Schwab Reports Monthly Activity Highlights

Friday, March 13, 2015 5:45 am PDT

Dateline:

SAN FRANCISCO

Public Company Information:

NYSE:
SCHW

SAN FRANCISCO--(BUSINESS WIRE)--The Charles Schwab Corporation released its Monthly Activity Report today. Company highlights for the month of February 2015 include:

  • Core net new assets (before significant one-time flows) brought to the company by new and existing clients in February 2015 totaled $12.3 billion. Net new assets of $6.8 billion contained the following items:
    • An outflow of $11.6 billion relating to our planned resignation from an Advisor Services cash management relationship.
    • A positive net adjustment of $6.1 billion to reflect the final impact of Schwab’s consolidation of its retirement plan recordkeeping platforms as previously announced in September 2013.
  • Total client assets were a record $2.53 trillion as of month-end February, up 10% from February 2014 and up 4% compared to January 2015.
  • Client assets receiving ongoing advisory services were also a record $1.25 trillion as of month-end February, up 11% from February 2014 and up 3% compared to January 2015.

CFO Joe Martinetto commented, “The success of our ‘through clients’ eyes’ strategy and ongoing improvement in the broader economic picture are helping to sustain strong growth in our business – client assets reached a record $2.53 trillion at month-end February, up $236.8 billion, or 10%, year-over-year. Thus far in 2015, client trading activity has started out below expectations and equity market returns were in negative territory until early February. At the same time, our expense management is tracking in line with our plans, including a normal seasonal lift in compensation due to payroll tax resets, our annual health savings account contribution, and typical salary adjustments. We also expect a sequential rise in first quarter marketing outlays given the launch of our new Schwab Intelligent Portfolios offering in March. Our first quarter 2015 earnings per share are therefore running approximately $0.01 lower than the company’s year-earlier results. With so much of the year ahead of us and the economy continuing to strengthen, we will monitor the environment and assess our spending in view of our developing revenue picture.”

Forward Looking Statements

This press release contains forward-looking statements relating to the improving economy; strong business growth; expenses; first quarter marketing outlays; and first quarter 2015 earnings per share. 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 grow client assets/relationships; the level of client assets, including cash balances; the company’s ability to monetize client assets; 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 company’s ability to manage expenses; 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; 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 9.4 million active brokerage accounts, 1.5 million corporate retirement plan participants, 983,000 banking accounts, and $2.53 trillion in client assets as of February 28, 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 Monthly Activity Report For February 2015

                                 
2014 2015 Change
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mo.   Yr.  

Market Indices

(at month end)
Dow Jones Industrial Average 16,322 16,458 16,581 16,717 16,827 16,563 17,098 17,043 17,391 17,828 17,823 17,165 18,133 6 % 11 %
Nasdaq Composite 4,308 4,199 4,115 4,243 4,408 4,370 4,580 4,493 4,631 4,792 4,736 4,635 4,964 7 % 15 %
Standard & Poor’s 500 1,859 1,872 1,884 1,924 1,960 1,931 2,003 1,972 2,018 2,068 2,059 1,995 2,105 6 % 13 %
Client Assets
(in billions of dollars)
Beginning Client Assets 2,217.4 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
Net New Assets (1, 2) 10.9 11.4 0.3 10.9 11.5 15.9 8.5 10.3 7.9 10.9 14.4 9.3 6.8 (27 %) (38 %)
Net Market Gains (Losses) 66.0     2.3     4.6     30.4     36.2     (35.1 )   57.1     (54.9 )   29.0     27.3     (29.6 )   (27.9 )   79.3  
Total Client Assets (at month end) 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   4 % 10 %
 
Receiving Ongoing Advisory Services
(at month end)
Investor Services 158.3 159.2 160.6 163.7 176.5 175.1 180.0 177.3 180.2 183.3 182.5 181.5 187.8 3 % 19 %
Advisor Services (3) 966.4 973.5 977.4 995.3 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 3 % 10 %
Client Accounts
(at month end, in thousands)
Active Brokerage Accounts 9,146 9,178 9,217 9,228 9,252 9,269 9,288 9,309 9,326 9,346 9,386 9,407 9,435 - 3 %
Banking Accounts 928 933 938 944 950 956 964 970 974 979 985 978 983 1 % 6 %
Corporate Retirement Plan Participants (2) 1,327 1,338 1,344 1,346 1,344 1,381 1,383 1,405 1,416 1,416 1,428 1,441 1,475 2 % 11 %
Client Activity
New Brokerage Accounts (in thousands) 78 90 95 71 76 78 75 76 76 70 97 84 80 (5 %) 3 %
Inbound Calls (in thousands) 1,846 1,961 1,938 1,691 1,806 1,873 1,768 1,755 1,928 1,656 1,980 1,872 1,827 (2 %) (1 %)
Web Logins (in thousands) 33,394 34,200 34,254 32,165 32,768 33,426 32,491 31,098 32,409 31,528 34,580 34,294 35,379 3 % 6 %
Cash as a Percentage of Client Assets (4) 12.7 % 12.7 % 12.4 % 12.2 % 11.9 % 12.1 % 11.9 % 12.2 % 12.1 % 11.9 % 12.3 % 12.3 % 11.9 %

(40) bp

(80) bp

Mutual Fund and Exchange-Traded Fund
Net Buys (Sells) (5, 6, 7)
(in millions of dollars)
Large Capitalization Stock (33 ) 676 95 129 311 773 620 228 1,881 1,538 1,347 1,084 (1,154 )
Small / Mid Capitalization Stock (381 ) 680 (430 ) (564 ) 220 (355 ) (639 ) (127 ) (307 ) 91 (346 ) 488 (12 )
International 891 1,028 1,665 1,240 2,137 817 524 166 (20 ) 794 177 1,630 3,463
Specialized 1,183 912 609 377 1,690 1,082 373 (24 ) 781 503 566 1,452 748
Hybrid 599 107 230 406 201 532 165 - (531 ) (363 ) (687 ) 180 138
Taxable Bond 3,208 1,344 449 1,346 606 92 683 (3,475 ) 797 577 (1,914 ) 1,298 2,722
Tax-Free Bond 429 474 246 584 516 277 400 463 584 479 603 598 471
Net Buy (Sell) Activity
(in millions of dollars)
Mutual Funds (6) 3,658 3,611 1,312 2,236 3,313 1,804 612 (4,022 ) 358 254 (4,381 ) 3,174 3,086
Exchange-Traded Funds (7) 2,237 1,612 1,553 1,284 2,368 1,414 1,514 1,253 2,827 3,365 4,127 3,556 3,290
Money Market Funds (318 ) (135 ) (4,141 ) (561 ) (1,664 ) 1,493 1,248 2,224 477 (1,643 ) 4,294 (2,080 ) (2,158 )
Average Interest-Earning Assets (8)
(in millions of dollars) 136,947 137,625 137,164 136,588 137,328 137,785 139,027 140,115 141,502 141,884 144,695 147,495 148,911 1 % 9 %
 

(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) Beginning in March 2014, amounts include both mutual fund and exchange-traded fund (ETF) transactions. Prior period amounts have been recast to reflect this change.
(6) 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.
(7) Represents the principal value of client ETF transactions handled by Schwab, including transactions in proprietary ETFs.
(8) Represents total interest-earning assets on the Company's balance sheet.

Contact:

MEDIA:
Charles Schwab
Greg Gable, 415-667-0473
or
INVESTORS/ANALYSTS:
Charles Schwab
Chelsea de St. Paer, 415-667-1064

Corporate Public Relations
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888-767-5432

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