Schwab Reports Strongest Quarterly Performance in Company History

$115 Billion in Core Net New Assets Represents a 7% Annualized Growth Rate

Revenues Rise 20% Year-Over-Year to $5.5 Billion; Net Income Reaches $2.0 Billion, up 32%

Record GAAP Earnings Per Share of $.99, $1.10 Adjusted (1) as Company Delivers Growth Plus Capital Return


The Charles Schwab Corporation announced today that its net income for the third quarter of 2022 was a record $2.0 billion compared with $1.8 billion for the second quarter of 2022, and $1.5 billion for the third quarter of 2021. Net income for the nine months ended September 30, 2022 was $5.2 billion, compared with $4.3 billion for the year-earlier period.

 

Three Months Ended

September 30,

%

Nine Months Ended

September 30,

%

Financial Highlights (1)

2022

 

2021

 

Change

 

2022

 

2021

 

Change

 

 

 

 

 

 

 

Net revenues (in millions)

$

5,500

 

$

4,570

 

20

%

$

15,265

 

$

13,812

 

11

%

Net income (in millions)

 

 

 

 

 

 

GAAP

$

2,020

 

$

1,526

 

32

%

$

5,215

 

$

4,275

 

22

%

Adjusted (1)

$

2,211

 

$

1,722

 

28

%

$

5,783

 

$

4,895

 

18

%

Diluted earnings per common share (2)

 

 

 

 

 

 

GAAP

$

.99

 

$

.74

 

34

%

$

2.53

 

$

2.06

 

23

%

Adjusted (1)

$

1.10

 

$

.84

 

31

%

$

2.83

 

$

2.39

 

18

%

Pre-tax profit margin

 

 

 

 

 

 

GAAP

 

48.7

%

 

44.0

%

 

 

44.5

%

 

41.2

%

 

Adjusted (1)

 

53.3

%

 

49.6

%

 

 

49.4

%

 

47.2

%

 

Return on average common stockholders’ equity (annualized)

 

25

%

 

12

%

 

 

18

%

 

11

%

 

Return on tangible common equity (annualized) (1)

 

74

%

 

23

%

 

 

42

%

 

21

%

 

(1)

Further details on non-GAAP financial measures and a reconciliation of such measures to GAAP reported results are included on pages 10-11 of this release.

(2)

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

Co-Chairman and CEO Walt Bettinger said, “Schwab’s performance during the third quarter reflected the continued success of our ‘Through Clients’ Eyes’ strategy and our contemporary full-service approach to helping clients achieve their financial goals. As we assisted investors with navigating persistent macroeconomic headwinds, we continued to drive robust business growth. Bolstered by record third quarter retail inflows, core net new assets equaled $115 billion for the period – a 7% annualized growth rate. Total client assets were $6.6 trillion at quarter-end, down 13% from a year ago, as robust asset gathering was more than offset by the $1.4 trillion impact of lower market valuations on client portfolios over the past 12 months. At the same time, our success in attracting and retaining clients supported a 4% year-over-year rise in active brokerage accounts – we ended the quarter at approximately 34 million.”

“Our modern wealth management approach provides a wide array of investing and financial capabilities to support investors through a range of market conditions – particularly in difficult times like these,” Mr. Bettinger continued. “Equity markets remained under pressure throughout the quarter – including the largest percentage drop for a September since 2008 – with the S&P 500® extending its year-to-date losses to 25%. The Federal Reserve assumed an increasingly hawkish stance, tightening monetary policy at the fastest rate in four decades, as it wrestled with elevated inflation and lingering effects from the global pandemic. Additionally, the continued war in Ukraine, along with increasing challenges across other major global economies weighed on overall market sentiment. That being said, clients remained engaged – with daily average trading volume of 5.5 million essentially flat versus the third quarter of last year, including net buying activity across both equities and fixed income securities.”

“Given our four decades of experience assisting individual investors and the advisors who serve them, we know prolonged environmental challenges can impact clients’ financial confidence, reinforcing the importance of continued investment across our three strategic initiatives: scale and efficiency, client segmentation, and win-win monetization,” Mr. Bettinger added. “Schwab’s extensive suite of advisory solutions, along with the recently introduced personalized investing capabilities, are designed to help clients achieve their evolving goals throughout their financial lives. This suite includes Wasmer SchroederTM Strategies, which offers investors a range of tax-exempt and taxable fixed income solutions. This team’s expertise, along with an attractive value proposition, increasing client demand for income solutions, and rising interest rates has helped these strategies attract over $5 billion in net flows over the last two years, including $1 billion during the third quarter of 2022 alone. Another example of win-win monetization is the recent steps we have taken to bolster our fund offering for RIAs by expanding our institutional no transaction fee (INTF) mutual fund platform to include over 800 additional highly rated equity and bond funds across 15 leading third-party asset managers.”

Mr. Bettinger concluded, “Through consistent strategic focus and disciplined execution, we believe we can drive sustained business momentum while continuing to deliver a high-quality wealth experience for clients and to build long-term value for stockholders.”

CFO Peter Crawford noted, “Schwab’s diversified financial model and a significant benefit from higher rates helped us convert ongoing success with clients into record total revenues of $5.5 billion, up 20% on a year-over-year basis. Net interest revenue increased by 44% to $2.9 billion, as rising rates helped our net interest margin to expand sequentially by 35 basis points to 1.97%. This movement more than offset the 6% contraction in interest-earning assets driven by clients’ cash sorting behavior and their continued market engagement. Asset management and administration fees decreased 5% to $1.0 billion as the challenging equity markets weighed on client asset balances. Trading revenue also declined slightly to $930 million primarily due to a mix shift within client trading activity.”

Mr. Crawford continued, “Driven largely by ongoing investments in our people and technology, GAAP expenses for the quarter increased 10% year-over-year to $2.8 billion. This amount includes $101 million in acquisition and integration-related costs and $152 million in amortization of acquired intangibles. Exclusive of these items, adjusted total expenses (1) were up 12% versus the third quarter of 2021 – consistent with our planned spending in 2022. Our pre-tax profit margin expanded to 48.7%, or 53.3% on an adjusted basis (1) – both all-time highs.”

“Diligent balance sheet management keeps us positioned to navigate a rapidly evolving environment while concurrently enhancing our financial performance and returning excess capital to our owners,” added Mr. Crawford. “In late July, the board of directors approved a 10% increase in our common dividend and a $15 billion stock repurchase authorization. During the third quarter, we repurchased 21.9 million shares for $1.5 billion. We’ve also announced the redemption of the $400 million Series A Preferred stock effective November 1. Inclusive of these actions, the company’s preliminary Tier 1 Leverage Ratio at quarter-end was 6.8%, above our recently updated operating objective of 6.50% – 6.75%. This quarter’s record overall results further demonstrate the durability of our all-weather model and its ability to deliver both profitable growth and meaningful return of excess capital through the cycle.”

(1) Further details on non-GAAP financial measures and a reconciliation of such measures to GAAP reported results are included on pages 10-11 of this release.

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 the recent repurchase of nonvoting common stock, was posted on August 1, 2022.

Fall Business Update

The company has scheduled a Fall Business Update for institutional investors on Thursday, October 27, 2022. The Update, which will be held via webcast, is scheduled to run from approximately 10:00 a.m. – 11:00 a.m. PT, 1:00 p.m. – 2:00 p.m. ET. Registration for this Update is accessible at https://www.aboutschwab.com/schwabevents.

Forward-Looking Statements

This press release contains forward-looking statements relating to success with clients; strategic initiatives; investments to attract and retain talent, improve service and the client experience, expand products, services and offerings to meet client needs, diversify revenues, and drive scale and efficiency; business momentum; stockholder value; balance sheet management; financial performance; returning excess capital to stockholders; Tier 1 Leverage Ratio operating objective; and all-weather model. These forward-looking statements reflect management’s expectations as of the date hereof. Achievement of these expectations and objectives is subject to risks and uncertainties that could cause actual results to differ materially from the expressed expectations.

Important factors that may cause such differences include, but are not limited to, the company’s ability to attract and retain clients and independent investment advisors and grow those relationships and client assets; develop and launch new and enhanced products, services, and capabilities, as well as enhance its infrastructure and capacity, in a timely and successful manner; hire and retain talent; support client activity levels; successfully implement integration strategies and plans; manage expenses; and monetize client assets. Other important factors include client use of the company’s advisory solutions and other products and services; general market conditions, including equity valuations and the level of interest rates; the level and mix of client trading activity; market volatility; margin loan balances; securities lending; competitive pressures on pricing; client cash sorting; client sensitivity to rates; level of client assets, including cash balances; capital and liquidity needs and management; balance sheet positioning relative to changes in interest rates; interest earning asset mix and growth; the migration of bank deposit account balances; 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 33.9 million active brokerage accounts, 2.3 million corporate retirement plan participants, 1.7 million banking accounts, and $6.64 trillion in client assets. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, asset management, custody, and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiaries, Charles Schwab & Co., Inc., TD Ameritrade, Inc., and TD Ameritrade Clearing, Inc., (members SIPC, https://www.sipc.org), and their affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent, fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its primary banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at https://www.aboutschwab.com.

TD Ameritrade, Inc. and TD Ameritrade Clearing, Inc. are separate but affiliated companies and subsidiaries of TD Ameritrade Holding Corporation. TD Ameritrade Holding Corporation is a wholly owned subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank.

THE CHARLES SCHWAB CORPORATION

Consolidated Statements of Income

(In millions, except per share amounts)

(Unaudited)

 

 

Three Months Ended

September 30,

Nine Months Ended

September 30,

 

2022

2021

2022

2021

Net Revenues

 

 

 

 

Interest revenue

$

3,357

 

$

2,153

 

$

8,386

 

$

6,236

 

Interest expense

 

(431

)

 

(123

)

 

(733

)

 

(348

)

Net interest revenue

 

2,926

 

 

2,030

 

 

7,653

 

 

5,888

 

Asset management and administration fees (1)

 

1,047

 

 

1,101

 

 

3,167

 

 

3,164

 

Trading revenue

 

930

 

 

964

 

 

2,778

 

 

3,135

 

Bank deposit account fees

 

413

 

 

323

 

 

1,059

 

 

1,011

 

Other

 

184

 

 

152

 

 

608

 

 

614

 

Total net revenues

 

5,500

 

 

4,570

 

 

15,265

 

 

13,812

 

Expenses Excluding Interest

 

 

 

 

Compensation and benefits

 

1,476

 

 

1,303

 

 

4,448

 

 

4,051

 

Professional services

 

264

 

 

250

 

 

766

 

 

723

 

Occupancy and equipment

 

292

 

 

246

 

 

855

 

 

722

 

Advertising and market development

 

89

 

 

119

 

 

296

 

 

363

 

Communications

 

131

 

 

144

 

 

444

 

 

457

 

Depreciation and amortization

 

167

 

 

140

 

 

476

 

 

404

 

Amortization of acquired intangible assets

 

152

 

 

153

 

 

460

 

 

461

 

Regulatory fees and assessments

 

65

 

 

64

 

 

200

 

 

208

 

Other

 

187

 

 

140

 

 

530

 

 

733

 

Total expenses excluding interest

 

2,823

 

 

2,559

 

 

8,475

 

 

8,122

 

Income before taxes on income

 

2,677

 

 

2,011

 

 

6,790

 

 

5,690

 

Taxes on income

 

657

 

 

485

 

 

1,575

 

 

1,415

 

Net Income

 

2,020

 

 

1,526

 

 

5,215

 

 

4,275

 

Preferred stock dividends and other

 

136

 

 

120

 

 

401

 

 

364

 

Net Income Available to Common Stockholders

$

1,884

 

$

1,406

 

$

4,814

 

$

3,911

 

Weighted-Average Common Shares Outstanding:

 

 

 

 

Basic

 

1,887

 

 

1,888

 

 

1,892

 

 

1,885

 

Diluted

 

1,895

 

 

1,898

 

 

1,901

 

 

1,895

 

Earnings Per Common Shares Outstanding
(2):

 

 

 

 

Basic

$

1.00

 

$

.74

 

$

2.54

 

$

2.07

 

Diluted

$

.99

 

$

.74

 

$

2.53

 

$

2.06

 

(1)

No fee waivers were recognized for the three months ended September 30, 2022. Includes fee waivers of $57 million for the nine months ended September 30, 2022, and $83 million and $246 million for the three and nine months ended September 30, 2021, respectively.

(2)

The Company has voting and nonvoting common stock outstanding. As the participation rights, including dividend and liquidation rights, are identical between the voting and nonvoting stock classes, basic and diluted earnings per share are the same for each class.

THE CHARLES SCHWAB CORPORATION

Financial and Operating Highlights

(Unaudited)

 

Q3-22 % change

2022

2021

 

vs.

vs.

Third

Second

First

Fourth

Third

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

Q3-21

Q2-22

Quarter

Quarter

Quarter

Quarter

Quarter

Net Revenues

 

 

 

 

 

 

 

Net interest revenue

44

%

15

%

$

2,926

 

$

2,544

 

$

2,183

 

$

2,142

 

$

2,030

 

Asset management and administration fees

(5

) %

 

 

1,047

 

 

1,052

 

 

1,068

 

 

1,110

 

 

1,101

 

Trading revenue

(4

) %

5

%

 

930

 

 

885

 

 

963

 

 

1,017

 

 

964

 

Bank deposit account fees

28

%

17

%

 

413

 

 

352

 

 

294

 

 

304

 

 

323

 

Other

21

%

(29

) %

 

184

 

 

260

 

 

164

 

 

135

 

 

152

 

Total net revenues

20

%

8

%

 

5,500

 

 

5,093

 

 

4,672

 

 

4,708

 

 

4,570

 

Expenses Excluding Interest

 

 

 

 

 

 

 

Compensation and benefits

13

%

4

%

 

1,476

 

 

1,426

 

 

1,546

 

 

1,399

 

 

1,303

 

Professional services

6

%

2

%

 

264

 

 

258

 

 

244

 

 

271

 

 

250

 

Occupancy and equipment

19

%

(1

) %

 

292

 

 

294

 

 

269

 

 

254

 

 

246

 

Advertising and market development

(25

) %

(15

) %

 

89

 

 

105

 

 

102

 

 

122

 

 

119

 

Communications

(9

) %

(22

) %

 

131

 

 

169

 

 

144

 

 

130

 

 

144

 

Depreciation and amortization

19

%

5

%

 

167

 

 

159

 

 

150

 

 

145

 

 

140

 

Amortization of acquired intangibles assets

(1

) %

(1

) %

 

152

 

 

154

 

 

154

 

 

154

 

 

153

 

Regulatory fees and assessments

2

%

(3

) %

 

65

 

 

67

 

 

68

 

 

67

 

 

64

 

Other

34

%

 

 

187

 

 

187

 

 

156

 

 

143

 

 

140

 

Total expenses excluding interest

10

%

 

 

2,823

 

 

2,819

 

 

2,833

 

 

2,685

 

 

2,559

 

Income before taxes on income

33

%

18

%

 

2,677

 

 

2,274

 

 

1,839

 

 

2,023

 

 

2,011

 

Taxes on income

35

%

37

%

 

657

 

 

481

 

 

437

 

 

443

 

 

485

 

Net Income

32

%

13

%

$

2,020

 

$

1,793

 

$

1,402

 

$

1,580

 

$

1,526

 

Preferred stock dividends and other

13

%

(4

) %

 

136

 

 

141

 

 

124

 

 

131

 

 

120

 

Net Income Available to Common Stockholders

34

%

14

%

$

1,884

 

$

1,652

 

$

1,278

 

$

1,449

 

$

1,406

 

Earnings per common share (1):

 

 

 

 

 

 

 

Basic

35

%

15

%

$

1.00

 

$

.87

 

$

.67

 

$

.77

 

$

.74

 

Diluted

34

%

14

%

$

.99

 

$

.87

 

$

.67

 

$

.76

 

$

.74

 

Dividends declared per common share

22

%

10

%

$

.22

 

$

.20

 

$

.20

 

$

.18

 

$

.18

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

 

 

1,887

 

 

1,896

 

 

1,894

 

 

1,892

 

 

1,888

 

Diluted

 

 

 

1,895

 

 

1,904

 

 

1,905

 

 

1,902

 

 

1,898

 

Performance Measures

 

 

 

 

 

 

 

Pre-tax profit margin

 

 

 

48.7

%

 

44.6

%

 

39.4

%

 

43.0

%

 

44.0

%

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

 

 

 

25

%

 

19

%

 

12

%

 

12

%

 

12

%

Financial Condition (at quarter end, in billions)

 

 

 

 

 

 

 

Cash and cash equivalents

36

%

(28

) %

$

46.5

 

$

64.6

 

$

91.1

 

$

63.0

 

$

34.3

 

Cash and investments segregated

4

%

(18

) %

 

44.1

 

 

53.5

 

 

54.4

 

 

53.9

 

 

42.3

 

Receivables from brokerage clients — net

(15

) %

(3

) %

 

73.9

 

 

76.1

 

 

84.1

 

 

90.6

 

 

86.6

 

Available for sale securities (3)

(37

) %

(11

) %

 

236.5

 

 

265.3

 

 

272.0

 

 

390.1

 

 

377.0

 

Held to maturity securities (3)

N/M

 

(4

) %

 

96.3

 

 

100.1

 

 

105.3

 

 

 

 

 

Bank loans — net

28

%

2

%

 

40.4

 

 

39.6

 

 

37.2

 

 

34.6

 

 

31.6

 

Total assets

(5

) %

(9

) %

 

577.6

 

 

637.6

 

 

681.0

 

 

667.3

 

 

607.5

 

Bank deposits

 

(10

) %

 

395.7

 

 

442.0

 

 

465.8

 

 

443.8

 

 

395.3

 

Payables to brokerage clients

(3

) %

(4

) %

 

110.0

 

 

114.9

 

 

125.3

 

 

125.7

 

 

113.1

 

Short-term borrowings

(83

) %

(64

) %

 

0.5

 

 

1.4

 

 

4.2

 

 

4.9

 

 

3.0

 

Long-term debt

7

%

(1

) %

 

20.8

 

 

21.1

 

 

21.9

 

 

18.9

 

 

19.5

 

Stockholders’ equity

(36

) %

(17

) %

 

37.0

 

 

44.5

 

 

48.1

 

 

56.3

 

 

57.4

 

Other

 

 

 

 

 

 

 

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

9

%

 

 

35.2

 

 

35.2

 

 

34.2

 

 

33.4

 

 

32.4

 

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

10

%

(43

) %

$

193

 

$

339

 

$

209

 

$

431

 

$

176

 

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

 

 

 

0.16

%

 

0.16

%

 

0.15

%

 

0.13

%

 

0.13

%

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

 

(11

) %

 

5,523

 

 

6,227

 

 

6,578

 

 

6,102

 

 

5,549

 

Number of Trading Days

 

3

%

 

64.0

 

 

62.0

 

 

62.0

 

 

63.5

 

 

64.0

 

Revenue Per Trade
(4)

(3

) %

15

%

$

2.63

 

$

2.29

 

$

2.36

 

$

2.62

 

$

2.71

 

 

 

 

 

 

 

 

 

(1)

The Company has voting and nonvoting common stock outstanding. As the participation rights, including dividend and liquidation rights, are identical between the voting and nonvoting stock classes, basic and diluted earnings per share are the same for each class.

(2)

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

(3)

In January 2022, the Company transferred a portion of its investment securities designated as available for sale to the held to maturity category, as described in Part I – Item 1 – Note 4 of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.

(4)

Revenue per trade is calculated as trading revenue divided by DATs multiplied by the number of trading days.

N/M Not meaningful. Percentage changes greater than 200% are presented as not meaningful.

THE CHARLES SCHWAB CORPORATION

Net Interest Revenue Information

(In millions, except ratios or as noted)

(Unaudited)

 

Three Months Ended

September 30,

Nine Months Ended

September 30,

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Average

Balance

Interest

Revenue/

Expense

Average

Yield/

Rate

Average

Balance

Interest

Revenue/

Expense

Average

Yield/

Rate

Average

Balance

Interest

Revenue/

Expense

Average

Yield/

Rate

Average

Balance

Interest

Revenue/

Expense

Average

Yield/

Rate

Interest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

53,127

$

294

2.16

%

$

38,732

$

11

0.12

%

$

63,598

$

461

 

0.95

%

$

39,848

$

27

 

0.09

%

Cash and investments segregated

 

49,554

 

214

1.69

%

 

42,617

 

5

0.04

%

 

50,891

 

308

 

0.80

%

 

43,914

 

19

 

0.06

%

Receivables from brokerage clients

 

72,751

 

912

4.91

%

 

80,873

 

628

3.04

%

 

78,630

 

2,244

 

3.76

%

 

74,831

 

1,800

 

3.17

%

Available for sale securities (1,2)

 

273,968

 

1,161

1.69

%

 

362,204

 

1,187

1.30

%

 

281,897

 

3,196

 

1.51

%

 

348,477

 

3,381

 

1.29

%

Held to maturity securities (2)

 

97,568

 

345

1.41

%

 

 

 

 

100,890

 

1,062

 

1.40

%

 

 

 

 

Bank loans

 

39,984

 

300

2.99

%

 

30,235

 

161

2.12

%

 

38,238

 

717

 

2.50

%

 

27,336

 

448

 

2.18

%

Total interest-earning assets

 

586,952

 

3,226

2.17

%

 

554,661

 

1,992

1.42

%

 

614,144

 

7,988

 

1.73

%

 

534,406

 

5,675

 

1.41

%

Securities lending revenue

 

 

124

 

 

 

159

 

 

 

383

 

 

 

 

557

 

 

Other interest revenue

 

 

7

 

 

 

2

 

 

 

15

 

 

 

 

4

 

 

Total interest-earning assets

$

586,952

$

3,357

2.26

%

$

554,661

$

2,153

1.54

%

$

614,144

$

8,386

 

1.81

%

$

534,406

$

6,236

 

1.55

%

Funding sources

 

 

 

 

 

 

 

 

 

 

 

 

Bank deposits

$

420,132

$

241

0.23

%

$

384,561

$

14

0.01

%

$

440,801

$

285

 

0.09

%

$

371,974

$

40

 

0.01

%

Payables to brokerage clients

 

96,802

 

41

0.17

%

 

92,498

 

3

0.01

%

 

101,472

 

47

 

0.06

%

 

89,087

 

7

 

0.01

%

Short-term borrowings

 

708

 

4

1.95

%

 

3,485

 

3

0.34

%

 

2,656

 

12

 

0.60

%

 

2,617

 

6

 

0.32

%

Long-term debt

 

21,024

 

131

2.49

%

 

19,030

 

99

2.10

%

 

20,673

 

363

 

2.34

%

 

17,225

 

281

 

2.18

%

Total interest-bearing liabilities

 

538,666

 

417

0.31

%

 

499,574

 

119

0.09

%

 

565,602

 

707

 

0.17

%

 

480,903

 

334

 

0.09

%

Non-interest-bearing funding sources

 

48,286

 

 

 

55,087

 

 

 

48,542

 

 

 

53,503

 

 

Securities lending expense

 

 

13

 

 

 

4

 

 

 

28

 

 

 

 

16

 

 

Other interest expense

 

 

1

 

 

 

 

 

 

(2

)

 

 

 

(2

)

 

Total funding sources

$

586,952

$

431

0.29

%

$

554,661

$

123

0.09

%

$

614,144

$

733

 

0.16

%

$

534,406

$

348

 

0.09

%

Net interest revenue

 

$

2,926

1.97

%

 

$

2,030

1.45

%

 

$

7,653

 

1.65

%

 

$

5,888

 

1.46

%

(1)

Amounts have been calculated based on amortized cost.

(2)

In January 2022, the Company transferred a portion of its investment securities designated as available for sale to the held to maturity category, as described in Part I – Item 1 – Note 4 of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.

THE CHARLES SCHWAB CORPORATION

Asset Management and Administration Fees Information

(In millions, except ratios or as noted)

(Unaudited)

 

Three Months Ended

September 30,

Nine Months Ended

September 30,

 

2022

2021

2022

2021

 

Average

Client

Assets

Revenue

Average

Fee

Average

Client

Assets

Revenue

Average

Fee

Average

Client

Assets

Revenue

Average

Fee

Average

Client

Assets

Revenue

Average

Fee

Schwab money market funds before fee

waivers

$

184,834

$

132

0.28

%

$

149,508

$

112

 

0.30

%

$

158,525

$

340

 

0.29

%

$

158,749

$

348

 

0.29

%

Fee waivers

 

 

 

 

 

(83

)

 

 

 

(57

)

 

 

 

(246

)

 

Schwab money market funds

 

184,834

 

132

0.28

%

 

149,508

 

29

 

0.08

%

 

158,525

 

283

 

0.24

%

 

158,749

 

102

 

0.09

%

Schwab equity and bond funds, ETFs, and

collective trust funds (CTFs)

 

422,711

 

89

0.08

%

 

441,344

 

99

 

0.09

%

 

436,928

 

278

 

0.09

%

 

411,312

 

279

 

0.09

%

Mutual Fund OneSource® and other non-transaction fee funds

 

183,019

 

139

0.30

%

 

234,582

 

188

 

0.32

%

 

196,032

 

453

 

0.31

%

 

228,643

 

540

 

0.32

%

Other third-party mutual funds and ETFs

 

747,676

 

160

0.08

%

 

918,363

 

187

 

0.08

%

 

805,204

 

510

 

0.08

%

 

888,003

 

533

 

0.08

%

Total mutual funds, ETFs, and CTFs (1)

$

1,538,240

 

520

0.13

%

$

1,743,797

 

503

 

0.11

%

$

1,596,689

 

1,524

 

0.13

%

$

1,686,707

 

1,454

 

0.12

%

Advice solutions (1)

 

 

 

 

 

 

 

 

 

 

 

 

Fee-based

$

431,276

 

452

0.42

%

$

463,827

 

511

 

0.44

%

$

446,979

 

1,409

 

0.42

%

$

445,521

 

1,469

 

0.44

%

Non-fee-based

 

85,567

 

 

 

90,649

 

 

 

 

87,528

 

 

 

 

87,758

 

 

 

Total advice solutions

$

516,843

 

452

0.35

%

$

554,476

 

511

 

0.37

%

$

534,507

 

1,409

 

0.35

%

$

533,279

 

1,469

 

0.37

%

Other balance-based fees (2)

 

537,809

 

58

0.04

%

 

632,806

 

68

 

0.04

%

 

573,733

 

186

 

0.04

%

 

604,995

 

195

 

0.04

%

Other (3)

 

 

17

 

 

 

19

 

 

 

 

48

 

 

 

 

46

 

 

Total asset management and administration fees

 

$

1,047

 

 

$

1,101

 

 

 

$

3,167

 

 

 

$

3,164

 

 

(1)

Advice solutions include managed portfolios, specialized strategies, and customized investment advice such as Schwab Wealth AdvisoryTM, Schwab Managed PortfoliosTM, Managed Account Select®, Schwab Advisor Network®, Windhaven Strategies®, ThomasPartners® Strategies, Schwab Index Advantage® advised retirement plan balances, Schwab Intelligent Portfolios®, Institutional Intelligent Portfolios®, Schwab Intelligent Portfolios Premium®, TD Ameritrade AdvisorDirect®, Essential Portfolios, Selective Portfolios, and Personalized Portfolios; as well as legacy non-fee advice solutions including Schwab Advisor Source and certain retirement plan balances. Average client assets for advice solutions may also include the asset balances contained in the mutual fund and/or ETF categories listed above. For the total end of period view, please see the Monthly Activity Report.

(2)

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

(3)

Includes miscellaneous service and transaction fees relating to mutual funds and ETFs that are not balance-based.

THE CHARLES SCHWAB CORPORATION

Growth in Client Assets and Accounts

(Unaudited)

 

Q3-22 % Change

2022

2021

 

vs.

vs.

Third

Second

First

Fourth

Third

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

Q3-21

Q2-22

Quarter

Quarter

Quarter

Quarter

Quarter

Assets in client accounts

 

 

 

 

 

 

 

Schwab One®, certain cash equivalents and bank deposits

 

(9

) %

$

501.4

 

$

552.5

 

$

584.3

 

$

566.1

 

$

503.9

 

Bank deposit account balances

(9

) %

(10

) %

 

139.6

 

 

155.6

 

 

154.8

 

 

158.5

 

 

153.3

 

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

 

 

 

 

 

 

 

Money market funds (1)

43

%

33

%

 

211.1

 

 

159.2

 

 

143.1

 

 

146.5

 

 

147.7

 

Equity and bond funds and CTFs (2)

(15

) %

(5

) %

 

141.5

 

 

149.5

 

 

175.8

 

 

183.1

 

 

167.4

 

Total proprietary mutual funds and CTFs

12

%

14

%

 

352.6

 

 

308.7

 

 

318.9

 

 

329.6

 

 

315.1

 

Mutual Fund Marketplace® (3)

 

 

 

 

 

 

 

Mutual Fund OneSource® and other non-transaction fee funds

(23

) %

(8

) %

 

181.5

 

 

196.6

 

 

235.5

 

 

234.9

 

 

234.7

 

Mutual fund clearing services

(36

) %

(5

) %

 

175.3

 

 

184.4

 

 

235.4

 

 

254.2

 

 

271.9

 

Other third-party mutual funds (4)

(24

) %

(7

) %

 

1,105.7

 

 

1,189.4

 

 

1,383.3

 

 

1,497.7

 

 

1,450.1

 

Total Mutual Fund Marketplace

(25

) %

(7

) %

 

1,462.5

 

 

1,570.4

 

 

1,854.2

 

 

1,986.8

 

 

1,956.7

 

Total mutual fund assets

(20

) %

(3

) %

 

1,815.1

 

 

1,879.1

 

 

2,173.1

 

 

2,316.4

 

 

2,271.8

 

Exchange-traded funds (ETFs)

 

 

 

 

 

 

 

Proprietary ETFs (2)

(8

) %

(2

) %

 

232.2

 

 

237.7

 

 

268.5

 

 

271.8

 

 

251.6

 

Other third-party ETFs

(8

) %

(3

) %

 

1,094.6

 

 

1,129.0

 

 

1,270.6

 

 

1,296.4

 

 

1,183.7

 

Total ETF assets

(8

) %

(3

) %

 

1,326.8

 

 

1,366.7

 

 

1,539.1

 

 

1,568.2

 

 

1,435.3

 

Equity and other securities

(18

) %

(4

) %

 

2,451.3

 

 

2,548.5

 

 

3,131.1

 

 

3,259.8

 

 

2,976.7

 

Fixed income securities

35

%

19

%

 

481.5

 

 

403.5

 

 

360.7

 

 

356.4

 

 

356.8

 

Margin loans outstanding

(15

) %

(3

) %

 

(71.5

)

 

(73.4

)

 

(81.0

)

 

(87.4

)

 

(83.8

)

Total client assets

(13

) %

(3

) %

$

6,644.2

 

$

6,832.5

 

$

7,862.1

 

$

8,138.0

 

$

7,614.0

 

Client assets by business

 

 

 

 

 

 

 

Investor Services

(15

) %

(3

) %

$

3,508.1

 

$

3,598.7

 

$

4,235.5

 

$

4,400.7

 

$

4,137.7

 

Advisor Services

(10

) %

(3

) %

 

3,136.1

 

 

3,233.8

 

 

3,626.6

 

 

3,737.3

 

 

3,476.3

 

Total client assets

(13

) %

(3

) %

$

6,644.2

 

$

6,832.5

 

$

7,862.1

 

$

8,138.0

 

$

7,614.0

 

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

 

 

 

 

 

 

 

Net new assets by business

 

 

 

 

 

 

 

Investor Services (5)

(5

) %

N/M

 

$

55.1

 

$

8.8

 

$

54.6

 

$

33.4

 

$

57.9

 

Advisor Services

(27

) %

72

%

 

59.5

 

 

34.6

 

 

65.9

 

 

101.2

 

 

81.1

 

Total net new assets

(18

) %

164

%

$

114.6

 

$

43.4

 

$

120.5

 

$

134.6

 

$

139.0

 

Net market gains (losses)

 

 

 

(302.9

)

 

(1,073.0

)

 

(396.4

)

 

389.4

 

 

(99.8

)

Net growth (decline)

 

 

$

(188.3

)

$

(1,029.6

)

$

(275.9

)

$

524.0

 

$

39.2

 

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

(24

) %

(12

) %

 

897

 

 

1,014

 

 

1,202

 

 

1,318

 

 

1,178

 

Client accounts (in thousands)

 

 

 

 

 

 

 

Active brokerage accounts (6)

4

%

 

 

33,875

 

 

33,896

 

 

33,577

 

 

33,165

 

 

32,675

 

Banking accounts

7

%

2

%

 

1,696

 

 

1,669

 

 

1,641

 

 

1,614

 

 

1,580

 

Corporate retirement plan participants

4

%

1

%

 

2,305

 

 

2,275

 

 

2,246

 

 

2,200

 

 

2,207

 

 

 

 

 

 

 

 

 

(1)

Total client assets in purchased money market funds are located at: https://www.aboutschwab.com/investor-relations.

(2)

Includes balances held on and off the Schwab platform. As of September 30, 2022, off-platform equity and bond funds, CTFs, and ETFs were $20.7 billion, $4.5 billion, and $89.6 billion, respectively.

(3)

Excludes all proprietary mutual funds and ETFs.

(4)

As of September 30, 2022, third-party money funds were $3.6 billion.

(5)

Second quarter of 2022 includes an outflow of $20.8 billion from a mutual fund clearing services client. Fourth quarter of 2021 includes outflows of $27.6 billion from mutual fund clearing services clients.

(6)

Third quarter of 2022 includes the company-initiated closure of approximately 152 thousand low-balance accounts.

N/M Not meaningful. Percentage changes greater than 200% are presented as not meaningful.

The Charles Schwab Corporation Monthly Activity Report For September 2022

 

 

2021

 

 

 

2022

 

 

 

 

 

 

 

 

Change

 

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Mo.

Yr.

Market Indices (at month end)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dow Jones Industrial Average®

33,844

 

35,820

 

34,484

 

36,338

 

35,132

 

33,893

 

34,678

 

32,977

 

32,990

 

30,775

 

32,845

 

31,510

 

28,726

 

(9

)%

(15

)%

Nasdaq Composite®

14,449

 

15,498

 

15,538

 

15,645

 

14,240

 

13,751

 

14,221

 

12,335

 

12,081

 

11,029

 

12,391

 

11,816

 

10,576

 

(10

)%

(27

)%

Standard & Poor’s® 500

4,308

 

4,605

 

4,567

 

4,766

 

4,516

 

4,374

 

4,530

 

4,132

 

4,132

 

3,785

 

4,130

 

3,955

 

3,586

 

(9

)%

(17

)%

Client Assets (in billions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning Client Assets

7,838.2

 

7,614.0

 

7,982.3

 

7,918.3

 

8,138.0

 

7,803.8

 

7,686.6

 

7,862.1

 

7,284.4

 

7,301.7

 

6,832.5

 

7,304.8

 

7,127.6

 

 

 

Net New Assets (1)

42.9

 

22.9

 

31.4

 

80.3

 

33.6

 

40.6

 

46.3

 

(9.2

)

32.8

 

19.8

 

31.5

 

43.3

 

39.8

 

(8

)%

(7

)%

Net Market Gains (Losses)

(267.1

)

345.4

 

(95.4

)

139.4

 

(367.8

)

(157.8

)

129.2

 

(568.5

)

(15.5

)

(489.0

)

440.8

 

(220.5

)

(523.2

)

 

 

Total Client Assets (at month end)

7,614.0

 

7,982.3

 

7,918.3

 

8,138.0

 

7,803.8

 

7,686.6

 

7,862.1

 

7,284.4

 

7,301.7

 

6,832.5

 

7,304.8

 

7,127.6

 

6,644.2

 

(7

)%

(13

)%

Core Net New Assets (2)

42.9

 

36.8

 

45.1

 

80.3

 

33.6

 

40.6

 

46.3

 

(9.2

)

32.8

 

40.6

 

31.5

 

43.3

 

39.8

 

(8

)%

(7

)%

Receiving Ongoing Advisory Services (at month end)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor Services

530.1

 

548.3

 

543.1

 

559.2

 

541.9

 

533.7

 

538.9

 

509.3

 

513.0

 

483.8

 

514.8

 

499.2

 

466.6

 

(7

)%

(12

)%

Advisor Services (3)

3,253.2

 

3,399.8

 

3,374.3

 

3,505.2

 

3,382.4

 

3,342.5

 

3,404.6

 

3,190.5

 

3,213.8

 

3,040.4

 

3,222.5

 

3,150.5

 

2,950.9

 

(6

)%

(9

)%

Client Accounts (at month end, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active Brokerage Accounts (4)

32,675

 

32,796

 

32,942

 

33,165

 

33,308

 

33,421

 

33,577

 

33,759

 

33,822

 

33,896

 

33,934

 

33,984

 

33,875

 

 

4

%

Banking Accounts

1,580

 

1,593

 

1,608

 

1,614

 

1,628

 

1,641

 

1,641

 

1,652

 

1,658

 

1,669

 

1,680

 

1,690

 

1,696

 

 

7

%

Corporate Retirement Plan Participants

2,207

 

2,213

 

2,198

 

2,200

 

2,216

 

2,235

 

2,246

 

2,261

 

2,275

 

2,275

 

2,267

 

2,285

 

2,305

 

1

%

4

%

Client Activity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Brokerage Accounts (in thousands)

374

 

397

 

448

 

473

 

426

 

356

 

420

 

386

 

323

 

305

 

278

 

332

 

287

 

(14

)%

(23

)%

Client Cash as a Percentage of Client Assets (5)

10.8

%

10.4

%

10.5

%

10.9

%

11.3

%

11.5

%

11.4

%

11.9

%

12.0

%

12.8

%

12.0

%

12.1

%

12.9

%

80 bp

210 bp

Derivative Trades as a Percentage of Total Trades

23.1

%

22.5

%

23.4

%

23.0

%

22.4

%

24.0

%

22.4

%

21.9

%

22.6

%

22.3

%

24.2

%

23.3

%

23.6

%

30 bp

50 bp

Selected Average Balances (in millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Interest-Earning Assets (6)

565,379

 

574,181

 

584,362

 

605,709

 

622,997

 

629,042

 

644,768

 

636,668

 

620,157

 

614,100

 

605,751

 

586,154

 

568,351

 

(3

)%

1

%

Average Margin Balances

81,705

 

83,835

 

87,311

 

88,328

 

86,737

 

84,354

 

81,526

 

83,762

 

78,841

 

74,577

 

72,177

 

72,855

 

73,224

 

1

%

(10

)%

Average Bank Deposit Account Balances (7)

152,330

 

154,040

 

153,877

 

154,918

 

157,706

 

153,824

 

155,657

 

152,653

 

154,669

 

155,306

 

154,542

 

148,427

 

141,198

 

(5

)%

(7

)%

Mutual Fund and Exchange-Traded Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Buys (Sells) (8,9) (in millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equities

7,596

 

8,840

 

13,099

 

11,519

 

7,384

 

9,371

 

14,177

 

(786

)

1,889

 

(1,586

)

5,589

 

10,465

 

(2,662

)

 

 

Hybrid

335

 

81

 

308

 

(1,207

)

(367

)

(478

)

(497

)

(529

)

(1,718

)

(1,054

)

(2,041

)

(783

)

(938

)

 

 

Bonds

6,232

 

4,425

 

4,097

 

5,600

 

1,804

 

(1,973

)

(7,851

)

(6,933

)

(6,121

)

(5,631

)

729

 

(141

)

(5,801

)

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual Funds (8)

(308

)

302

 

189

 

(2,859

)

(4,961

)

(6,318

)

(11,888

)

(16,657

)

(20,761

)

(16,258

)

(8,674

)

(7,117

)

(15,200

)

 

 

Exchange-Traded Funds (9)

14,471

 

13,044

 

17,315

 

18,771

 

13,782

 

13,238

 

17,717

 

8,409

 

14,811

 

7,987

 

12,951

 

16,658

 

5,799

 

 

 

Money Market Funds

(1,512

)

(451

)

(1,725

)

(144

)

(1,984

)

(1,086

)

(1,344

)

(3,430

)

7,106

 

11,544

 

13,711

 

19,702

 

17,018

 

 

 

Note: Certain supplemental details related to the information above can be found at: https://www.aboutschwab.com/financial-reports.

(1)

June 2022 includes an outflow of $20.8 billion from a mutual fund clearing services client. November 2021 includes an outflow of $13.7 billion from a mutual fund clearing services client. October 2021 includes an outflow of $13.9 billion from a mutual fund clearing services client.

(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)

September 2022 includes the company-initiated closure of approximately 152 thousand low-balance accounts.

(5)

Schwab One®, certain cash equivalents, bank deposits, third-party bank deposit accounts, and money market fund balances as a percentage of total client assets.

(6)

Represents average total interest-earning assets on the company’s balance sheet.

(7)

Represents average TD Ameritrade clients’ uninvested cash sweep account balances held in deposit accounts at third-party financial institutions.

(8)

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.

(9)

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

THE CHARLES SCHWAB CORPORATION

Non-GAAP Financial Measures

(In millions, except ratios and per share amounts)

(Unaudited)

In addition to disclosing financial results in accordance with generally accepted accounting principles in the U.S. (GAAP), Schwab’s third quarter earnings release contains references to the non-GAAP financial measures described below. We believe these non-GAAP financial measures provide useful supplemental information about the financial performance of the Company, and facilitate meaningful comparison of Schwab’s results in the current period to both historic and future results. These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may not be comparable to non-GAAP financial measures presented by other companies.

Schwab’s use of non-GAAP measures is reflective of certain adjustments made to GAAP financial measures as described below.

Non-GAAP Adjustment or Measure

Definition

Usefulness to Investors and Uses by Management

Acquisition and integration-related costs and amortization of acquired intangible assets

Schwab adjusts certain GAAP financial measures to exclude the impact of acquisition and integration-related costs incurred as a result of the Company’s acquisitions, amortization of acquired intangible assets, and, where applicable, the income tax effect of these expenses.

 

Adjustments made to exclude amortization of acquired intangible assets are reflective of all acquired intangible assets, which were recorded as part of purchase accounting. These acquired intangible assets contribute to the Company’s revenue generation. Amortization of acquired intangible assets will continue in future periods over their remaining useful lives.

We exclude acquisition and integration-related costs and amortization of acquired intangible assets for the purpose of calculating certain non-GAAP measures because we believe doing so provides additional transparency of Schwab’s ongoing operations, and is useful in both evaluating the operating performance of the business and facilitating comparison of results with prior and future periods.

 

Acquisition and integration-related costs fluctuate based on the timing of acquisitions and integration activities, thereby limiting comparability of results among periods, and are not representative of the costs of running the Company’s ongoing business. Amortization of acquired intangible assets is excluded because management does not believe it is indicative of the Company’s underlying operating performance.

Return on tangible common equity

Return on tangible common equity represents annualized adjusted net income available to common stockholders as a percentage of average tangible common equity. Tangible common equity represents common equity less goodwill, acquired intangible assets — net, and related deferred tax liabilities.

Acquisitions typically result in the recognition of significant amounts of goodwill and acquired intangible assets. We believe return on tangible common equity may be useful to investors as a supplemental measure to facilitate assessing capital efficiency and returns relative to the composition of Schwab’s balance sheet.

The Company also uses adjusted diluted EPS and return on tangible common equity as components of performance criteria for employee bonus and certain executive management incentive compensation arrangements. The Compensation Committee of CSC’s Board of Directors maintains discretion in evaluating performance against these criteria.

THE CHARLES SCHWAB CORPORATION

Non-GAAP Financial Measures

(In millions, except ratios and per share amounts)

(Unaudited)

 

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

 

Three Months Ended September 30,

Nine Months Ended September 30,

 

2022

2021

2022

2021

 

Total

Expenses

Excluding

Interest

Net

Income

Total

Expenses

Excluding

Interest

Net

Income

Total

Expenses

Excluding

Interest

Net

Income

Total

Expenses

Excluding

Interest

Net

Income

Total expenses excluding interest (GAAP),

Net income (GAAP)

$

2,823

 

$

2,020

 

$

2,559

 

$

1,526

 

$

8,475

 

$

5,215

 

$

8,122

 

$

4,275

 

Acquisition and integration-related costs (1)

 

(101

)

 

101

 

 

(104

)

 

104

 

 

(291

)

 

291

 

 

(367

)

 

367

 

Amortization of acquired intangible assets

 

(152

)

 

152

 

 

(153

)

 

153

 

 

(460

)

 

460

 

 

(461

)

 

461

 

Income tax effects (2)

 

N/A

 

 

(62

)

 

N/A

 

 

(61

)

 

N/A

 

 

(183

)

 

N/A

 

 

(208

)

Adjusted total expenses (non-GAAP),

Adjusted net income (non-GAAP)

$

2,570

 

$

2,211

 

$

2,302

 

$

1,722

 

$

7,724

 

$

5,783

 

$

7,294

 

$

4,895

 

(1)

Acquisition and integration-related costs for the three and nine months ended September 30, 2022 primarily consist of $57 million and $166 million of compensation and benefits, $36 million and $102 million of professional services, and $6 million and $14 million of occupancy and equipment. Acquisition and integration-related costs for the three and six months ended September 30, 2021 primarily consist of $58 million and $227 million of compensation and benefits, $35 million and $99 million of professional services, and $7 million and $30 million of occupancy and equipment.

(2)

The income tax effects of the non-GAAP adjustments are determined using an effective tax rate reflecting the exclusion of non-deductible acquisition costs and are used to present the acquisition and integration-related costs and amortization of acquired intangible assets on an after-tax basis.

N/A Not applicable.

 

Three Months Ended September 30,

Nine Months Ended September 30,

 

2022

2021

2022

2021

 

Amount

% of

Total Net

Revenues

Amount

% of

Total Net

Revenues

Amount

% of

Total Net

Revenues

Amount

% of

Total Net

Revenues

Income before taxes on income (GAAP),

Pre-tax profit margin (GAAP)

$

2,677

48.7

%

$

2,011

44.0

%

$

6,790

44.5

%

$

5,690

41.2

%

Acquisition and integration-related costs

 

101

1.8

%

 

104

2.3

%

 

291

1.9

%

 

367

2.7

%

Amortization of acquired intangible assets

 

152

2.8

%

 

153

3.3

%

 

460

3.0

%

 

461

3.3

%

Adjusted income before taxes on income (non-GAAP),

Adjusted pre-tax profit margin (non-GAAP)

$

2,930

53.3

%

$

2,268

49.6

%

$

7,541

49.4

%

$

6,518

47.2

%

 

Three Months Ended September 30,

Nine Months Ended September 30,

 

2022

2021

2022

2021

 

Amount

Diluted

EPS

Amount

Diluted

EPS

Amount

Diluted

EPS

Amount

Diluted

EPS

Net income available to common stockholders (GAAP),

Earnings per common share — diluted (GAAP)

$

1,884

 

$

.99

 

$

1,406

 

$

.74

 

$

4,814

 

$

2.53

 

$

3,911

 

$

2.06

 

Acquisition and integration-related costs

 

101

 

 

.05

 

 

104

 

 

.05

 

 

291

 

 

.15

 

 

367

 

 

.19

 

Amortization of acquired intangible assets

 

152

 

 

.08

 

 

153

 

 

.08

 

 

460

 

 

.24

 

 

461

 

 

.24

 

Income tax effects

 

(62

)

 

(.02

)

 

(61

)

 

(.03

)

 

(183

)

 

(.09

)

 

(208

)

 

(.10

)

Adjusted net income available to common stockholders

(non-GAAP), Adjusted diluted EPS (non-GAAP)

$

2,075

 

$

1.10

 

$

1,602

 

$

.84

 

$

5,382

 

$

2.83

 

$

4,531

 

$

2.39

 

 

Three Months Ended September 30,

Nine Months Ended September 30,

 

2022

2021

2022

2021

Return on average common stockholders’ equity (GAAP)

 

25

%

 

12

%

 

18

%

 

11

%

Average common stockholders’ equity

$

30,282

 

$

47,492

 

$

36,526

 

$

47,908

 

Less: Average goodwill

 

(11,951

)

 

(11,952

)

 

(11,952

)

 

(11,952

)

Less: Average acquired intangible assets — net

 

(8,999

)

 

(9,609

)

 

(9,151

)

 

(9,762

)

Plus: Average deferred tax liabilities related to goodwill

and acquired intangible assets — net

 

1,848

 

 

1,895

 

 

1,867

 

 

1,913

 

Average tangible common equity

$

11,180

 

$

27,826

 

$

17,290

 

$

28,107

 

Adjusted net income available to common stockholders (1)

$

2,075

 

$

1,602

 

$

5,382

 

$

4,531

 

Return on tangible common equity (non-GAAP)

 

74

%

 

23

%

 

42

%

 

21

%

(1)

See table above for the reconciliation of net income available to common stockholders to adjusted net income available to common stockholders (non-GAAP).

 

Source: The Charles Schwab Corporation