Close

Schwab Reports Second Quarter Results

FREE Breaking News Alerts from StreetInsider.com!

E-mail Address

StreetInsider.com Top Tickers, 4/25/2024

1. TSLA
2. META
3. ENPH
4. TXN
5. SPOT
6. BA
7. IBM
8. V
9. KMB
10. HCP


July 16, 2015 8:45 AM EDT

Asset Management and Administration Fees and Net Interest Revenue Set Quarterly Records

$37.0 Billion Core Net New Assets Set a Second Quarter Record

SAN FRANCISCO--(BUSINESS WIRE)-- The Charles Schwab Corporation announced today that its net income for the second quarter of 2015 was $353 million, up 17% from $302 million for the first quarter of 2015, and up 9% from $324 million for the second quarter of 2014. Net income for the six months ended June 30, 2015 was $655 million, up 1% from the year-earlier period. The company’s financial results for the second quarter and first six months of 2015 include litigation proceeds of approximately $17 million (included in Other revenue) relating to the company’s non-agency residential mortgage-backed securities portfolio; this increased earnings per share by $0.01.

       

Three Months Ended

Six Months Ended

 

--June 30,-- % --June 30,-- %
Financial Highlights   2015     2014     Change   2015     2014     Change
 
Net revenues (in millions) $ 1,566   $ 1,478 6 % $ 3,092   $ 2,956 5 %
Net income (in millions) $ 353 $ 324 9 % $ 655 $ 650 1 %
Diluted earnings per common share $ .25 $ .23 9 % $ .47 $ .47 -
Pre-tax profit margin 36.2 % 35.3 % 34.0 % 35.3 %

Return on average common stockholders’ equity (annualized)

12 % 12 % 11 % 13 %
                                         
 

CEO Walt Bettinger said, “Our contemporary full-service investing model continues to appeal to clients and prospects, and helped us achieve strong quarterly operating results in the face of sideways equity markets and continuing low interest rates. We gathered $37.0 billion of core net new assets, the highest second quarter in our history, and maintained a 6% annualized organic growth rate despite seasonal tax outflows in April. Clients opened 280,000 new brokerage accounts, up 16% year-over-year and another second quarter record. Total client assets were $2.54 trillion at quarter-end, up 6% from a year ago. Client assets under the guidance of a registered independent advisor or enrolled in one of our retail or other advisory solutions also rose 6% year-over-year, to $1.26 trillion. At month-end June, we were serving 9.6 million brokerage accounts, 1.0 million banking accounts, and 1.5 million retirement plan participants, up 4%, 6% and 10%, respectively, from the second quarter of 2014.”

“We continue to drive growth by leveraging our ‘through clients’ eyes’ strategy and our scale to build products and services aimed at making life better for investors,” Mr. Bettinger continued. “That scale is evident across our unique in-house combination of brokerage, asset management, and banking capabilities. Institutional Intelligent Portfolios™ is the latest example of an offering that draws from all these capabilities to create better solutions for our clients. In this case, independent advisors now have access to an automated investment management platform that enables them to reach new clients, scale their businesses, and complement the wealth management services and client experience that they already provide. Institutional Intelligent Portfolios launched on June 23rd; advisors are currently enrolling and customizing their programs. Schwab Intelligent Portfolios™, our related automated investment service for retail clients, got off to a strong start after its release in the first quarter, and reached $3.0 billion in assets and over 39,000 accounts as of June 30th. In addition to launching these new offerings, we remain committed to expanding existing platforms in areas of strong client demand. We have broadened Schwab ETF OneSource™ to include over 200 commission-free ETFs as of month-end June. Investors can access a wide range of funds from 13 providers and 66 Morningstar categories with zero online commissions.”

CFO Joe Martinetto commented, “We delivered solid financial performance in the second quarter, as our diversified revenue streams helped us work through a mixed bag of environmental drivers and we stayed the course on our planned spending. Interest rates picked up at least slightly across the yield curve during the quarter, which helped limit pressure on our net interest margin. In addition, our strong asset gathering fueled sustained growth in interest-earning assets. As a result, net interest revenue grew by 9% year-over-year and set a new quarterly record. Equity market returns were in positive territory for much of the second quarter but retreated as June came to a close. Even with limited help from market valuations, asset management and administration fees grew 6% and set another quarterly record due to the overall effectiveness of our asset gathering, a bit of rate-related help on net money market fund revenues, and ongoing client demand for our advisory solutions. While client trading activity remained muted for much of the quarter, which resulted in a 4% decline in trading revenue, the strength of our non-trading revenues yielded 6% overall revenue growth from a year ago. Our 4% increase in total expenses was right in line with our expectations and helped us deliver a 9% increase in earnings and a pre-tax profit margin of 36.2%. We are managing the levers under our control to ensure flexibility across a range of environmental conditions and protect our ability to drive profitable growth.”

Mr. Martinetto concluded, “We continue to maintain a healthy balance sheet while taking advantage of our growing capital base to more effectively monetize client cash balances. This quarter we completed a bulk transfer of sweep balances from money market funds to Schwab Bank totaling approximately $650 million. As we closed out the first half of 2015, our preliminary consolidated Tier 1 Leverage ratio was 6.9%.”

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

Investor Services

  • New retail brokerage accounts for the quarter totaled approximately 176,000, up 19% year-over-year; total accounts were 6.7 million as of June 30, 2015, up 2% year-over-year.
  • Held financial planning conversations with approximately 29,000 clients. Approximately 54,000 planning conversations have been held year-to-date.
  • Launched Schwab’s Apple Watch™ app, giving clients at-a-glance views of market headlines and personal watchlists, access to stock quotes, and the ability to initiate equity or options trades for quick completion on their iPhone.
  • Launched Apple® Touch ID™ capability for the Schwab mobile app, allowing clients to log in to their accounts quickly and securely using their fingerprint on any Apple Touch ID-enabled device.

Advisor Services

  • Launched Institutional Intelligent Portfolios, an automated investment management platform for RIAs; firms can create their own set of portfolios choosing from over 450 ETFs across 28 asset classes and all major fund families.
  • Held the annual EXPLORE® conference for the company’s top independent advisor clients. Schwab leadership discussed Institutional Intelligent Portfolios, RIA industry advocacy, and the Schwab Executive Leadership Program for developing next-generation RIA firm management.

Products and Infrastructure

  • For Charles Schwab Bank:
    • Balance sheet assets = $122.4 billion, up 18% year-over-year.
    • Outstanding mortgage and home equity loans = $11.1 billion, comparable to a year ago.
    • First mortgage originations through its loan program during the quarter = $1.1 billion.
    • Pledged Asset Line® balances = $2.9 billion, up 61% year-over-year.
    • Delinquency, nonaccrual, and loss reserve ratios for Schwab Bank’s loan portfolio = 0.19%, 0.22% and 0.26%, respectively, at month-end June.
    • Schwab Bank High Yield Investor Checking® accounts = 814,000, with $12.2 billion in balances.
  • Client assets managed by Windhaven® totaled $14.9 billion, down 22% from the second quarter of 2014.
  • Client assets managed by ThomasPartners® totaled $7.1 billion, up 25% from the second quarter of 2014.
  • Client assets managed by Intelligent Portfolios (Schwab Intelligent Portfolios, launched in March 2015, and Institutional Intelligent Portfolios, launched in June 2015) totaled $3.0 billion, up $2.2 billion from the first quarter of 2015.
  • Expanded Schwab ETF OneSource to offer four more ETFs; investors can now trade 202 ETFs from 13 providers covering 66 Morningstar Categories, including multi-currency, for $0 online trade commissions.

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://www.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 business growth; profitable growth; maintaining a healthy balance sheet; growth in the capital base; and monetization of client cash balances. 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 Intelligent Portfolios; client use of the company’s investment advisory services and other products and services; 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; 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; 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 impact of financial reform legislation and related regulations; and other factors set forth in the company’s most recent reports on Form 10-K and Form 10-Q.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with more than 325 offices and 9.6 million active brokerage accounts, 1.5 million corporate retirement plan participants, 1.0 million banking accounts, and $2.54 trillion in client assets as of June 30, 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.

 

THE CHARLES SCHWAB CORPORATION

Consolidated Statements of Income

(In millions, except per share amounts)
(Unaudited)
 
  Three Months Ended   Six Months Ended
June 30, June 30,
    2015   2014   2015   2014
Net Revenues    
Asset management and administration fees $ 670 $ 632 $ 1,314 $ 1,243
Interest revenue 645 588 1,262 1,167
Interest expense   (33 )   (26 )   (62 )   (52 )
Net interest revenue 612 562 1,200 1,115
Trading revenue 203 212 430 459
Other 79 65 142 133
Provision for loan losses     2       7       6       6  
Total net revenues     1,566       1,478       3,092       2,956  
Expenses Excluding Interest
Compensation and benefits 540 520 1,121 1,048
Professional services 112 112 226 218
Occupancy and equipment 85 80 168 160
Advertising and market development 62 65 131 128
Communications 59 57 117 113
Depreciation and amortization 55 48 109 96
Other     86       75       169       150  
Total expenses excluding interest     999       957       2,041       1,913  
Income before taxes on income 567 521 1,051 1,043
Taxes on income     214       197       396       393  
Net Income     353       324       655       650  
Preferred stock dividends and other     23       22       34       30  
Net Income Available to Common Stockholders   $ 330     $ 302     $ 621     $ 620  
Weighted-Average Common Shares Outstanding — Diluted     1,326       1,313       1,325       1,312  
Earnings Per Common Share — Basic $ .25 $ .23 $ .47 $ .47
Earnings Per Common Share — Diluted   $ .25     $ .23     $ .47     $ .47  
 

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

 
THE CHARLES SCHWAB CORPORATION
Financial and Operating Highlights
(Unaudited)
 

 

 
   

Q2-15 % change

  2015   2014
vs.   vs. Second   First Fourth   Third   Second
(In millions, except per share amounts and as noted) Q2-14 Q1-15 Quarter   Quarter   Quarter   Quarter   Quarter
Net Revenues        
Asset management and administration fees 6 % 4 % $ 670 $ 644 $ 641 $ 649 $ 632
Net interest revenue 9 % 4 % 612 588 584 573 562
Trading revenue (4 %) (11 %) 203 227 239 209 212
Other (1) 22 % 25 % 79 63 90 119 65
Provision for loan losses (71 %) (50 %)   2         4         (3 )       1         7    
Total net revenues 6 % 3 %   1,566         1,526         1,551         1,551         1,478    
Expenses Excluding Interest
Compensation and benefits 4 % (7 %) 540 581 543 593 520
Professional services - (2 %) 112 114 122 117 112
Occupancy and equipment 6 % 2 % 85 83 82 82 80
Advertising and market development (5 %) (10 %) 62 69 58 59 65
Communications 4 % 2 % 59 58 55 55 57
Depreciation and amortization 15 % 2 % 55 54 54 49 48
Other 15 % 4 %   86         83         83         78         75    
Total expenses excluding interest 4 % (4 %)   999         1,042         997         1,033         957    
Income before taxes on income 9 % 17 % 567 484 554 518 521
Taxes on income 9 % 18 %   214         182         204         197         197    
Net Income 9 % 17 % $ 353       $ 302       $ 350       $ 321       $ 324    
Preferred stock dividends and other 5 % 109 %   23         11         21         9         22    
Net Income Available to Common Stockholders 9 % 13 % $ 330       $ 291       $ 329       $ 312       $ 302    
Basic earnings per common share 9 % 14 % $ .25 $ .22 $ .25 $ .24 $ .23
Diluted earnings per common share 9 % 14 % $ .25 $ .22 $ .25 $ .24 $ .23
Dividends declared per common share - - $ .06 $ .06 $ .06 $ .06 $ .06
Weighted-average common shares outstanding - diluted 1 % -   1,326         1,323         1,320         1,316         1,313    
Performance Measures
Pre-tax profit margin 36.2 % 31.7 % 35.7 % 33.4 % 35.3 %
Return on average common stockholders’ equity (annualized) (2)   12   %     10   %     12   %     12   %     12   %
Financial Condition (at quarter end, in billions)
Cash and investments segregated (6 %) (8 %) $ 17.9 $ 19.4 $ 20.8 $ 19.9 $ 19.1
Receivables from brokerage clients 13 % 4 % $ 16.6 $ 16.0 $ 15.7 $ 15.4 $ 14.7
Bank loans 9 % 3 % $ 14.0 $ 13.6 $ 13.4 $ 13.1 $ 12.9
Total assets 14 % 2 % $ 163.6 $ 160.2 $ 154.6 $ 147.4 $ 143.4
Bank deposits 18 % 3 % $ 112.9 $ 109.5 $ 102.8 $ 97.3 $ 95.7
Payables to brokerage clients - - $ 31.5 $ 31.6 $ 34.3 $ 33.1 $ 31.5
Long-term debt 53 % - $ 2.9 $ 2.9 $ 1.9 $ 1.9 $ 1.9
Stockholders’ equity 11 % 2 % $ 12.4       $ 12.2       $ 11.8       $ 11.5       $ 11.2    
Other
Full-time equivalent employees (at quarter end, in thousands) 6 % - 14.9 14.9 14.6 14.3 14.1

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

(24 %) 26 % $ 77 $ 61 $ 90 $ 146 $ 101

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

  0.16   %     0.17   %     0.17   %     0.18   %     0.16   %
Clients’ Daily Average Trades (in thousands)
Revenue trades (3) (3 %) (15 %) 267 313 315 269 274
Asset-based trades (4) 4 % (11 %) 78 88 80 64 75

Other trades (5)

11 % (18 %)   149         181         169         136         134    
Total 2 % (15 %)   494         582         564         469         483    
Average Revenue Per Revenue Trade (3) (2 %) - $ 11.97       $ 11.98       $ 12.04       $ 12.24       $ 12.26    
             
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.

 

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

 
THE CHARLES SCHWAB CORPORATION
Net Interest Revenue Information
(In millions)
(Unaudited)
       
  Three Months Ended Six Months Ended
June 30, June 30,
2015   2014 2015   2014
  Interest   Average   Interest   Average   Interest   Average   Interest   Average
Average Revenue/ Yield/ Average Revenue/ Yield/ Average Revenue/ Yield/ Average Revenue/ Yield/
    Balance   Expense   Rate Balance   Expense   Rate Balance   Expense   Rate Balance   Expense   Rate
Interest-earning assets:
Cash and cash equivalents $ 8,540 $ 6 0.28 % $ 6,001 $ 3 0.20 % $ 8,959 $ 11 0.25 % $ 6,349 $ 7 0.22 %
Cash and investments segregated 18,265 7 0.15 % 19,614 6 0.12 % 18,884 13 0.14 % 20,611 12 0.12 %
Broker-related receivables (1) 261 - 0.02 % 312 - - 271 - 0.06 % 303 - 0.15 %
Receivables from brokerage clients 15,105 125 3.32 % 13,634 120 3.53 % 14,763 244 3.33 % 13,397 236 3.55 %
Securities available for sale (2) 61,194 153 1.00 % 52,564 138 1.05 % 59,315 295 1.00 % 52,269 278 1.07 %
Securities held to maturity 36,458 227 2.50 % 32,043 206 2.58 % 35,673 445 2.52 % 31,448 405 2.60 %
Bank loans     13,866     91   2.63 %   12,775     88   2.76 %   13,701     181   2.66 %   12,661     175   2.79 %
Total interest-earning assets     153,689     609   1.59 %   136,943     561   1.64 %   151,566     1,189   1.58 %   137,038     1,113   1.64 %
Other interest revenue           36             27             73             54    
Total interest-earning assets   $ 153,689   $ 645   1.68 % $ 136,943   $ 588   1.72 % $ 151,566   $ 1,262   1.68 % $ 137,038   $ 1,167   1.72 %
Funding sources:
Bank deposits $ 110,159 $ 6 0.02 % $ 94,938 $ 8 0.03 % $ 108,008 $ 14 0.03 % $ 94,360 $ 15 0.03 %
Payables to brokerage clients (1) 25,138 - 0.01 % 26,352 - 0.01 % 25,602 1 0.01 % 26,779 1 0.01 %
Long-term debt     2,901     24   3.32 %   1,901     18   3.80 %   2,527     43   3.43 %   1,902     36   3.82 %
Total interest-bearing liabilities     138,198     30   0.09 %   123,191     26   0.08 %   136,137     58   0.09 %   123,041     52   0.09 %
Non-interest-bearing funding sources 15,491 13,752 15,429 13,997
Other interest expense (1,3)           3             -             4             -    
Total funding sources   $ 153,689   $ 33   0.08 % $ 136,943   $ 26   0.07 % $ 151,566   $ 62   0.08 % $ 137,038   $ 52   0.08 %
Net interest revenue         $ 612   1.60 %       $ 562   1.65 %       $ 1,200   1.60 %       $ 1,115   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.

 
**********
 
THE CHARLES SCHWAB CORPORATION
Asset Management and Administration Fees Information
(In millions)
(Unaudited)
       
  Three Months Ended Six Months Ended
June 30, June 30,
2015   2014 2015   2014
Average       Average     Average     Average    
Client Average Client Average Client Average Client Average
    Assets   Revenue     Fee Assets   Revenue   Fee Assets   Revenue   Fee Assets   Revenue   Fee

Schwab money market funds before fee waivers

$ 157,418 $ 230 0.59 % $ 162,683 $ 235 0.58 % $ 161,411 $ 469 0.59 % $ 164,868 $ 474 0.58 %
Fee waivers           (168 )               (183 )             (353 )             (368 )    
Schwab money market funds 157,418 62 0.16 % 162,683 52 0.13 % 161,411 116 0.14 % 164,868 106 0.13 %
Schwab equity and bond funds (1) 103,986 56 0.22 % 80,527 47 0.23 % 100,556 108 0.22 % 78,058 92 0.24 %
Mutual Fund OneSource ® (2)     245,694     200       0.33 %   247,107     204     0.33 %   244,333     397     0.33 %   244,601     401     0.33 %
Total mutual funds (3)   $ 507,098     318       0.25 % $ 490,317     303     0.25 % $ 506,300     621     0.25 % $ 487,527     599     0.25 %

Advice solutions (3):

Fee-based $ 174,657 228 0.52 % $ 156,197 209 0.54 % $ 172,405 448 0.52 % $ 153,065 408 0.54 %
Intelligent Portfolios 2,159 - - N/A N/A N/A 1,725 - - N/A N/A N/A
Legacy Non-Fee     16,783     N/A       N/A     15,595     N/A     N/A     16,815     N/A     N/A     15,564     N/A     N/A  
Total advice solutions   $ 193,599     228       0.47 % $ 171,792     209     0.49 % $ 190,945     448     0.47 % $ 168,629     408     0.49 %
Other (2,4)           124                 120               245               236      

Total asset management and administration fees

        $ 670               $ 632             $ 1,314             $ 1,243      
(1)   Includes Schwab Exchange-traded Funds.
(2) Beginning in the second quarter of 2015, certain Mutual Fund OneSource balances were reclassified to Other third-party mutual funds. Related revenues have been reclassified to Other asset management and administration fees. Prior period information has been recast to reflect this change.
(3) Beginning in the second quarter of 2015, Fee-based, Intelligent Portfolios and Legacy Non-Fee advice solutions are presented separately. Prior period information has been recast to reflect this change. Advice solutions include managed portfolios, specialized strategies and customized investment advice. Fee-based advice solutions include Schwab Private Client, Schwab Managed Portfolios, Managed Account Select, Schwab Advisor Network, Windhaven Strategies, Thomas Partners Dividend Growth Strategy, and Schwab Index Advantage advised retirement plan balances. Intelligent Portfolios include Schwab Intelligent Portfolios, launched in March 2015, and Institutional Intelligent Portfolios, launched in June 2015. Legacy Non-Fee advice solutions include superseded programs such as, Schwab Advisor Source and certain retirement plan balances. Average client assets for advice solutions may also include the asset balances contained in the three categories of mutual funds listed above.
(4) Includes various asset-based fees, such as trust fees, 401(k) recordkeeping fees, and mutual fund clearing fees and other service fees.
N/A Not applicable.
 
THE CHARLES SCHWAB CORPORATION
Growth in Client Assets and Accounts
(Unaudited)
         
   

Q2-15 % Change

  2015   2014
vs.   vs. Second   First Fourth   Third   Second
(In billions, at quarter end, except as noted) Q2-14 Q1-15 Quarter   Quarter   Quarter   Quarter   Quarter
Assets in client accounts
Schwab One®, certain cash equivalents and bank deposits 13 % 2 % $ 143.0 $ 140.0 $ 136.0 $ 129.7 $ 126.5
Proprietary mutual funds (Schwab Funds® and Laudus Funds®):
Money market funds (3 %) (4 %) 155.6 162.5 167.9 164.7 160.0
Equity and bond funds 8 % -   64.1       64.1       61.5       59.1       59.1  
Total proprietary mutual funds - (3 %)   219.7       226.6       229.4       223.8       219.1  
Mutual Fund Marketplace® (1)
Mutual Fund OneSource® (2) (6 %) (2 %) 233.2 239.1 236.2 238.8 247.5
Mutual fund clearing services 17 % 11 % 188.9 170.6 164.7 166.3 161.1
Other third-party mutual funds (2) 7 % 2 %   519.4       508.3       486.2       479.4       487.6  
Total Mutual Fund Marketplace 5 % 3 %   941.5       918.0       887.1       884.5       896.2  
Total mutual fund assets 4 % 1 %   1,161.2       1,144.6       1,116.5       1,108.3       1,115.3  
Exchange-traded funds (ETFs)
Proprietary ETFs 60 % 11 % 34.3 31.0 26.9 22.9 21.5
ETF OneSource™ (1) 56 % 2 % 16.5 16.1 14.7 14.1 10.6
Other third-party ETFs 9 % 1 %   207.4       205.3       194.7       184.2       190.1  
Total ETF assets 16 % 2 %   258.2       252.4       236.3       221.2       222.2  
Equity and other securities 6 % (1 %) 815.1 820.9 800.4 771.6 766.5
Fixed income securities (2 %) - 181.1 181.2 188.7 187.3 185.2
Margin loans outstanding 11 % 4 %   (15.3 )     (14.7 )     (14.3 )     (14.4 )     (13.8 )
Total client assets 6 % 1 % $ 2,543.3     $ 2,524.4     $ 2,463.6     $ 2,403.7     $ 2,401.9  
Client assets by business
Investor Services 6 % 1 % $ 1,406.8 $ 1,391.2 $ 1,351.5 $ 1,323.3 $ 1,321.0
Advisor Services 5 % -   1,136.5       1,133.2       1,112.1       1,080.4       1,080.9  
Total client assets 6 % 1 % $ 2,543.3     $ 2,524.4     $ 2,463.6     $ 2,403.7     $ 2,401.9  
Net growth in assets in client accounts (for the quarter ended)
Net new assets

Investor Services (3, 4)

176 % 16 % $ 26.8 $ 23.2 $ 13.8 $ 18.7 $ 9.7
Advisor Services (5) (22 %) 85 %   10.2       5.5       19.4       16.0       13.0  
Total net new assets 63 % 29 %   37.0       28.7       33.2       34.7       22.7  
Net market (losses) gains (125 %) (156 %)   (18.1 )     32.1       26.7       (32.9 )     71.2  
Net growth (80 %) (69 %) $ 18.9     $ 60.8     $ 59.9     $ 1.8     $ 93.9  
New brokerage accounts (in thousands, for the quarter ended) 16 % 2 % 280 274 243 229 242
Clients (in thousands)
Active Brokerage Accounts 4 % 1 % 9,605 9,493 9,386 9,309 9,252
Banking Accounts 6 % 2 % 1,004 986 985 970 950
Corporate Retirement Plan Participants (3) 10 % -   1,474       1,474       1,428       1,405       1,344  
         
(1)   Excludes all proprietary mutual funds and ETFs.
(2) Beginning in the second quarter of 2015, certain Mutual Fund OneSource balances were reclassified to Other third-party mutual funds. Prior period information has been recast to reflect this change.
(3) 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.
(4) Second quarter of 2015 includes inflows of $17.4 billion from certain mutual fund clearing service clients. Third quarter of 2014 includes inflows of $10.2 billion and an outflow of $3.4 billion from certain mutual fund clearing service clients.
(5) 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.
 
The Charles Schwab Corporation Monthly Activity Report For June 2015
                             
2014 2015  

Change

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

June

Mo.

Yr.

Market Indices
(at month end)
Dow Jones Industrial Average 16,827 16,563 17,098 17,043 17,391 17,828 17,823 17,165 18,133 17,776 17,841 18,011 17,620 (2 %) 5 %
Nasdaq Composite 4,408 4,370 4,580 4,493 4,631 4,792 4,736 4,635 4,964 4,901 4,941 5,070 4,987 (2 %) 13 %
Standard & Poor’s 500 1,960 1,931 2,003 1,972 2,018 2,068 2,059 1,995 2,105 2,068 2,086 2,107 2,063 (2 %) 5 %
Client Assets
(in billions of dollars)
Beginning Client Assets 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 2,549.3 2,568.8

Net New Assets (1, 2)

11.5 15.9 8.5 10.3 7.9 10.9 14.4 9.3 6.8 12.6 9.1 10.1 17.8 76 % 55 %
Net Market Gains (Losses) 36.2     (35.1 )   57.1     (54.9 )   29.0     27.3     (29.6 )   (27.9 )   79.3     (19.3 )   15.8     9.4   (43.3 )
Total Client Assets (at month end) 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     2,549.3     2,568.8   2,543.3   (1 %) 6 %
 
Receiving Ongoing Advisory Services
(at month end)
Investor Services 176.5 175.1 180.0 177.3 180.2 183.3 182.5 181.5 187.8 188.4 191.0 192.8 191.4 (1 %) 8 %
Advisor Services (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 1,071.9 1,079.3 1,066.7 (1 %) 5 %
Client Accounts
(at month end, in thousands)
Active Brokerage Accounts 9,252 9,269 9,288 9,309 9,326 9,346 9,386 9,407 9,435 9,493 9,553 9,572 9,605 - 4 %
Banking Accounts 950 956 964 970 974 979 985 978 983 986 992 1,000 1,004 - 6 %
Corporate Retirement Plan Participants (2) 1,344 1,381 1,383 1,405 1,416 1,416 1,428 1,441 1,475 1,474 1,469 1,469 1,474 - 10 %
Client Activity
New Brokerage Accounts (in thousands) 76 78 75 76 76 70 97 84 80 110 111 80 89 11 % 17 %
Inbound Calls (in thousands) 1,806 1,873 1,768 1,755 1,928 1,656 1,980 1,872 1,827 1,930 1,954 1,621 1,763 9 % (2 %)
Web Logins (in thousands) 32,768 33,426 32,491 31,098 32,409 31,528 34,580 34,294 35,379 36,278 35,966 32,112 31,644 (1 %) (3 %)
Client Cash as a Percentage of Client Assets (4) 11.9 % 12.1 % 11.9 % 12.2 % 12.1 % 11.9 % 12.3 % 12.3 % 11.9 % 12.0 % 11.5 % 11.6 % 11.7 % 10 bp (20) bp
Mutual Fund and Exchange-Traded Fund
Net Buys (Sells) (5, 6)
(in millions of dollars)
Large Capitalization Stock 311 773 620 228 1,881 1,538 1,347 1,084 (1,154 ) (586 ) (1,496 ) (1,410 ) (804 )
Small / Mid Capitalization Stock 220 (355 ) (639 ) (127 ) (307 ) 91 (346 ) 488 (12 ) 290 423 (108 ) 78
International 2,137 817 524 166 (20 ) 794 177 1,630 3,463 4,650 3,613 2,718 2,255
Specialized 1,690 1,082 373 (24 ) 781 503 566 1,452 748 (47 ) (5 ) 25 8
Hybrid 201 532 165 - (531 ) (363 ) (687 ) 180 138 (284 ) (210 ) (238 ) (133 )
Taxable Bond 606 92 683 (3,475 ) 797 577 (1,914 ) 1,298 2,722 924 1,075 1,757 421
Tax-Free Bond 516 277 400 463 584 479 603 598 471 613 13 (101 ) (132 )
Net Buy (Sell) Activity
(in millions of dollars)
Mutual Funds (5) 3,313 1,804 612 (4,022 ) 358 254 (4,381 ) 3,174 3,086 1,765 420 813 (725 )
Exchange-Traded Funds (6) 2,368 1,414 1,514 1,253 2,827 3,365 4,127 3,556 3,290 3,795 2,993 1,830 2,418
Money Market Funds (1,664 ) 1,493 1,248 2,224 477 (1,643 ) 4,294 (2,080 ) (2,158 ) (1,362 ) (6,970 ) 421 (358 )
Average Interest-Earning Assets (7)
(in millions of dollars) 137,328 137,785 139,027 140,115 141,502 141,884 144,695 147,495 148,911 152,247 152,697 153,466   155,369   1 % 13 %
(1)  

June 2015 includes an inflow of $8.1 billion from a mutual fund clearing services client. April 2015 includes inflows of $9.3 billion from certain mutual fund clearing service clients. 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 service 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®, certain cash equivalents, bank deposits 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.

MEDIA:
Charles Schwab
Greg Gable, 415-667-0473
or
INVESTORS/ANALYSTS:
Charles Schwab
Rich Fowler, 415-667-1841

Source: The Charles Schwab Corporation


Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Press Releases

Related Entities

Morningstar, Inc., Dividend, FDIC, Earnings