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

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8-K - FORM 8-K - SCHWAB CHARLES CORP	d375686d8k.htm

EXHIBIT 99.1

LOGO

News Release

Contacts:


MEDIA:		INVESTORS/ANALYSTS:

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

SCHWAB REPORTS SECOND QUARTER RESULTS

Client Focus Yields Increased Net New Assets

Growth, Diversified Revenues and Operating Discipline All Contribute to Financial Performance

SAN FRANCISCO, July 17, 2012 – The Charles Schwab Corporation announced today that its net income for the second quarter of 2012 was $275 million, up 41% from $195 million for the first quarter of 2012, and up 16% from $238 million for the second quarter of 2011. Net income for the six months ended June 30, 2012 was $470 million, down 2% from the year-earlier period. The company’s financial results for both the second quarter and first half of 2012 include a pre-tax gain of $70 million, or approximately $44 million after-tax, relating to the previously disclosed resolution of a vendor dispute.


	Three Months Ended —June 30,—						% Change			Six Months Ended —June 30,—						% Change
Financial Highlights	2012			2011			% Change			2012			2011			% Change

Net revenues (in millions)	$	1,283		$	1,190			8	%	$	2,472		$	2,397			3	%
Net income (in millions)	$	275		$	238			16	%	$	470		$	481			(2	)%
Diluted earnings per common share	$	.20		$	.20			—		$	.36		$	.40			(10	)%
Pre-tax profit margin		33.7	%		32.4	%					30.1	%		32.5	%
Return on average common stockholders’ equity (annualized)		13	%		14	%					11	%		15	%

CEO and President Walt Bettinger commented, “Our ‘through clients’ eyes’ strategy continues to prove itself and deliver growth as it resonates with investors in all economic environments. While the economy and financial markets faced heightened challenges during the second quarter, demand for our full-service capabilities remained strong – we ended the quarter with 2.5 million accounts at Schwab that were either enrolled in one of our advisory offerings or under the guidance of an independent advisor, up 9% year-over-year. Even as trading activity weakened during the period, we saw other signs of sustained client engagement, including $16.0 billion in net new assets, up 4% from a year ago; an ongoing pattern of net purchases of securities throughout the quarter; and cash holdings at Schwab that remained at pre-financial crisis levels. In addition, clients opened 221,000 new brokerage accounts during the second quarter, up 8% year-over-year. We ended the quarter with 8.7 million active brokerage accounts, 822,000 banking accounts, and $1.80 trillion in total client assets, up 7, 10, and 9%, respectively, over June 2011.”

Mr. Bettinger added, “We’re proud that a growing number of clients trust us to help them reach their financial goals, and we believe our commitment to sustained investment in our client base is essential to reinforcing that trust and supporting our long-term expansion. That investment is always balanced with our emphasis on strong near-term profitability. Our ongoing expense discipline helped the company to move forward with our key 2012 client initiatives during the second quarter and still deliver a pre-tax profit margin of nearly 30% excluding the one-time vendor payment.”

CFO Joe Martinetto said, “Our second quarter financial performance benefited from the company’s diversified revenue streams as well as our growing client base and expense discipline. Environmental headwinds picked up yet again during the quarter, including further declines in long-term interest rates. While trading revenue slowed under these conditions, asset management and administration fees and net interest revenue both increased sequentially, by 2% and 6%, respectively. As a result, our second quarter results included 1% sequential growth for those three major revenue lines combined. With our expenses staying within planned levels, we were able to achieve an 18% increase in net income from the first quarter even before factoring in the vendor payment.”

Mr. Martinetto concluded, “During the second quarter we took advantage of market conditions to further strengthen our operating flexibility via a second preferred stock offering, which followed our first-ever preferred offering during January 2012. Completing these offerings leaves us with nearly $900 million of this cost-effective, non-dilutive capital as part of our funding mix. With our healthy financial performance, balance sheet and capital base, Schwab is ready to continue its profitable growth in the months ahead.”

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

Investor Services

•

Net new accounts for the quarter totaled approximately 40,000, down 2% year-over-year. Total accounts reached 6.1 million as of June 30, 2012, up 2% year-over-year.

•

Expanded the company’s integrated mobile banking capabilities to include Schwab Bank Bill Pay™ for iPad^® and mobile devices. The new Bill Pay feature allows Schwab Bank clients to make, edit, monitor and cancel payments as well as add and edit new payees and billers.

Institutional Services

Advisor Services

•

Bolstered the Schwab OpenView Workflow Library™ to include a full range of 28 universal workflows, covering critical aspects of managing a successful investment advisory practice, including lead generation, client onboarding, service requests and business operations.

•

Launched the Schwab Advisor Center^® application for the iPhone^®, enabling advisors to view their clients’ account balances, positions and transactions while away from the office.

Products and Infrastructure

•

For Charles Schwab Bank:

•

Balance sheet assets = $72.2 billion, up 27% year-over-year.

•

Outstanding mortgage and home equity loans = $9.1 billion, up 3% year-over-year.

•

First mortgage originations by Quicken Loans and Schwab during the quarter = $1.0 billion.

•

Delinquency, nonaccrual, and loss reserve ratios for Schwab Bank’s loan portfolio = 0.80%, 0.48% and 0.52%, respectively, at month-end June.

•

Schwab Bank High Yield Investor Checking^® accounts = 631,000, with $10.7 billion in balances.

•

Client assets managed by Windhaven^® totaled $11.1 billion; up 8% from the first quarter of 2012.

•

Total assets under management in Schwab ETFs™ = $6.7 billion. Total assets in Schwab Managed Portfolios-ETFs = $2.4 billion.

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

Supporting schedules are either attached or located at: http://www.aboutschwab.com/media/xls/q2_2012_schedule.xls

Forward Looking Statements

This press release contains forward looking statements relating to the company’s growth 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, the company’s ability to attract and retain clients and grow client assets/relationships; competitive pressures on rates and fees; general market conditions, including the level of interest rates, equity valuations and trading activity; the level of client assets,

including cash balances; the company’s ability to monetize client assets; the company’s ability to develop and launch new products, services and capabilities in a timely and successful manner; capital needs and management; level of expenses; the impact of changes in market conditions on money market fund fee waivers, revenues, expenses and pre-tax margins; 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 Form 10-Q for the period ending March 31, 2012.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with more than 300 offices and 8.7 million client brokerage accounts, 1.52 million corporate retirement plan participants, 822,000 banking accounts, and $1.80 trillion in client assets. The company was ranked “Highest in Investor Satisfaction with Self-Directed Services” in the 2012 U.S. Self-Directed Investor Satisfaction Study^SM from J.D. Power and Associates. 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 June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net Revenues
Asset management and administration fees	$	496		$	502		$	980		$	1,004

Interest revenue		497			496			969			977
Interest expense		(39	)		(45	)		(77	)		(90	)

Net interest revenue		458			451			892			887

Trading revenue		219			205			462			446
Other		121			35			167			74
Provision for loan losses		(4	)		(1	)		(4	)		(5	)
Net impairment losses on securities ⁽¹⁾		(7	)		(2	)		(25	)		(9	)

Total net revenues		1,283			1,190			2,472			2,397

Expenses Excluding Interest
Compensation and benefits		446			430			911			867
Professional services		93			92			189			184
Occupancy and equipment		80			73			156			144
Advertising and market development		57			51			124			111
Communications		55			54			113			110
Depreciation and amortization		48			33			96			68
Class action litigation and regulatory reserve		—			7			—			7
Other		72			64			138			126

Total expenses excluding interest		851			804			1,727			1,617

Income before taxes on income		432			386			745			780
Taxes on income		157			148			275			299

Net Income		275			238			470			481

Preferred stock dividends		14			—			14			—

Net Income Available to Common Stockholders	$	261		$	238		$	456		$	481

Weighted-Average Common Shares Outstanding — Diluted		1,274			1,210			1,273			1,208

Earnings Per Common Share — Basic	$	.20		$	.20		$	.36		$	.40
Earnings Per Common Share — Diluted	$	.20		$	.20		$	.36		$	.40

⁽¹⁾

Net impairment losses on securities include total other-than-temporary impairment losses of $12 million and $11 million, net of $5 million and $9 million recognized in other comprehensive income, for the three months ended June 30, 2012 and 2011, respectively. Net impairment losses on securities include total other-than-temporary impairment losses of $14 million and $11 million, net of $(11) million and $2 million recognized in other comprehensive income, for the six months ended June 30, 2012 and 2011, respectively.

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

THE CHARLES SCHWAB CORPORATION

Financial and Operating Highlights

(Unaudited)


	Q2-12 % change						2012						2011
(In millions, except per share amounts and as noted)	vs. Q2-11			vs. Q1-12			Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Second Quarter
Net Revenues
Asset management and administration fees		(1	%)		2	%	$	496		$	484		$	458		$	466		$	502
Net interest revenue		2	%		6	%		458			434			395			443			451
Trading revenue		7	%		(10	%)		219			243			233			248			205
Other ⁽¹⁾		N/M			163	%		121			46			41			45			35
Provision for loan losses		N/M			N/M			(4	)		—			(5	)		(8	)		(1	)
Net impairment losses on securities		N/M			(61	%)		(7	)		(18	)		(9	)		(13	)		(2	)

Total net revenues		8	%		8	%		1,283			1,189			1,113			1,181			1,190

Expenses Excluding Interest
Compensation and benefits		4	%		(4	%)		446			465			442			423			430
Professional services		1	%		(3	%)		93			96			99			104			92
Occupancy and equipment		10	%		5	%		80			76			79			78			73
Advertising and market development		12	%		(15	%)		57			67			69			48			51
Communications		2	%		(5	%)		55			58			54			56			54
Depreciation and amortization		45	%		—			48			48			48			39			33
Class action litigation and regulatory reserve		N/M			—			—			—			—			—			7
Other		13	%		9	%		72			66			70			73			64

Total expenses excluding interest		6	%		(3	%)		851			876			861			821			804

Income before taxes on income		12	%		38	%		432			313			252			360			386
Taxes on income		6	%		33	%		157			118			89			140			148

Net Income		16	%		41	%	$	275		$	195		$	163		$	220		$	238

Preferred stock dividends		N/M			N/M			14			—			—			—			—

Net Income Available to Common Stockholders		10	%		34	%	$	261		$	195		$	163		$	220		$	238

Basic earnings per common share		—			33	%	$	.20		$	.15		$	.13		$	.18		$	.20
Diluted earnings per common share		—			33	%	$	.20		$	.15		$	.13		$	.18		$	.20
Dividends declared per common share		—			—		$	.06		$	.06		$	.06		$	.06		$	.06
Weighted-average common shares outstanding – diluted		5	%		—			1,274			1,273			1,271			1,229			1,210

Performance Measures
Pre-tax profit margin								33.7	%		26.3	%		22.6	%		30.5	%		32.4	%
Return on average common stockholders’ equity (annualized) ⁽²⁾								13	%		10	%		8	%		12	%		14	%

Financial Condition (at quarter end, in billions)
Cash and investments segregated		(5	%)		(16	%)	$	22.7		$	26.9		$	26.0		$	27.0		$	23.8
Receivables from brokerage clients		3	%		7	%	$	12.0		$	11.2		$	11.1		$	11.1		$	11.6
Loans to banking clients		3	%		—		$	9.8		$	9.8		$	9.8		$	9.7		$	9.5
Total assets ⁽³⁾		15	%		—		$	111.8		$	111.5		$	108.6		$	102.9		$	97.6
Deposits from banking clients		27	%		6	%	$	66.3		$	62.3		$	60.9		$	54.1		$	52.3
Payables to brokerage clients		(6	%)		(13	%)	$	31.8		$	36.4		$	35.5		$	36.6		$	33.9
Long-term debt		—			—		$	2.0		$	2.0		$	2.0		$	2.0		$	2.0
Stockholders’ equity ⁽⁴⁾		36	%		10	%	$	9.1		$	8.3		$	7.7		$	7.7		$	6.7

Other
Full-time equivalent employees (at quarter end, in thousands)		4	%		(2	%)		13.7			14.0			14.1			13.9			13.2
Annualized net revenues per average full-time equivalent employee (in thousands)		3	%		9	%	$	372		$	340		$	316		$	350		$	361
Capital expenditures—cash purchases of equipment, office facilities, and property, net (in millions)		(30	%)		(9	%)	$	31		$	34		$	55		$	54		$	44

Clients’ Daily Average Trades (in thousands)
Revenue trades ⁽⁵⁾		8	%		(10	%)		285.2			318.4			307.4			323.1			264.9
Asset-based trades ⁽⁶⁾		16	%		(6	%)		50.6			53.7			45.9			50.6			43.6
Other trades ⁽⁷⁾		13	%		(4	%)		99.8			104.1			106.3			101.7			88.6

Total		10	%		(9	%)		435.6			476.2			459.6			475.4			397.1

Average Revenue Per Revenue Trade ⁽⁵⁾		(1	%)		(2	%)	$	12.15		$	12.35		$	12.21		$	12.04		$	12.23

⁽¹⁾	Includes $70 million relating to a confidential resolution of a vendor dispute, which was received in the second quarter of 2012.

⁽²⁾	Return on average common stockholders’ equity is calculated using net income available to common stockholders divided by average common stockholders’ equity.

⁽³⁾

Total assets as of June 30, 2012, March 31, 2012, December 31, 2011, and September 30, 2011, reflect preliminary purchase accounting for the assignment of fair values to optionsXpress Holdings, Inc.’s assets and liabilities acquired. Amounts are subject to refinement as information relative to the closing date fair values becomes available.

⁽⁴⁾	In the second quarter and first quarter of 2012, the Company issued non-cumulative perpetual preferred stock, Series B, for a total liquidation preference of $485 million and non-cumulative perpetual preferred stock, Series A, with a total liquidation preference of $400 million, respectively.

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

THE CHARLES SCHWAB CORPORATION

Net Interest Revenue Information

(In millions)

(Unaudited)


	Three Months Ended June 30,														Six Months Ended June 30,
	2012							2011							2012							2011
	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	$	5,721	$	4		0.28	%	$	5,318	$	3		0.23	%	$	6,134	$	8		0.26	%	$	5,137	$	6		0.24	%
Cash and investments segregated		25,429		11		0.17	%		23,478		9		0.15	%		26,140		21		0.16	%		23,335		23		0.20	%
Broker-related receivables ⁽¹⁾		306		—		0.06	%		367		—		—			311		—		0.07	%		370		—		0.06	%
Receivables from brokerage clients		11,091		115		4.17	%		10,880		122		4.50	%		10,646		221		4.17	%		10,609		239		4.54	%
Securities available for sale ⁽²⁾		38,407		152		1.59	%		26,105		110		1.69	%		37,302		297		1.60	%		25,563		216		1.70	%
Securities held to maturity		15,240		108		2.85	%		16,350		145		3.56	%		15,106		207		2.76	%		16,742		285		3.43	%
Loans to banking clients		9,884		77		3.13	%		9,366		77		3.30	%		9,874		156		3.18	%		9,188		152		3.34	%
Loans held for sale ⁽¹⁾		18		—		4.04	%		27		—		4.71	%		36		1		4.12	%		70		1		4.50	%

Total interest-earning assets		106,096		467		1.77	%		91,891		466		2.03	%		105,549		911		1.74	%		91,014		922		2.04	%

Other interest revenue				30							30							58							55

Total interest-earning assets	$	106,096	$	497		1.88	%	$	91,891	$	496		2.17	%	$	105,549	$	969		1.85	%	$	91,014	$	977		2.16	%

Funding sources:
Deposits from banking clients	$	62,560	$	10		0.06	%	$	51,338	$	16		0.13	%	$	61,833	$	20		0.07	%	$	50,836	$	33		0.13	%
Payables to brokerage clients ⁽¹⁾		29,977		—		0.01	%		28,086		—		0.01	%		30,266		1		0.01	%		27,573		1		0.01	%
Long-term debt		1,999		27		5.43	%		2,004		27		5.40	%		2,000		54		5.43	%		2,005		54		5.43	%

Total interest-bearing liabilities		94,536		37		0.16	%		81,428		43		0.21	%		94,099		75		0.16	%		80,414		88		0.22	%

Non-interest-bearing funding sources		11,560							10,463							11,450							10,600
Other interest expense				2							2							2							2

Total funding sources	$	106,096	$	39		0.14	%	$	91,891	$	45		0.20	%	$	105,549	$	77		0.15	%	$	91,014	$	90		0.20	%

Net interest revenue			$	458		1.74	%			$	451		1.97	%			$	892		1.70	%			$	887		1.96	%

⁽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.

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

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. Certain prior period amounts have been reclassified to conform to the 2012 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, 2011.

**********

THE CHARLES SCHWAB CORPORATION

Asset Management and Administration Fees Information

(In millions)

(Unaudited)


	Three Months Ended June 30,																Six Months Ended June 30,
	2012								2011								2012								2011
	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	$	153,103	$	220			0.58	%	$	149,652	$	208			0.56	%	$	154,858	$	442			0.57	%	$	151,027	$	419			0.56	%
Fee waivers				(146	)							(128	)							(309	)							(240	)

Schwab money market funds		153,103		74			0.19	%		149,652		80			0.21	%		154,858		133			0.17	%		151,027		179			0.24	%
Equity and bond funds ⁽¹⁾		46,375		31			0.27	%		42,577		31			0.29	%		46,003		63			0.28	%		41,892		60			0.29	%
Mutual Fund OneSource ^®		212,028		164			0.31	%		224,022		182			0.33	%		213,689		330			0.31	%		219,994		356			0.33	%

Total mutual funds ⁽²⁾	$	411,506		269			0.26	%	$	416,251		293			0.28	%	$	414,550		526			0.26	%	$	412,913		595			0.29	%

Advice solutions⁽²⁾	$	117,001		140			0.48	%	$	111,911		134			0.48	%	$	116,248		279			0.48	%	$	110,002		263			0.48	%
Other ⁽³⁾				87								75								175								146

Total asset management and administration fees			$	496							$	502							$	980							$	1,004

⁽¹⁾	Includes Schwab ETFs.

⁽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 includes Schwab Advisor Network, Schwab Advisor Source, and Windhaven. 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, 401k record keeping fees, and mutual fund clearing and other service fees.

THE CHARLES SCHWAB CORPORATION

Reconciliation of Net Revenues, Income Before Taxes on Income,

and Net Income Excluding Certain Items to Reported Amounts

(In millions)

(Unaudited)


	Three Months Ended June 30, 2012			Three Months Ended March 31, 2012			% Change
Net Revenues Excluding Certain Items	$	1,213		$	1,189			2	%
Other revenues⁽¹⁾		70			—			N/M

Reported Net Revenues	$	1,283		$	1,189			8	%

Reported Expenses Excluding Interest	$	851		$	876			(3	%)

Income Before Taxes On Income Excluding Certain Items	$	362		$	313			16	%
Add: Other revenues excluded above		70			—			N/M

Reported Income Before Taxes on Income	$	432		$	313			38	%

Net Income Excluding Certain Items⁽²⁾	$	231		$	195			18	%
Add: Other revenues excluded above		70			—			N/M
Tax expense		(26	)		—			N/M

Reported Net Income	$	275		$	195			41	%

Pre-tax Profit Margin Excluding Certain Items⁽²⁾		29.8	%		26.3	%
Reported Pre-tax Profit Margin		33.7	%		26.3	%

⁽¹⁾	Relates to a confidential resolution of a vendor dispute, which was received in the second quarter of 2012.

⁽²⁾

Management believes these non-GAAP financial measures are useful indicators of the Company’s ongoing financial performance, and tools that can provide meaningful insight into financial performance without the effects of certain material items that are not expected to be an ongoing part of operations.

N/M Not meaningful.

THE CHARLES SCHWAB CORPORATION

Growth in Client Assets and Accounts

(Unaudited)


	Q2-12 % Change						2012						2011
(In billions, at quarter end, except as noted)	vs. Q2-11			vs. Q1-12			Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Second Quarter
Assets in client accounts
Schwab One^®, other cash equivalents and deposits from banking clients		14	%		(1	%)	$	98.2		$	98.8		$	96.4		$	90.9		$	86.5
Proprietary funds (Schwab Funds^® and Laudus Funds^®):
Money market funds		1	%		(1	%)		152.9			154.4			159.8			155.5			152.0
Equity and bond funds		(9	%)		(1	%)		45.3			45.8			38.2			34.3			49.6

Total proprietary funds		(2	%)		(1	%)		198.2			200.2			198.0			189.8			201.6

Mutual Fund Marketplace^® ⁽¹⁾
Mutual Fund OneSource^®		(4	%)		(4	%)		211.2			219.5			198.6			187.9			220.8
Mutual fund clearing services		189	%		—			126.4			127.0			104.2			98.6			43.7
Other third-party mutual funds		5	%		(2	%)		328.7			334.1			305.9			290.4			314.2

Total Mutual Fund Marketplace		15	%		(2	%)		666.3			680.6			608.7			576.9			578.7

Total mutual fund assets		11	%		(2	%)		864.5			880.8			806.7			766.7			780.3

Equity and other securities ⁽¹⁾		7	%		(2	%)		670.4			685.0			607.9			552.9			624.5
Fixed income securities		3	%		1	%		180.5			179.4			176.9			176.4			175.1
Margin loans outstanding		3	%		7	%		(11.2	)		(10.5	)		(10.2	)		(10.5	)		(10.9	)

Total client assets		9	%		(2	%)	$	1,802.4		$	1,833.5		$	1,677.7		$	1,576.4		$	1,655.5


Client assets by business
Investor Services		4	%		(2	%)	$	737.0		$	753.3		$	697.9		$	655.4		$	711.6
Advisor Services		4	%		(1	%)		727.6			735.9			679.0			640.1			697.8
Other Institutional Services		37	%		(2	%)		337.8			344.3			300.8			280.9			246.1

Total client assets by business		9	%		(2	%)	$	1,802.4		$	1,833.5		$	1,677.7		$	1,576.4		$	1,655.5


Net growth in assets in client accounts (for the quarter ended)
Net new assets
Investor Services ⁽²⁾		45	%		(51	%)	$	2.9		$	5.9		$	5.3		$	11.6		$	2.0
Advisor Services		(7	%)		(21	%)		9.9			12.6			9.2			10.6			10.6
Other Institutional Services ⁽³⁾		14	%		(84	%)		3.2			20.4			7.0			63.8			2.8

Total net new assets		4	%		(59	%)		16.0			38.9			21.5			86.0			15.4

Net market (losses) gains		N/M			(140	%)		(47.1	)		116.9			79.8			(165.1	)		(6.8	)

Net (decline) growth		N/M			(120	%)	$	(31.1	)	$	155.8		$	101.3		$	(79.1	)	$	8.6


New brokerage accounts (in thousands, for the quarter ended) ⁽⁴⁾		8	%		(8	%)		221			240			203			506			205
Clients (in thousands)
Active Brokerage Accounts		7	%		1	%		8,720			8,639			8,552			8,510			8,140
Banking Accounts		10	%		3	%		822			801			780			769			745
Corporate Retirement Plan Participants		6	%		1	%		1,524			1,516			1,492			1,462			1,439

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

⁽²⁾	Includes inflows of $7.5 billion from the acquisition of optionsXpress Holdings, Inc. in the third quarter of 2011.

⁽³⁾	Includes inflows of $12.0 billion and $60.9 billion from mutual fund clearing services clients in the first quarter of 2012 and third quarter of 2011, respectively.

⁽⁴⁾	Includes 315,000 new brokerage accounts from the acquisition of optionsXpress Holdings, Inc. in the third quarter of 2011.

N/M Not meaningful.

The Charles Schwab Corporation Monthly Market Activity Report For June 2012


	2011																					2012																		% change
	Jun			Jul			Aug			Sep			Oct			Nov			Dec			Jan			Feb			Mar			Apr			May			June			Mo.			Yr.
Change in Client Assets (in billions of dollars)
Net New Assets⁽¹⁾		6.5			9.9			62.4			13.7			5.0			6.0			10.5			7.1			21.3			10.5			1.0			9.2			5.8			(37	%)		(11	%)
Net Market (Losses) Gains		(23.7	)		(15.9	)		(58.0	)		(91.2	)		97.4			(13.4	)		(4.2	)		58.9			43.4			14.6			(8.0	)		(78.3	)		39.2


Total Client Assets (at month end, in billions of dollars)		1,655.5			1,649.5			1,653.9			1,576.4			1,678.8			1,671.4			1,677.7			1,743.7			1,808.4			1,833.5			1,826.5			1,757.4			1,802.4			3	%		9	%


New Brokerage Accounts ⁽²⁾ (in thousands)		61			56			71			379			64			64			75			74			76			90			87			70			64			(9	%)		5	%

Clients (at month end, in thousands)
Active Brokerage Accounts		8,140			8,152			8,181			8,510			8,523			8,534			8,552			8,572			8,599			8,639			8,684			8,706			8,720			—			7	%
Banking Accounts		745			754			765			769			774			777			780			787			794			801			808			815			822			1	%		10	%
Corporate Retirement Plan Participants		1,439			1,443			1,452			1,462			1,468			1,478			1,492			1,504			1,511			1,516			1,526			1,522			1,524			—			6	%

Clients’ Daily Average Trades ⁽³⁾ (in thousands)		363.8			404.1			545.3			466.8			509.5			433.5			435.1			468.4			500.1			461.7			458.9			432.3			417.0			(4	%)		15	%

Market Indices (at month end)
Dow Jones Industrial Average		12,414			12,143			11,614			10,913			11,955			12,046			12,218			12,633			12,952			13,212			13,214			12,394			12,880			4	%		4	%
Nasdaq Composite		2,774			2,756			2,579			2,415			2,684			2,620			2,605			2,814			2,967			3,092			3,046			2,827			2,935			4	%		6	%
Standard & Poor’s 500		1,321			1,292			1,219			1,131			1,253			1,247			1,258			1,312			1,366			1,408			1,398			1,310			1,362			4	%		3	%

Daily Average Market Share Volume (in millions)
NYSE		3,890			3,798			5,781			4,584			4,773			4,053			3,576			3,991			3,910			3,806			3,713			3,940			3,869			(2	%)		(1	%)
Nasdaq		2,001			1,890			2,514			2,084			2,086			1,852			1,606			1,819			1,895			1,675			1,697			1,898			1,782			(6	%)		(11	%)
Total US Exchanges		7,226			6,955			10,526			8,455			8,614			7,319			6,345			6,917			6,921			6,603			6,497			7,083			6,857			(3	%)		(5	%)

Mutual Fund Net Buys (Sells) ⁽⁴⁾ (in millions of dollars)
Large Capitalization Stock		(656.5	)		(1,345.0	)		(431.2	)		(226.7	)		(686.0	)		(640.2	)		(840.8	)		(2.0	)		71.5			(338.5	)		(75.8	)		(97.6	)		(428.2	)
Small / Mid Capitalization Stock		(787.5	)		(611.7	)		(965.8	)		(301.8	)		(276.2	)		(424.5	)		(483.7	)		(15.5	)		(7.9	)		(420.6	)		(175.8	)		(291.7	)		(257.5	)
International		(179.8	)		(494.4	)		(479.4	)		(378.1	)		(267.6	)		(484.2	)		(1,034.9	)		669.2			564.5			138.7			257.5			150.9			167.1
Specialized		271.5			63.1			(52.5	)		136.2			(214.2	)		266.1			(161.6	)		206.4			286.3			538.0			109.2			(54.6	)		151.5
Hybrid		263.8			(16.6	)		170.7			(31.5	)		59.4			(153.3	)		158.1			730.2			535.2			669.2			313.7			164.1			(136.5	)
Taxable Bond		1,315.2			762.3			(669.0	)		980.1			1,265.5			642.7			1,079.3			2,728.5			3,407.0			3,154.7			2,097.6			1,492.0			1,725.9
Tax-Free Bond		62.3			85.1			(317.9	)		90.5			120.7			293.2			459.9			644.4			678.8			547.3			199.0			296.1			222.8
Money Market Funds		1,605.5			228.3			5,882.3			(1,263.4	)		1,748.8			(178.2	)		2,697.6			(3,037.3	)		(2,359.6	)		(1,338.3	)		(2,327.0	)		442.4			457.4

⁽¹⁾

February 2012 includes inflows of $12.0 billion from a mutual fund clearing services client. September 2011 includes inflows of $7.5 billion related to the acquisition of optionsXpress Holdings, Inc. August 2011 includes inflows of $56.1 billion from a mutual fund clearing services client. July 2011 includes inflows of $4.8 billion from a mutual fund clearing services client.

⁽²⁾	September 2011 includes 315,000 new brokerage accounts related to the acquisition of optionsXpress Holdings, Inc.

⁽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.

SCHWAB CHARLES CORP - FORM 8-K - EX-99.1 - PRESS RELEASE - July 17, 2012

Attached files

SCHWAB CHARLES CORP Reports