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Charles Schwab (SCHW) Reports Monthly Activity Highlights

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The Charles Schwab Corporation (NYSE: SCHW) released its Monthly Activity Report today. Company highlights for the month of May 2024 include:

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240614224954/en/

Core net new assets brought to the company by new and existing clients totaled $31.1 billion – representing our second highest May ever.
Total client assets were $9.21 trillion as of month-end May, up 20% from May 2023 and up 4% compared to April 2024.
New brokerage accounts were 314,000 in May, flat year-over-year and down 13% compared to April 2024.
Consistent with the commentary at the Institutional Investor Day on May 22, the company currently expects second quarter total revenue to decrease by 1%–2% relative to the prior quarter and an adjusted(1) pre-tax profit margin of approximately 40%. These results reflect the anticipated impact of tax season on transactional sweep cash as well as expected trading volumes during the period.

(1)

Adjusted pre-tax profit margin is calculated as total net revenues less adjusted total expenses, which exclude acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs, as a percentage of total net revenues. Pre-tax quarterly non-GAAP adjustments are estimated to range between approximately $150 to $200 million during 2024.

Forward-Looking Statements

This press release contains forward-looking statements relating to second quarter transactional sweep cash, trading volumes, revenue, adjusted pre-tax profit margin and non-GAAP adjustments. These forward-looking statements reflect management’s expectations as of the date hereof. 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 are described in the company’s most recent reports on Form 10-K and Form 10-Q, which have been filed with the Securities and Exchange Commission and are available on the company’s website (https://www.aboutschwab.com/financial-reports) and on the Securities and Exchange Commission’s website (https://www.sec.gov). The company makes no commitment to update any forward-looking statements.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with 35.5 million active brokerage accounts, 5.3 million workplace plan participant accounts, 1.9 million banking accounts, and $9.21 trillion in client assets as of May 31, 2024. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, asset management, custody, and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, https://www.sipc.org), and its 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 primary banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at https://www.aboutschwab.com.

The Charles Schwab Corporation Monthly Activity Report For May 2024

	2023																2024										Change
	May		Jun		Jul		Aug		Sep		Oct		Nov		Dec		Jan		Feb		Mar		Apr		May		Mo.	Yr.
Market Indices (at month end)
Dow Jones Industrial Average®	32,908		34,408		35,560		34,722		33,508		33,053		35,951		37,690		38,150		38,996		39,807		37,816		38,686		2%	18%
Nasdaq Composite®	12,935		13,788		14,346		14,035		13,219		12,851		14,226		15,011		15,164		16,092		16,379		15,658		16,735		7%	29%
Standard & Poor’s® 500	4,180		4,450		4,589		4,508		4,288		4,194		4,568		4,770		4,846		5,096		5,254		5,036		5,278		5%	26%
Client Assets (in billions of dollars)
Beginning Client Assets	7,631.5		7,650.2		8,015.8		8,241.0		8,094.7		7,824.5		7,653.4		8,180.6		8,516.6		8,558.1		8,879.5		9,118.4		8,847.5
Net New Assets (1)	24.6		33.8		12.9		8.1		27.2		5.0		19.2		42.1		14.8		31.7		41.7		10.0		31.0		N/M	26%
Net Market (Losses) Gains	(5.9	)	331.8		212.3		(154.4	)	(297.4	)	(176.1	)	508.0		293.9		26.7		289.7		197.2		(280.9	)	327.8
Total Client Assets (at month end)	7,650.2		8,015.8		8,241.0		8,094.7		7,824.5		7,653.4		8,180.6		8,516.6		8,558.1		8,879.5		9,118.4		8,847.5		9,206.3		4%	20%
Core Net New Assets (1,2)	20.7		33.8		13.7		4.9		27.1		11.3		21.7		43.1		17.2		33.4		45.0		1.0		31.1		N/M	50%
Receiving Ongoing Advisory Services (at month end)
Investor Services	526.3		547.5		560.6		552.2		533.0		522.2		557.0		581.4		584.1		601.8		618.5		602.2		624.0		4%	19%
Advisor Services (3)	3,377.8		3,527.8		3,619.8		3,554.2		3,448.0		3,380.3		3,604.4		3,757.4		3,780.4		3,902.5		4,009.5		3,893.9		4,027.3		3%	19%
Client Accounts (at month end, in thousands)
Active Brokerage Accounts	34,311		34,382		34,434		34,440		34,540		34,571		34,672		34,838		35,017		35,127		35,301		35,426		35,524		-	4%
Banking Accounts	1,768		1,781		1,792		1,798		1,799		1,812		1,825		1,838		1,856		1,871		1,885		1,901		1,916		1%	8%
Workplace Plan Participant Accounts (4)	4,962		5,003		5,030		5,037		5,141		5,212		5,212		5,221		5,226		5,268		5,277		5,282		5,345		1%	8%
Client Activity
New Brokerage Accounts (in thousands)	314		315		303		311		280		284		286		340		366		345		383		361		314		(13%)	-
Client Cash as a Percentage of Client Assets (5,6)	10.9	%	10.5	%	10.2	%	10.4	%	10.8	%	11.2	%	10.7	%	10.5	%	10.5	%	10.2	%	10.0	%	10.2	%	9.9	%	(30) bp	(100) bp
Derivative Trades as a Percentage of Total Trades	23.5	%	23.9	%	23.0	%	24.4	%	24.2	%	23.2	%	23.1	%	21.8	%	21.8	%	22.2	%	21.9	%	22.1	%	21.9	%	(20) bp	(160) bp
Selected Average Balances (in millions of dollars)
Average Interest-Earning Assets (7)	483,438		479,752		466,659		449,483		444,864		438,522		439,118		446,305		443,694		434,822		431,456		423,532		415,950		(2%)	(14%)
Average Margin Balances	60,250		61,543		63,040		64,226		64,014		63,946		61,502		62,309		61,368		63,600		66,425		68,827		67,614		(2%)	12%
Average Bank Deposit Account Balances (8)	103,149		102,917		102,566		101,928		100,404		97,893		94,991		95,518		95,553		92,075		90,774		88,819		86,844		(2%)	(16%)
Mutual Fund and Exchange-Traded Fund
Net Buys (Sells) (9,10) (in millions of dollars)
Equities	(1,366	)	9,190		7,423		(278	)	675		(3,039	)	6,099		7,903		8,182		7,624		10,379		3,472		5,734
Hybrid	(889	)	(903	)	(407	)	(1,037	)	(828	)	(1,457	)	(1,466	)	(1,596	)	(501	)	(1,330	)	(439	)	(703	)	(558	)
Bonds	2,029		3,302		2,515		4,696		2,723		1,094		255		6,104		7,510		9,883		7,561		5,949		5,854
Net Buy (Sell) Activity (in millions of dollars)
Mutual Funds (9)	(7,157	)	(4,485	)	(3,333	)	(6,476	)	(5,853	)	(12,245	)	(9,267	)	(7,406	)	(966	)	(1,348	)	(1,607	)	(4,818	)	(5,544	)
Exchange-Traded Funds (10)	6,931		16,074		12,864		9,857		8,423		8,843		14,155		19,817		16,157		17,525		19,108		13,536		16,574
Money Market Funds	15,256		9,112		7,911		16,869		13,388		16,976		11,670		7,745		11,717		10,129		9,085		(2,357	)	9,790

		Note: Certain supplemental details related to the information above can be found at: https://www.aboutschwab.com/financial-reports.
(1)		Unless otherwise noted, differences between net new assets and core net new assets are net flows from off-platform Schwab Bank Retail CDs. Additionally, 2024 includes an inflow of $10.3 billion from a mutual fund clearing services client in April, and 2023 includes outflows from a large international relationship of $0.8 billion in September, $6.2 billion in October, $5.4 billion in November, and $0.6 billion in December.
(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, and activity from off-platform Schwab Bank Retail CDs. These flows may span multiple reporting periods.
(3)		Excludes Retirement Business Services.
(4)		Beginning October 2023, Retirement Plan Participants was expanded to include accounts in Stock Plan Services, Designated Brokerage Services, and Retirement Business Services. Participants may be enrolled in services in more than one Workplace business. Prior periods have been recast to reflect this change.
(5)		Schwab One®, certain cash equivalents, bank deposits, third-party bank deposit accounts, and money market fund balances as a percentage of total client assets.
(6)		Beginning July 2023, client cash as a percentage of client assets excludes brokered CDs issued by Charles Schwab Bank. Prior periods have been recast to reflect this change.
(7)		Represents average total interest-earning assets on the Company's balance sheet.
(8)		Represents average clients’ uninvested cash sweep account balances held in deposit accounts at third-party financial institutions.
(9)		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.
(10)		Represents the principal value of client ETF transactions handled by Schwab, including transactions in proprietary ETFs.
		N/M - Not meaningful. Percentage changes greater than 200% are presented as not meaningful.