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

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8-K - FORM 8-K - SCHWAB CHARLES CORP	d758923d8k.htm

EXHIBIT 99.1

News Release

Contacts:

MEDIA:

INVESTORS/ANALYSTS:

Greg Gable

Charles Schwab

Phone: 415-667-0473

Rich Fowler

Charles Schwab

Phone: 415-667-1841

SCHWAB REPORTS SECOND QUARTER NET INCOME UP 27% YEAR OVER YEAR

First Half Earnings of $650 Million Highest in Company History

Client Assets Reach a Record $2.40 Trillion

SAN FRANCISCO, July 16, 2014 – The Charles Schwab Corporation announced today that its net income for the second quarter of 2014 was $324 million, comparable to $326 million for the first quarter of 2014, and up 27% from $256 million for the second quarter of 2013. Net income for the six months ended June 30, 2014 was $650 million, up 41% from the year-earlier period.


	Three Months Ended —June 30,—						%	Six Months Ended —June 30,—						%
Financial Highlights	2014			2013			Change	2014			2013			Change
Net revenues (in millions)	$	1,478		$	1,337		11%	$	2,956		$	2,627		13%
Net income (in millions)	$	324		$	256		27%	$	650		$	462		41%
Diluted earnings per common share	$	.23		$	.18		28%	$	.47		$	.33		42%
Pre-tax profit margin		35.3	%		30.8	%			35.3	%		28.3	%
Return on average common stockholders’ equity (annualized)		12	%		10	%			13	%		10	%

CEO Walt Bettinger said, “With the right full-service model for serving today’s investors, we are driving sustained momentum in our business. As investor engagement continues to gain strength, we offer the transparency, open architecture, technology and accessibility – including personal relationships – that support our clients’ confidence and trust in Schwab as a partner that can help them build their financial futures. We gathered $11.5 billion in net new assets in June and $22.7 billion during the second quarter, the highest June in our history and the highest second quarter in 6 years. Clients opened 242,000 new brokerage accounts during the quarter, and we ended the quarter serving 9.3 million active brokerage accounts and 950,000 banking accounts, up 3% and 4%, respectively, from year-earlier levels. Total client assets reached a record $2.40 trillion as of June 30, an increase of $351 billion, or 17%, from June 2013.”

“Wealth management capabilities are an important element of our contemporary full-service investing model,” Mr. Bettinger continued. “Many of our clients are at a stage where they have accumulated significant asset levels, they are increasingly looking for professional help, and they expect Schwab to be just as proficient in serving their current needs as we are in serving clients at other points in their investing lives. With a model that encompasses both nationally-branded wealth management services offered through our retail financial consultants and access to highly customized and local expertise offered by independent advisors, the value of these capabilities to new and existing clients is clear. Over 70% of retail client assets at Schwab are being served by a dedicated branch professional, we have held more than 110,000 planning conversations with clients over the past year, and approximately 50% of total client assets at Schwab are receiving some form of ongoing advisory service – $1.01 trillion under the guidance of independent advisors and approximately $175 billion in retail and other advisory solutions, up 20% and 28%, respectively, over year-earlier levels.”

- 1 -

CFO Joe Martinetto commented, “Our financial performance thus far in 2014 is right in line with management expectations. Given an environment that is no longer masking our progress, it’s clear our financial model is working. Our success with clients and diversified income sources produced revenue growth of 11% for the second quarter. Record levels of asset management and administration fees and net interest revenue, which grew by 10% and 19%, respectively, more than offset a decline in trading revenues as client activity slowed. Our expense discipline continued during the second quarter – we limited expense growth to 3%, which helped expand our operating leverage even as we continued to invest in new products and services for our clients. Overall, we achieved a pre-tax profit margin of 35.3% and a 27% year-over-year increase in net income for the second quarter while improving the company’s return on equity to 12%. Our pre-tax margin for the first half of 2014 was also 35.3%, an improvement of 700 basis points over the year-ago period and our best performance since 2008; our first half net income of $650 million is the best start to any year in our history. At the same time, we have continued to build a strong balance sheet capable of supporting our ongoing growth, with stockholders’ equity now exceeding $11 billion and a preliminary consolidated Tier 1 Leverage Ratio of 6.8%.”

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

Investor Services

•

Held financial planning conversations with approximately 29,000 clients, up 16% from a year ago.

•

Launched a new Schwab.com mobile-optimized homepage, where clients and prospects can easily learn about Schwab’s products and services, access our market perspectives, and start the new account opening process.

•

New retail brokerage accounts for the quarter totaled approximately 148,000, down from 155,000 a year ago; total accounts reached 6.6 million as of June 30, 2014, up 2% year-over-year.

Advisor Services

•

Held the annual EXPLORE^® conference for the company’s top independent advisor clients. Schwab leadership discussed top client initiatives and growth opportunities for RIAs, including serving younger high net worth investors.

•

Launched new approval tools to allow secure electronic signatures and wire transfer authorizations, improving advisor efficiency and streamlining the client experience by reducing the need for paper and faxing.

•

Added six funds to Schwab Alternative Investment OneSource™, a platform that provides advisors and their clients with access to alternative investment funds registered under the Securities Act of 1933. A total of 30 funds are now available on the platform.

Products and Infrastructure

•

For Charles Schwab Bank:

^¡

Balance sheet assets = $103.7 billion, up 14% year-over-year.

^¡

Outstanding mortgage and home equity loans = $11.1 billion, up 5% year-over-year.

^¡

First mortgage originations through its loan program during the quarter = $605 million.

^¡

Delinquency, nonaccrual, and loss reserve ratios for Schwab Bank’s loan portfolio = 0.32%, 0.29% and 0.32%, respectively, at month-end June.

^¡

Schwab Bank High Yield Investor Checking^® accounts = 756,000, with $11.9 billion in balances.

•

For Charles Schwab Investment Management:

^¡

Client assets invested in Schwab proprietary funds surpassed the quarter-trillion mark, ending at a record $251 billion, up 10% year-over-year.

^¡

Schwab ETFs^™finished the first half of 2014 ranked fifth in industry flows, up from eighth for all of 2013, as reported by ETF.com.

^¡

Schwab asset management products on third-party platforms have nearly doubled since June 2012 to $11.7 billion.

•

Client assets managed by Windhaven^® totaled $19.0 billion, up 10% year-over-year.

•

Client assets managed by ThomasPartners^® totaled $5.7 billion, up 107% from the second quarter of 2013.

•

Launched the Schwab OneSource Choice Variable Annuity™ with optional living benefit, which is designed for investors looking for choice and flexibility in a retirement income solution, provides the opportunity for tax-deferred growth with over 75 funds, and allows for qualified investments.

Supporting schedules are either attached or located at: http://www.aboutschwab.com/investor-relations/financial-reports

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Commentary from the CFO

Joe Martinetto, Executive Vice President and Chief Financial Officer, provides insight and commentary regarding Schwab’s financial picture at: http://www.aboutschwab.com/investor_relations/cfo_commentary

Forward-Looking Statements

This press release contains forward-looking statements relating to the company’s business momentum; investor engagement; financial model; and balance sheet strength. Achievement of these expectations and objectives is subject to risks and uncertainties that could cause actual results to differ materially from the expressed expectations.

Important factors that may cause such differences include, but are not limited to, 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; competitive pressures on rates and fees; the level of client assets, including cash balances; the company’s ability to monetize client assets; capital needs and management; client enrollments in advisory services; the company’s ability to develop and launch new products, services and capabilities in a timely and successful manner; the company’s ability to manage expenses; the impact of changes in market conditions on money market fund fee waivers, revenues, expenses and pre-tax margins; regulatory guidance; acquisition integration costs; trading activity; the effect of adverse developments in litigation or regulatory matters and the extent of any charges associated with legal matters; any adverse impact of financial reform legislation and related regulations; and other factors set forth in the company’s most recent reports on Form 10-K and Form 10-Q.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with more than 325 offices and 9.3 million active brokerage accounts, 1.3 million corporate retirement plan participants, 950,000 banking accounts, and $2.40 trillion in client assets as of June 30, 2014. 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 lending services and products. More information is available at www.schwab.com and www.aboutschwab.com.

###

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THE CHARLES SCHWAB CORPORATION

Consolidated Statements of Income

(In millions, except per share amounts)

(Unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
Net Revenues
Asset management and administration fees	$	632		$	572		$	1,243		$	1,124

Interest revenue		588			499			1,167			996
Interest expense		(26	)		(26	)		(52	)		(54	)

Net interest revenue		562			473			1,115			942

Trading revenue		212			235			459			458
Other		65			59			133			115
Provision for loan losses		7			1			6			(5	)
Net impairment losses on securities⁽¹⁾		—			(3	)		—			(7	)

Total net revenues		1,478			1,337			2,956			2,627

Expenses Excluding Interest
Compensation and benefits		520			494			1,048			1,030
Professional services		112			106			218			205
Occupancy and equipment		80			77			160			154
Advertising and market development		65			67			128			141
Communications		57			56			113			110
Depreciation and amortization		48			51			96			102
Other		75			74			150			142

Total expenses excluding interest		957			925			1,913			1,884

Income before taxes on income		521			412			1,043			743
Taxes on income		197			156			393			281

Net Income		324			256			650			462

Preferred stock dividends		22			23			30			31

Net Income Available to Common Stockholders	$	302		$	233		$	620		$	431

Weighted-Average Common Shares Outstanding — Diluted		1,313			1,288			1,312			1,285

Earnings Per Common Share — Basic	$	.23		$	.18		$	.47		$	.33
Earnings Per Common Share — Diluted	$	.23		$	.18		$	.47		$	.33

⁽¹⁾

There were no net impairment losses on securities for the three or six months ended June 30, 2014. Net impairment losses on securities include total other-than-temporary impairment losses of $2 million recognized in other comprehensive income, net of $(1) million reclassified from other comprehensive income, for the three months ended June 30, 2013. Net impairment losses on securities include total other-than-temporary impairment losses of $2 million recognized in other comprehensive income, net of $(5) million reclassified from other comprehensive income, for the six months ended June 30, 2013.

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

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THE CHARLES SCHWAB CORPORATION

Financial and Operating Highlights

(Unaudited)


	Q2-14 % change						2014						2013
	vs.			vs.			Second			First			Fourth			Third			Second
(In millions, except per share amounts and as noted)	Q2-13			Q1-14			Quarter			Quarter			Quarter			Quarter			Quarter
Net Revenues
Asset management and administration fees		10	%		3	%	$	632		$	611		$	608		$	583		$	572
Net interest revenue		19	%		2	%		562			553			532			506			473
Trading revenue		(10	%)		(14	%)		212			247			231			224			235
Other		10	%		(4	%)		65			68			64			57			59
Provision for loan losses		N/M			N/M			7			(1	)		2			4			1
Net impairment losses on securities		(100	%)		—			—			—			(2	)		(1	)		(3	)

Total net revenues		11	%		—			1,478			1,478			1,435			1,373			1,337

Expenses Excluding Interest
Compensation and benefits		5	%		(2	%)		520			528			515			482			494
Professional services		6	%		6	%		112			106			107			103			106
Occupancy and equipment		4	%		—			80			80			78			77			77
Advertising and market development		(3	%)		3	%		65			63			59			57			67
Communications		2	%		2	%		57			56			55			55			56
Depreciation and amortization		(6	%)		—			48			48			49			51			51
Other		1	%		—			75			75			74			84			74

Total expenses excluding interest		3	%		—			957			956			937			909			925

Income before taxes on income		26	%		—			521			522			498			464			412
Taxes on income		26	%		1	%		197			196			179			174			156

Net Income		27	%		(1	%)	$	324		$	326		$	319		$	290		$	256

Preferred stock dividends		(4	%)		175	%		22			8			22			8			23

Net Income Available to Common Stockholders		30	%		(5	%)	$	302		$	318		$	297		$	282		$	233

Basic earnings per common share		28	%		(4	%)	$	.23		$	.24		$	.23		$	.22		$	.18
Diluted earnings per common share		28	%		(4	%)	$	.23		$	.24		$	.23		$	.22		$	.18
Dividends declared per common share		—			—		$	.06		$	.06		$	.06		$	.06		$	.06
Weighted-average common shares outstanding - diluted		2	%		—			1,313			1,311			1,304			1,296			1,288

Performance Measures
Pre-tax profit margin								35.3	%		35.3	%		34.7	%		33.8	%		30.8	%
Return on average common stockholders’ equity (annualized) ⁽¹⁾								12	%		13	%		13	%		13	%		10	%

Financial Condition (at quarter end, in billions)
Cash and investments segregated		(29	%)		(7	%)	$	19.1		$	20.5		$	23.6		$	23.5		$	27.0
Receivables from brokerage clients		15	%		1	%	$	14.7		$	14.6		$	14.0		$	13.1		$	12.8
Loans to banking clients		10	%		2	%	$	12.9		$	12.6		$	12.4		$	12.1		$	11.7
Total assets		6	%		—		$	143.4		$	144.1		$	143.6		$	140.2		$	135.9
Deposits from banking clients		14	%		—		$	95.7		$	95.6		$	93.0		$	91.2		$	84.3
Payables to brokerage clients		(15	%)		(2	%)	$	31.5		$	32.3		$	35.3		$	34.5		$	36.9
Long-term debt		19	%		—		$	1.9		$	1.9		$	1.9		$	1.9		$	1.6
Stockholders’ equity		15	%		4	%	$	11.2		$	10.8		$	10.4		$	10.1		$	9.7

Other
Full-time equivalent employees (at quarter end, in thousands)		1	%		1	%		14.1			14.0			13.8			13.8			13.9
Annualized net revenues per average full-time equivalent employee (in thousands)		10	%		—		$	422		$	422		$	416		$	398		$	385
Capital expenditures - cash purchases of equipment, office facilities, and property, net (in millions)		46	%		51	%	$	101		$	67		$	90		$	65		$	69

Clients’ Daily Average Trades (in thousands)
Revenue trades ⁽²⁾		(9	%)		(19	%)		274			337			297			283			302
Asset-based trades ⁽³⁾		9	%		4	%		75			72			63			58			69
Other trades ⁽⁴⁾		6	%		(8	%)		134			145			128			138			126

Total		(3	%)		(13	%)		483			554			488			479			497

Average Revenue Per Revenue Trade⁽²⁾		1	%		2	%	$	12.26		$	12.03		$	12.33		$	12.39		$	12.19

⁽¹⁾	Return on average common stockholders’ equity is calculated using net income available to common stockholders divided by average common stockholders’ equity.

⁽²⁾	Includes all client trades that generate either commission revenue or revenue from principal markups (i.e., fixed income); also known as DART.

⁽³⁾	Includes eligible trades executed by clients who participate in one or more of the Company’s asset-based pricing relationships.

⁽⁴⁾	Includes all commission free trades, including Schwab Mutual Fund OneSource^® funds and ETFs, and other proprietary products.

N/M	Not meaningful.

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

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THE CHARLES SCHWAB CORPORATION

Net Interest Revenue Information

(In millions)

(Unaudited)


	Three Months Ended June 30,														Six Months Ended June 30,
	2014							2013							2014							2013
	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	$	6,001	$	3		0.20	%	$	6,148	$	3		0.20	%	$	6,349	$	7		0.22	%	$	7,023	$	8		0.23	%
Cash and investments segregated		19,614		6		0.12	%		26,438		9		0.14	%		20,611		12		0.12	%		27,011		21		0.16	%
Broker-related receivables ⁽¹⁾		312		—		—			398		—		0.12	%		303		—		0.15	%		379		—		0.13	%
Receivables from brokerage clients		13,634		120		3.53	%		11,571		106		3.67	%		13,397		236		3.55	%		11,457		212		3.73	%
Securities available for sale ⁽²⁾		52,564		138		1.05	%		48,611		137		1.13	%		52,269		278		1.07	%		47,764		275		1.16	%
Securities held to maturity		32,043		206		2.58	%		22,857		133		2.33	%		31,448		405		2.60	%		21,965		264		2.42	%
Loans to banking clients		12,775		88		2.76	%		11,603		79		2.73	%		12,661		175		2.79	%		11,348		159		2.83	%

Total interest-earning assets		136,943		561		1.64	%		127,626		467		1.47	%		137,038		1,113		1.64	%		126,947		939		1.49	%

Other interest revenue				27							32							54							57

Total interest-earning assets	$	136,943	$	588		1.72	%	$	127,626	$	499		1.57	%	$	137,038	$	1,167		1.72	%	$	126,947	$	996		1.58	%

Funding sources:
Deposits from banking clients	$	94,938	$	8		0.03	%	$	82,260	$	7		0.03	%	$	94,360	$	15		0.03	%	$	81,306	$	17		0.04	%
Payables to brokerage clients⁽¹⁾		26,352		—		0.01	%		31,164		—		0.01	%		26,779		1		0.01	%		31,627		1		0.01	%
Long-term debt		1,901		18		3.80	%		1,630		17		4.18	%		1,902		36		3.82	%		1,631		34		4.20	%

Total interest-bearing liabilities		123,191		26		0.08	%		115,054		24		0.08	%		123,041		52		0.09	%		114,564		52		0.09	%

Non-interest-bearing funding sources		13,752							12,572							13,997							12,383
Other interest expense ⁽¹⁾				—							2							—							2

Total funding sources	$	136,943	$	26		0.07	%	$	127,626	$	26		0.08	%	$	137,038	$	52		0.08	%	$	126,947	$	54		0.08	%

Net interest revenue			$	562		1.65	%			$	473		1.49	%			$	1,115		1.64	%			$	942		1.50	%

⁽¹⁾	Interest revenue or expense was less than $500,000 in the period or periods presented.

⁽²⁾	Amounts have been calculated based on amortized cost.

Note 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. 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, 2013.

**********

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THE CHARLES SCHWAB CORPORATION

Asset Management and Administration Fees Information

(In millions)

(Unaudited)


	Three Months Ended																Six Months Ended
	June 30,																June 30,
	2014								2013								2014								2013
	Average Client Assets		Revenue			Average Fee			Average Client Assets		Revenue			Average Fee			Average Client Assets		Revenue			Average Fee			Average Client Assets		Revenue			Average Fee
Schwab money market funds before fee waivers	$	162,683	$	235			0.58	%	$	158,194	$	226			0.57	%	$	164,868	$	474			0.58	%	$	160,416	$	456			0.57	%
Fee waivers				(183	)							(157	)							(368	)							(312	)

Schwab money market funds		162,683		52			0.13	%		158,194		69			0.17	%		164,868		106			0.13	%		160,416		144			0.18	%
Equity and bond funds ⁽¹⁾		80,527		47			0.23	%		61,276		38			0.25	%		78,058		92			0.24	%		58,408		73			0.25	%
Mutual Fund OneSource ^®		265,524		211			0.32	%		239,763		191			0.32	%		263,053		415			0.32	%		237,361		375			0.32	%

Total mutual funds⁽²⁾	$	508,734		310			0.24	%	$	459,233		298			0.26	%	$	505,979		613			0.24	%	$	456,185		592			0.26	%

Advice solutions⁽²⁾	$	165,009		209			0.51	%	$	142,181		177			0.50	%	$	161,799		408			0.51	%	$	138,827		340			0.49	%
Other ⁽³⁾				113								97								222								192

Total asset management and administration fees			$	632							$	572							$	1,243							$	1,124

⁽¹⁾	Includes Schwab Exchange-traded Funds.

⁽²⁾

Advice solutions include separately managed accounts, customized personal advice for tailored portfolios, and specialized planning and full-time portfolio management offered through the Company’s Schwab Private Client, Schwab Managed Portfolio and Managed Account Select programs. Advice solutions also include Schwab Advisor Network, Schwab Advisor Source, Windhaven, and ThomasPartners. Average client assets for advice solutions may also include the asset balances contained in the three categories of mutual funds listed above.

⁽³⁾	Includes various asset based fees, such as trust fees, 401(k) record keeping fees, and mutual fund clearing and other service fees.

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THE CHARLES SCHWAB CORPORATION

Growth in Client Assets and Accounts

(Unaudited)


	Q2-14 % Change						2014						2013
	vs.			vs.			Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Second Quarter
(In billions, at quarter end, except as noted)	Q2-13			Q1-14			Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Second Quarter
Assets in client accounts
Schwab One^®, other cash equivalents and deposits from banking clients		4	%		—		$	126.5		$	126.8		$	127.3		$	125.0		$	121.1
Proprietary mutual funds (Schwab Funds^® and Laudus Funds^®):
Money market funds		(1	%)		(4	%)		160.0			166.3			167.7			165.1			161.6
Equity and bond funds ⁽¹⁾		26	%		4	%		59.1			56.7			54.4			50.0			47.0

Total proprietary funds		5	%		(2	%)		219.1			223.0			222.1			215.1			208.6

Mutual Fund Marketplace^®⁽²⁾
Mutual Fund OneSource^®		16	%		3	%		271.6			264.5			260.5			246.5			234.9
Mutual fund clearing services		15	%		6	%		161.1			151.5			147.4			164.5			140.6
Other third-party mutual funds		16	%		5	%		463.5			439.4			420.9			398.3			400.3

Total Mutual Fund Marketplace		16	%		5	%		896.2			855.4			828.8			809.3			775.8

Total mutual fund assets		13	%		3	%		1,115.3			1,078.4			1,050.9			1,024.4			984.4

Exchange-traded funds (ETFs) ⁽¹⁾
Proprietary ETFs		78	%		13	%		21.5			19.0			16.8			14.2			12.1
ETF OneSource^{® (2)}		61	%		12	%		10.6			9.5			8.5			7.7			6.6
Other third-party ETFs		23	%		3	%		190.1			184.3			179.0			165.2			155.0

Total ETF assets		28	%		4	%		222.2			212.8			204.3			187.1			173.7

Equity and other securities⁽¹⁾		27	%		6	%		766.5			722.0			702.0			643.6			605.8
Fixed income securities		4	%		2	%		185.2			181.2			177.5			176.9			177.6
Margin loans outstanding		18	%		5	%		(13.8	)		(13.2	)		(12.6	)		(12.0	)		(11.7	)

Total client assets		17	%		4	%	$	2,401.9		$	2,308.0		$	2,249.4		$	2,145.0		$	2,050.9

Client assets by business
Investor Services		15	%		4	%	$	1,321.0		$	1,270.9		$	1,241.5		$	1,196.0		$	1,150.5
Advisor Services		20	%		4	%		1,080.9			1,037.1			1,007.9			949.0			900.4

Total client assets		17	%		4	%	$	2,401.9		$	2,308.0		$	2,249.4		$	2,145.0		$	2,050.9

Net growth (decline) in assets in client accounts (for the quarter ended)
Net new assets
Investor Services^{(3, 4)}		127	%		(43	%)	$	9.7		$	16.9		$	(12.8	)	$	2.4		$	(35.3	)
Advisor Services		(4	%)		(25	%)		13.0			17.3			14.6			15.7			13.6

Total net new assets		N/M			(34	%)		22.7			34.2			1.8			18.1			(21.7	)

Net market gains (losses)		N/M			192	%		71.2			24.4			102.6			76.0			(12.3	)

Net growth (decline)		N/M			60	%	$	93.9		$	58.6		$	104.4		$	94.1		$	(34.0	)

New brokerage accounts (in thousands, for the quarter ended)		—			(6	%)		242			258			250			223			243
Clients (in thousands)
Active Brokerage Accounts		3	%		1	%		9,252			9,178			9,093			9,013			8,962
Banking Accounts		4	%		2	%		950			933			916			930			910
Corporate Retirement Plan Participants ⁽³⁾		(16	%)		—			1,344			1,338			1,305			1,297			1,595

⁽¹⁾	Beginning in the first quarter of 2014, exchange-traded funds (ETFs) are presented separately; they were previously included in Equity and bond funds and Equity and other securities. Prior period information has been recast to reflect this change.

⁽²⁾	Excludes all proprietary mutual funds and ETFs.

⁽³⁾

In the third quarter of 2013, the Company reduced its reported totals for overall client assets and retirement plan participants by $24.7 billion and 317,000, respectively, to reflect the estimated impact of the consolidation of its retirement plan recordkeeping platforms and subsequent resignation from certain retirement plan clients.

⁽⁴⁾

Fourth quarter of 2013 includes inflows of $5.4 billion from certain mutual fund clearing services clients. Fourth and second quarters of 2013 include outflows of $30.2 billion and $44.3 billion, respectively, relating to the planned transfer of a mutual fund clearing services client. Third quarter of 2013 includes inflows of $17.5 billion and an outflow of $2.1 billion from certain mutual fund clearing services clients. Second quarter of 2013 also includes an inflow of $2.6 billion from another mutual fund clearing services client.

N/M Not meaningful.

- 8 -

The Charles Schwab Corporation Monthly Market Activity Report For June 2014


	2013																					2014																		% change
	Jun			Jul			Aug			Sep			Oct			Nov			Dec			Jan			Feb			Mar			Apr			May			Jun			Mo.			Yr.
Change in Client Assets
(in billions of dollars)
Net New Assets^(1,2)		(19.8	)		8.8			(2.4	)		11.7			(19.8	)		11.7			9.9			11.9			10.9			11.4			0.3			10.9			11.5			6	%		158	%
Net Market Gains (Losses)		(39.1	)		62.3			(38.1	)		51.8			52.0			28.2			22.4			(43.9	)		66.0			2.3			4.6			30.4			36.2

Total Client Assets
(at month end, in billions of dollars)		2,050.9			2,122.0			2,081.5			2,145.0			2,177.2			2,217.1			2,249.4			2,217.4			2,294.3			2,308.0			2,312.9			2,354.2			2,401.9			2	%		17	%

New Brokerage Accounts
(in thousands)		69			75			78			70			81			76			93			90			78			90			95			71			76			7	%		10	%

Clients
(at month end, in thousands)
Active Brokerage Accounts		8,962			8,974			8,999			9,013			9,032			9,055			9,093			9,119			9,146			9,178			9,217			9,228			9,252			—			3	%
Banking Accounts		910			918			926			930			930			922			916			923			928			933			938			944			950			1	%		4	%
Corporate Retirement Plan Participants ⁽¹⁾		1,595			1,602			1,294			1,297			1,294			1,301			1,305			1,325			1,327			1,338			1,344			1,346			1,344			—			(16	%)

Clients’ Daily Average Trades ⁽³⁾
(in thousands)		518			499			467			469			491			467			504			588			556			516			535			446			467			5	%		(10	%)

Market Indices
(at month end)
Dow Jones Industrial Average		14,910			15,500			14,810			15,130			15,546			16,086			16,577			15,699			16,322			16,458			16,581			16,717			16,827			1	%		13	%
Nasdaq Composite		3,403			3,626			3,590			3,771			3,920			4,060			4,177			4,104			4,308			4,199			4,115			4,243			4,408			4	%		30	%
Standard & Poor’s 500		1,606			1,686			1,633			1,682			1,757			1,806			1,848			1,783			1,859			1,872			1,884			1,924			1,960			2	%		22	%

Daily Average Market Share Volume
(in millions)
NYSE		3,745			3,089			2,947			3,303			3,340			3,180			3,095			3,613			3,661			3,418			3,406			3,027			3,013			—			(20	%)
Nasdaq		1,870			1,633			1,504			1,756			1,877			1,789			1,758			2,153			2,102			2,226			2,111			1,869			1,900			2	%		2	%
Total US Exchanges		7,090			5,718			5,454			6,115			6,268			5,878			5,800			6,921			6,981			6,860			6,585			5,745			5,758			—			(19	%)

Mutual Fund and Exchange-traded Fund Net Buys (Sells) ^{(4, 5, 6)}
(in millions of dollars)
Large Capitalization Stock		1,504			1,663			(87	)		292			725			929			942			226			(33	)		676			95			129			311
Small / Mid Capitalization Stock		793			985			372			319			1,022			227			400			373			(381	)		680			(430	)		(564	)		220
International		672			1,624			1,895			1,616			2,746			1,535			1,403			1,782			891			1,028			1,665			1,240			2,137
Specialized		(1,448	)		855			566			175			711			386			(278	)		1,213			1,183			912			609			377			1,690
Hybrid		352			612			323			243			213			82			301			447			599			107			230			406			201
Taxable Bond		(5,607	)		(733	)		(2,312	)		(990	)		314			563			(963	)		1,256			3,208			1,344			449			1,346			606
Tax-Free Bond		(1,261	)		(579	)		(941	)		(391	)		(256	)		(144	)		(354	)		464			429			474			246			584			516

Mutual Fund Net Buys (Sells) ⁽⁵⁾
(in millions of dollars)		(4,777	)		2,192			(927	)		356			2,842			1,407			(480	)		4,838			3,658			3,611			1,312			2,236			3,313

Exchange-traded Fund Net Buys (Sells) ⁽⁶⁾
(in millions of dollars)		(218	)		2,235			744			908			2,633			2,171			1,930			923			2,237			1,612			1,553			1,284			2,368

Money Market Fund Net Buys (Sells)
(in millions of dollars)		5,044			710			1,917			846			(1,431	)		616			3,429			(986	)		(318	)		(135	)		(4,141	)		(561	)		(1,664	)

⁽¹⁾

In August 2013, the Company reduced its reported totals for overall client assets and retirement plan participants by $24.7 billion and 317,000, respectively, to reflect the estimated impact of the consolidation of its retirement plan recordkeeping platforms and subsequent resignation from certain retirement plan clients.

⁽²⁾

November and October 2013 include inflows of $2.5 billion and $2.9 billion, respectively, from certain mutual fund clearing services clients. October and June 2013 include outflows of $30.2 billion and $26.7 billion, respectively, relating to the planned transfer of a mutual fund clearing services client. September 2013 includes an inflow of $4.9 billion and outflow of $2.1 billion from certain mutual fund clearing services clients. August 2013 includes inflows of $9.5 billion and $3.1 billion from certain mutual fund clearing services clients.

⁽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 exchange-traded funds (ETFs), and other proprietary products.

⁽⁴⁾	Beginning in March 2014, amounts include both Mutual Fund and ETF transactions. Prior period amounts have been recast to reflect this change.

⁽⁵⁾	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.

⁽⁶⁾	Represents the principal value of client ETF transactions handled by Schwab, including transactions in proprietary ETFs.

- 9 -

SCHWAB CHARLES CORP - FORM 8-K - EX-99.1 - July 16, 2014

Attached files

SCHWAB CHARLES CORP Reports