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

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8-K - 8-K - SCHWAB CHARLES CORP	a8kshell093018.htm



		EXHIBIT 99.1
News Release Contacts:
MEDIA: Mayura Hooper Charles Schwab Phone: 415-667-1525	INVESTORS/ANALYSTS: Rich Fowler Charles Schwab Phone: 415-667-1841

SCHWAB REPORTS RECORD QUARTERLY NET INCOME OF $923 MILLION, UP 49%

Revenues Grow 19% Year-Over-Year to $2.6 Billion, Marking Thirteen Consecutive Record Quarters

Core Net New Assets of $53.5 Billion Set a Third Quarter Record

SAN FRANCISCO, October 15, 2018 – The Charles Schwab Corporation announced today that its net income for the third quarter of 2018 was a record $923 million, up 7% from $866 million for the prior quarter, and up 49% from $618 million for the third quarter of 2017. Net income for the nine months ended September 30, 2018 was $2.6 billion, up 46% from the year-earlier period.



	Three Months Ended September 30,						%	Nine Months Ended September 30,						%
Financial Highlights	2018			2017			Change	2018			2017			Change

Net revenues (in millions)	$	2,579		$	2,165		19%	$	7,463		$	6,376		17%
Net income (in millions)	$	923		$	618		49%	$	2,572		$	1,757		46%
Diluted earnings per common share	$	.65		$	.42		55%	$	1.79		$	1.21		48%
Pre-tax profit margin	47.3		%	43.6		%		44.9		%	42.3		%
Return on average common
stockholders’ equity (annualized)	20		%	15		%		19		%	15		%

Note: All per-share results are rounded to the nearest cent, based on weighted-average diluted common shares outstanding.

CEO Walt Bettinger said, “Schwab’s unwavering focus on our ‘Through Clients’ Eyes’ strategy and disciplined execution have helped us set new performance records again and again. Clients opened 369,000 brokerage accounts in the third quarter, bringing our year-to-date new accounts to 1.2 million – the highest nine-month total in our history. The company is growing through both our Retail channel and the registered investment advisors who custody on our platform. Households new to Retail rose 24% for the first nine months of 2018 compared to last year, with 53% of those new clients under the age of 40. Additionally, Advisor Services attracted 173 RIA teams to Schwab thus far in the year, a pace that beats all pre-2017 annual totals. Each of our two primary businesses helped propel total company core net new assets to $53.5 billion, a third quarter record. We’ve generated $172.5 billion in core net new assets year-to-date – also surpassing all full-year totals prior to 2017. Client trading activity provided further evidence of ongoing engagement during the summer months. Against a backdrop of relatively stable markets, daily average trades reached 683,000, consistent with the second quarter and a third quarter record. In addition, clients continued to seek help and guidance through us; assets receiving ongoing advice marked a new high of $1.85 trillion at September 30^th, up 15%. Total client assets grew 12% year-over-year, ending the quarter at a record $3.56 trillion.”

Mr. Bettinger added, “The consistent application of our ‘Virtuous Cycle’ has enabled us to drive growth, scale, and efficiency as we capture more market share. Since 2008, we have increased brokerage accounts over 50% and tripled our client asset base, all while driving down our ratio of expenses to client assets by a third – a notable accomplishment for a U.S. investment services firm of our size, especially without any substantial acquisitions. And

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we are not letting up: the company has attracted at least two dollars in inflows for every dollar transferred to a competitor for six consecutive quarters and our third quarter core net new assets represented a 7% annualized organic growth rate, outpacing our 6% average over the past 10 years. This success with clients has enabled us to make ongoing investments to support our current and future growth. Schwab’s 2018 investment priorities – Application Modernization, Business Process Transformation, and Digital Accelerator – should all help to improve our cost structure advantage versus others in our industry, along with our ability to attract and serve an increasing share of the $45 trillion in U.S. investable wealth. We believe we have never been better positioned to continue winning in the marketplace and extending our lead in a scalable and efficient way – a testament to our inexorable pursuit of sustained profitable growth through putting clients first.”

CFO Peter Crawford commented, “As our ‘no trade-offs’ approach continued to resonate with clients, the company’s strengthened business momentum and a generally favorable economic environment helped drive the thirteenth consecutive quarter of record revenues. Net interest revenue grew 41% year-over-year to a record $1.5 billion due to larger client cash sweep balances, as well as the cumulative effect of the Fed’s rate normalization. Asset management and administration fees declined 6% to $809 million, reflecting lower money market fund revenue as a result of transfers to bank sweep, client asset allocation choices, and our 2017 fee reductions. Our clients’ record trading activity boosted trading revenue 17% to $176 million. Overall, total revenues reached $2.6 billion, a 19% increase from last year, while expenses rose 11%, reflecting hiring to support our expanding client base and ongoing investments for driving growth and efficiency. As a result, pre-tax income increased 29% to a record $1.2 billion. Year-to-date through September, we’ve produced a 530 basis point gap between revenue and expense growth and delivered a record 44.9% pre-tax profit margin, resulting in $2.6 billion of net income, which exceeds all prior full-year totals in our history.”

Mr. Crawford concluded, “During the third quarter, we effectively managed our balance sheet to support both growth and solid financial performance. The company’s consolidated balance sheet reached $272 billion at month-end September, a $10 billion quarterly increase, largely driven by bank sweep transfers and client activity. We transferred balances totaling $23 billion from sweep money market funds to bank sweep in the quarter, bringing our 2018 transfers to $68 billion and leaving $33 billion remaining in sweep funds at quarter-end. In July, the Board of Directors declared a 30% increase in the quarterly cash dividend to $0.13 per common share. We finished the quarter with a preliminary Tier 1 Leverage Ratio of 7.5% and we delivered a 20% return on equity – our highest ROE in nine years.”

Supporting schedules and selected balances are either attached or located at: http://www.aboutschwab.com/investor-relations/.

Commentary from the CFO

Periodically, our Chief Financial Officer provides insight and commentary regarding Schwab’s financial picture at: http://www.aboutschwab.com/investor-relations/cfo-commentary. The most recent commentary, which provides perspective on crossing the $250 billion consolidated asset threshold for heightened regulatory requirements, was posted on August 14, 2018.

Forward-Looking Statements

This press release contains forward-looking statements relating to growth in client accounts and assets; investments to support growth, serve clients and drive scale and efficiency; market share; expenses; and cost structure advantage. 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, the company’s ability to attract and retain clients and registered investment advisors and grow those relationships and client assets; general market conditions, including the level of interest rates, equity valuations, and trading activity; competitive pressures on pricing, including deposit rates; the company’s ability to develop and launch new products, services, and capabilities, as well as enhance its infrastructure, in a timely and successful manner; client use of the company’s advisory solutions

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and other products and services; level of client assets, including cash balances; the company’s ability to manage expenses; and other factors set forth in the company’s most recent report on Form 10-K.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with more than 350 offices and 11.4 million active brokerage accounts, 1.6 million corporate retirement plan participants, 1.3 million banking accounts, and $3.56 trillion in client assets as of September 30, 2018. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, money management, custody, 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 September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Net Revenues
Interest revenue	$	1,755		$	1,176		$	4,766		$	3,358
Interest expense	(228		)	(94		)	(569		)	(223		)
Net interest revenue	1,527			1,082			4,197			3,135
Asset management and administration fees	809			861			2,474			2,529
Trading revenue	176			151			557			500
Other	67			71			235			212
Total net revenues	2,579			2,165			7,463			6,376
Expenses Excluding Interest
Compensation and benefits	737			662			2,252			2,026
Professional services	164			152			476			429
Occupancy and equipment	124			111			368			323
Advertising and market development	70			63			220			205
Communications	59			56			179			171
Depreciation and amortization	78			69			226			200
Regulatory fees and assessments	57			43			158			133
Other	71			64			232			192
Total expenses excluding interest	1,360			1,220			4,111			3,679
Income before taxes on income	1,219			945			3,352			2,697
Taxes on income	296			327			780			940
Net Income	923			618			2,572			1,757
Preferred stock dividends and other	38			43			128			127
Net Income Available to Common Stockholders	$	885		$	575		$	2,444		$	1,630
Weighted-Average Common Shares Outstanding:
Basic	1,351			1,339			1,349			1,338
Diluted	1,364			1,353			1,363			1,352
Earnings Per Common Shares Outstanding:
Basic	$	.66		$	.43		$	1.81		$	1.22
Diluted	$	.65		$	.42		$	1.79		$	1.21
Dividends Declared Per Common Share	$	.13		$	.08		$	.33		$	.24

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THE CHARLES SCHWAB CORPORATION
Financial and Operating Highlights
(Unaudited)

	Q3-18 % change				2018									2017
	vs.		vs.		Third			Second			First			Fourth			Third
(In millions, except per share amounts and as noted)	Q3-17		Q2-18		Quarter			Quarter			Quarter			Quarter			Quarter
Net Revenues
Net interest revenue	41	%	9	%	$	1,527		$	1,407		$	1,263		$	1,147		$	1,082
Asset management and administration fees	(6	)%	(1	)%	809			814			851			863			861
Trading revenue	17	%	(2	)%	176			180			201			154			151
Other	(6	)%	(21	)%	67			85			83			78			71
Total net revenues	19	%	4	%	2,579			2,486			2,398			2,242			2,165
Expenses Excluding Interest
Compensation and benefits	11	%	(1	)%	737			745			770			711			662
Professional services	8	%	5	%	164			156			156			151			152
Occupancy and equipment	12	%	2	%	124			122			122			113			111
Advertising and market development	11	%	(9	)%	70			77			73			63			63
Communications	5	%	2	%	59			58			62			60			56
Depreciation and amortization	13	%	4	%	78			75			73			69			69
Regulatory fees and assessments	33	%	14	%	57			50			51			46			43
Other	11	%	(1	)%	71			72			89			76			64
Total expenses excluding interest	11	%	—		1,360			1,355			1,396			1,289			1,220
Income before taxes on income	29	%	8	%	1,219			1,131			1,002			953			945
Taxes on income	(9	)%	12	%	296			265			219			356			327
Net Income	49	%	7	%	$	923		$	866		$	783		$	597		$	618
Preferred stock dividends and other	(12	)%	(28	)%	38			53			37			47			43
Net Income Available to Common Stockholders	54	%	9	%	$	885		$	813		$	746		$	550		$	575
Earnings per common share:
Basic	53	%	10	%	$	.66		$	.60		$	.55		$	.41		$	.43
Diluted	55	%	8	%	$	.65		$	.60		$	.55		$	.41		$	.42
Dividends declared per common share	63	%	30	%	$	.13		$	.10		$	.10		$	.08		$	.08
Weighted-average common shares outstanding:
Basic	1	%	—		1,351			1,350			1,347			1,343			1,339
Diluted	1	%	—		1,364			1,364			1,362			1,358			1,353
Performance Measures
Pre-tax profit margin					47.3		%	45.5		%	41.8		%	42.5		%	43.6		%
Return on average common stockholders’ equity (annualized) ⁽¹⁾					20		%	19		%	18		%	14		%	15		%
Financial Condition (at quarter end, in billions)
Cash and investments segregated	(47	)%	(23	)%	$	8.5		$	11.0		$	12.8		$	15.1		$	15.9
Receivables from brokerage clients — net	21	%	—		22.4			22.4			21.2			20.6			18.5
Bank loans — net	2	%	—		16.6			16.6			16.4			16.5			16.2
Total assets	18	%	4	%	272.1			261.9			248.3			243.3			230.7
Bank deposits	29	%	7	%	213.4			199.9			190.2			169.7			165.3
Payables to brokerage clients	(11	)%	(8	)%	27.9			30.3			31.1			31.2			31.5
Short-term borrowings	(100	)%	—		—			—			—			15.0			5.0
Long-term debt	76	%	—		5.8			5.8			4.1			4.8			3.3
Stockholders’ equity	16	%	3	%	20.8			20.1			19.3			18.5			18.0
Other
Full-time equivalent employees (at quarter end, in thousands)	10	%	2	%	19.1			18.7			18.2			17.6			17.3
Capital expenditures — purchases of equipment, office facilities, and property, net (in millions)	32	%	24	%	$	156		$	126		$	135		$	141		$	118
Expenses excluding interest as a percentage of average client assets (annualized)					0.15		%	0.16		%	0.17		%	0.16		%	0.16		%
Clients’ Daily Average Trades (in thousands)
Revenue trades ⁽²⁾	22	%	2	%	382			376			462			345			312
Asset-based trades ⁽³⁾	(6	)%	(13	)%	129			149			139			120			137
Other trades ⁽⁴⁾	(7	)%	(4	)%	172			179			211			163			184
Total	8	%	(3	)%	683			704			812			628			633
Average Revenue Per Revenue Trade ⁽²⁾	(6	)%	—		$	7.27		$	7.30		$	7.24		$	7.33		$	7.74

⁽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 trading revenue (i.e., commission revenue or principal transaction revenue); 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.

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THE CHARLES SCHWAB CORPORATION

Net Interest Revenue Information

(In millions)

(Unaudited)



	Three Months Ended September 30,												Nine Months Ended September 30,
	2018						2017						2018						2017
	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	$	18,623	$	94	1.98	%	$	10,498	$	33	1.25	%	$	16,164	$	217	1.78	%	$	9,375	$	72	1.03	%
Cash and investments segregated	10,253		51		1.94	%	17,355		44		1.01	%	12,002		149		1.64	%	19,609		120		0.82	%
Broker-related receivables	307		1		1.94	%	459		1		0.96	%	324		4		1.62	%	428		2		0.74	%
Receivables from brokerage clients	20,224		217		4.19	%	16,498		151		3.63	%	19,629		600		4.03	%	15,861		415		3.50	%
Available for sale securities ⁽¹⁾	55,283		328		2.34	%	45,906		187		1.62	%	52,797		859		2.16	%	55,070		615		1.49	%
Held to maturity securities	137,065		887		2.57	%	107,557		606		2.24	%	129,490		2,420		2.48	%	99,523		1,691		2.27	%
Bank loans	16,579		142		3.43	%	16,058		122		3.01	%	16,522		410		3.31	%	15,764		347		2.94	%
Total interest-earning assets	258,334		1,720		2.63	%	214,331		1,144		2.12	%	246,928		4,659		2.50	%	215,630		3,262		2.02	%
Other interest revenue			35						32						107						96
Total interest-earning assets	$	258,334	$	1,755	2.69	%	$	214,331	$	1,176	2.18	%	$	246,928	$	4,766	2.56	%	$	215,630	$	3,358	2.08	%
Funding sources
Bank deposits	$	208,666	$	158	0.30	%	$	163,039	$	49	0.12	%	$	193,010	$	339	0.23	%	$	163,475	$	98	0.08	%
Payables to brokerage clients	20,595		16		0.31	%	24,833		6		0.10	%	21,591		37		0.23	%	26,198		11		0.06	%
Short-term borrowings	—		—		—		1,695		6		1.40	%	4,488		54		1.59	%	1,475		11		1.00	%
Long-term debt	5,790		51		3.52	%	3,436		30		3.46	%	5,053		131		3.46	%	3,349		89		3.55	%
Total interest-bearing liabilities	235,051		225		0.38	%	193,003		91		0.19	%	224,142		561		0.33	%	194,497		209		0.14	%
Non-interest-bearing funding sources	23,283						21,328						22,786						21,133
Other interest expense			3						3						8						14
Total funding sources	$	258,334	$	228	0.36	%	$	214,331	$	94	0.18	%	$	246,928	$	569	0.31	%	$	215,630	$	223	0.14	%
Net interest revenue			$	1,527	2.33	%			$	1,082	2.00	%			$	4,197	2.25	%			$	3,135	1.94	%

⁽¹⁾Amounts have been calculated based on amortized cost.

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THE CHARLES SCHWAB CORPORATION

Asset Management and Administration Fees Information

(In millions)

(Unaudited)



	Three Months Ended September 30,													Nine Months Ended September 30,
	2018						2017							2018						2017
	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	$	130,202	$	122	0.37	%	$	158,927	$	220		0.55	%	$	142,177	$	451	0.42	%	$	160,230	$	675		0.56	%
Fee waivers			—						(1		)					—						(10		)
Schwab money market funds	130,202		122		0.37	%	158,927		219			0.55	%	142,177		451		0.42	%	160,230		665			0.55	%
Schwab equity and bond funds and ETFs	219,137		67		0.12	%	164,011		56			0.14	%	206,058		195		0.13	%	151,579		163			0.14	%
Mutual Fund OneSource^® and other non- transaction fee funds	209,560		171		0.32	%	219,076		179			0.32	%	216,699		524		0.32	%	214,058		528			0.33	%
Other third-party mutual funds and ETFs ⁽¹⁾	342,316		75		0.09	%	291,307		65			0.09	%	329,033		216		0.09	%	278,479		182			0.09	%
Total mutual funds and ETFs ⁽²⁾	$	901,215	435		0.19	%	$	833,321	519			0.25	%	$	893,967	1,386		0.21	%	$	804,346	1,538			0.26	%
Advice solutions ⁽²⁾
Fee-based	$	234,338	294		0.50	%	$	206,854	265			0.51	%	$	228,326	859		0.50	%	$	199,500	765			0.51	%
Non-fee-based	65,146		—		—		50,758		—			—		62,377		—		—		46,785		—			—
Total advice solutions	$	299,484	294		0.39	%	$	257,612	265			0.41	%	$	290,703	859		0.40	%	$	246,285	765			0.42	%
Other balance-based fees ⁽³⁾	400,048		63		0.06	%	424,280		67			0.06	%	404,596		191		0.06	%	406,442		192			0.06	%
Other ⁽⁴⁾			17						10							38						34
Total asset management and administration fees			$	809					$	861						$	2,474					$	2,529

⁽¹⁾ Includes Schwab ETF OneSource^™.

⁽²⁾ Advice solutions include managed portfolios, specialized strategies, and customized investment advice such as Schwab Private Client, Schwab Managed Portfolios, Managed Account Select^®, Schwab Advisor Network^®, Windhaven^® Strategies, ThomasPartners^® Strategies, Schwab Index Advantage^® advised retirement plan balances, Schwab Intelligent Portfolios^®, Institutional Intelligent Portfolios^®, and Schwab Intelligent Advisory^®, launched in March 2017; as well as legacy non-fee advice solutions including Schwab Advisor Source and certain retirement plan balances. Beginning the fourth quarter of 2017, a prospective change was made to add non-fee based average assets from managed portfolios. Average client assets for advice solutions may also include the asset balances contained in the mutual fund and/or ETF categories listed above. For the total end of period view, please see the Monthly Activity Report.

⁽³⁾ Includes various asset-related fees, such as trust fees, 401(k) recordkeeping fees, and mutual fund clearing fees and other service fees.

⁽⁴⁾ Includes miscellaneous service and transaction fees relating to mutual funds and ETFs that are not balance-based.

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THE CHARLES SCHWAB CORPORATION

Growth in Client Assets and Accounts

(Unaudited)



	Q3-18 % Change				2018									2017
	vs.		vs.		Third			Second			First			Fourth			Third
(In billions, at quarter end, except as noted)	Q3-17		Q2-18		Quarter			Quarter			Quarter			Quarter			Quarter
Assets in client accounts
Schwab One^®, certain cash equivalents and bank deposits	23	%	5	%	$	239.5		$	228.2		$	219.4		$	198.6		$	195.0
Proprietary mutual funds (Schwab Funds^® and Laudus Funds^®)
Money market funds ⁽¹⁾	(19	)%	(4	)%	128.5			134.2			145.0			163.6			159.2
Equity and bond funds ⁽²⁾	19	%	6	%	91.7			86.6			83.4			82.5			77.3
Total proprietary mutual funds	(7	)%	—		220.2			220.8			228.4			246.1			236.5
Mutual Fund Marketplace^{® (3)}
Mutual Fund OneSource^® and other non-transaction fee funds	(4	)%	—		212.6			212.5			221.6			225.2			221.2
Mutual fund clearing services	(23	)%	4	%	182.2			175.3			178.3			265.4			236.5
Other third-party mutual funds	13	%	3	%	740.1			716.1			693.4			682.6			652.5
Total Mutual Fund Marketplace	2	%	3	%	1,134.9			1,103.9			1,093.3			1,173.2			1,110.2
Total mutual fund assets	1	%	2	%	1,355.1			1,324.7			1,321.7			1,419.3			1,346.7
Exchange-traded funds (ETFs)
Proprietary ETFs ⁽²⁾	43	%	9	%	125.2			114.8			104.5			99.1			87.8
Schwab ETF OneSource™ ⁽³⁾	25	%	8	%	33.3			30.8			29.8			28.7			26.6
Other third-party ETFs	18	%	5	%	338.6			322.1			314.7			308.8			286.7
Total ETF assets	24	%	6	%	497.1			467.7			449.0			436.6			401.1
Equity and other securities	18	%	7	%	1,202.4			1,121.7			1,075.9			1,080.0			1,016.9
Fixed income securities	22	%	6	%	290.4			275.1			258.8			245.6			238.4
Margin loans outstanding	23	%	2	%	(20.8		)	(20.4		)	(19.4		)	(18.3		)	(16.9		)
Total client assets	12	%	5	%	$	3,563.7		$	3,397.0		$	3,305.4		$	3,361.8		$	3,181.2
Client assets by business
Investor Services	10	%	5	%	$	1,876.9		$	1,784.8		$	1,740.8		$	1,810.9		$	1,707.0
Advisor Services	14	%	5	%	1,686.8			1,612.2			1,564.6			1,550.9			1,474.2
Total client assets	12	%	5	%	$	3,563.7		$	3,397.0		$	3,305.4		$	3,361.8		$	3,181.2
Net growth in assets in client accounts (for the quarter ended)
Net new assets by business
Investor Services ⁽⁴⁾	19	%	103	%	$	27.8		$	13.7		$	(50.8	)	$	46.4		$	23.4
Advisor Services	(9	)%	(15	)%	25.7			30.2			32.0			31.7			28.2
Total net new assets	4	%	22	%	$	53.5		$	43.9		$	(18.8	)	$	78.1		$	51.6
Net market gains (losses)	27	%	137	%	113.2			47.7			(37.6		)	102.5			89.0
Net growth (decline)	19	%	82	%	$	166.7		$	91.6		$	(56.4	)	$	180.6		$	140.6
New brokerage accounts (in thousands, for the quarter ended)	10	%	(4	)%	369			384			443			386			336
Clients (in thousands)
Active Brokerage Accounts ⁽⁵⁾	8	%	2	%	11,423			11,202			11,005			10,755			10,565
Banking Accounts	9	%	3	%	1,283			1,250			1,221			1,197			1,176
Corporate Retirement Plan Participants	5	%	2	%	1,627			1,599			1,594			1,568			1,552

⁽¹⁾ Total client assets in purchased money market funds are located at: http://www.aboutschwab.com/investor-relations.

⁽²⁾ Includes proprietary equity and bond funds and ETFs held on and off the Schwab platform. As of September 30, 2018, off-platform equity and bond funds and ETFs were $11.9 billion and $30.4 billion, respectively.

⁽³⁾ Excludes all proprietary mutual funds and ETFs.

⁽⁴⁾Second quarter of 2018 includes outflows of $9.5 billion from certain mutual fund clearing services clients. First quarter of 2018 includes outflows of $84.4 billion from certain mutual fund clearing services clients. Fourth quarter of 2017 includes an inflow of $16.2 billion from a mutual fund clearing services client.

⁽⁵⁾ In September 2018, the definition of active brokerage accounts was standardized across all account types as accounts with activity within the preceding 270 days. This change increased active accounts by approximately 63,000.

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The Charles Schwab Corporation Monthly Activity Report For September 2018



	2017								2018																		Change
	Sep		Oct		Nov		Dec		Jan		Feb		Mar		Apr		May		Jun		Jul		Aug		Sep		Mo.	Yr.
Market Indices (at month end)
Dow Jones Industrial Average	22,405		23,377		24,272		24,719		26,149		25,029		24,103		24,163		24,416		24,271		25,415		25,965		26,458		2%	18%
Nasdaq Composite	6,496		6,728		6,874		6,903		7,411		7,273		7,063		7,066		7,442		7,510		7,672		8,110		8,046		(1)%	24%
Standard & Poor’s 500	2,519		2,575		2,648		2,674		2,824		2,714		2,641		2,648		2,705		2,718		2,816		2,902		2,914		—	16%
Client Assets (in billions of dollars) ⁽¹⁾
Beginning Client Assets	3,122.3		3,181.2		3,256.5		3,318.8		3,361.8		3,480.5		3,328.8		3,305.4		3,312.1		3,378.1		3,397.0		3,477.9		3,555.9
Net New Assets ⁽¹⁾	17.8		35.4		15.7		27.0		11.5		(50.5	)	20.2		0.4		19.4		24.1		16.3		20.8		16.4		(21)%	(8)%
Net Market Gains (Losses)	41.1		39.9		46.6		16.0		107.2		(101.2	)	(43.6	)	6.3		46.6		(5.2	)	64.6		57.2		(8.6	)
Total Client Assets (at month end)	3,181.2		3,256.5		3,318.8		3,361.8		3,480.5		3,328.8		3,305.4		3,312.1		3,378.1		3,397.0		3,477.9		3,555.9		3,563.7		—	12%
Core Net New Assets ⁽²⁾	17.8		19.2		15.7		27.0		18.7		21.3		25.6		9.9		19.4		24.1		16.3		20.8		16.4		(21)%	(8)%
Receiving Ongoing Advisory Services (at month end)
Investor Services	255.0		259.8		265.1		268.7		278.6		273.0		273.2		274.7		279.1		280.0		287.0		292.0		292.7		—	15%
Advisor Services ⁽³⁾	1,358.6		1,382.6		1,410.8		1,431.1		1,483.7		1,449.5		1,444.4		1,451.6		1,478.0		1,488.7		1,525.5		1,555.3		1,559.2		—	15%
Client Accounts (at month end, in thousands)
Active Brokerage Accounts ⁽⁴⁾	10,565		10,603		10,671		10,755		10,858		10,936		11,005		11,081		11,145		11,202		11,243		11,310		11,423		1%	8%
Banking Accounts	1,176		1,181		1,192		1,197		1,210		1,218		1,221		1,230		1,240		1,250		1,262		1,274		1,283		1%	9%
Corporate Retirement Plan Participants	1,552		1,556		1,564		1,568		1,580		1,580		1,594		1,599		1,599		1,599		1,611		1,621		1,627		—	5%
Client Activity
New Brokerage Accounts (in thousands)	106		117		122		147		165		138		140		141		122		121		118		132		119		(10)%	12%
Inbound Calls (in thousands)	1,709		1,988		1,804		2,046		2,303		2,005		2,145		2,034		1,852		1,814		1,849		1,964		1,715		(13)%	—
Web Logins (in thousands)	39,639		51,454		50,583		54,486		64,488		60,830		58,906		55,980		56,234		56,491		57,137		62,797		53,923		(14)%	36%
Client Cash as a Percentage of Client Assets ⁽⁵⁾	11.1	%	10.9	%	10.8	%	10.8	%	10.4	%	10.9	%	11.0	%	10.9	%	10.6	%	10.7	%	10.5	%	10.4	%	10.3	%	(10) bp	(80) bp
Mutual Fund and Exchange-Traded Fund
Net Buys (Sells) ^{(6, 7)} (in millions of dollars)
Large Capitalization Stock	(138	)	(51	)	85		1,023		496		715		(158	)	410		953		981		486		918		311
Small / Mid Capitalization Stock	45		378		(144	)	274		(125	)	(167	)	130		359		753		1,195		768		(186	)	151
International	1,549		1,913		2,627		1,852		4,306		2,685		1,546		809		372		(498	)	(529	)	186		(88	)
Specialized	465		655		58		424		1,569		187		326		122		(19	)	383		520		(245	)	73
Hybrid	460		(118	)	(263	)	307		978		(88	)	529		(541	)	(241	)	(288	)	(548	)	(678	)	(324	)
Taxable Bond	3,809		3,466		2,389		2,561		3,284		155		2,117		1,661		1,002		928		879		965		1,371
Tax-Free Bond	494		452		371		341		1,247		211		247		(113	)	449		588		306		559		262
Net Buy (Sell) Activity (in millions of dollars)
Mutual Funds ⁽⁶⁾	3,002		2,401		882		775		4,843		(417	)	1,976		(36	)	(88	)	555		(522	)	(1,936	)	(1,538	)
Exchange-Traded Funds ⁽⁷⁾	3,682		4,294		4,241		6,007		6,912		4,115		2,761		2,743		3,357		2,734		2,404		3,455		3,294
Money Market Funds	(374	)	213		1,166		2,968		(5,730	)	(4,292	)	(9,100	)	(4,156	)	(2,245	)	(4,919	)	(4,801	)	704		(1,883	)
Average Interest-Earning Assets ⁽⁸⁾
(in millions of dollars)	216,472		219,658		223,292		228,540		234,619		239,922		241,049		239,833		242,584		249,432		254,211		259,137		261,741		1%	21%

⁽¹⁾April, March, February, and January 2018 include outflows of $9.5 billion, $5.4 billion, $71.8 billion, and $7.2 billion, respectively, from certain mutual fund clearing services clients. October 2017 includes an inflow of $16.2 billion from a mutual fund clearing services client.

⁽²⁾ Net new assets before significant one-time inflows or outflows, such as acquisitions/divestitures or extraordinary flows (generally greater than $10 billion) relating to a specific client. These flows may span multiple reporting periods.

⁽³⁾ Excludes Retirement Business Services.

⁽⁴⁾In September 2018, the definition of active brokerage accounts was standardized across all account types as accounts with activity within the preceding 270 days. This change increased active accounts by approximately 63,000.

⁽⁵⁾ Schwab One^®, certain cash equivalents, bank deposits, and money market fund balances as a percentage of total client assets.

⁽⁶⁾ 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.

⁽⁷⁾ Represents the principal value of client ETF transactions handled by Schwab, including transactions in proprietary ETFs.

⁽⁸⁾ Represents average total interest-earning assets on the Company’s balance sheet.

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SCHWAB CHARLES CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - October 15, 2018

Attached files

SCHWAB CHARLES CORP Reports