Exhibit 99.1
FOR IMMEDIATE RELEASE
| CONTACTS: | Media | Glen Mathison | (415) 636-5448 | |||||||||
| Investors/Analysts | Rich Fowler | (415) 636-9869 |
SCHWAB REPORTS QUARTERLY RESULTS
NET NEW ASSETS TOTAL $28.1 BILLION
SAN FRANCISCO, April 17, 2006 – The Charles Schwab Corporation announced today that its net income for the quarter ended March 31, 2006 was $243 million. In comparison, the company reported net income of $187 million for the fourth quarter of 2005 and net income of $145 million for the first quarter of 2005.
| Three Months Ended —March 31,— | % Change | ||||||||||
Financial Highlights | 2006 | 2005 | |||||||||
Net revenues (in millions) | $ | 1,279 | $ | 1,059 | 21 | % | |||||
Net income (in millions) | $ | 243 | $ | 145 | 68 | % | |||||
Diluted earnings per share | $ | .19 | $ | .11 | 73 | % | |||||
Pre-tax profit margin (1) | 31.2 | % | 23.2 | % | |||||||
Return on stockholders’ equity | 21 | % | 13 | % | |||||||
| (1) | From continuing operations. |
Chairman and CEO Charles Schwab commented, “Our focus on building stronger relationships with our clients – providing the help and investment solutions they want – is working. We also believe our ongoing national advertising campaign is helping to strengthen our business momentum. Clients opened 188,000 new brokerage accounts during the first quarter of 2006, 25% higher than a year ago, while net new assets totaled $28.1 billion, up 75% from a year ago. I’m proud that we ended March with a record $1.281 trillion in total client assets, up 19% from a year ago. Our progress in the first three months of 2006 is also reflected in financial performance that includes 21% net revenue growth and the best quarterly earnings since we began our turnaround in mid-2004.”
CFO Chris Dodds said, “Improved client asset flows, higher equity valuations, and increased trading activity all contributed to making our first quarter 2006 net revenues the highest in over five years. Cost discipline across the company enabled us to limit expense growth to just 8%, and we achieved a record 31.2% pre-tax profit margin for the quarter even after incurring $25 million in severance charges. Our first quarter net income reached $243 million, up 68% from a year ago, which gives us a robust start towards continued financial progress in 2006. That start includes an ongoing focus on capital management – just $23 million in capital expenditures and another $154 million in share repurchases helped us to achieve a 21% return on equity for the quarter.”
Business highlights for the first quarter (data as of quarter-end unless otherwise noted):
Advised Investing
| • | For accounts at the company with an ongoing advice component (includes accounts enrolled in Schwab advice offers, accounts managed by independent investment advisors (IAs), and U.S. Trust® accounts): |
| • | Net new client assets during the quarter = $18.6 billion. |
| • | Total assets = a record $637 billion, up 23% year-over-year. |
| • | Total number of accounts = 1.7 million. |
Schwab Investor Services Business (includes Individual Investor and Corporate and Retirement Services businesses)
| • | Number of brokerage accounts enrolled in Schwab advice offers = 196,000, up 31% year-over-year. |
| • | Net new assets into Schwab Corporate and Retirement Services retirement plan offerings during the quarter = $4.1 billion. |
| • | Total client assets in employer-sponsored retirement plans at Schwab = $159 billion, up 23% year-over-year. |
| • | Initiated direct-dial callback capabilities for clients, enabling them to work with the same phone representative in resolving related questions or service matters, thereby improving timeliness and quality of service. |
| • | Launched the Client Concierge Service, which provides a single point-of-contact for new clients to help them establish an account and learn about the products and services available at Schwab. |
Schwab Institutional® Business
| • | Total client assets associated with Schwab Institutional = $439 billion, up 25% year-over-year. |
| • | Client assets new to the Schwab Advisor Network® program during the quarter = $1.5 billion, down 14% year-over-year. |
| • | Client assets at Schwab associated with IA referral programs = $31.4 billion, up 22% year-over-year. |
| • | Opened new sales offices in Cincinnati and Los Angeles. |
| • | Introduced the IMPACT Awards™, an industry-wide program designed to honor advisors and firms that have advanced the independent advisory industry through their visionary leadership, operational excellence and technological innovation. The 2006 winners will be announced at the IMPACT® conference later this year. |
U.S. Trust Business
| • | Total client assets at U.S. Trust = $156 billion, up 12% year-over-year. |
| • | Total referrals from Schwab to U.S. Trust were over 280, down 9% year-over-year. |
| • | Client assets at U.S. Trust associated with the referral program = $6.3 billion, up 29% year-over-year. |
| • | First quarter 2006 net purchases of Excelsior Funds through Schwab and third party platforms totaled approximately $740 million, up 86% year-over-year. |
| • | Simplified organizational structure, strengthened strategic focus, and improved operating efficiencies by selling its Planned Giving Services unit, consolidating mutual fund administration under Charles Schwab Investment Management, and consolidating its bank charters into a single national bank. |
Products and Infrastructure
| • | Total client assets held in third-party Mutual Fund OneSource® funds = $148 billion, up 21% year-over-year. |
| • | Total client assets held in proprietary funds (Schwab Funds®, Excelsior®, and Laudus Funds™) = $177 billion, up 11% year-over-year. |
| • | Total client assets held in fixed income securities = $163 billion, up 15% year-over-year. |
| • | For Charles Schwab Bank, N.A.: |
| • | Balance sheet assets = $7.7 billion, up 13% from the prior quarter. |
| • | Outstanding mortgage and home equity loans = $2.0 billion. |
| • | First mortgage originations during the quarter = $272 million. |
| • | Launched the Schwab Inflation Protected Fund™, a new bond-fund offering designed primarily for investors at or near retirement. |
| • | Achieved first place for the Schwab Equity Ratings®-based model portfolio in Barron’s annual stock selection competition for the five-year category, after two successive wins in 2003 and 2004 for best three-year performance. |
| • | Announced a new security guarantee covering 100% of any losses that arise from unauthorized activity in all client accounts. |
| • | Continued to upgrade and modernize the company’s systems infrastructure by working with IBM to secure peak-load mainframe processing capacity that can be accessed and paid for on demand. This systems environment also supports enhanced security features for the company’s internet-based services. |
| • | Awarded two Gold Monitor awards by Corporate Insight. The first was in the Products and Services category, which specifically cited the company for notable enhancements to its fixed income screening and selection tools. The company was also recognized in the Research and News category for the third consecutive year. |
The Charles Schwab Corporation (NASDAQ: SCHW) is a leading provider of financial services, with more than 325 offices, 6.7 million client brokerage accounts, 512,000 401(k) plan participants, 175,000 banking accounts, and $1.3 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (memberSIPC), offers 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 its Schwab Institutional division. The Charles Schwab Bank, N.A. (member FDIC) provides banking and mortgage services and products. The company’s other operating subsidiaries include U.S. Trust Corporation (member FDIC) and CyberTrader®, Inc. (memberSIPC). More information is available atwww.aboutschwab.com.
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THE CHARLES SCHWAB CORPORATION
Consolidated Statements of Income
(In millions, except per share amounts)
(Unaudited)
Three Months Ended March 31, | ||||||||
| 2006 | 2005 | |||||||
Net Revenues | ||||||||
Asset management and administration fees | $ | 618 | $ | 547 | ||||
Interest revenue | 605 | 412 | ||||||
Interest expense | (212 | ) | (138 | ) | ||||
Net interest revenue | 393 | 274 | ||||||
Trading revenue | 227 | 207 | ||||||
Other | 41 | 31 | ||||||
Total net revenues | 1,279 | 1,059 | ||||||
Expenses Excluding Interest | ||||||||
Compensation and benefits | 536 | 454 | ||||||
Occupancy and equipment | 79 | 82 | ||||||
Professional services | 68 | 62 | ||||||
Depreciation and amortization | 48 | 54 | ||||||
Communications | 49 | 51 | ||||||
Advertising and market development | 50 | 36 | ||||||
Restructuring charges | — | 21 | ||||||
Other | 50 | 53 | ||||||
Total expenses excluding interest | 880 | 813 | ||||||
Income from continuing operations before taxes on income | 399 | 246 | ||||||
Taxes on income | (157 | ) | (95 | ) | ||||
Income from continuing operations | 242 | 151 | ||||||
Gain (loss) from discontinued operations, net of tax | 1 | (6 | ) | |||||
Net Income | $ | 243 | $ | 145 | ||||
Weighted-Average Common Shares Outstanding — Diluted | 1,296 | 1,326 | ||||||
Earnings Per Share — Basic | ||||||||
Income from continuing operations | $ | .19 | $ | .11 | ||||
Gain (loss) from discontinued operations, net of tax | — | — | ||||||
Net income | $ | .19 | $ | .11 | ||||
Earnings Per Share — Diluted | ||||||||
Income from continuing operations | $ | .19 | $ | .11 | ||||
Gain (loss) from discontinued operations, net of tax | — | — | ||||||
Net income | $ | .19 | $ | .11 | ||||
Dividends Declared Per Common Share | $ | .025 | $ | .020 | ||||
See Notes to Consolidated Statements of Income and Financial and Operating Highlights.
THE CHARLES SCHWAB CORPORATION
Financial and Operating Highlights
(Unaudited)
| 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||
(In millions, except per share | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||||||||||||||||||
Net Revenues | ||||||||||||||||||||||||||||||||||||
Asset management and administration fees | $ | 618 | $ | 586 | $ | 584 | $ | 552 | $ | 547 | $ | 544 | $ | 523 | $ | 517 | $ | 507 | ||||||||||||||||||
Net interest revenue | 393 | 355 | 331 | 297 | 274 | 258 | 245 | 224 | 209 | |||||||||||||||||||||||||||
Trading revenue | 227 | 198 | 187 | 187 | 207 | 218 | 185 | 261 | 361 | |||||||||||||||||||||||||||
Other | 41 | 41 | 36 | 51 | 31 | 40 | 47 | 32 | 31 | |||||||||||||||||||||||||||
Total net revenues | 1,279 | 1,180 | 1,138 | 1,087 | 1,059 | 1,060 | 1,000 | 1,034 | 1,108 | |||||||||||||||||||||||||||
Expenses Excluding Interest | ||||||||||||||||||||||||||||||||||||
Compensation and benefits | 536 | 512 | 481 | 455 | 454 | 447 | 455 | 493 | 482 | |||||||||||||||||||||||||||
Occupancy and equipment | 79 | 85 | 83 | 81 | 82 | 90 | 97 | 100 | 102 | |||||||||||||||||||||||||||
Professional services | 68 | 68 | 66 | 57 | 62 | 64 | 62 | 61 | 58 | |||||||||||||||||||||||||||
Depreciation and amortization | 48 | 51 | 52 | 51 | 54 | 59 | 58 | 53 | 56 | |||||||||||||||||||||||||||
Communications | 49 | 47 | 46 | 48 | 51 | 53 | 53 | 56 | 61 | |||||||||||||||||||||||||||
Advertising and market development | 50 | 60 | 39 | 43 | 36 | 33 | 43 | 46 | 62 | |||||||||||||||||||||||||||
Restructuring charges (1) | — | — | (4 | ) | — | 21 | 100 | 112 | 2 | — | ||||||||||||||||||||||||||
Other | 50 | 50 | 46 | 49 | 53 | 54 | 48 | 54 | 43 | |||||||||||||||||||||||||||
Total expenses excluding interest | 880 | 873 | 809 | 784 | 813 | 900 | 928 | 865 | 864 | |||||||||||||||||||||||||||
Income from continuing operations before taxes on income | 399 | 307 | 329 | 303 | 246 | 160 | 72 | 169 | 244 | |||||||||||||||||||||||||||
Taxes on income | (157 | ) | (120 | ) | (123 | ) | (117 | ) | (95 | ) | (58 | ) | (26 | ) | (62 | ) | (85 | ) | ||||||||||||||||||
Income from continuing operations | 242 | 187 | 206 | 186 | 151 | 102 | 46 | 107 | 159 | |||||||||||||||||||||||||||
Gain (loss) from discontinued operations, net of tax | 1 | — | 1 | — | (6 | ) | (49 | ) | (87 | ) | 6 | 2 | ||||||||||||||||||||||||
Net Income (Loss) | $ | 243 | $ | 187 | $ | 207 | $ | 186 | $ | 145 | $ | 53 | $ | (41 | ) | $ | 113 | $ | 161 | |||||||||||||||||
Basic earnings (loss) per share | $ | .19 | $ | .15 | $ | .16 | $ | .14 | $ | .11 | $ | .04 | $ | (.03 | ) | $ | .08 | $ | .12 | |||||||||||||||||
Diluted earnings (loss) per share | $ | .19 | $ | .14 | $ | .16 | $ | .14 | $ | .11 | $ | .04 | $ | (.03 | ) | $ | .08 | $ | .12 | |||||||||||||||||
Dividends declared per common share | $ | .025 | $ | .025 | $ | .022 | $ | .022 | $ | .020 | $ | .020 | $ | .020 | $ | .020 | $ | .014 | ||||||||||||||||||
Weighted-average common shares outstanding - diluted | 1,296 | 1,298 | 1,308 | 1,314 | 1,326 | 1,348 | 1,364 | 1,373 | 1,375 | |||||||||||||||||||||||||||
Performance Measures | ||||||||||||||||||||||||||||||||||||
Net revenue growth (decline) over prior year’s quarter | 21 | % | 11 | % | 14 | % | 5 | % | (4 | %) | — | — | 6 | % | 28 | % | ||||||||||||||||||||
Pre-tax profit margin from continuing operations | 31.2 | % | 26.0 | % | 28.9 | % | 27.9 | % | 23.2 | % | 15.1 | % | 7.2 | % | 16.3 | % | 22.0 | % | ||||||||||||||||||
Return on stockholders’ equity(2) | 21 | % | 17 | % | 19 | % | 17 | % | 13 | % | 5 | % | (3 | %) | 10 | % | 14 | % | ||||||||||||||||||
Financial Condition(at quarter end) | ||||||||||||||||||||||||||||||||||||
Cash and investments segregated (in billions) | $ | 14.5 | $ | 15.3 | $ | 15.5 | $ | 17.4 | $ | 18.5 | $ | 19.0 | $ | 19.6 | $ | 20.5 | $ | 20.8 | ||||||||||||||||||
Receivables from brokerage clients (in billions) | $ | 10.7 | $ | 10.8 | $ | 10.4 | $ | 9.9 | $ | 9.7 | $ | 9.8 | $ | 9.2 | $ | 9.3 | $ | 9.3 | ||||||||||||||||||
Loans to banking clients (in billions) | $ | 8.6 | $ | 8.5 | $ | 8.2 | $ | 7.6 | $ | 7.1 | $ | 6.8 | $ | 6.2 | $ | 6.8 | $ | 6.0 | ||||||||||||||||||
Total assets (in billions) | $ | 47.6 | $ | 47.4 | $ | 45.4 | $ | 46.5 | $ | 46.4 | $ | 47.1 | $ | 45.9 | $ | 47.3 | $ | 46.3 | ||||||||||||||||||
Deposits from banking clients (in billions) | $ | 14.9 | $ | 14.1 | $ | 12.9 | $ | 12.0 | $ | 11.4 | $ | 11.1 | $ | 10.2 | $ | 10.0 | $ | 9.3 | ||||||||||||||||||
Payables to brokerage clients (in billions) | $ | 23.4 | $ | 24.7 | $ | 23.9 | $ | 25.4 | $ | 26.4 | $ | 27.2 | $ | 25.9 | $ | 26.9 | $ | 26.5 | ||||||||||||||||||
Long-term debt (in millions) | $ | 509 | $ | 514 | $ | 537 | $ | 565 | $ | 577 | $ | 585 | $ | 611 | $ | 645 | $ | 779 | ||||||||||||||||||
Stockholders’ equity (in millions) | $ | 4,632 | $ | 4,450 | $ | 4,349 | $ | 4,318 | $ | 4,275 | $ | 4,386 | $ | 4,555 | $ | 4,732 | $ | 4,662 | ||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||
Full-time equivalent employees (at quarter end, in thousands) | 14.1 | 14.0 | 13.7 | 13.6 | 13.9 | 14.2 | 14.8 | 16.3 | 16.5 | |||||||||||||||||||||||||||
Annualized net revenues per average full-time equivalent employee (in thousands) | $ | 364 | $ | 339 | $ | 335 | $ | 317 | $ | 302 | $ | 294 | $ | 261 | $ | 251 | $ | 272 | ||||||||||||||||||
Capital expenditures - cash purchases of equipment, office facilities, and property, net (in millions)(3) | $ | 23 | $ | 23 | $ | 25 | $ | 29 | $ | 23 | $ | 43 | $ | 66 | $ | 51 | $ | 34 | ||||||||||||||||||
Clients’ Daily Average Trades (in thousands) | ||||||||||||||||||||||||||||||||||||
Revenue trades(4) | 275.2 | 229.5 | 194.7 | 176.5 | 191.3 | 177.7 | 128.1 | 142.2 | 178.0 | |||||||||||||||||||||||||||
Schwab Investor Services (5) | 20.6 | 14.5 | 14.2 | 11.3 | 10.0 | 9.4 | 7.8 | 6.8 | 5.6 | |||||||||||||||||||||||||||
Schwab Institutional® | 13.3 | 11.2 | 12.7 | 10.2 | 9.9 | 8.7 | 8.2 | 8.4 | 8.5 | |||||||||||||||||||||||||||
Total | 309.1 | 255.2 | 221.6 | 198.0 | 211.2 | 195.8 | 144.1 | 157.4 | 192.1 | |||||||||||||||||||||||||||
Active Trader Daily Average Revenue Trades (in thousands)(4, 6) | 172.8 | 142.5 | 115.6 | 101.8 | 106.0 | 98.0 | 66.1 | 72.5 | 91.5 | |||||||||||||||||||||||||||
Average Revenue Per Revenue Trade(4) | $ | 13.39 | $ | 13.66 | $ | 15.05 | $ | 16.28 | $ | 17.95 | $ | 19.32 | $ | 22.96 | $ | 30.06 | $ | 33.16 | ||||||||||||||||||
| (1) | Restructuring charges include costs relating to workforce, facilities, systems hardware, software, and equipment reductions. |
| (2) | Calculated based on annualized quarterly net income (loss) and average stockholders’ equity for the quarter. |
| (3) | Capital expenditures in the fourth quarter of 2005 are presented net of proceeds of $17 million from the sale of equipment. |
| (4) | Includes all client trades (both individuals and institutions) that generate either commission revenue or revenue from principal markups (i.e., fixed income); also known as DART. |
| (5) | Includes eligible trades placed by individual investors enrolled in Schwab Private ClientTM and advised investing offers. |
| (6) | Active Trader includes all CyberTrader clients and Schwab clients enrolled in Schwab’s Active Trader offer. Active Trader DART is included in total DART above. |
See Notes to Consolidated Statements of Income and Financial and Operating Highlights.
THE CHARLES SCHWAB CORPORATION
Notes to Consolidated Statement of Income and Financial and Operating Highlights
(Unaudited)
The Company
The consolidated statement of income and financial and operating highlights include The Charles Schwab Corporation and its majority-owned subsidiaries (collectively referred to as the Company), including Charles Schwab & Co., Inc., U.S. Trust Corporation, and CyberTrader, Inc. Prior period amounts have been adjusted to summarize the impact of the Company’s sales of its capital markets business, Schwab Soundview Capital Markets, and its U.K. brokerage subsidiary, Charles Schwab Europe, in gain (loss) from discontinued operations. The consolidated statement of income and financial and operating highlights should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2005 Annual Report on Form 10-K for the year ended December 31, 2005. Certain prior periods’ revenues and expenses have been reclassified to conform with the current period presentation. All material intercompany balances and transactions have been eliminated.
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THE CHARLES SCHWAB CORPORATION
Growth in Client Assets and Accounts
(Unaudited)
| 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||
(In billions, at quarter end, | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||||||||||||||||||
Assets in client accounts | ||||||||||||||||||||||||||||||||||||
Schwab One®, other cash equivalents and deposits from banking clients | $ | 37.8 | $ | 38.4 | $ | 36.3 | $ | 37.0 | $ | 37.5 | $ | 37.2 | $ | 35.7 | $ | 36.5 | $ | 35.4 | ||||||||||||||||||
Proprietary funds (Schwab Funds®, Excelsior®, and Laudus FundsTM): | ||||||||||||||||||||||||||||||||||||
Money market funds | 119.6 | 115.6 | 111.2 | 109.7 | 112.0 | 111.8 | 114.0 | 115.0 | 116.3 | |||||||||||||||||||||||||||
Equity and bond funds | 56.9 | 51.3 | 50.1 | 46.3 | 46.4 | 43.1 | 38.4 | 37.5 | 36.8 | |||||||||||||||||||||||||||
Total proprietary funds | 176.5 | 166.9 | 161.3 | 156.0 | 158.4 | 154.9 | 152.4 | 152.5 | 153.1 | |||||||||||||||||||||||||||
Mutual Fund Marketplace®(1): | ||||||||||||||||||||||||||||||||||||
Mutual Fund OneSource® | 147.9 | 135.0 | 130.7 | 125.1 | 122.2 | 127.8 | 114.5 | 115.2 | 115.1 | |||||||||||||||||||||||||||
Mutual fund clearing services | 65.7 | 60.2 | 57.3 | 51.2 | 47.1 | 44.2 | 38.1 | 33.9 | 37.5 | |||||||||||||||||||||||||||
Other third-party mutual funds | 156.6 | 142.7 | 138.1 | 126.4 | 120.3 | 114.4 | 103.6 | 101.7 | 100.5 | |||||||||||||||||||||||||||
Total Mutual Fund Marketplace | 370.2 | 337.9 | 326.1 | 302.7 | 289.6 | 286.4 | 256.2 | 250.8 | 253.1 | |||||||||||||||||||||||||||
Total mutual fund assets | 546.7 | 504.8 | 487.4 | 458.7 | 448.0 | 441.3 | 408.6 | 403.3 | 406.2 | |||||||||||||||||||||||||||
Equity and other securities(1) | 544.2 | 511.8 | 500.8 | 472.6 | 459.6 | 472.0 | 429.2 | 437.0 | 431.7 | |||||||||||||||||||||||||||
Fixed income securities | 162.9 | 154.6 | 151.2 | 147.0 | 141.7 | 140.5 | 136.5 | 130.6 | 132.1 | |||||||||||||||||||||||||||
Margin loans outstanding | (10.4 | ) | (10.4 | ) | (10.2 | ) | (9.7 | ) | (9.6 | ) | (9.8 | ) | (9.1 | ) | (9.1 | ) | (9.1 | ) | ||||||||||||||||||
Total client assets | $ | 1,281.2 | $ | 1,199.2 | $ | 1,165.5 | $ | 1,105.6 | $ | 1,077.2 | $ | 1,081.2 | $ | 1,000.9 | $ | 998.3 | $ | 996.3 | ||||||||||||||||||
Net growth in assets in client accounts (for the quarter ended) | ||||||||||||||||||||||||||||||||||||
Net new client assets(2) | $ | 28.1 | $ | 24.3 | $ | 23.4 | $ | 11.2 | $ | 16.1 | $ | 16.8 | $ | 13.0 | $ | 6.7 | $ | 13.8 | ||||||||||||||||||
Net market gains (losses) | 53.9 | 9.4 | 36.5 | 17.2 | (20.1 | ) | 63.5 | (10.4 | ) | (4.7 | ) | 15.8 | ||||||||||||||||||||||||
Net growth (decline) | $ | 82.0 | $ | 33.7 | $ | 59.9 | $ | 28.4 | $ | (4.0 | ) | $ | 80.3 | $ | 2.6 | $ | 2.0 | $ | 29.6 | |||||||||||||||||
U.S. Trust client assets(3) | $ | 155.7 | $ | 148.5 | $ | 146.9 | $ | 139.8 | $ | 138.8 | $ | 141.1 | $ | 137.3 | $ | 137.0 | $ | 135.8 | ||||||||||||||||||
New brokerage accounts (in thousands, for the quarter ended) | 188 | 153 | 129 | 144 | 151 | 134 | 114 | 139 | 160 | |||||||||||||||||||||||||||
Active client accounts (in thousands)(4) | ||||||||||||||||||||||||||||||||||||
Brokerage | 6,725 | 7,120 | 7,138 | 7,202 | 7,287 | 7,321 | 7,389 | 7,474 | 7,518 | |||||||||||||||||||||||||||
Banking | 175 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
401(k) Plan Participants | 512 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
| (1) | Excludes all proprietary money market, equity, and bond funds. |
| (2) | Includes inflows of $3.0 billion in the third quarter of 2005 at U.S. Trust related to two Special Fiduciary business clients. Includes a one-time special dividend from Microsoft Corporation of $1.2 billion in the fourth quarter of 2004. Includes individual inflows (outflows) of $2.1 billion and ($6.0) billion in the third and second quarters of 2004, respectively, related to mutual fund clearing clients. |
| (3) | Included in total client assets above. |
| (4) | Periodically, the Company reviews its active account base. The Company has identified over 400,000 brokerage accounts that meet its current definition of active, but had little or no balances and no likelihood of further activity. Effective March 31, 2006, the Company has removed these accounts from its active brokerage account total. Amounts for periods prior to 2006 were not adjusted. While the Company has adjusted its definition of an active brokerage account to exclude certain zero and minimal balance accounts, the basic definition remains “accounts with balances or activity within the preceding 8 months.” In addition, to present a more comprehensive view of its client relationships, the Company has added disclosures for its banking accounts (i.e., deposits, credit cards, HELOCs, mortgages, and other loans) and 401(k) plan participants. Amounts for periods prior to 2006 are not available. |
The Charles Schwab Corporation Monthly Market Activity Report For March 2006
| % change | |||||||||||||||||||||||||||||||||||||||||||
2005 Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | 2006 Jan | Feb | Mar | Mo. | Yr. | |||||||||||||||||||||||||||||
Change in Client Assets | |||||||||||||||||||||||||||||||||||||||||||
Net New Assets (1) | 5.8 | 1.1 | 3.9 | 6.2 | 6.3 | 10.3 | 6.8 | 7.6 | 7.5 | 9.2 | 9.5 | 10.6 | 8.0 | (25 | %) | 38 | % | ||||||||||||||||||||||||||
Net Market Gains (Losses) | (17.4 | ) | (16.8 | ) | 26.9 | 7.1 | 30.4 | (2.8 | ) | 8.9 | (21.1 | ) | 28.4 | 2.1 | 37.5 | (1.7 | ) | 18.1 | |||||||||||||||||||||||||
Total Client Assets | 1,077.2 | 1,061.5 | 1,092.3 | 1,105.6 | 1,142.3 | 1,149.8 | 1,165.5 | 1,152.0 | 1,187.9 | 1,199.2 | 1,246.2 | 1,255.1 | 1,281.2 | 2 | % | 19 | % | ||||||||||||||||||||||||||
New Brokerage Accounts | 58 | 63 | 40 | 41 | 39 | 47 | 43 | 46 | 47 | 60 | 63 | 56 | 69 | 23 | % | 19 | % | ||||||||||||||||||||||||||
Active Client Accounts(2) | |||||||||||||||||||||||||||||||||||||||||||
Brokerage | 7,287 | 7,285 | 7,262 | 7,202 | 7,182 | 7,177 | 7,138 | 7,117 | 7,115 | 7,120 | 6,693 | 6,707 | 6,725 | — | (8 | %) | |||||||||||||||||||||||||||
Banking | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 169 | 170 | 175 | 3 | % | N/A | |||||||||||||||||||||||||||
401(k) Plan Participants | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 496 | 506 | 512 | 1 | % | N/A | |||||||||||||||||||||||||||
Market Indices(at month end) | |||||||||||||||||||||||||||||||||||||||||||
Dow Jones Industrial Average | 10,504 | 10,193 | 10,468 | 10,275 | 10,641 | 10,482 | 10,569 | 10,440 | 10,806 | 10,718 | 10,865 | 10,993 | 11,109 | 1 | % | 6 | % | ||||||||||||||||||||||||||
Nasdaq Composite | 1,999 | 1,922 | 2,068 | 2,057 | 2,185 | 2,152 | 2,152 | 2,120 | 2,233 | 2,205 | 2,306 | 2,281 | 2,340 | 3 | % | 17 | % | ||||||||||||||||||||||||||
Standard & Poor’s 500 | 1,181 | 1,157 | 1,192 | 1,191 | 1,234 | 1,220 | 1,229 | 1,207 | 1,249 | 1,248 | 1,280 | 1,281 | 1,295 | 1 | % | 10 | % | ||||||||||||||||||||||||||
Schwab 1000 | 3,813 | 3,736 | 3,865 | 3,881 | 4,028 | 3,983 | 4,009 | 3,943 | 4,088 | 4,087 | 4,205 | 4,195 | 4,256 | 1 | % | 12 | % | ||||||||||||||||||||||||||
Clients’ Daily Average Trades | |||||||||||||||||||||||||||||||||||||||||||
Revenue Trades(3) | 196.6 | 182.7 | 169.4 | 177.3 | 189.5 | 189.1 | 205.7 | 229.7 | 236.7 | 222.4 | 297.8 | 287.5 | 245.4 | (15 | %) | 25 | % | ||||||||||||||||||||||||||
Schwab Investor Services(4) | 9.6 | 10.8 | 11.4 | 11.5 | 12.0 | 14.4 | 16.0 | 16.4 | 15.6 | 11.6 | 22.6 | 18.9 | 20.3 | 7 | % | 111 | % | ||||||||||||||||||||||||||
Schwab Institutional® | 10.0 | 10.3 | 9.5 | 10.8 | 12.6 | 11.8 | 13.8 | 12.8 | 11.1 | 9.7 | 13.6 | 13.2 | 13.1 | (1 | %) | 31 | % | ||||||||||||||||||||||||||
Total | 216.2 | 203.8 | 190.3 | 199.6 | 214.1 | 215.3 | 235.5 | 258.9 | 263.4 | 243.7 | 334.0 | 319.6 | 278.8 | (13 | %) | 29 | % | ||||||||||||||||||||||||||
Daily Average Market Share Volume | |||||||||||||||||||||||||||||||||||||||||||
NYSE | 1,683 | 1,693 | 1,502 | 1,516 | 1,479 | 1,441 | 1,683 | 1,847 | 1,642 | 1,553 | 1,868 | 1,737 | 1,656 | (5 | %) | (2 | %) | ||||||||||||||||||||||||||
Nasdaq | 1,849 | 1,839 | 1,686 | 1,748 | 1,674 | 1,539 | 1,716 | 1,796 | 1,768 | 1,704 | 2,171 | 2,014 | 2,135 | 6 | % | 15 | % | ||||||||||||||||||||||||||
Total | 3,532 | 3,532 | 3,188 | 3,264 | 3,153 | 2,980 | 3,399 | 3,643 | 3,410 | 3,257 | 4,039 | 3,751 | 3,791 | 1 | % | 7 | % | ||||||||||||||||||||||||||
Mutual Fund Net Buys (Sells)(5) | |||||||||||||||||||||||||||||||||||||||||||
Large Capitalization Stock | 106.5 | 91.8 | 388.3 | 364.5 | 236.0 | 198.5 | 386.3 | (133.4 | ) | 546.2 | 168.9 | 1,057.0 | 786.3 | 566.6 | |||||||||||||||||||||||||||||
Small / Mid Capitalization Stock | 514.5 | 39.0 | 150.7 | 486.8 | 438.8 | 374.3 | 332.1 | 69.6 | 358.8 | 158.6 | 763.5 | 734.1 | 774.4 | ||||||||||||||||||||||||||||||
International | 1,006.6 | 587.5 | 485.7 | 411.7 | 513.7 | 765.7 | 945.7 | 764.3 | 1,004.9 | 1,019.4 | 2,063.2 | 1,510.8 | 1,693.5 | ||||||||||||||||||||||||||||||
Specialized | 334.4 | 120.6 | 94.9 | 224.7 | 199.7 | 78.8 | 230.1 | (39.3 | ) | (24.4 | ) | 41.9 | 348.7 | 257.1 | 171.0 | ||||||||||||||||||||||||||||
Hybrid | 276.3 | 216.5 | 197.2 | 196.9 | 265.9 | 177.5 | 261.4 | 226.9 | 324.3 | 145.9 | 286.5 | 242.7 | 266.7 | ||||||||||||||||||||||||||||||
Taxable Bond | 410.1 | 374.9 | 437.1 | 847.9 | 601.4 | 761.4 | 678.5 | 247.7 | (25.5 | ) | (195.9 | ) | 774.3 | 766.4 | 698.6 | ||||||||||||||||||||||||||||
Tax-Free Bond | 114.9 | (67.8 | ) | 117.1 | 179.7 | 115.1 | 113.4 | 61.7 | 6.2 | (65.5 | ) | (186.8 | ) | 267.7 | 232.4 | 177.3 | |||||||||||||||||||||||||||
Money Market Funds | 214.6 | (985.5 | ) | (469.6 | ) | (1,409.0 | ) | 6.5 | 944.6 | (286.2 | ) | 1,883.6 | 335.2 | 1,866.7 | 874.8 | 2,211.0 | (216.6 | ) | |||||||||||||||||||||||||
| (1) | March 2006 and January 2006 include an outflow of $1.6 billion and an inflow of $1.6 billion, respectively, at U.S. Trust related to two Special Fiduciary business clients. August 2005 data includes inflows of $3.0 billion at U.S. Trust related to two Special Fiduciary business clients. |
| (2) | Periodically, the Company reviews its active account base. The Company has identified over 400,000 brokerage accounts that meet its current definition of active, but had little or no balances and no likelihood of further activity. Effective March 31, 2006, the Company has removed these accounts from its active brokerage account total and adjusted amounts back to January 2006. Amounts for periods prior to January 2006 were not adjusted. While the Company has adjusted its definition of an active brokerage account to exclude certain zero and minimal balance accounts, the basic definition remains “accounts with balances or activity within the preceding 8 months.” In addition, to present a more comprehensive view of its client relationships, the Company has added disclosures for its banking accounts (i.e., deposits, credit cards, HELOCs, mortgages, and other loans) and 401(k) plan participant. Amounts for periods prior to December 2005 are not available. |
| (3) | Includes all client trades (both individuals and institutions) that generate either commission revenue or revenue from principal markups (i.e., fixed income); also known as DART. |
| (4) | Includes eligible trades placed by individual investors enrolled in Schwab Private ClientTM and advised investing offers. |
| (5) | Represents the principal value of client mutual fund (no-load, low-load, load) transactions handled by Schwab and U.S. Trust, including transactions in Schwab Funds®, Excelsior® Funds, Laudus FundTM, and other proprietary funds. Includes institutional funds available only to Investment Managers. |