EX-99.1 2 exhibit991033119.htm EXHIBIT 99.1 Exhibit
 
 
EXHIBIT 99.1

News Release

Contacts:
 
cslogoa03.jpg
MEDIA:
Mayura Hooper
Charles Schwab
Phone: 415-667-1525
INVESTORS/ANALYSTS:
Rich Fowler
Charles Schwab
Phone: 415-667-1841

SCHWAB REPORTS RECORD QUARTERLY NET INCOME OF $964 MILLION, UP 23%
Revenues Grow 14% Year-Over-Year to $2.7 Billion, Marking Fifteen Consecutive Record Quarters
Core Net New Assets Total $51.7 Billion and Total Client Assets Reach a Record $3.59 Trillion
 
SAN FRANCISCO, April 15, 2019 – The Charles Schwab Corporation announced today that its net income for the first quarter of 2019 was a record $964 million, up 3% from $935 million for the prior quarter, and up 23% from $783 million for the first quarter of 2018.
 
 
Three Months Ended March 31,
 
%
Financial Highlights
 
2019
 
2018
 
Change
 
 
 
 
 
 
 
Net revenues (in millions)
 
$
2,723

 
$
2,398

 
14%
Net income (in millions)
 
$
964

 
$
783

 
23%
Diluted earnings per common share
 
$
.69

 
$
.55

 
25%
Pre-tax profit margin
 
46.4
%
 
41.8
%
 
 
Return on average common
 
 
 
 
 
 
    stockholders’ equity (annualized)
 
20
%
 
18
%
 
 
 
 
 
 
 
 
 
Note: All per-share results are rounded to the nearest cent, based on weighted-average diluted common shares outstanding.
 
CEO Walt Bettinger said, “Over the past quarter, our Virtuous Cycle, driven by our “Through Clients’ Eyes” strategy, continued to attract client accounts and assets at a robust pace. The equity markets gathered momentum during the quarter, with the S&P 500 rising 21% from the December correction and posting its best first quarter since 1998. At the same time, investors faced a mixed geopolitical and economic landscape, including international trade negotiations, the evolving Brexit debate, and a potential slowing in Fed rate hikes. While we believe that this environment impacted investor sentiment and activity, demand for help and support from Schwab remained strong. New brokerage accounts totaled 386,000 during the quarter and client account openings have now exceeded 100,000 for 28 consecutive months. In addition, clients entrusted us with total core net new assets of $51.7 billion for the quarter, representing a 6% annualized growth rate, consistent with our long-term average and a noteworthy start to 2019, particularly given the unsettled environment. Total client assets reached a record $3.59 trillion at month-end March, up 8% year-over-year.”

“We remain steadfast in our ‘no-trade offs’ approach to serving clients, diligently seeking to offer straightforward and transparent products and services that provide investors with greater choice and value,” Mr. Bettinger continued. “Recently, we marked the sixth anniversary of Schwab ETF OneSourceTM, already one of the largest commission-free exchange-traded fund programs in the industry, by doubling its lineup to 500 ETFs covering 79 Morningstar® categories. Client assets held in program ETFs have grown at a compound annual rate of approximately 50% since inception, reaching $180.9 billion at quarter end. In addition, as part of our ongoing efforts to provide clients with the help and advice needed to pursue their investing goals, we recently replaced Schwab Intelligent AdvisoryTM with Schwab Intelligent Portfolios PremiumTM. This solution combines automated investing with guidance from a certified planning

- 1 -

professional in a subscription-based package designed to offer a simpler, more modern and more approachable planning and investing experience. Client assets enrolled in our digital advisory solutions at quarter end reached $37.7 billion, up 23% from a year ago. Overall assets receiving ongoing advice grew faster than total client assets over the past year, and totaled $1.87 trillion at March 31, 2019.”

Mr. Bettinger added, “Recently, Schwab was selected as one of the 2019 FORTUNE Top 50 ‘World’s Most Admired Companies®’, as well as rated #1 Overall in the 2019 Investor’s Business Daily Best Online Brokers Survey. In addition, we ranked Highest in Investor Satisfaction with DIY Self-Directed Services in the J.D. Power 2019 U.S. Self-Directed Investor Satisfaction Study.* While these accolades come from distinct perspectives, we believe they all reflect the importance of our emphasis on value, service, transparency, and trust as we attract and support a growing share of U.S. investable wealth.”

CFO Peter Crawford commented, “Our unwavering focus on championing our clients’ goals translated into strong first quarter financial performance as well as business growth, indicating the Schwab financial formula continues to operate as intended. Overall, revenues rose by 14% year-over-year to a record $2.7 billion. Net interest revenue grew 33% to a record $1.7 billion largely due to higher interest-earning assets stemming from the transfer of sweep money market funds to bank and broker-dealer sweep as well as client cash allocations. Additionally, our net interest margin expanded to 2.46%, up from 2.12% a year earlier, following the Fed’s four rate hikes in 2018. Asset management and administration fees decreased 11% to $755 million, mainly as a result of lower money market fund revenue as we executed on sweep transfers. Trading revenue declined by 8% to $185 million largely due to client first quarter trading activity that was strong but below last year’s then-record pace. Finally, other revenue rose 23%, driven by a gain on the assignment of leased office space in our 215 Fremont building in San Francisco. Turning to expenses, our 5% increase in spending was consistent with our expectations. Compensation was 10% higher in the first quarter as we hired to serve our expanding client base. Professional services rose by 9%, primarily due to our investments in projects to further drive efficiency and scale. Our disciplined expense management helped result in a 900 basis point gap between year-over-year revenue and expense growth, and a 46.4% pre-tax profit margin. We believe this focus positions us well to maintain and even improve our ratio of expenses to client assets, which was just 17 bps for the quarter using average balances, and 16 bps based on the quarter-end total.”

Mr. Crawford concluded, “During the first quarter, we continued to emphasize effective balance sheet management. While clients sorted through their invested and transactional cash allocations, we transferred $11.6 billion from sweep money market funds to bank and broker-dealer sweep. This activity contributed to consolidated balance sheet assets of $283 billion at quarter end. A small amount of the $14.4 billion in sweep money market fund balances outstanding as of month-end March remains to be transferred; we expect to complete those transfers by the end of April. In January 2019, we announced a 31% increase in our dividend and a $4 billion stock repurchase authorization, which we expect to access in coming quarters to return excess capital to stockholders. Our preliminary Tier 1 Leverage Ratio ended the quarter at 7.2%, modestly above our operating objective of 6.75%-7%. We achieved a 20% return on equity for the third consecutive quarter – our strongest performance since early 2009 – exemplifying our commitment to being good stewards of our stockholders’ capital.”

Supporting schedules and selected balances are either attached or located at: https://www.aboutschwab.com/financial-reports.

*Disclaimer: From FORTUNE Magazine, February 2019, ©2019 Fortune Media IP Limited. FORTUNE and The World’s Most Admired Companies are registered trademarks of Fortune Media IP Limited and are used under license. FORTUNE and Fortune Media IP Limited are not affiliated with, and do not endorse the products or services of, Charles Schwab.
 
From Investor’s Business Daily, January 28, 2019, ©2019 Investor’s Business Daily, Inc. All rights reserved. Used by permission and protected by the Copyright Laws of the United States. The printing, copying, redistribution or retransmission of this Content without express written permission is prohibited.

Charles Schwab received the highest numerical score in the DIY segment of the J.D. Power 2019 Self-Directed Investor Satisfaction Study of investors’ satisfaction who use self-directed investment firms. Visit https://jdpower.com/awards.

- 2 -

Commentary from the CFO
Periodically, our Chief Financial Officer provides insight and commentary regarding Schwab’s financial picture at: https://www.aboutschwab.com/cfo-commentary. The most recent commentary, which provides perspective on crossing the $250 billion consolidated asset threshold for heightened regulatory requirements, was posted on August 14, 2018.

Forward-Looking Statements
This press release contains forward-looking statements relating to Fed rate hikes; growth in the client base, accounts and assets; efficiency and scale; ratio of expenses to client assets; transfers to sweep; capital returns to stockholders; and Tier 1 Leverage Ratio operating objective. 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, general market conditions, including the level of interest rates, equity valuations, and trading activity; the company’s ability to attract and retain clients and registered investment advisors and grow those relationships and client assets; competitive pressures on pricing, including deposit rates; the company’s ability to develop and launch new products, services, infrastructure and capabilities in a timely and successful manner; client use of the company’s advisory solutions and other products and services; the company’s ability to manage expenses; client sensitivity to interest rates; capital and liquidity needs and management; and other factors set forth in the company’s most recent report on Form 10-K.

About Charles Schwab
The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with more than 360 offices and 11.8 million active brokerage accounts, 1.7 million corporate retirement plan participants, 1.3 million banking accounts, and $3.59 trillion in client assets as of March 31, 2019. 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 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 https://www.schwab.com and https://www.aboutschwab.com.

###

- 3 -


THE CHARLES SCHWAB CORPORATION
Consolidated Statements of Income
(In millions, except per share amounts)
(Unaudited)





 
 
Three Months Ended
March 31,
 
 
2019
 
2018
Net Revenues
 
 
 
 
Interest revenue
 
$
1,998

 
$
1,421

Interest expense
 
(317
)
 
(158
)
Net interest revenue
 
1,681

 
1,263

Asset management and administration fees
 
755

 
851

Trading revenue
 
185

 
201

Other
 
102

 
83

Total net revenues
 
2,723

 
2,398

Expenses Excluding Interest
 
 
 
 
Compensation and benefits
 
850

 
770

Professional services
 
170

 
156

Occupancy and equipment
 
131

 
122

Advertising and market development
 
69

 
73

Communications
 
62

 
62

Depreciation and amortization
 
83

 
73

Regulatory fees and assessments
 
32

 
51

Other
 
62

 
89

Total expenses excluding interest
 
1,459

 
1,396

Income before taxes on income
 
1,264

 
1,002

Taxes on income
 
300

 
219

Net Income
 
964

 
783

Preferred stock dividends and other
 
39

 
37

Net Income Available to Common Stockholders
 
$
925

 
$
746

Weighted-Average Common Shares Outstanding:
 
 
 
 
Basic
 
1,333

 
1,347

Diluted
 
1,344

 
1,362

Earnings Per Common Shares Outstanding:
 
 
 
 
Basic
 
$
.69

 
$
.55

Diluted
 
$
.69

 
$
.55



         



- 4 -

THE CHARLES SCHWAB CORPORATION
Financial and Operating Highlights
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q1-19 % change
 
 
2019
 
2018
 
vs.
 
vs.
 
 
First
 
Fourth
 
Third
 
Second
 
First
(In millions, except per share amounts and as noted)
Q1-18
 
Q4-18
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
Net Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest revenue
33
%
 
3
%
 
 
$
1,681

 
$
1,626

 
$
1,527

 
$
1,407

 
$
1,263

Asset management and administration fees
(11
)%
 
—

 
 
755

 
755

 
809

 
814

 
851

Trading revenue
(8
)%
 
(10
)%
 
 
185

 
206

 
176

 
180

 
201

Other
23
%
 
24
%
 
 
102

 
82

 
67

 
85

 
83

Total net revenues
14
%
 
2
%
 
 
2,723

 
2,669

 
2,579

 
2,486

 
2,398

Expenses Excluding Interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
10
%
 
6
%
 
 
850

 
805

 
737

 
745

 
770

Professional services
9
%
 
(4
)%
 
 
170

 
178

 
164

 
156

 
156

Occupancy and equipment
7
%
 
2
%
 
 
131

 
128

 
124

 
122

 
122

Advertising and market development
(5
)%
 
(26
)%
 
 
69

 
93

 
70

 
77

 
73

Communications
—

 
(2
)%
 
 
62

 
63

 
59

 
58

 
62

Depreciation and amortization
14
%
 
4
%
 
 
83

 
80

 
78

 
75

 
73

Regulatory fees and assessments
(37
)%
 
3
%
 
 
32

 
31

 
57

 
50

 
51

Other
(30
)%
 
(23
)%
 
 
62

 
81

 
71

 
72

 
89

Total expenses excluding interest
5
%
 
—

 
 
1,459

 
1,459

 
1,360

 
1,355

 
1,396

Income before taxes on income
26
%
 
4
%
 
 
1,264

 
1,210

 
1,219

 
1,131

 
1,002

Taxes on income
37
%
 
9
%
 
 
300

 
275

 
296

 
265

 
219

Net Income
23
%
 
3
%
 
 
$
964

 
$
935

 
$
923

 
$
866

 
$
783

Preferred stock dividends and other
5
%
 
(22
)%
 
 
39

 
50

 
38

 
53

 
37

Net Income Available to Common Stockholders
24
%
 
5
%
 
 
$
925

 
$
885

 
$
885

 
$
813

 
$
746

Earnings per common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
25
%
 
5
%
 
 
$
.69

 
$
.66

 
$
.66

 
$
.60

 
$
.55

Diluted
25
%
 
6
%
 
 
$
.69

 
$
.65

 
$
.65

 
$
.60

 
$
.55

Dividends declared per common share
70
%
 
31
%
 
 
$
.17

 
$
.13

 
$
.13

 
$
.10

 
$
.10

Weighted-average common shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
(1
)%
 
(1
)%
 
 
1,333

 
1,343

 
1,351

 
1,350

 
1,347

Diluted
(1
)%
 
(1
)%
 
 
1,344

 
1,354

 
1,364

 
1,364

 
1,362

Performance Measures
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-tax profit margin
 
 
 
 
 
46.4
%
 
45.3
%
 
47.3
%
 
45.5
%
 
41.8
%
Return on average common stockholders’ equity (annualized) (1)
 
 
 
 
 
20
%
 
20
%
 
20
%
 
19
%
 
18
%
Financial Condition (at quarter end, in billions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and investments segregated
9
%
 
2
%
 
 
$
13.9

 
$
13.6

 
$
8.5

 
$
11.0

 
$
12.8

Receivables from brokerage clients — net
(3
)%
 
(6
)%
 
 
20.5

 
21.7

 
22.4

 
22.4

 
21.2

Bank loans — net
1
%
 
(1
)%
 
 
16.5

 
16.6

 
16.6

 
16.6

 
16.4

Total assets
14
%
 
(5
)%
 
 
282.8

 
296.5

 
272.1

 
261.9

 
248.3

Bank deposits
15
%
 
(5
)%
 
 
219.5

 
231.4

 
213.4

 
199.9

 
190.2

Payables to brokerage clients
(5
)%
 
(9
)%
 
 
29.7

 
32.7

 
27.9

 
30.3

 
31.1

Long-term debt
66
%
 
(1
)%
 
 
6.8

 
6.9

 
5.8

 
5.8

 
4.1

Stockholders’ equity
12
%
 
4
%
 
 
21.6

 
20.7

 
20.8

 
20.1

 
19.3

Other
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Full-time equivalent employees (at quarter end, in thousands)
10
%
 
3
%
 
 
20.0

 
19.5

 
19.1

 
18.7

 
18.2

Capital expenditures — purchases of equipment, office facilities, and
property, net (in millions)
34
%
 
14
%
 
 
$
181

 
$
159

 
$
156

 
$
126

 
$
135

Expenses excluding interest as a percentage of average client assets
(annualized)
 
 
 
 
 
0.17
%
 
0.17
%
 
0.15
%
 
0.16
%
 
0.17
%
Clients’ Daily Average Trades (in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue trades (2)
(10
)%
 
(10
)%
 
 
418

 
466

 
382

 
376

 
462

Asset-based trades (3)
7
%
 
(21
)%
 
 
149

 
188

 
129

 
149

 
139

Other trades (4)
—

 
(1
)%
 
 
210

 
213

 
172

 
179

 
211

Total
(4
)%
 
(10
)%
 
 
777

 
867

 
683

 
704

 
812

Average Revenue Per Revenue Trade (2)
(1
)%
 
1
%
 
 
$
7.19

 
$
7.13

 
$
7.27

 
$
7.30

 
$
7.24

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Return on average common stockholders’ equity is calculated using net income available to common stockholders divided by average common stockholders’ equity.
(2) Includes all client trades that generate trading revenue (i.e., commission revenue or principal transaction revenue); also known as DART.
(3) Includes eligible trades executed by clients who participate in one or more of the company’s asset-based pricing relationships.
(4) Includes all commission-free trades, including Schwab Mutual Fund OneSource® funds and ETFs, and other proprietary products.


- 5 -

THE CHARLES SCHWAB CORPORATION
Net Interest Revenue Information
(In millions)
(Unaudited)

 
Three Months Ended
March 31,
 
2019
 
 
2018
 
Average
Balance
 
Interest
Revenue/
Expense
 
Average
Yield/
Rate
 
 
Average
Balance
 
Interest
Revenue/
Expense
 
Average
Yield/
Rate
Interest-earning assets
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
24,983

 
$
151

 
2.42
%
 
 
$
17,084

 
$
66

 
1.53
%
Cash and investments segregated
13,533

 
83

 
2.44
%
 
 
13,969

 
48

 
1.37
%
Broker-related receivables
257

 
2

 
2.75
%
 
 
287

 
1

 
1.32
%
Receivables from brokerage clients
18,972

 
214

 
4.52
%
 
 
18,872

 
179

 
3.79
%
Available for sale securities (1)
66,853

 
451

 
2.70
%
 
 
50,371

 
240

 
1.91
%
Held to maturity securities
132,427

 
916

 
2.77
%
 
 
121,412

 
721

 
2.38
%
Bank loans
16,578

 
149

 
3.61
%
 
 
16,456

 
130

 
3.19
%
Total interest-earning assets
273,603

 
1,966

 
2.88
%
 
 
238,451

 
1,385

 
2.33
%
Other interest revenue
 
 
32

 
 
 
 
 
 
36

 
 
Total interest-earning assets
$
273,603

 
$
1,998

 
2.92
%
 
 
$
238,451

 
$
1,421

 
2.39
%
Funding sources
 
 
 
 
 
 
 
 
 
 
 
 
Bank deposits
$
219,987

 
$
226

 
0.42
%
 
 
$
176,988

 
$
64

 
0.15
%
Payables to brokerage clients
22,184

 
23

 
0.43
%
 
 
22,469

 
7

 
0.14
%
Short-term borrowings (2)
30

 
—

 
2.48
%
 
 
12,170

 
47

 
1.55
%
Long-term debt
6,845

 
62

 
3.61
%
 
 
4,392

 
37

 
3.37
%
Total interest-bearing liabilities
249,046

 
311

 
0.51
%
 
 
216,019

 
155

 
0.29
%
Non-interest-bearing funding sources
24,557

 
 
 
 
 
 
22,432

 
 
 
 
Other interest expense
 
 
6

 
 
 
 
 
 
3

 
 
Total funding sources
$
273,603

 
$
317

 
0.46
%
 
 
$
238,451

 
$
158

 
0.27
%
Net interest revenue
 
 
$
1,681

 
2.46
%
 
 
 
 
$
1,263

 
2.12
%
(1) Amounts have been calculated based on amortized cost.
(2) Interest expense was less than $500,000 in the period presented.


- 6 -

THE CHARLES SCHWAB CORPORATION
Asset Management and Administration Fees Information
(In millions)
(Unaudited)


 
 
Three Months Ended
March 31,
 
 
2019
 
 
2018
 
 
Average
Client
Assets
 
Revenue
 
Average
Fee
 
 
Average
Client
Assets
 
Revenue
 
Average
Fee
Schwab money market funds
 
$
158,268

 
$
122

 
0.31
%
 
 
$
156,362

 
$
182

 
0.47
%
Schwab equity and bond funds, ETFs, and collective trust funds (CTFs) (1)
 
244,314

 
70

 
0.12
%
 
 
212,519

 
74

 
0.14
%
Mutual Fund OneSource® and other non-transaction fee funds
 
187,223

 
147

 
0.32
%
 
 
222,669

 
178

 
0.32
%
Other third-party mutual funds and ETFs (2)
 
452,461

 
75

 
0.07
%
 
 
319,722

 
70

 
0.09
%
Total mutual funds, ETFs, and CTFs (3)
 
$
1,042,266

 
414

 
0.16
%
 
 
$
911,272

 
504

 
0.22
%
Advice solutions (3) 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee-based
 
$
230,394

 
278

 
0.49
%
 
 
$
224,760

 
282

 
0.51
%
Non-fee-based
 
66,756

 
—

 
—

 
 
59,762

 
—

 
—

Total advice solutions
 
$
297,150

 
278

 
0.38
%
 
 
$
284,522

 
282

 
0.40
%
Other balance-based fees (1,4)
 
392,191

 
52

 
0.05
%
 
 
410,443

 
55

 
0.05
%
Other (5)
 
 
 
11

 
 
 
 
 
 
10

 
 
Total asset management and administration fees
 
 
 
$
755

 
 
 
 
 
 
$
851

 
 
(1) Beginning in the first quarter of 2019, a change was made to move CTFs from other balance-based fees. Prior periods have been recast to reflect this change.
(2) Includes Schwab ETF OneSourceTM.
(3) Advice solutions include managed portfolios, specialized strategies, and customized investment advice such as Schwab Private ClientTM, 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®, and Schwab Intelligent Portfolios PremiumTM; 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.
(4) Includes various asset-related fees, such as trust fees, 401(k) recordkeeping fees, and mutual fund clearing fees and other service fees.
(5) Includes miscellaneous service and transaction fees relating to mutual funds and ETFs that are not balance-based.
 

- 7 -

THE CHARLES SCHWAB CORPORATION
Growth in Client Assets and Accounts
(Unaudited)


 
Q1-19 % Change
 
 
2019
 
2018
 
vs.
 
vs.
 
 
First
 
Fourth
 
Third
 
Second
 
First
(In billions, at quarter end, except as noted)
Q1-18
 
Q4-18
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
Assets in client accounts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Schwab One®, certain cash equivalents and bank deposits
13
%
 
(5
)%
 
 
$
247.0

 
$
261.2

 
$
239.5

 
$
228.2

 
$
219.4

Proprietary mutual funds (Schwab Funds® and Laudus Funds®) and CTFs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds (1)
10
%
 
4
%
 
 
159.7

 
153.5

 
128.5

 
134.2

 
145.0

Equity and bond funds and CTFs (2,3)
8
%
 
13
%
 
 
106.2

 
94.3

 
107.4

 
102.1

 
98.7

Total proprietary mutual funds and CTFs
9
%
 
7
%
 
 
265.9

 
247.8

 
235.9

 
236.3

 
243.7

Mutual Fund Marketplace® (4)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mutual Fund OneSource® and other non-transaction fee funds
(12
)%
 
8
%
 
 
195.1

 
180.5

 
212.6

 
212.5

 
221.6

Mutual fund clearing services
2
%
 
11
%
 
 
182.7

 
164.4

 
182.2

 
175.3

 
178.3

Other third-party mutual funds
6
%
 
13
%
 
 
737.2

 
650.4

 
740.1

 
716.1

 
693.4

Total Mutual Fund Marketplace
2
%
 
12
%
 
 
1,115.0

 
995.3

 
1,134.9

 
1,103.9

 
1,093.3

Total mutual fund assets
3
%
 
11
%
 
 
1,380.9

 
1,243.1

 
1,370.8

 
1,340.2

 
1,337.0

Exchange-traded funds (ETFs)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proprietary ETFs (3)
29
%
 
17
%
 
 
134.7

 
115.2

 
125.2

 
114.8

 
104.5

Schwab ETF OneSource™ (4)
177
%
 
170
%
 
 
82.5

 
30.6

 
33.3

 
30.8

 
29.8

Other third-party ETFs
(3
)%
 
(2
)%
 
 
303.7

 
309.9

 
338.6

 
322.1

 
314.7

Total ETF assets
16
%
 
14
%
 
 
520.9

 
455.7

 
497.1

 
467.7

 
449.0

Equity and other securities (2)
7
%
 
13
%
 
 
1,131.3

 
1,005.4

 
1,186.7

 
1,106.2

 
1,060.6

Fixed income securities
25
%
 
6
%
 
 
324.1

 
306.1

 
290.4

 
275.1

 
258.8

Margin loans outstanding
(3
)%
 
(3
)%
 
 
(18.8
)
 
(19.3
)
 
(20.8
)
 
(20.4
)
 
(19.4
)
Total client assets
8
%
 
10
%
 
 
$
3,585.4

 
$
3,252.2

 
$
3,563.7

 
$
3,397.0

 
$
3,305.4

Client assets by business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investor Services
8
%
 
11
%
 
 
$
1,886.7

 
$
1,701.7

 
$
1,876.9

 
$
1,784.8

 
$
1,740.8

Advisor Services
9
%
 
10
%
 
 
1,698.7

 
1,550.5

 
1,686.8

 
1,612.2

 
1,564.6

Total client assets
8
%
 
10
%
 
 
$
3,585.4

 
$
3,252.2

 
$
3,563.7

 
$
3,397.0

 
$
3,305.4

Net growth in assets in client accounts (for the quarter ended)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net new assets by business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investor Services (5)
N/M

 
2
%
 
 
$
29.2

 
$
28.7

 
$
27.8

 
$
13.7

 
$
(50.8
)
Advisor Services
(30
)%
 
(15
)%
 
 
22.5

 
26.6

 
25.7

 
30.2

 
32.0

Total net new assets
N/M

 
(7
)%
 
 
$
51.7

 
$
55.3

 
$
53.5

 
$
43.9

 
$
(18.8
)
Net market gains (losses)
N/M

 
N/M

 
 
281.5

 
(366.8
)
 
113.2

 
47.7

 
(37.6
)
Net growth (decline)
N/M

 
N/M

 
 
$
333.2

 
$
(311.5
)
 
$
166.7

 
$
91.6

 
$
(56.4
)
New brokerage accounts (in thousands, for the quarter ended)
(13
)%
 
2
%
 
 
386

 
380

 
369

 
384

 
443

Client accounts (in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Active brokerage accounts (6)
7
%
 
2
%
 
 
11,787

 
11,593

 
11,423

 
11,202

 
11,005

Banking accounts
6
%
 
—

 
 
1,300

 
1,302

 
1,283

 
1,250

 
1,221

Corporate retirement plan participants
6
%
 
2
%
 
 
1,684

 
1,655

 
1,627

 
1,599

 
1,594

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

(1) Total client assets in purchased money market funds are located at: https://www.aboutschwab.com/investor-relations.
(2) Beginning in the first quarter of 2019, a change was made to move CTFs from equity and other securities. Prior periods have been recast to reflect this change.
(3) Includes balances held on and off the Schwab platform. As of March 31, 2019, off-platform equity and bond funds, CTFs, and ETFs were $11.8 billion, $4.4 billion, and $36.3 billion, respectively.
(4) Excludes all proprietary mutual funds and ETFs.
(5) Second quarter of 2018 includes outflows of $9.5 billion from certain mutual fund clearing services clients. First quarter of 2018 includes outflows of $84.4 billion from certain mutual fund clearing services clients.
(6) In September 2018, the definition of active brokerage accounts was standardized across all account types as accounts with activity within the preceding 270 days. This change increased active accounts by approximately 63,000.
N/M Not meaningful.

- 8 -

The Charles Schwab Corporation Monthly Activity Report For March 2019
 
2018
 
 
 
 
 
 
 
 
 
2019
 
 
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
24,103

24,163

24,416

24,271

25,415

25,965

26,458

25,116

25,538

23,327

25,000

25,916

25,929

—

8
%
Nasdaq Composite
7,063

7,066

7,442

7,510

7,672

8,110

8,046

7,306

7,331

6,635

7,282

7,533

7,729

3
%
9
%
Standard & Poor’s 500
2,641

2,648

2,705

2,718

2,816

2,902

2,914

2,712

2,760

2,507

2,704

2,784

2,834

2
%
7
%
Client Assets (in billions of dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning Client Assets
3,328.8

3,305.4

3,312.1

3,378.1

3,397.0

3,447.9

3,555.9

3,563.7

3,388.1

3,431.9

3,252.2

3,447.7

3,533.0

 
 
Net New Assets (1)
20.2

0.4

19.4

24.1

16.3

20.8

16.4

14.9

15.6

24.8

15.1

18.3

18.3

—

(9
)%
Net Market Gains (Losses)
(43.6
)
6.3

46.6

(5.2
)
64.6

57.2

(8.6
)
(190.5
)
28.2

(204.5
)
180.4

67.0

34.1

 
 
Total Client Assets (at month end)
3,305.4

3,312.1

3,378.1

3,397.0

3,477.9

3,555.9

3,563.7

3,388.1

3,431.9

3,252.2

3,447.7

3,533.0

3,585.4

1
%
8
%
Core Net New Assets (2)
25.6

9.9

19.4

24.1

16.3

20.8

16.4

14.9

15.6

24.8

15.1

18.3

18.3

—

(29
)%
Receiving Ongoing Advisory Services (at month end)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investor Services
273.2

274.7

279.1

280.0

287.0

292.0

292.7

280.3

284.7

272.4

286.9

294.2

298.4

1
%
9
%
Advisor Services (3)
1,444.4

1,451.6

1,478.0

1,488.7

1,525.5

1,555.3

1,559.2

1,485.8

1,510.1

1,436.1

1,514.2

1,551.6

1,572.8

1
%
9
%
Client Accounts (at month end, in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Active Brokerage Accounts (4)
11,005

11,081

11,145

11,202

11,243

11,310

11,423

11,479

11,529

11,593

11,653

11,712

11,787

1
%
7
%
Banking Accounts (5)
1,221

1,230

1,240

1,250

1,262

1,274

1,283

1,289

1,297

1,302

1,312

1,313

1,300

(1
)%
6
%
Corporate Retirement Plan Participants
1,594

1,599

1,599

1,599

1,611

1,621

1,627

1,634

1,639

1,655

1,679

1,685

1,684

—

6
%
Client Activity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Brokerage Accounts (in thousands)
140

141

122

121

118

132

119

133

115

132

131

115

140

22
%
—

Inbound Calls (in thousands)
2,145

2,034

1,852

1,814

1,849

1,964

1,715

1,976

1,681

1,839

1,924

1,742

1,882

8
%
(12
)%
Web Logins (in thousands)
58,906

55,980

56,234

56,491

57,137

62,797

53,923

59,261

54,654

53,920

64,563

60,121

63,692

6
%
8
%
Client Cash as a Percentage of Client Assets (6)
11.0
%
10.9
%
10.6
%
10.7
%
10.5
%
10.4
%
10.3
%
11.1
%
11.2
%
12.8
%
11.7
%
11.5
%
11.3
%
 (20) bp

 30 bp

Mutual Fund and Exchange-Traded Fund
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Net Buys (Sells) (7, 8) (in millions of dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Large Capitalization Stock
(158
)
410

953

981

486

918

311

308

331

717

1,343

1,109

1,045

 
 
Small / Mid Capitalization Stock
130

359

753

1,195

768

(186
)
151

(1,344
)
(456
)
(1,414
)
1,329

638

302

 
 
International
1,546

809

372

(498
)
(529
)
186

(88
)
(109
)
(418
)
(2,163
)
2,212

1,086

1,274

 
 
Specialized
326

122

(19
)
383

520

(245
)
73

(914
)
(397
)
(2,105
)
124

609

750

 
 
Hybrid
529

(541
)
(241
)
(288
)
(548
)
(678
)
(324
)
(1,313
)
(1,248
)
(2,985
)
(321
)
(309
)
(357
)
 
 
Taxable Bond
2,117

1,661

1,002

928

879

965

1,371

(351
)
(836
)
(4,342
)
3,956

2,871

1,923

 
 
Tax-Free Bond
247

(113
)
449

588

306

559

262

(591
)
(407
)
(409
)
1,184

1,111

1,133

 
 
Net Buy (Sell) Activity (in millions of dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mutual Funds (7)
1,976

(36
)
(88
)
555

(522
)
(1,936
)
(1,538
)
(5,734
)
(7,955
)
(21,372
)
6,740

2,312

1,850

 
 
Exchange-Traded Funds (8)
2,761

2,743

3,357

2,734

2,404

3,455

3,294

1,420

4,524

8,671

3,087

4,803

4,220

 
 
Money Market Funds
(9,100
)
(4,156
)
(2,245
)
(4,919
)
(4,801
)
704

(1,933
)
2,546

8,515

13,548

4,944

(1,577
)
1,785

 
 
Average Interest-Earning Assets (9)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in millions of dollars)
241,049

239,833

242,584

249,432

254,211

259,137

261,741

264,156

265,648

274,913

277,068

270,718

272,727

1
%
13
%
 
 
(1) April and March 2018 include outflows of $9.5 billion and $5.4 billion, respectively, from certain mutual fund clearing services clients.
(2) Net new assets before significant one-time inflows or outflows, such as acquisitions/divestitures or extraordinary flows (generally greater than $10 billion) relating to a specific client. These flows may span multiple reporting periods.
(3) Excludes Retirement Business Services.
(4) In September 2018, the definition of active brokerage accounts was standardized across all account types as accounts with activity within the preceding 270 days. This change increased active accounts by approximately 63,000.
(5) In March 2019, banking accounts were reduced by approximately 23,000 as a result of inactive account closures.
(6) Schwab One®, certain cash equivalents, bank deposits, and money market fund balances as a percentage of total client assets.
(7) 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.
(8) Represents the principal value of client ETF transactions handled by Schwab, including transactions in proprietary ETFs.
(9) Represents average total interest-earning assets on the company’s balance sheet.

- 9 -