The Charles Schwab Corporation (SCHW) 8-K Schwab Reports Quarterly Results

Exhibit 99.1

Contacts:

MEDIA:	INVESTORS/ANALYSTS:
Glen Mathison	Rich Fowler
Charles Schwab	Charles Schwab
Phone: 415-636-5448	Phone: 415-636-9869

SCHWAB REPORTS QUARTERLY RESULTS

NET NEW ASSETS TOTAL $21 BILLION

SAN FRANCISCO, October 16, 2006 – The Charles Schwab Corporation announced today that its net income for the quarter ended September 30, 2006 was $266 million. In comparison, the company reported net income of $251 million for the second quarter of 2006 and net income of $207 million for the third quarter of 2005. For the first nine months of 2006, the Company’s net income was $760 million, compared with $538 million earned during the same period in 2005.

	Three Months Ended —September 30,—						% Change		Nine Months Ended —September 30,—						% Change
Financial Highlights	2006			2005					2006			2005
Net revenues (in millions)	$	1,290		$	1,138		13	%	$	3,880		$	3,284		18	%
Net income (in millions)	$	266		$	207		29	%	$	760		$	538		41	%
Diluted earnings per share	$	.21		$	.16		31	%	$	.59		$	.41		44	%
Pre-tax profit margin1		33.9	%		28.9	%				32.2	%		26.7	%
Return on stockholders’ equity		23	%		19	%				22	%		16	%

^1. From continuing operations.

Chairman and CEO Charles Schwab commented, “We continue to focus on delivering great value, performance and service in building relationships with our clients. As previously announced, we instituted a number of price reductions effective July 1^st, including the elimination of various service and account fees. In recognition of our ability to help clients improve their investment performance, Barron’s once again awarded Schwab top honors in its semi-annual stock recommendation competition for both the three- and five-year performance categories. These accomplishments, combined with our commitment to service and building client loyalty, supported solid client metrics during the traditionally slower summer season. Net new assets totaled $21 billion in the third quarter and clients opened 137,000 new brokerage accounts. With strong asset flows and improved valuations in the securities markets, total client assets rose 14% to a record $1.332 trillion by month-end September. Our progress with clients is also reflected in our third quarter financial performance, including 13% net revenue growth and a 29% increase in earnings.”

CFO Chris Dodds said, “Non-trading revenues reached a new record of $1.122 billion, or 87% of total net revenues, in the third quarter. Our reduced reliance on more volatile trading revenue, combined with ongoing expense discipline, is enabling us to deliver more consistent and predictable margins and earnings. We limited overall expense growth to just 5% during the quarter, helping us achieve a record 33.9% pre-tax profit margin and the second highest level of quarterly earnings in the firm’s history. We also remain committed to rigorous capital management – outlays for capital expenditures totaled just $38 million during the quarter while common stock repurchases totaled $300 million, contributing to a 23% return on equity.”

Business highlights for the third quarter (data as of quarter-end unless otherwise noted):

Schwab Investor Services Business (includes Individual Investor and Corporate and Retirement Services)

• Client assets enrolled in Schwab advice offers = $45.6 billion, up 25% year-over-year.

• Client assets in employer-sponsored retirement plans at Schwab = $169 billion, up 18% year-over-year.

• Introduced complimentary phone-based portfolio consultations for clients with less than $250,000 in assets.

• Expanded distribution ofOn Investing^®, Schwab’s quarterly financial journal, to include over 2.7 million Schwab Investor Services clients. This publication features investment insights and commentary from Schwab experts.

Schwab Institutional^® Business

• Expanded online cashiering services for advisors to include real-time Schwab MoneyLink^® (ACH) transaction queries.

• Enhanced Internet-based eDocuments sites for both advisors and their clients to provide multi-year archiving of online statements, trade confirms and tax reports, along with document search capabilities.

• Added 12 investment strategies to the Managed Account Access™ program. There are now approximately 2,470 strategies available to advisors and their clients across the Managed Account Platforms. Also added 3 funds to the Alternative Investment Source platform, bringing the total available to 32.

U.S. Trust Business

• Assets under management = $93.6 billion, up 3% year-over-year. Total client assets = $158.7 billion.

• Net new client assets during the quarter = $611 million.

• Launched Private Fund Solutions, a private equity and venture capital vehicle for qualified investors, with an initial client offering that provided access to the Cerberus Institutional Partners IV fund in increments of $500,000. The fund normally requires a $10 million investment.

• The Capital Markets Advisory Division created and delivered its first structured notes as part of integrated wealth management planning for certain clients. These notes were tailored to each client’s specific risk profile and provided targeted exposure to specific commodities, currencies and equity markets.

Products and Infrastructure

• For Charles Schwab Bank, N.A.:

• Balance sheet assets = $10.0 billion, up 10% from the prior quarter.

• Outstanding mortgage and home equity loans = $2.2 billion.

• First mortgage originations during the quarter = $271 million.

• Introduced Schwab Managed Portfolios™, a suite of diversified portfolios that combine Schwab Equity Ratings^®-based mutual funds with funds chosen from the company’s Mutual Fund OneSource Select List^®. Schwab’s money managers create and maintain these portfolios for individuals with as little as $50,000 to invest.

• Barron’s awarded first place to a model portfolio based on Schwab Equity Ratings^® for the most recent three- and five-year periods.

The Charles Schwab Corporation (Nasdaq: SCHW) is a leading provider of financial services, with more than 330 offices and 6.8 million client brokerage accounts, 535,000 corporate retirement plan participants, 181,000 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. (member SIPC, http://www.sipc.org), 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. (member SIPC, http://www.sipc.org). More information is available atwww.schwab.com.

###

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,
	2006			2005			2006			2005
Net Revenues
Asset management and administration fees	$	650		$	584		$	1,910		$	1,683
Interest revenue		669			509			1,927			1,385
Interest expense		(262	)		(178	)		(709	)		(483	)
Net interest revenue		407			331			1,218			902
Trading revenue		168			187			606			581
Other		65			36			146			118
Total net revenues		1,290			1,138			3,880			3,284
Expenses Excluding Interest
Compensation and benefits		517			481			1,580			1,390
Occupancy and equipment		81			83			242			246
Professional services		79			66			222			185
Depreciation and amortization		46			52			141			157
Communications		47			46			147			145
Advertising and market development		33			39			142			118
Restructuring charges		—			(4	)		—			17
Other		50			46			158			148
Total expenses excluding interest		853			809			2,632			2,406
Income from continuing operations before taxes on income		437			329			1,248			878
Taxes on income		(171	)		(123	)		(491	)		(335	)
Income from continuing operations		266			206			757			543
Gain (loss) from discontinued operations, net of tax		—			1			3			(5	)
Net Income	$	266		$	207		$	760		$	538
Weighted-Average Common Shares Outstanding — Diluted		1,277			1,308			1,289			1,316
Earnings Per Share — Basic
Income from continuing operations	$	.21		$	.16		$	.59		$	.42
Gain (loss) from discontinued operations, net of tax		—			—		$	.01		$	(.01	)
Net income	$	.21		$	.16		$	.60		$	.41
Earnings Per Share — Diluted
Income from continuing operations	$	.21		$	.16		$	.59		$	.41
Gain (loss) from discontinued operations, net of tax		—			—			—			—
Net income	$	.21		$	.16		$	.59		$	.41
Dividends Declared Per Common Share	$	.030		$	.022		$	.085		$	.064

See Notes to Consolidated Statements of Income and Financial and Operating Highlights.

THE CHARLES SCHWAB CORPORATION

Financial and Operating Highlights

(Unaudited)

	Q3-06 % change				2006									2005
(In millions, except per share amounts and as noted)	vs.   Q3-05		vs.   Q2-06		Third   Quarter			Second   Quarter			First   Quarter			Fourth   Quarter			Third   Quarter
Net Revenues
Asset management and administration fees	11	%	1	%	$	650		$	642		$	618		$	586		$	584
Net interest revenue	23	%	(3	%)		407			418			393			355			331
Trading revenue	(10	%)	(20	%)		168			211			227			198			187
Other(1)	81	%	63	%		65			40			41			41			36
Total net revenues	13	%	(2	%)		1,290			1,311			1,279			1,180			1,138
Expenses Excluding Interest
Compensation and benefits	7	%	(2	%)		517			527			536			512			481
Occupancy and equipment	(2	%)	(1	%)		81			82			79			85			83
Professional services	20	%	5	%		79			75			68			68			66
Depreciation and amortization	(12	%)	(2	%)		46			47			48			51			52
Communications	2	%	(8	%)		47			51			49			47			46
Advertising and market development	(15	%)	(44	%)		33			59			50			60			39
Restructuring charges	(100	%)	—			—			—			—			—			(4	)
Other	9	%	(14	%)		50			58			50			50			46
Total expenses excluding interest	5	%	(5	%)		853			899			880			873			809
Income from continuing operations before taxes on income	33	%	6	%		437			412			399			307			329
Taxes on income	39	%	5	%		(171	)		(163	)		(157	)		(120	)		(123	)
Income from continuing operations	29	%	7	%		266			249			242			187			206
Gain from discontinued operations, net of tax	(100	%)	(100	%)		—			2			1			—			1
Net Income	29	%	6	%	$	266		$	251		$	243		$	187		$	207
Basic earnings per share	31	%	5	%	$	.21		$	.20		$	.19		$	.15		$	.16
Diluted earnings per share	31	%	11	%	$	.21		$	.19		$	.19		$	.14		$	.16
Dividends declared per common share	36	%	—		$	.030		$	.030		$	.025		$	.025		$	.022
Weighted-average common shares outstanding - diluted	(2	%)	(1	%)		1,277			1,294			1,296			1,298			1,308
Performance Measures
Pre-tax profit margin from continuing operations						33.9	%		31.4	%		31.2	%		26.0	%		28.9	%
Annualized return on stockholders’ equity						23	%		22	%		21	%		17	%		19	%
Financial Condition (at quarter end, in billions)
Cash and investments segregated	(29	%)	(6	%)	$	11.0		$	11.7		$	14.5		$	15.3		$	15.5
Receivables from brokerage clients	(1	%)	(6	%)	$	10.3		$	10.9		$	10.7		$	10.8		$	10.4
Loans to banking clients	11	%	2	%	$	9.1		$	8.9		$	8.6		$	8.5		$	8.2
Total assets	4	%	—		$	47.1		$	46.9		$	47.6		$	47.4		$	45.4
Deposits from banking clients	39	%	14	%	$	17.9		$	15.7		$	14.9		$	14.1		$	12.9
Payables to brokerage clients	(15	%)	(6	%)	$	20.2		$	21.5		$	23.4		$	24.7		$	23.9
Long-term debt	(20	%)	(20	%)	$	.4		$	.5		$	.5		$	.5		$	.5
Stockholders’ equity	7	%	—		$	4.6		$	4.6		$	4.6		$	4.5		$	4.3
Other
Full-time equivalent employees (at quarter end, in thousands)	4	%	1	%		14.3			14.1			14.1			14.0			13.7
Annualized net revenues per average full-time equivalent employee (in thousands)	8	%	(3	%)	$	362		$	373		$	364		$	339		$	335
Capital expenditures - cash purchases of equipment, office facilities, and property, net (in millions)(2)	52	%	N/M		$	38		$	(26	)	$	23		$	23		$	25
Clients’ Daily Average Trades (in thousands)
Revenue trades(3)	3	%	(20	%)		201.2			250.7			275.2			229.5			194.7
Schwab Investor Services (4)	25	%	(2	%)		17.8			18.1			20.6			14.5			14.2
Schwab Institutional®	14	%	(6	%)		14.5			15.4			13.3			11.2			12.7
Total	5	%	(18	%)		233.5			284.2			309.1			255.2			221.6
Average Revenue Per Revenue Trade(3)	(14	%)	(4	%)	$	12.89		$	13.47		$	13.39		$	13.66		$	15.05

⁽¹⁾ Other revenue in the third quarter of 2006 includes $25 million related to the confidential resolution of a legal matter.

⁽²⁾ Capital expenditures in the second quarter of 2006 are presented net of proceeds of $62 million from the sale of a data center and in the fourth quarter of 2005 are presented net of proceeds of $17 million from the sale of equipment.

⁽³⁾ Includes all client trades 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 Client^TM and advised investing offers.

N/M Not meaningful.

See Notes to Consolidated Statements of Income and Financial and Operating Highlights.

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Statements 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. 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 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.

**********

Growth in Client Assets and Accounts

(Unaudited)

	Q3-06 % change				2006									2005
(In billions, at quarter end, except as noted)	vs. Q3-05		vs. Q2-06		Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter
Assets in client accounts
Schwab One®, other cash equivalents and deposits from banking clients	3	%	2	%	$	37.5		$	36.6		$	37.8		$	38.4		$	36.3
Proprietary funds (Schwab Funds®, Excelsior®, and Laudus FundsTM):
Money market funds	18	%	5	%		131.0			125.3			119.6			115.6			111.2
Equity and bond funds	31	%	6	%		65.6			61.9			56.9			51.3			50.1
Total proprietary funds	22	%	5	%		196.6			187.2			176.5			166.9			161.3
Mutual Fund Marketplace®(1):
Mutual Fund OneSource®	13	%	2	%		147.7			144.3			147.9			135.0			130.7
Mutual fund clearing services	27	%	7	%		72.7			68.2			65.7			60.2			57.3
Other third-party mutual funds	16	%	5	%		160.2			152.8			156.6			142.7			138.1
Total Mutual Fund Marketplace	17	%	4	%		380.6			365.3			370.2			337.9			326.1
Total mutual fund assets	18	%	4	%		577.2			552.5			546.7			504.8			487.4
Equity and other securities(1)	10	%	4	%		549.4			530.8			544.2			511.8			500.8
Fixed income securities	18	%	6	%		177.9			168.4			162.9			154.6			151.2
Margin loans outstanding	(3	%)	(6	%)		(9.9	)		(10.5	)		(10.4	)		(10.4	)		(10.2	)
Total client assets	14	%	4	%	$	1,332.1		$	1,277.8		$	1,281.2		$	1,199.2		$	1,165.5
Client assets by business
Schwab Investor Services	10	%	4	%	$	629.5		$	606.9		$	617.3		$	581.9		$	571.4
Schwab Institutional	21	%	5	%		467.7			444.6			439.4			406.0			387.6
U.S. Trust	8	%	2	%		158.7			154.9			155.7			148.5			146.9
Mutual fund clearing services and other	28	%	7	%		76.2			71.4			68.8			62.8			59.6
Total clients assets by business	14	%	4	%	$	1,332.1		$	1,277.8		$	1,281.2		$	1,199.2		$	1,165.5
Net growth in assets in client accounts (for the quarter ended)
Net new client assets(2)	(11	%)	(3	%)	$	20.9		$	21.6		$	28.1		$	24.3		$	23.4
Net market gains (losses)	(8	%)	N/M			33.4			(25.0	)		53.9			9.4			36.5
Net growth (decline)	(9	%)	N/M		$	54.3		$	(3.4	)	$	82.0		$	33.7		$	59.9
New brokerage accounts (in thousands, for the quarter ended)	6	%	(21	%)		137			173			188			153			129
Active client accounts (in thousands)(3)
Brokerage	(5	%)	—			6,761			6,759			6,725			7,120			7,138
Banking	N/A		2	%		181			178			175			N/A			N/A
Corporate Retirement Plan Participants	N/A		3	%		535			521			512			N/A			N/A

⁽¹⁾ Excludes all proprietary money market, equity, and bond funds.

⁽²⁾ Includes inflows of $1.0 billion in the third quarter of 2006, $2.3 billion in the second quarter of 2006, and $3.0 billion in the third quarter of 2005 at U.S. Trust related to Special Fiduciary business clients.

⁽³⁾ Periodically, the Company reviews its active account base. The Company identified over 400,000 brokerage accounts that met its current definition of active, but had little or no balances and no likelihood of further activity. Effective March 31, 2006, the Company removed these accounts from its active brokerage account total. Amounts for periods prior to 2006 were not adjusted. While the Company 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 added disclosures for its banking accounts (i.e., deposits, credit cards, HELOCs, mortgages, and other loans) and Corporate Retirement Plan Participants. Amounts for periods prior to 2006 are not available.

The Charles Schwab Corporation Monthly Market Activity Report For September 2006

																										% change
	2005 Sep		Oct		Nov		Dec		2006 Jan	Feb		Mar		Apr		May		Jun		Jul		Aug		Sep		Mo.		Yr.
Change in Client Assets (in billions of dollars)
Net New Assets (1)	6.8		7.6		7.5		9.2		9.5	10.6		8.0		4.6		9.3		7.7		6.8		7.1		7.0		(1	%)	3	%
Net Market Gains (Losses)	8.9		(21.1	)	28.4		2.1		37.5	(1.7	)	18.1		13.7		(34.4	)	(4.3	)	(0.4	)	20.8		13.0
Total Client Assets (at month end, in billions of dollars)	1,165.5		1,152.0		1,187.9		1,199.2		1,246.2	1,255.1		1,281.2		1,299.5		1,274.4		1,277.8		1,284.2		1,312.1		1,332.1		2	%	14	%
New Brokerage Accounts (in thousands)	43		46		47		60		63	56		69		73		52		48		42		49		46		(6	%)	7	%
Active Client Accounts(2) (at month end, in thousands)
Brokerage	7,138		7,117		7,115		7,120		6,693	6,707		6,725		6,753		6,759		6,759		6,757		6,760		6,761		—		(5	%)
Banking	N/A		N/A		N/A		N/A		169	170		175		175		177		178		178		180		181		1	%	N/A
Corporate Retirement Plan Participants	N/A		N/A		N/A		N/A		496	506		512		519		522		521		527		529		535		1	%	N/A
Market Indices (at month end)
Dow Jones Industrial Average	10,569		10,440		10,806		10,718		10,865	10,993		11,109		11,367		11,168		11,150		11,186		11,381		11,679		3	%	11	%
Nasdaq Composite	2,152		2,120		2,233		2,205		2,306	2,281		2,340		2,323		2,179		2,172		2,091		2,184		2,258		3	%	5	%
Standard & Poor’s 500	1,229		1,207		1,249		1,248		1,280	1,281		1,295		1,311		1,270		1,270		1,277		1,304		1,336		2	%	9	%
Schwab 1000	4,009		3,943		4,088		4,087		4,205	4,195		4,256		4,302		4,170		4,174		4,170		4,258		4,359		2	%	9	%
Clients’ Daily Average Trades (in thousands)
Revenue Trades(3)	205.7		229.7		236.7		222.4		297.8	287.5		245.4		258.7		269.6		224.9		213.8		190.8		200.9		5	%	(2	%)
Schwab Investor Services(4)	16.0		16.4		15.6		11.6		22.6	18.9		20.3		20.0		17.3		17.3		16.3		18.0		19.1		6	%	19	%
Schwab Institutional®	13.8		12.8		11.1		9.7		13.6	13.2		13.1		14.6		15.7		15.8		15.1		14.1		14.4		2	%	4	%
Total	235.5		258.9		263.4		243.7		334.0	319.6		278.8		293.3		302.6		258.0		245.2		222.9		234.4		5	%	—
Daily Average Market Share Volume (in millions)
NYSE	1,683		1,847		1,642		1,553		1,868	1,737		1,656		1,681		1,791		1,765		1,592		1,431		1,565		9	%	(7	%)
Nasdaq	1,716		1,796		1,768		1,704		2,171	2,014		2,135		2,139		2,164		2,087		1,895		1,710		1,942		14	%	13	%
Total	3,399		3,643		3,410		3,257		4,039	3,751		3,791		3,820		3,955		3,852		3,487		3,141		3,507		12	%	3	%
Mutual Fund Net Buys (Sells)(5) (in millions of dollars)
Large Capitalization Stock	386.3		(133.4	)	546.2		168.9		1,057.0	786.3		566.6		418.4		288.5		67.1		228.4		107.6		583.9
Small / Mid Capitalization Stock	332.1		69.6		358.8		158.6		763.5	734.1		774.4		709.2		126.8		(370.1	)	(207.7	)	(200.4	)	(229.3	)
International	945.7		764.3		1,004.9		1,019.4		2,063.2	1,510.8		1,693.5		1,353.6		550.7		(619.2	)	46.0		333.7		607.4
Specialized	230.1		(39.3	)	(24.4	)	41.9		348.7	257.1		171.0		180.8		(20.5	)	(210.8	)	94.1		13.8		(258.3	)
Hybrid	261.4		226.9		324.3		145.9		286.5	242.7		266.7		119.2		129.6		213.1		224.0		415.2		310.7
Taxable Bond	678.5		247.7		(25.5	)	(195.9	)	774.3	766.4		698.6		165.2		598.9		701.8		692.4		1,146.2		1,086.2
Tax-Free Bond	61.7		6.2		(65.5	)	(186.8	)	267.7	232.4		177.3		6.5		177.0		152.3		211.8		210.7		204.8
Money Market Funds	(286.2	)	1,883.6		335.2		1,866.7		874.8	2,211.0		(216.6	)	(1,446.2	)	3,457.9		3,156.1		2,181.3		1,055.5		1,076.5

⁽¹⁾ September, April, March, and January 2006 include an inflow of $1.0 billion, an inflow of $2.3 billion, an outflow of $1.6 billion, and an inflow $1.6 billion, respectively, at U.S. Trust related to Special Fiduciary business clients.

⁽²⁾ Periodically, the Company reviews its active account base. The Company identified over 400,000 brokerage accounts that met its current definition of active, but had little or no balances and no likelihood of further activity. Effective March 31, 2006, the Company 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 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 added disclosures for its banking accounts (i.e., deposits, credit cards, HELOCs, mortgages, and other loans) and Corporate Retirement Plan Participants. Amounts for periods December 2005 and prior are not available.

⁽³⁾ Includes all client trades 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 Client^TM and advised investing offers.

⁽⁵⁾ Represents the principal value of client mutual fund transactions handled by Schwab and U.S. Trust, including transactions in proprietary funds. Includes institutional funds available only to Investment Managers.