Schwab Reports Monthly Activity Highlights

Mar 14, 2024 08:45 am
WESTLAKE, Texas -- 

The Charles Schwab Corporation released its Monthly Activity Report today. Company highlights for the month of February 2024 include:

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240314277581/en/

  • Core net new assets brought to the company by new and existing clients totaled $33.4 billion. Net new assets excluding mutual fund clearing totaled $31.1 billion.
  • Total client assets were $8.88 trillion as of month-end February, up 20% from February 2023 and up 4% versus January 2024.
  • Transactional sweep cash ended February 2024 at $403.2 billion, representing a decrease of $2.9 billion versus the prior month.
  • With the company’s diversified financial model benefiting from rising equity markets and stronger client trading activity to start the year, the company anticipates first quarter sequential revenue growth of approximately 5% to 6% and adjusted(1) pre-tax profit margin expansion of nearly four percentage points versus the fourth quarter as the full impact of the late 2023 incremental cost savings are realized.

(1)

Adjusted pre-tax profit margin is calculated as total net revenues less adjusted total expenses, which exclude acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs, as a percentage of total net revenues. 1Q24 GAAP pre-tax profit margin is currently expected to expand by more than 900 basis points versus 4Q23. This sequential improvement is driven by a combination of business performance and lower expected non-GAAP adjustments during the first quarter of 2024. 4Q23 adjustments totaled $413 million, including $216 million in pre-tax restructuring costs.

Forward-Looking Statements

This press release contains forward-looking statements relating to first quarter revenue and adjusted pre-tax profit margin. These forward-looking statements reflect management’s expectations as of the date hereof. Achievement of these expectations 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, client use of the company’s advisory solutions and other products and services; general market conditions, including the level of interest rates and equity valuations; client cash allocation decisions; client sensitivity to rates; level of client assets, including cash balances; competitive pressures on pricing; balance sheet positioning relative to changes in interest rates; interest earning asset mix and growth; the level and mix of client trading activity; market volatility; securities lending; and margin loan balances. Other important factors include the company’s ability to support client activity levels, monetize client assets, and manage expenses; developments in litigation or regulatory matters; 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 35.1 million active brokerage accounts, 5.3 million workplace plan participant accounts, 1.9 million banking accounts, and $8.88 trillion in client assets as of February 29, 2024. 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 LLC. TD Ameritrade Holding LLC 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 Monthly Activity Report For February 2024
 

2023

 

2024

 

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®

32,657

 

33,274

 

34,098

 

32,908

 

34,408

 

35,560

 

34,722

 

33,508

 

33,053

 

35,951

 

37,690

 

38,150

 

38,996

 

2

%

19

%

Nasdaq Composite®

11,456

 

12,222

 

12,227

 

12,935

 

13,788

 

14,346

 

14,035

 

13,219

 

12,851

 

14,226

 

15,011

 

15,164

 

16,092

 

6

%

40

%

Standard & Poor’s® 500

3,970

 

4,109

 

4,169

 

4,180

 

4,450

 

4,589

 

4,508

 

4,288

 

4,194

 

4,568

 

4,770

 

4,846

 

5,096

 

5

%

28

%

Client Assets (in billions of dollars)
Beginning Client Assets

7,480.6

 

7,380.2

 

7,580.0

 

7,631.5

 

7,650.2

 

8,015.8

 

8,241.0

 

8,094.7

 

7,824.5

 

7,653.4

 

8,180.6

 

8,516.6

 

8,558.1

 

Net New Assets (1)

41.7

 

72.9

 

13.6

 

24.6

 

33.8

 

12.9

 

8.1

 

27.2

 

5.0

 

19.2

 

42.1

 

14.8

 

31.7

 

114

%

(24

%)

Net Market (Losses) Gains

(142.1

)

126.9

 

37.9

 

(5.9

)

331.8

 

212.3

 

(154.4

)

(297.4

)

(176.1

)

508.0

 

293.9

 

26.7

 

289.7

 

Total Client Assets (at month end)

7,380.2

 

7,580.0

 

7,631.5

 

7,650.2

 

8,015.8

 

8,241.0

 

8,094.7

 

7,824.5

 

7,653.4

 

8,180.6

 

8,516.6

 

8,558.1

 

8,879.5

 

4

%

20

%

Core Net New Assets (1,2)

41.7

 

53.9

 

(2.3

)

20.7

 

33.8

 

13.7

 

4.9

 

27.1

 

11.3

 

21.7

 

43.1

 

17.2

 

33.4

 

94

%

(20

%)

Receiving Ongoing Advisory Services (at month end)
Investor Services

515.5

 

526.2

 

530.7

 

526.3

 

547.5

 

560.6

 

552.2

 

533.0

 

522.2

 

557.0

 

581.4

 

584.1

 

601.8

 

3

%

17

%

Advisor Services (3)

3,289.6

 

3,369.3

 

3,394.9

 

3,377.8

 

3,527.8

 

3,619.8

 

3,554.2

 

3,448.0

 

3,380.3

 

3,604.4

 

3,757.4

 

3,780.4

 

3,902.5

 

3

%

19

%

Client Accounts (at month end, in thousands)
Active Brokerage Accounts

34,010

 

34,120

 

34,248

 

34,311

 

34,382

 

34,434

 

34,440

 

34,540

 

34,571

 

34,672

 

34,838

 

35,017

 

35,127

 

-

 

3

%

Banking Accounts

1,733

 

1,746

 

1,757

 

1,768

 

1,781

 

1,792

 

1,798

 

1,799

 

1,812

 

1,825

 

1,838

 

1,856

 

1,871

 

1

%

8

%

Workplace Plan Participant Accounts (4)

4,839

 

4,845

 

4,869

 

4,962

 

5,003

 

5,030

 

5,037

 

5,141

 

5,212

 

5,212

 

5,221

 

5,226

 

5,268

 

1

%

9

%

Client Activity
New Brokerage Accounts (in thousands)

320

 

378

 

331

 

314

 

315

 

303

 

311

 

280

 

284

 

286

 

340

 

366

 

345

 

(6

%)

8

%

Client Cash as a Percentage of Client Assets (5,6)

11.6

%

11.2

%

10.8

%

10.9

%

10.5

%

10.2

%

10.4

%

10.8

%

11.2

%

10.7

%

10.5

%

10.5

%

10.2

%

(30) bp (140) bp
Derivative Trades as a Percentage of Total Trades

23.5

%

22.8

%

23.4

%

23.5

%

23.9

%

23.0

%

24.4

%

24.2

%

23.2

%

23.1

%

21.8

%

21.8

%

22.2

%

40 bp (130) bp
Selected Average Balances (in millions of dollars)
Average Interest-Earning Assets (7)

503,122

 

497,627

 

493,215

 

483,438

 

479,752

 

466,659

 

449,483

 

444,864

 

438,522

 

439,118

 

446,305

 

443,694

 

434,822

 

(2

%)

(14

%)

Average Margin Balances

60,575

 

60,848

 

60,338

 

60,250

 

61,543

 

63,040

 

64,226

 

64,014

 

63,946

 

61,502

 

62,309

 

61,368

 

63,600

 

4

%

5

%

Average Bank Deposit Account Balances (8)

115,816

 

109,392

 

104,775

 

103,149

 

102,917

 

102,566

 

101,928

 

100,404

 

97,893

 

94,991

 

95,518

 

95,553

 

92,075

 

(4

%)

(20

%)

Mutual Fund and Exchange-Traded Fund
Net Buys (Sells) (9,10) (in millions of dollars)
Equities

5,850

 

(3,234

)

1,126

 

(1,366

)

9,190

 

7,423

 

(278

)

675

 

(3,039

)

6,099

 

7,903

 

8,182

 

7,624

 

Hybrid

47

 

(1,641

)

(462

)

(889

)

(903

)

(407

)

(1,037

)

(828

)

(1,457

)

(1,466

)

(1,596

)

(501

)

(1,330

)

Bonds

4,281

 

6,158

 

2,575

 

2,029

 

3,302

 

2,515

 

4,696

 

2,723

 

1,094

 

255

 

6,104

 

7,510

 

9,883

 

Net Buy (Sell) Activity (in millions of dollars)
Mutual Funds (9)

(2,338

)

(7,423

)

(4,904

)

(7,157

)

(4,485

)

(3,333

)

(6,476

)

(5,853

)

(12,245

)

(9,267

)

(7,406

)

(966

)

(1,348

)

Exchange-Traded Funds (10)

12,516

 

8,706

 

8,143

 

6,931

 

16,074

 

12,864

 

9,857

 

8,423

 

8,843

 

14,155

 

19,817

 

16,157

 

17,525

 

Money Market Funds

23,347

 

27,106

 

6,291

 

15,256

 

9,112

 

7,911

 

16,869

 

13,388

 

16,976

 

11,670

 

7,745

 

11,717

 

10,129

 

 

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

(1)

Unless otherwise noted, differences between net new assets and core net new assets are net flows from off-platform Schwab Bank Retail CDs - including March 2023 which reflects inflows of $19.0 billion from off-platform Schwab Bank Retail CDs issued year-to-date through March 31, 2023. Additionally, 2023 includes outflows from a large international relationship of $0.8 billion in September, $6.2 billion in October, $5.4 billion in November, and $0.6 billion in December, and an inflow of $12.0 billion from a mutual fund clearing services client in April.

(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, and activity from off-platform Schwab Bank Retail CDs. These flows may span multiple reporting periods.

(3)

Excludes Retirement Business Services.

(4)

Beginning October 2023, Retirement Plan Participants was expanded to include accounts in Stock Plan Services, Designated Brokerage Services, and Retirement Business Services. Participants may be enrolled in services in more than one Workplace business. Prior periods have been recast to reflect this change.

(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)

Beginning July 2023, client cash as a percentage of client assets excludes brokered CDs issued by Charles Schwab Bank. Prior periods have been recast to reflect this change.

(7)

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

(8)

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

(9)

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.

(10)

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

 

MEDIA:
Mayura Hooper
Charles Schwab
Phone: 415-667-1525

INVESTORS/ANALYSTS:
Jeff Edwards
Charles Schwab
Phone: 415-667-1524