SCHWAB CHARLES CORP - FORM 8-K - EX-99.1 - PRESS RELEASE

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8-K - FORM 8-K - SCHWAB CHARLES CORP	d8k.htm

EXHIBIT 99.1

News Release

Contacts:


MEDIA:		INVESTORS/ANALYSTS:

Greg Gable		Rich Fowler
Charles Schwab		Charles Schwab
Phone: 415-667-0473		Phone: 415-667-1841

SCHWAB REPORTS FOURTH QUARTER REVENUES UP 14% YEAR-OVER-YEAR

December net new assets exceed $11 billion, highest in 23 months

SAN FRANCISCO, January 18, 2011 – The Charles Schwab Corporation announced today that its net income was $119 million for the fourth quarter of 2010, down 27% from $164 million for the fourth quarter of 2009. Prior to the inclusion of charges relating to the Schwab YieldPlus^® Fund, Schwab’s fourth quarter net income was $218 million, up 33% over the year ago period. For the twelve months ended December 31, 2010, the company’s net income was $454 million, down 42% from the year-earlier period. The company’s 2010 net income prior to the inclusion of charges relating to YieldPlus and other previously disclosed matters totaled $775 million.

Chairman Charles Schwab said, “I’m proud of the progress we’ve made in building a model of full-service investing and brokerage that goes beyond serving the privileged few to ensure that high-quality help and advice is available to any investor seeking to build a better financial future. We currently serve a record $1.57 trillion in client assets, which represents an 8% compound annual growth rate since 2000 – a testament to the appeal of our approach. Schwab’s share of the investable assets in the U.S. is growing and the future looks bright. We enter 2011 with an expanded range of products and services and enhanced value for our clients.”


	Three Months Ended —December 31,—						% Change			Twelve Months Ended —December 31,—						% Change
Financial Highlights	2010			2009			% Change			2010			2009			% Change
Net revenues (in millions)	$	1,127		$	986			14	%	$	4,248		$	4,193			1	%
Net income (in millions)	$	119		$	164			(27	%)	$	454		$	787			(42	%)
Diluted earnings per share	$	.10		$	.14			(29	%)	$	.38		$	.68			(44	%)
Pre-tax profit margin		20.3	%		27.0	%					18.3	%		30.4	%
Return on stockholders’ equity (annualized)		8	%		13	%					8	%		17	%

CEO Walt Bettinger commented, “Our business momentum continues, with $11.4 billion in net new assets for December alone, and we’re demonstrating significantly improved financial performance, with fourth quarter revenues up 14% over year-earlier levels and profits up solidly after adjusting for charges. With the worst of the economic crisis behind us, our focus shifted in 2010 to increasing our investment to drive growth, while at the same time improving profitability regardless of any recovery in short-term interest rates. We nearly doubled our spending on client-related initiatives last year to $130 million, with completed initiatives including an ETF-based advice program, expanded fixed income offerings, and integrated mobile applications for brokerage and banking.”

“We believe the importance of sustained investment in our clients is reflected in the strength of our metrics,” Mr. Bettinger continued. “New brokerage account openings rose by 5% in 2010 and exceeded 750,000 for the fourth consecutive year, net new assets totaled $78.1 billion excluding significant one-time flows, down from 2009 due to the

environment, but once again exceeding the pace reported by any other firm, and total client assets were up 11% year-over- year. This continued growth in our client base – along with ongoing recovery in the equity markets – enabled us to rebound from a 19% decline in revenues during 2009 to a 1% increase in 2010, despite absorbing over $200 million in additional money fund management fee waivers. As we planned, rising revenues combined with our expense discipline enabled us to deliver improving profit margins during the year – prior to charges, our fourth quarter pre-tax profit margin was 9 percentage points higher than the first quarter trough. Our commitment to disciplined, profitable growth across all market cycles is unwavering, and we recognize that growth is only possible if we continue to invest in our clients.”

CFO Joe Martinetto added, “Our financial priorities remain straightforward – sustain a healthy balance sheet, support continued growth in our businesses, and deliver improving profitability as market headwinds abate. Our asset quality remains extremely high with limited credit-related losses. In addition, we expanded stockholders’ equity by 22% during 2010 to $6.2 billion, and we ended the year with approximately $1.1 billion in available cash and liquid investments at the parent level. Our full-year 2010 revenues and expenses – setting aside charges – were right in line with our expectations given the environment. We were also encouraged to see sequential improvement across all three of our major sources of revenue – net interest revenue, asset management and administration fees, and trading revenue – in the fourth quarter, only the second such occurrence since the end of 2007. We remain convinced that our diversified business model will enable us to deliver improving revenues and profitability as we go forward even if short-term rates remain at current levels.”

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

Investor Services

•

Net new accounts for the quarter totaled approximately 38,000, up 6% year-over-year. Total accounts reached 5.6 million as of December 31, 2010 up 4% year-over-year.

Institutional Services

Advisor Services

•

Expanded Schwab’s annual IMPACT^® conference, one of the country’s largest gatherings of independent investment advisors, to include clients and representatives of Other Institutional Services businesses, such as independent retirement plan recordkeepers. Total attendance at the conference was nearly 4,000.

Products and Infrastructure

•

For Charles Schwab Bank:

•

Balance sheet assets = $54.9 billion, up 27% year-over-year.

•

Outstanding mortgage and home equity loans = $8.2 billion, up 17% year-over-year.

•

First mortgage originations during the quarter = $1.7 billion.

•

Delinquency, nonaccrual, and loss reserve ratios for Schwab Bank’s loan portfolio = 0.96%, 0.58% and 0.60%, respectively, at month-end December.

•

Schwab Bank High Yield Investor Checking^® accounts = 516,000, with $9.9 billion in balances.

•

Introduced a new issue municipal bond calendar that makes it easier for clients to review, research and order new municipal bonds online.

•

Month-end December total assets under management in Schwab ETFs™ = $2.7 billion. Total assets in Schwab Managed Portfolios-ETFs = $2.0 billion.

•

Completed the acquisition of Windhaven Investment Management, Inc. for $150 million in cash and stock.

•

Launched an integrated brokerage and banking application for iPhone^® users.

•

Client assets enrolled in the PIMCO Municipal Bond Ladder SMA strategies reached $725 million.

Apple and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries. iPhone is a trademark of Apple Inc.

Supporting schedules are either attached or located at: http://www.aboutschwab.com/media/xls/q4_2010_schedule.xls

Forward Looking Statements

This press release contains forward looking statements relating to the company’s revenues and profitability. 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, general market conditions, including the level of interest rates, equity valuations and trading activity; the company’s ability to attract and retain clients and grow client assets/relationships; the impact of changes in market conditions on money market fund fee waivers, revenue, expenses and pre-tax margins; competitive pressures on rates and fees; the level of client assets, including cash balances; unanticipated adverse developments in litigation or regulatory matters and the extent of any charges associated with legal matters; the unknown costs of complying with new regulations emerging from recent financial reform legislation; and other factors set forth in the company’s Form 10-Q for the period ending September 30, 2010.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with more than 300 offices and 8.0 million client brokerage accounts, 1.5 million corporate retirement plan participants, 690,000 banking accounts, and $1.57 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), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and mortgage services and products. More information is available at www.schwab.com and www.aboutschwab.com.

###

THE CHARLES SCHWAB CORPORATION

Consolidated Statements of Income

(In millions, except per share amounts)

(Unaudited)


	Three Months Ended December 31,						Twelve Months Ended December 31,
	2010			2009			2010			2009
Net Revenues
Asset management and administration fees	$	497		$	436		$	1,822		$	1,875

Interest revenue		462			365			1,723			1,428
Interest expense		(48	)		(55	)		(199	)		(183	)

Net interest revenue		414			310			1,524			1,245

Trading revenue		206			224			830			996
Other		36			43			135			175
Provision for loan losses		(9	)		(5	)		(27	)		(38	)
Net impairment losses on securities ⁽¹⁾		(17	)		(22	)		(36	)		(60	)

Total net revenues		1,127			986			4,248			4,193

Expenses Excluding Interest
Compensation and benefits		397			371			1,573			1,544
Professional services		92			81			341			275
Occupancy and equipment		70			73			272			318
Advertising and market development		57			50			196			191
Communications		53			51			207			206
Depreciation and amortization		38			38			146			159
Class action litigation and regulatory reserve		124			—			320			—
Money market mutual fund charges		—			—			132			—
Other		67			56			282			224

Total expenses excluding interest		898			720			3,469			2,917

Income before taxes on income		229			266			779			1,276
Taxes on income		(110	)		(102	)		(325	)		(489	)

Net Income	$	119		$	164		$	454		$	787

Weighted-Average Common Shares Outstanding — Diluted		1,200			1,163			1,194			1,160

Earnings Per Share — Basic	$	.10		$	.14		$	.38		$	.68
Earnings Per Share — Diluted	$	.10		$	.14		$	.38		$	.68

⁽¹⁾

Net impairment losses on securities include total other-than-temporary impairment losses of $0 million and $39 million, net of $(17) million and $17 million recognized in other comprehensive income, for the three months ended December 31, 2010 and 2009, respectively, and total other-than-temporary impairment losses of $41 million and $278 million, net of $5 million and $218 million recognized in other comprehensive income, for the twelve months ended December 31, 2010 and 2009, respectively.

See Notes to Consolidated Statements of Income, Financial and Operating Highlights, and Net Interest Revenue Information.

THE CHARLES SCHWAB CORPORATION

Financial and Operating Highlights

(Unaudited)


	Q4-10 % change						2010												2009
(In millions, except per share amounts and as noted)	vs. Q4-09			vs. Q3-10			Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter
Net Revenues
Asset management and administration fees		14	%		6	%	$	497		$	468		$	437		$	420		$	436
Net interest revenue		34	%		7	%		414			387			383			340			310
Trading revenue		(8	%)		13	%		206			182			233			209			224
Other		(16	%)		13	%		36			32			36			31			43
Provision for loan losses		80	%		N/M			(9	)		(3	)		(1	)		(14	)		(5	)
Net impairment losses on securities		(23	%)		N/M			(17	)		(3	)		(8	)		(8	)		(22	)

Total net revenues		14	%		6	%		1,127			1,063			1,080			978			986

Expenses Excluding Interest
Compensation and benefits		7	%		4	%		397			381			393			402			371
Professional services		14	%		8	%		92			85			84			80			81
Occupancy and equipment		(4	%)		6	%		70			66			68			68			73
Advertising and market development		14	%		68	%		57			34			43			62			50
Communications		4	%		8	%		53			49			53			52			51
Depreciation and amortization		—			9	%		38			35			36			37			38
Class action litigation and regulatory reserve ⁽¹⁾		N/M			N/M			124			—			—			196			—
Money market mutual fund charges ⁽²⁾		—			N/M			—			132			—			—			—
Other ⁽³⁾		20	%		(18	%)		67			82			65			68			56

Total expenses excluding interest		25	%		4	%		898			864			742			965			720

Income before taxes on income		(14	%)		15	%		229			199			338			13			266
Taxes on income		8	%		47	%		(110	)		(75	)		(133	)		(7	)		(102	)

Net Income		(27	%)		(4	%)	$	119		$	124		$	205		$	6		$	164

Basic earnings per share		(29	%)		—		$	.10		$	.10		$	.17		$	—		$	.14
Diluted earnings per share		(29	%)		—		$	.10		$	.10		$	.17		$	—		$	.14
Dividends declared per common share		—			—		$	.06		$	.06		$	.06		$	.06		$	.06
Weighted-average common shares outstanding – diluted		3	%		1	%		1,200			1,194			1,195			1,188			1,163

Performance Measures
Pre-tax profit margin								20.3	%		18.7	%		31.3	%		1.3	%		27.0	%
Return on stockholders’ equity (annualized)								8	%		8	%		14	%		—			13	%

Financial Condition (at quarter end, in billions)
Cash and investments segregated		23	%		13	%	$	22.7		$	20.1		$	18.9		$	19.5		$	18.4
Receivables from brokerage clients		30	%		14	%	$	11.2		$	9.8		$	9.9		$	9.0		$	8.6
Loans to banking clients		19	%		6	%	$	8.7		$	8.2		$	7.8		$	7.6		$	7.3
Total assets		23	%		6	%	$	92.6		$	87.3		$	82.3		$	78.3		$	75.4
Deposits from banking clients		30	%		4	%	$	50.6		$	48.8		$	45.9		$	42.1		$	38.8
Payables to brokerage clients		18	%		12	%	$	30.9		$	27.7		$	26.4		$	26.4		$	26.2
Long-term debt ⁽⁴⁾		33	%		—		$	2.0		$	2.0		$	1.3		$	1.3		$	1.5
Stockholders’ equity		22	%		3	%	$	6.2		$	6.0		$	5.9		$	5.7		$	5.1

Other
Full-time equivalent employees (at quarter end, in thousands)		3	%		2	%		12.8			12.5			12.5			12.6			12.4
Annualized net revenues per average full-time equivalent employee (in thousands)		11	%		4	%	$	355		$	340		$	343		$	310		$	321
Capital expenditures—cash purchases of equipment, office facilities, and property, net (in millions)		59	%		89	%	$	51		$	27		$	25		$	24		$	32

Asset Management and Administration Fees
Asset management and administration fees before money market mutual fund fee waivers		10	%		7	%	$	599		$	561		$	550		$	545		$	546
Money market mutual fund fee waivers		(7	%)		10	%		(102	)		(93	)		(113	)		(125	)		(110	)

Asset management and administration fees		14	%		6	%	$	497		$	468		$	437		$	420		$	436

Clients’ Daily Average Trades (in thousands)
Revenue trades ⁽⁵⁾		2	%		16	%		271.6			233.2			302.9			275.7			266.3
Asset-based trades ⁽⁶⁾		(5	%)		7	%		39.3			36.8			46.1			45.6			41.5
Other trades ⁽⁷⁾		5	%		2	%		84.6			82.6			87.6			94.2			80.6

Total		2	%		12	%		395.5			352.6			436.6			415.5			388.4

Average Revenue Per Revenue Trade ⁽⁵⁾		(11	%)		(2	%)	$	12.07		$	12.32		$	12.15		$	12.60		$	13.59

⁽¹⁾	Includes a regulatory reserve of $119 million in the fourth quarter of 2010, a class action litigation reserve of $196 million in the first quarter of 2010, and other charges relating to the Schwab YieldPlus Fund ^®.

⁽²⁾	Includes a charge of $132 million relating to losses recognized by Schwab money market mutual funds in the third quarter of 2010.

⁽³⁾	Includes charges of $21 million and $9 million in the third quarter and first quarter of 2010, respectively, relating to the termination of the Company’s Invest First ^® and WorldPoints^(a) Visa^(b) credit card program.

⁽⁴⁾	Includes $700 million of Senior Notes that mature in 2020, which were issued in the third quarter of 2010.

⁽⁵⁾	Includes all client trades that generate either commission revenue or revenue from principal markups (i.e., fixed income); also known as DART.

⁽⁶⁾	Includes eligible trades executed by clients who participate in one or more of the Company’s asset-based pricing relationships.

⁽⁷⁾	Includes all commission free trades, including Schwab Mutual Fund OneSource ^® funds and ETFs, and other proprietary products.

N/M Not meaningful.

See Notes to Consolidated Statements of Income, Financial and Operating Highlights, and Net Interest Revenue Information.

^(a) WorldPoints is a registered trademark of FIA Card Services, N.A.; ^(b)Visa is a registered trademark of Visa International Service Association.

THE CHARLES SCHWAB CORPORATION

Net Interest Revenue Information

(In millions)

(Unaudited)


	Three Months Ended December 31,														Twelve Months Ended December 31,
	2010							2009							2010							2009
	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	$	5,551	$	3		0.21	%	$	8,005	$	6		0.30	%	$	7,269	$	19		0.26	%	$	7,848	$	33		0.42	%
Cash and investments segregated		21,017		16		0.30	%		17,702		13		0.29	%		19,543		57		0.29	%		16,291		80		0.49	%
Broker-related receivables ⁽¹⁾		379		—		0.16	%		388		—		0.04	%		317		—		0.08	%		363		1		0.28	%
Receivables from brokerage clients		9,754		115		4.68	%		7,616		97		5.05	%		8,981		437		4.87	%		6,749		351		5.20	%
Other securities owned ⁽²⁾		—		—		—			344		1		1.15	%		74		—		0.45	%		126		1		0.79	%
Securities available for sale ⁽³⁾		25,298		110		1.73	%		22,482		132		2.33	%		24,209		486		2.01	%		18,558		521		2.81	%
Securities held to maturity		15,308		121		3.14	%		3,314		31		3.71	%		10,440		361		3.46	%		1,915		74		3.86	%
Loans to banking clients		8,534		71		3.30	%		7,185		64		3.53	%		7,987		275		3.44	%		6,671		241		3.61	%
Loans held for sale ⁽⁴⁾		116		1		4.43	%		78		—		4.91	%		80		4		5.00	%		110		5		4.55	%

Total interest-earning assets		85,957		437		2.02	%		67,114		344		2.03	%		78,900		1,639		2.08	%		58,631		1,307		2.23	%

Other interest revenue				25							21							84							121

Total interest-earning assets	$	85,957	$	462		2.13	%	$	67,114	$	365		2.16	%	$	78,900	$	1,723		2.18	%	$	58,631	$	1,428		2.44	%

Funding sources:
Deposits from banking clients	$	49,082	$	20		0.16	%	$	37,079	$	34		0.36	%	$	44,858	$	105		0.23	%	$	31,249	$	107		0.34	%
Payables to brokerage clients⁽⁵⁾		24,530		—		0.01	%		19,810		1		0.02	%		22,715		2		0.01	%		18,002		3		0.02	%
Long-term debt		2,008		28		5.53	%		1,514		20		5.24	%		1,648		92		5.58	%		1,231		71		5.77	%

Total interest-bearing liabilities		75,620		48		0.25	%		58,403		55		0.37	%		69,221		199		0.29	%		50,482		181		0.36	%

Non-interest-bearing funding sources		10,337							8,711							9,679							8,149
Other interest expense				—							—							—							2

Total funding sources	$	85,957	$	48		0.22	%	$	67,114	$	55		0.33	%	$	78,900	$	199		0.25	%	$	58,631	$	183		0.32	%

Net interest revenue			$	414		1.91	%			$	310		1.83	%			$	1,524		1.93	%			$	1,245		2.12	%

⁽¹⁾	Includes receivables from brokers, dealers, and clearing organizations. Interest revenue on broker-related receivables was less than $500,000 in the fourth quarters of 2010 and 2009 and twelve months ended 2010.

⁽²⁾	Interest revenue on other securities owned was less than $500,000 for the twelve months ended 2010.

⁽³⁾	Amounts have been calculated based on amortized cost.

⁽⁴⁾	Interest revenue on loans held for sale was less than $1 million in the fourth quarter of 2009.

⁽⁵⁾	Interest expense on payables to brokerage clients was less than $500,000 in the fourth quarter of 2010.

See Notes to Consolidated Statements of Income, Financial and Operating Highlights, and Net Interest Revenue Information.

Notes to Consolidated Statements of Income, Financial and Operating Highlights,

and Net Interest Revenue Information

(Unaudited)

The Company

The consolidated statements of income, financial and operating highlights, and net interest revenue information include The Charles Schwab Corporation (CSC) and its majority-owned subsidiaries (collectively referred to as the Company), including Charles Schwab & Co., Inc. and Charles Schwab Bank. Certain prior year amounts have been reclassified to conform to the 2010 presentation. The consolidated statements of income, financial and operating highlights, and net interest revenue information 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, 2009.

**********

THE CHARLES SCHWAB CORPORATION

Reconciliation of Net Income Excluding Certain Charges to Reported Net Income

(In millions)

(Unaudited)


	Three Months Ended December 31,					Twelve Months Ended December 31,
	2010			2009		2010			2009
Net Income Excluding Certain Charges	$	218		$	164	$	775		$	787
Class action litigation and regulatory reserve⁽¹⁾		124			—		320			—
Money market mutual fund charges ⁽²⁾		—			—		132			—
Other expense ⁽³⁾		—			—		30			—

Total charges		124			—		482			—
Tax effect		(25	)		—		(161	)		—
Total charges, net of tax		99			—		321			—

Reported Net Income	$	119		$	164	$	454		$	787

⁽¹⁾	Includes a regulatory reserve of $119 million in the fourth quarter of 2010, a class action litigation reserve of $196 million in the first quarter of 2010, and other charges relating to the Schwab YieldPlus Fund^®.

⁽²⁾	Includes a charge relating to losses recognized by Schwab money market mutual funds in the third quarter of 2010.

⁽³⁾	Includes charges of $21 million and $9 million in the third quarter and first quarter of 2010, respectively, relating to the termination of the Company’s Invest First^® and WorldPoints Visa credit card program.

THE CHARLES SCHWAB CORPORATION

Growth in Client Assets and Accounts

(Unaudited)


	Q4-10 % change						2010												2009
(In billions, at quarter end, except as noted)	vs. Q4-09			vs. Q3-10			Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter
Assets in client accounts
Schwab One^®, other cash equivalents and deposits from banking clients		25	%		4	%	$	81.1		$	77.9		$	72.4		$	68.0		$	65.1
Proprietary funds (Schwab Funds^® and Laudus Funds^®):
Money market funds		(10	%)		1	%		154.5			152.4			156.2			164.1			171.2
Equity and bond funds		11	%		8	%		46.0			42.7			39.2			43.5			41.6

Total proprietary funds		(6	%)		3	%		200.5			195.1			195.4			207.6			212.8

Mutual Fund Marketplace^® ⁽¹⁾
Mutual Fund OneSource^{® (2)}		19	%		8	%		208.6			193.9			177.2			187.4			175.0
Mutual fund clearing services		(49	%)		12	%		42.1			37.5			29.3			86.0			81.8
Other third-party mutual funds⁽²⁾		20	%		6	%		291.8			275.0			249.9			258.7			243.8

Total Mutual Fund Marketplace		8	%		7	%		542.5			506.4			456.4			532.1			500.6

Total mutual fund assets		4	%		6	%		743.0			701.5			651.8			739.7			713.4

Equity and other securities ⁽¹⁾		22	%		12	%		589.4			526.4			474.2			522.2			485.0
Fixed income securities		3	%		(2	%)		171.3			174.7			172.2			169.5			167.0
Margin loans outstanding		30	%		12	%		(10.3	)		(9.2	)		(9.1	)		(8.3	)		(7.9	)

Total client assets		11	%		7	%	$	1,574.5		$	1,471.3		$	1,361.5		$	1,491.1		$	1,422.6


Client assets by business
Investor Services		18	%		7	%	$	686.5		$	644.6		$	568.7		$	606.4		$	583.2
Advisor Services		11	%		7	%		654.9			609.9			596.7			624.0			590.4
Other Institutional Services		(6	%)		8	%		233.1			216.8			196.1			260.7			249.0

Total client assets by business		11	%		7	%	$	1,574.5		$	1,471.3		$	1,361.5		$	1,491.1		$	1,422.6

Net growth in assets in client accounts (for the quarter ended)
Net new assets
Investor Services⁽³⁾		61	%		117	%	$	5.0		$	2.3		$	1.3		$	4.4		$	3.1
Advisor Services ⁽³⁾		27	%		105	%		16.4			8.0			10.2			14.7			12.9
Other Institutional Services ⁽⁴⁾		(45	%)		12	%		4.8			4.3			(49.0	)		4.2			8.8

Total net new assets		6	%		79	%		26.2			14.6			(37.5	)		23.3			24.8

Net market gains (losses)		125	%		(19	%)		77.0			95.2			(92.1	)		45.2			34.2

Net growth (decline)		75	%		(6	%)	$	103.2		$	109.8		$	(129.6	)	$	68.5		$	59.0

New brokerage accounts (in thousands, for the quarter ended)		11	%		34	%		225			168			206			230			202
Clients (in thousands)
Active Brokerage Accounts		4	%		1	%		7,998			7,919			7,883			7,805			7,701
Banking Accounts ⁽⁵⁾		22	%		4	%		690			665			634			605			567
Corporate Retirement Plan Participants		1	%		—			1,477			1,473			1,467			1,469			1,465

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

⁽²⁾	Certain client assets at December 31, 2009, have been reclassified from Mutual Fund OneSource^® to other third-party mutual funds.

⁽³⁾	Includes inflows of $520 million in Investor Services and $1.5 billion in Advisor Services from the acquisition of Windhaven in the fourth quarter of 2010.

⁽⁴⁾	Includes inflows of $1.2 billion from a mutual fund clearing services client in the fourth quarter of 2010. Includes net outflows of $51.5 billion in the second quarter of 2010 related to the planned deconversion of a mutual fund clearing services client.

⁽⁵⁾	Effective September 2010, the number of banking accounts excludes credit cards. Prior period amounts have been recast to reflect this change.

The Charles Schwab Corporation Monthly Market Activity Report For December 2010


	2009 Dec			2010 Jan			Feb			Mar			Apr			May			Jun			Jul			Aug			Sep			Oct			Nov						% change
	2009 Dec			2010 Jan			Feb			Mar			Apr			May			Jun			Jul			Aug			Sep			Oct			Nov			Dec			Mo.			Yr.
Change in Client Assets (in billions of dollars)
Net New Assets⁽¹⁾		10.2			6.0			7.9			9.4			3.8			(24.8	)		(16.5	)		6.2			4.2			4.2			6.8			8.0			11.4			43	%		12	%
Net Market Gains (Losses)		15.0			(27.9	)		23.7			49.4			16.9			(74.5	)		(34.5	)		53.7			(31.5	)		73.0			32.3			(5.5	)		50.2


Total Client Assets (at month end, in billions of dollars)		1,422.6			1,400.7			1,432.3			1,491.1			1,511.8			1,412.5			1,361.5			1,421.4			1,394.1			1,471.3			1,510.4			1,512.9			1,574.5			4	%		11	%


New Brokerage Accounts (in thousands)		80			75			66			89			89			59			58			53			59			56			60			66			99			50	%		24	%

Clients (at month end, in thousands)
Active Brokerage Accounts		7,701			7,734			7,760			7,805			7,852			7,869			7,883			7,891			7,908			7,919			7,932			7,951			7,998			1	%		4	%
Banking Accounts ⁽²⁾		567			581			592			605			616			625			634			643			655			665			673			681			690			1	%		22	%
Corporate Retirement Plan Participants		1,465			1,467			1,467			1,469			1,467			1,462			1,467			1,468			1,467			1,473			1,468			1,463			1,477			1	%		1	%

Clients’ Daily Average Trades⁽³⁾ (in thousands)		366.0			465.3			394.8			391.3			439.9			512.7			364.4			365.3			346.7			346.0			371.7			413.9			401.1			(3	%)		10	%

Market Indices (at month end)
Dow Jones Industrial Average		10,428			10,067			10,325			10,857			11,009			10,137			9,774			10,466			10,015			10,788			11,119			11,006			11,578			5	%		11	%
Nasdaq Composite		2,269			2,147			2,238			2,398			2,461			2,257			2,109			2,255			2,114			2,369			2,507			2,498			2,653			6	%		17	%
Standard & Poor’s 500		1,115			1,074			1,104			1,169			1,187			1,089			1,031			1,102			1,049			1,141			1,183			1,181			1,258			7	%		13	%

Daily Average Market Share Volume (in millions)
NYSE		1,099			1,162			1,145			1,052			1,216			1,678			1,378			1,151			1,003			1,007			1,041			1,039			926			(11	%)		(16	%)
Nasdaq		1,825			2,443			2,255			2,334			2,540			2,849			2,251			2,126			1,943			2,033			2,035			2,004			1,686			(16	%)		(8	%)

Total		2,924			3,605			3,400			3,386			3,756			4,527			3,629			3,277			2,946			3,040			3,076			3,043			2,612			(14	%)		(11	%)

Mutual Fund Net Buys (Sells) ⁽⁴⁾ (in millions of dollars)
Large Capitalization Stock		(345.0	)		(14.0	)		(344.7	)		74.4			233.7			(515.0	)		(322.5	)		(254.5	)		(773.9	)		(467.6	)		(166.9	)		(244.7	)		81.8
Small / Mid Capitalization Stock		(51.5	)		238.3			132.8			416.3			465.3			(273.1	)		(122.0	)		(461.7	)		(502.6	)		(239.5	)		(92.4	)		63.4			388.6
International		225.9			621.2			352.5			565.3			552.5			(1,118.6	)		107.2			63.9			40.1			423.0			577.6			507.0			379.6
Specialized		51.4			86.1			198.4			17.4			143.2			(74.8	)		42.4			8.3			(24.4	)		115.8			33.7			95.9			61.4
Hybrid		775.1			1,037.5			779.3			1,096.6			767.0			203.0			495.2			363.1			556.0			405.1			662.3			754.8			652.4
Taxable Bond		1,771.6			2,262.2			1,654.9			2,786.5			1,777.5			863.1			1,848.4			2,103.3			1,849.0			1,730.6			1,201.5			(112.4	)		(1,331.7	)
Tax-Free Bond		473.4			356.0			325.3			331.9			157.3			114.3			8.6			195.4			340.0			(39.8	)		87.2			(573.0	)		(925.4	)
Money Market Funds		(2,204.7	)		(1,907.1	)		(756.7	)		(4,481.4	)		(5,372.7	)		1,565.1			(4,139.0	)		(1,007.5	)		(1,028.2	)		(1,889.2	)		(206.8	)		(302.3	)		2,852.5

⁽¹⁾

November 2010 includes inflows of $2.0 billion from the acquisition of Windhaven. October 2010 includes inflows of $1.2 billion from a mutual fund clearing services client. June 2010 and May 2010 include net outflows of $22.0 billion and $29.5 billion, respectively, from the planned deconversion of a mutual fund clearing services client.

⁽²⁾	The number of banking accounts excludes credit cards, which totaled 169,000 when the Company ended the sponsorship of its affinity card program at month end September 2010. Prior period amounts have been recast to reflect this change.

⁽³⁾	Includes revenue trades from commissions or principal mark-ups, trades by clients in asset-based pricing relationships and all commission-free trades, including Schwab Mutual Fund OneSource^® funds and ETFs, and other proprietary products.

⁽⁴⁾	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.

Attached files

SCHWAB CHARLES CORP Reports

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