$
32.3 

 

Long-term debt

 
53% 

 
53% 

 

 

$
2.9 

 

 

$
1.9 

 

 

$
1.9 

 

 

$
1.9 

 

 

$
1.9 

 

Stockholders’ equity

 
13% 

 
3% 

 

 

$
12.2 

 

 

$
11.8 

 

 

$
11.5 

 

 

$
11.2 

 

 

$
10.8 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 
6% 

 
2% 

 

 

 
14.9 

 

 

 
14.6 

 

 

 
14.3 

 

 

 
14.1 

 

 

 
14.0 

 

Capital expenditures - cash purchases of equipment, office

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

facilities, and property, net (in millions)

 
(9%)

 
(32%)

 

 

$
61 

 

 

$
90 

 

 

$
146 

 

 

$
101 

 

 

$
67 

 

Expenses excluding interest as a percentage of average client assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(annualized)

 

 

 

 

 

 

 
0.17 

%

 

 
0.17 

%

 

 
0.18 

%

 

 
0.16 

%

 

 
0.17 

%

Clients’ Daily Average Trades (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue trades (3)

 
(7%)

 
(1%)

 

 

 
313 

 

 

 
315 

 

 

 
269 

 

 

 
274 

 

 

 
337 

 

Asset-based trades (4)

 
22% 

 
10% 

 

 

 
88 

 

 

 
80 

 

 

 
64 

 

 

 
75 

 

 

 
72 

 

Other trades (5)

 
25% 

 
7% 

 

 

 
181 

 

 

 
169 

 

 

 
136 

 

 

 
134 

 

 

 
145 

 

Total

 
5% 

 
3% 

 

 

 
582 

 

 

 
564 

 

 

 
469 

 

 

 
483 

 

 

 
554 

 

Average Revenue Per Revenue Trade (3)

 

 -

 

 -

 

 

$
11.98 

 

 

$
12.04 

 

 

$
12.24 

 

 

$
12.26 

 

 

$
12.03 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: Certain prior-period amounts have been reclassified to conform to the 2015 presentation.

(1)

Includes net impairment losses on securities of $(1) million in the third quarter of 2014.

(2)

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

(3)

Includes all client trades that generate either commission revenue or revenue from principal markups (i.e., fixed income); also known as DART.

(4)

Includes eligible trades executed by clients who participate in one or more of the Company’s asset-based pricing relationships.

(5)

Includes all commission-free trades, including Schwab Mutual Fund OneSource® funds and ETFs, and other proprietary products.

N/M Not meaningful.

 

See Note to Consolidated Statements of Income, Financial and Operating Highlights, and Net Interest Revenue Information.

 

-  6  -

 

THE  CHARLES  SCHWAB  CORPORATION

Net Interest Revenue Information

(In millions)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

March 31,

 

 

 

 

2015

 

 

 

2014

 

 

 

Average
Balance

 

Interest
Revenue/
Expense

 

Average
Yield/
Rate

 

 

Average
Balance

 

Interest
Revenue/
Expense

 

Average
Yield/
Rate

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$
9,383 

 

$
5 

 
0.22% 

 

 

$
6,701 

 

$
4 

 
0.24% 

Cash and investments segregated

 
19,510 

 

 
6 

 
0.12% 

 

 

 
21,619 

 

 
6 

 
0.11% 

Broker-related receivables (1)

 
280 

 

 

 -

 
0.10% 

 

 

 
294 

 

 

 -

 
0.35% 

Receivables from brokerage clients

 
14,416 

 

 
119 

 
3.35% 

 

 

 
13,158 

 

 
116 

 
3.58% 

Securities available for sale (2)

 
57,416 

 

 
142 

 
1.00% 

 

 

 
51,971 

 

 
140 

 
1.09% 

Securities held to maturity

 
34,879 

 

 
218 

 
2.53% 

 

 

 
30,846 

 

 
199 

 
2.62% 

Loans to banking clients

 
13,534 

 

 
90 

 
2.70% 

 

 

 
12,546 

 

 
87 

 
2.81% 

Total interest-earning assets

 
149,418 

 

 
580 

 
1.57% 

 

 

 
137,135 

 

 
552 

 
1.63% 

Other interest revenue

 

 

 

 
37 

 

 

 

 

 

 

 

 
27 

 

 

Total interest-earning assets

$
149,418 

 

$
617 

 
1.67% 

 

 

$
137,135 

 

$
579 

 
1.71% 

Funding sources:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits from banking clients

$
105,834 

 

$
8 

 
0.03% 

 

 

$
93,776 

 

$
7 

 
0.03% 

Payables to brokerage clients

 
26,071 

 

 
1 

 
0.01% 

 

 

 
27,210 

 

 
1 

 
0.01% 

Long-term debt

 
2,148 

 

 
19 

 
3.59% 

 

 

 
1,902 

 

 
18 

 
3.84% 

Total interest-bearing liabilities

 
134,053 

 

 
28 

 
0.08% 

 

 

 
122,888 

 

 
26 

 
0.09% 

Non-interest-bearing funding sources

 
15,365 

 

 

 

 

 

 

 

 
14,247 

 

 

 

 

 

Other interest expense (1,3)

 

 

 

 
1 

 

 

 

 

 

 

 

 

 -

 

 

Total funding sources

$
149,418 

 

$
29 

 
0.07% 

 

 

$
137,135 

 

$
26 

 
0.07% 

Net interest revenue

 

 

 

$
588 

 
1.60% 

 

 

 

 

 

$
553 

 
1.64% 

 

(1)

Interest revenue or expense was less than $500,000 in the period or periods presented.

(2)

Amounts have been calculated based on amortized cost.

(3)

Includes the impact of capitalizing interest on building construction and software development.

 

See Note to Consolidated Statements of Income, Financial and Operating Highlights, and Net Interest Revenue Information.

 

 

 

Note to Consolidated Statements of Income, Financial and Operating Highlights,

and Net Interest Revenue Information

(Unaudited)

 

The Company

The consolidated statements of income, financial and operating highlights, and net interest revenue information include The Charles Schwab Corporation (CSC) and its majority-owned subsidiaries (collectively referred to as the Company), including Charles Schwab & Co., Inc. and Charles Schwab Bank. The consolidated statements of income, financial and operating highlights, and net interest revenue information should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

 

**********

 

-  7  -

 

THE  CHARLES  SCHWAB  CORPORATION

Asset Management and Administration Fees Information

(In millions)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

March 31,

 

 

 

 

2015

 

 

 

2014

 

 

 

Average
Client
Assets

 

Revenue

 

Average
Fee

 

 

Average
Client
Assets

 

Revenue

 

Average
Fee

Schwab money market funds before fee waivers

$
165,403 

 

$
238 

 
0.58% 

 

 

$
167,053 

 

$
239 

 
0.58% 

Fee waivers

 

 

 

 
(184)

 

 

 

 

 

 

 

 
(185)

 

 

Schwab money market funds

 
165,403 

 

 
54 

 
0.13% 

 

 

 
167,053 

 

 
54 

 
0.13% 

Equity and bond funds (1)

 
97,127 

 

 
52 

 
0.22% 

 

 

 
75,586 

 

 
45 

 
0.24% 

Mutual Fund OneSource ®

 
262,402 

 

 
204 

 
0.32% 

 

 

 
259,865 

 

 
204 

 
0.32% 

Total mutual funds (2)

$
524,932 

 

 
310 

 
0.24% 

 

 

$
502,504 

 

 
303 

 
0.24% 

Advice solutions (2)

$
178,599 

 

 
220 

 
0.50% 

 

 

$
158,390 

 

 
199 

 
0.51% 

Other (3)

 

 

 

 
114 

 

 

 

 

 

 

 

 
109 

 

 

Total asset management and administration fees

 

 

 

$
644 

 

 

 

 

 

 

 

$
611 

 

 

 

(1)

Includes Schwab Exchange-traded Funds.

(2)

Advice solutions include separately managed accounts,  customized personal advice for tailored portfolios, and specialized planning and full-time portfolio management offered through the Company’s Schwab Private Client, Schwab Managed Portfolio and Managed Account Select programs. Advice solutions also include Schwab Advisor Network, Schwab Advisor Source, Windhaven,  ThomasPartners, and Schwab Intelligent Portfolios. Average client assets for advice solutions may also include the asset balances contained in the three categories of mutual funds listed above.

(3)

Includes various asset-based fees, such as trust fees, 401(k) recordkeeping fees, and mutual fund clearing and other service fees.

 

 

-  8  -

 

THE  CHARLES  SCHWAB  CORPORATION

Growth in Client Assets and Accounts

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1-15 % Change

 

 

2015

 

2014

 

 

 

 

vs.

 

vs.

 

 

First

 

Fourth

 

Third

 

Second

 

First

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

 

Q1-14

 

Q4-14

 

 

Quarter

 

Quarter

 

Quarter

 

Quarter

 

Quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets in client accounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schwab One®, other cash equivalents and deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

from banking clients 

 
10% 

 
3% 

 

 

$
140.0 

 

$
136.0 

 

$
129.7 

 

$
126.5 

 

$
126.8 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds 

 
(2%)

 
(3%)

 

 

 
162.5 

 

 
167.9 

 

 
164.7 

 

 
160.0 

 

 
166.3 

Equity and bond funds 

 
13% 

 
4% 

 

 

 
64.1 

 

 
61.5 

 

 
59.1 

 

 
59.1 

 

 
56.7 

Total proprietary mutual funds

 
2% 

 
(1%)

 

 

 
226.6 

 

 
229.4 

 

 
223.8 

 

 
219.1 

 

 
223.0 

Mutual Fund Marketplace® (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual Fund OneSource®

 

 -

 
1% 

 

 

 
264.1 

 

 
260.5 

 

 
262.1 

 

 
271.6 

 

 
264.5 

Mutual fund clearing services 

 
13% 

 
4% 

 

 

 
170.6 

 

 
164.7 

 

 
166.3 

 

 
161.1 

 

 
151.5 

Other third-party mutual funds

 
10% 

 
5% 

 

 

 
483.3 

 

 
461.9 

 

 
456.1 

 

 
463.5 

 

 
439.4 

Total Mutual Fund Marketplace 

 
7% 

 
3% 

 

 

 
918.0 

 

 
887.1 

 

 
884.5 

 

 
896.2 

 

 
855.4 

Total mutual fund assets 

 
6% 

 
3% 

 

 

 
1,144.6 

 

 
1,116.5 

 

 
1,108.3 

 

 
1,115.3 

 

 
1,078.4 

Exchange-traded funds (ETFs)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proprietary ETFs

 
63% 

 
15% 

 

 

 
31.0 

 

 
26.9 

 

 
22.9 

 

 
21.5 

 

 
19.0 

ETF OneSource™  (1)

 
69% 

 
10% 

 

 

 
16.1 

 

 
14.7 

 

 
14.1 

 

 
10.6 

 

 
9.5 

Other third-party ETFs

 
11% 

 
5% 

 

 

 
205.3 

 

 
194.7 

 

 
184.2 

 

 
190.1 

 

 
184.3 

Total ETF assets

 
19% 

 
7% 

 

 

 
252.4 

 

 
236.3 

 

 
221.2 

 

 
222.2 

 

 
212.8 

Equity and other securities

 
14% 

 
3% 

 

 

 
820.9 

 

 
800.4 

 

 
771.6 

 

 
766.5 

 

 
722.0 

Fixed income securities

 

 -

 
(4%)

 

 

 
181.2 

 

 
188.7 

 

 
187.3 

 

 
185.2 

 

 
181.2 

Margin loans outstanding

 
11% 

 
3% 

 

 

 
(14.7)

 

 
(14.3)

 

 
(14.4)

 

 
(13.8)

 

 
(13.2)

Total client assets

 
9% 

 
2% 

 

 

$
2,524.4 

 

$
2,463.6 

 

$
2,403.7 

 

$
2,401.9 

 

$
2,308.0 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Client assets by business

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor Services

 
9% 

 
3% 

 

 

$
1,391.2 

 

$
1,351.5 

 

$
1,323.3 

 

$
1,321.0 

 

$
1,270.9 

Advisor Services

 
9% 

 
2% 

 

 

 
1,133.2 

 

 
1,112.1 

 

 
1,080.4 

 

 
1,080.9 

 

 
1,037.1 

Total client assets

 
9% 

 
2% 

 

 

$
2,524.4 

 

$
2,463.6 

 

$
2,403.7 

 

$
2,401.9 

 

$
2,308.0 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net new assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor Services (2, 3)

 
37% 

 
68% 

 

 

$
23.2 

 

$
13.8 

 

$
18.7 

 

$
9.7 

 

$
16.9 

Advisor Services (4)

 
(68%)

 
(72%)

 

 

 
5.5 

 

 
19.4 

 

 
16.0 

 

 
13.0 

 

 
17.3 

Total net new assets

 
(16%)

 
(14%)

 

 

 
28.7 

 

 
33.2 

 

 
34.7 

 

 
22.7 

 

 
34.2 

Net market gains (losses)

 
32% 

 
20% 

 

 

 
32.1 

 

 
26.7 

 

 
(32.9)

 

 
71.2 

 

 
24.4 

Net growth

 
4% 

 
2% 

 

 

$
60.8 

 

$
59.9 

 

$
1.8 

 

$
93.9 

 

$
58.6 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 
6% 

 
13% 

 

 

 
274 

 

 
243 

 

 
229 

 

 
242 

 

 
258 

Clients (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active Brokerage Accounts

 
3% 

 
1% 

 

 

 
9,493 

 

 
9,386 

 

 
9,309 

 

 
9,252 

 

 
9,178 

Banking Accounts

 
6% 

 

 -

 

 

 
986 

 

 
985 

 

 
970 

 

 
950 

 

 
933 

Corporate Retirement Plan Participants (2)

 
10% 

 
3% 

 

 

 
1,474 

 

 
1,428 

 

 
1,405 

 

 
1,344 

 

 
1,338 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Excludes all proprietary mutual funds and ETFs.

(2)

In the first quarter of 2015, the Company increased its reported totals for overall client assets and retirement plan participants by $6.1 billion and 35,000, respectively, to reflect the final impact of the consolidation of its retirement plan recordkeeping platforms as previously announced in September 2013.

(3)

Third quarter of 2014 includes inflows of $10.2 billion and an outflow of $3.4 billion from certain mutual fund clearing services clients.

(4)

First quarter of 2015 includes an outflow of $11.6 billion relating to the Company’s planned resignation from an Advisor Services cash management relationship.

 

 

 

-  9  -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Charles Schwab Corporation Monthly Activity Report For March 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

 

 

 

 

Change

 

 

 

Mar

 

Apr

 

May

 

Jun

 

Jul

 

Aug

 

Sep

 

Oct

 

Nov

 

Dec

 

Jan

 

Feb

 

Mar

 

Mo.

Yr.

Market Indices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(at month end)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dow Jones Industrial Average
16,458 

 
16,581 

 
16,717 

 
16,827 

 
16,563 

 
17,098 

 
17,043 

 
17,391 

 
17,828 

 
17,823 

 
17,165 

 
18,133 

 
17,776 

 

(2%)

8%

Nasdaq Composite 

4,199 

 
4,115 

 
4,243 

 
4,408 

 
4,370 

 
4,580 

 
4,493 

 
4,631 

 
4,792 

 
4,736 

 
4,635 

 
4,964 

 
4,901 

 

(1%)

17%

Standard & Poor’s 500

1,872 

 
1,884 

 
1,924 

 
1,960 

 
1,931 

 
2,003 

 
1,972 

 
2,018 

 
2,068 

 
2,059 

 
1,995 

 
2,105 

 
2,068 

 

(2%)

10%

Client Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in billions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning Client Assets
2,294.3 

 
2,308.0 

 
2,312.9 

 
2,354.2 

 
2,401.9 

 
2,382.7 

 
2,448.3 

 
2,403.7 

 
2,440.6 

 
2,478.8 

 
2,463.6 

 
2,445.0 

 
2,531.1 

 

 

 

Net New Assets (1, 2)
11.4 

 
0.3 

 
10.9 

 
11.5 

 
15.9 

 
8.5 

 
10.3 

 
7.9 

 
10.9 

 
14.4 

 
9.3 

 
6.8 

 
12.6 

 

86%

18%

Net Market Gains (Losses)
2.3 

 
4.6 

 
30.4 

 
36.2 

 
(35.1)

 
57.1 

 
(54.9)

 
29.0 

 
27.3 

 
(29.6)

 
(27.9)

 
79.3 

 
(19.3)

 

 

 

Total Client Assets (at month end)
2,308.0 

 
2,312.9 

 
2,354.2 

 
2,401.9 

 
2,382.7 

 
2,448.3 

 
2,403.7 

 
2,440.6 

 
2,478.8 

 
2,463.6 

 
2,445.0 

 
2,531.1 

 
2,524.4 

 

-

9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receiving Ongoing Advisory Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(at month end)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor Services
159.2 

 
160.6 

 
163.7 

 
176.5 

 
175.1 

 
180.0 

 
177.3 

 
180.2 

 
183.3 

 
182.5 

 
181.5 

 
187.8 

 
188.4 

 

-

18%

Advisor Services (3)
973.5 

 
977.4 

 
995.3 

 
1,014.9 

 
1,007.2 

 
1,035.3 

 
1,015.3 

 
1,032.4 

 
1,049.0 

 
1,045.6 

 
1,038.4 

 
1,065.8 

 
1,063.4 

 

-

9%

Client Accounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(at month end, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active Brokerage Accounts
9,178 

 
9,217 

 
9,228 

 
9,252 

 
9,269 

 
9,288 

 
9,309 

 
9,326 

 
9,346 

 
9,386 

 
9,407 

 
9,435 

 
9,493 

 

1%

3%

Banking Accounts
933 

 
938 

 
944 

 
950 

 
956 

 
964 

 
970 

 
974 

 
979 

 
985 

 
978 

 
983 

 
986 

 

-

6%

Corporate Retirement Plan Participants (2)
1,338 

 
1,344 

 
1,346 

 
1,344 

 
1,381 

 
1,383 

 
1,405 

 
1,416 

 
1,416 

 
1,428 

 
1,441 

 
1,475 

 
1,474 

 

-

10%

Client Activity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Brokerage Accounts (in thousands)
90 

 
95 

 
71 

 
76 

 
78 

 
75 

 
76 

 
76 

 
70 

 
97 

 
84 

 
80 

 
110 

 

38%

22%

Inbound Calls (in thousands)
1,961 

 
1,938 

 
1,691 

 
1,806 

 
1,873 

 
1,768 

 
1,755 

 
1,928 

 
1,656 

 
1,980 

 
1,872 

 
1,827 

 
1,930 

 

6%

(2%)

Web Logins (in thousands)
34,200 

 
34,254 

 
32,165 

 
32,768 

 
33,426 

 
32,491 

 
31,098 

 
32,409 

 
31,528 

 
34,580 

 
34,294 

 
35,379 

 
36,278 

 

3%

6%

Cash as a Percentage of Client Assets (4)
12.7% 

 
12.4% 

 
12.2% 

 
11.9% 

 
12.1% 

 
11.9% 

 
12.2% 

 
12.1% 

 
11.9% 

 
12.3% 

 
12.3% 

 
11.9% 

 
12.0% 

 

10 bp

(70) bp

Mutual Fund and Exchange-Traded Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Buys (Sells) (5, 6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Large Capitalization Stock
676 

 
95 

 
129 

 
311 

 
773 

 
620 

 
228 

 
1,881 

 
1,538 

 
1,347 

 
1,084 

 
(1,154)

 
(586)

 

 

 

Small / Mid Capitalization Stock
680 

 
(430)

 
(564)

 
220 

 
(355)

 
(639)

 
(127)

 
(307)

 
91 

 
(346)

 
488 

 
(12)

 
290 

 

 

 

International
1,028 

 
1,665 

 
1,240 

 
2,137 

 
817 

 
524 

 
166 

 
(20)

 
794 

 
177 

 
1,630 

 
3,463 

 
4,650 

 

 

 

Specialized
912 

 
609 

 
377 

 
1,690 

 
1,082 

 
373 

 
(24)

 
781 

 
503 

 
566 

 
1,452 

 
748 

 
(47)

 

 

 

Hybrid
107 

 
230 

 
406 

 
201 

 
532 

 
165 

 

 -

 
(531)

 
(363)

 
(687)

 
180 

 
138 

 
(284)

 

 

 

Taxable Bond
1,344 

 
449 

 
1,346 

 
606 

 
92 

 
683 

 
(3,475)

 
797 

 
577 

 
(1,914)

 
1,298 

 
2,722 

 
924 

 

 

 

Tax-Free Bond
474 

 
246 

 
584 

 
516 

 
277 

 
400 

 
463 

 
584 

 
479 

 
603 

 
598 

 
471 

 
613 

 

 

 

Net Buy (Sell) Activity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual Funds (5)
3,611 

 
1,312 

 
2,236 

 
3,313 

 
1,804 

 
612 

 
(4,022)

 
358 

 
254 

 
(4,381)

 
3,174 

 
3,086 

 
1,765 

 

 

 

Exchange-Traded Funds (6)
1,612 

 
1,553 

 
1,284 

 
2,368 

 
1,414 

 
1,514 

 
1,253 

 
2,827 

 
3,365 

 
4,127 

 
3,556 

 
3,290 

 
3,795 

 

 

 

Money Market Funds
(135)

 
(4,141)

 
(561)

 
(1,664)

 
1,493 

 
1,248 

 
2,224 

 
477 

 
(1,643)

 
4,294 

 
(2,080)

 
(2,158)

 
(1,362)

 

 

 

Average Interest-Earning Assets (7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions of dollars)
137,625 

 
137,164 

 
136,588 

 
137,328 

 
137,785 

 
139,027 

 
140,115 

 
141,502 

 
141,884 

 
144,695 

 
147,495 

 
148,911 

 
152,247 

 

2%

11%

 

(1)

 

February 2015 includes an outflow of $11.6 billion relating to the Company’s planned resignation from an Advisor Services cash management relationship. September 2014 includes an inflow of $7.8 billion and outflow of $3.4 billion from certain mutual fund clearing services clients. July 2014 includes an inflow of $2.4 billion from a mutual fund clearing services client.

(2)

 

In February 2015, the Company increased its reported totals for overall client assets and retirement plan participants by $6.1 billion and 35,000, respectively, to reflect the final impact of the consolidation of its retirement plan recordkeeping platforms as previously announced in September 2013.

(3)

 

Excludes Retirement Business Services Trust.

(4)

 

Schwab One®, other cash equivalents, deposits from banking clients and money market fund balances as a percentage of total client assets.

(5)

 

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.

(6)

 

Represents the principal value of client ETF transactions handled by Schwab, including transactions in proprietary ETFs.

(7)

 

Represents total interest-earning assets on the Company's balance sheet.

 

-  10  -

 

 

 

-  11  -