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

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8-K - FORM 8-K - SCHWAB CHARLES CORP	d408200d8k.htm

EXHIBIT 99.1

LOGO

News Release

Contacts:


MEDIA:		INVESTORS/ANALYSTS:

Alison Wertheim		Rich Fowler
Charles Schwab		Charles Schwab
Phone: 415-667-0475		Phone: 415-667-1841

SCHWAB REPORTS GROWTH IN THIRD QUARTER REVENUE AND INCOME

Core Net New Assets Rise 23% Year-Over-Year

Diversified Revenues and Operating Discipline Continue to Drive Financial Performance

SAN FRANCISCO, October 15, 2012 – The Charles Schwab Corporation announced today that its net income for the third quarter of 2012 was $247 million, down 10% from $275 million for the second quarter of 2012, and up 12% from $220 million for the third quarter of 2011. Net income for the nine months ended September 30, 2012 was $717 million, up 2% year-over-year. The company’s third quarter and year-to-date financial results include a non-recurring state tax benefit of approximately $20 million. Schwab’s year-to-date results also include an after-tax gain of approximately $44 million relating to the resolution of a vendor dispute, which was recorded in the second quarter.


	Three Months Ended —September 30,—						% Change			Nine Months Ended —September 30,—						% Change
Financial Highlights	2012			2011			% Change			2012			2011			% Change
Net revenues (in millions)	$	1,196		$	1,181			1	%	$	3,668		$	3,578			3	%
Net income (in millions)	$	247		$	220			12	%	$	717		$	701			2	%
Diluted earnings per common share	$	.19		$	.18			6	%	$	.54		$	.57			(5	%)
Pre-tax profit margin		30.2	%		30.5	%					30.2	%		31.9	%
Return on average common stockholders’ equity (annualized)		11	%		12	%					11	%		13	%

CEO and President Walt Bettinger commented, “Our clients remain resilient yet cautious in this challenging economic environment. They continue to be net purchasers of securities; their cash holdings at Schwab remain at pre-crisis levels; and while their trading activity this summer was muted, it’s been consistent with our experience in prior presidential election years. The company’s third quarter metrics were solid, including 198,000 new brokerage accounts, $2.8 billion in net new enrollments in our retail advisory offerings, and $21.7 billion in core net new assets. We ended the quarter with 8.7 million active brokerage accounts, and 844,000 banking accounts, up 3% and 10%, respectively, year-over-year. Also, retail advised balances and total client assets grew to $123.8 billion and a record $1.89 trillion at month-end September, increasing by 20% each.”

“We know that this environment continues to impact our clients’ confidence in making investment decisions, reinforcing the importance of sustained investment in our full-service model,” Mr. Bettinger continued. “We came into 2012 expecting to complete and deliver a number of significant improvements in our client service capabilities during the year. We remain on track with every one of those initiatives, including the launches of our index-based 401(k) offering and independent branch model, the bolstering of our mortgage lending program, expanding and improving our global investing capabilities, adding to our mobile and tablet solutions, offering an integrated technology platform for independent advisors, and leveraging the strengths of optionsXpress^® and Compliance11^® in our trading and designated

brokerage services. We believe Schwab’s demonstrated commitment to finding a better way to serve investors is an important element of building client trust – trust that is reflected in our improved loyalty scores from individual investors, as well as our industry-leading scores from independent advisors.”

CFO Joe Martinetto said, “Our third quarter financial performance once again demonstrated the combined power of our growing client base, diversified revenue streams and ongoing expense discipline. Both trading and net interest revenues declined sequentially due to environmental factors, yet asset management and administration fees rose by 6% due to improved net money market fund yields, along with growth in other mutual fund balances and our advice programs. Additionally, by keeping our expenses within planned levels, we were able to maintain our pre-tax profit margin at approximately 30% while sustaining our investments in the client experience.”

“We took two additional steps to strengthen our balance sheet during the third quarter,” Mr. Martinetto added. “We redeemed all of our outstanding Trust Preferred Securities and the underlying 7.50% Junior Subordinated Notes, which totaled $202 million, following the Federal Reserve’s issuance of proposed rules that will phase out those securities’ eligibility for regulatory capital treatment. We also completed a debt exchange offer that effectively replaced $256 million of our outstanding 4.95% Senior Notes due in 2014 for new 10-year Senior Notes at a reduced cost. We remain committed to sustaining the financial strength and flexibility needed to pursue profitable growth in all environments.”

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

Investor Services

•

Net new accounts for the quarter totaled approximately 14,000, down 22% year-over-year. Total accounts reached 6.1 million as of September 30, 2012, up 7% year-over-year.

•

Extended the company’s integrated mobile brokerage and banking capabilities to iPad^® users, enabling Schwab clients to deposit checks remotely by taking a picture of a check with their iPad camera.

•

Launched the Schwab Global Account™, a platform providing investors direct, 24/7 online access to 12 foreign equity markets with the ability to trade in their local currencies whenever the markets are open.

•

Launched two products for optionsXpress users: Idea Hub™, which provides actionable trade ideas, grouped into trading themes; and Walk Limit™, which can “walk” or adjust an option order’s limit price automatically to help optimize execution.

Institutional Services

Advisor Services

•

Expanded the company’s ‘Insight to Action’ practice management consulting program, offering registered investment advisors (RIAs) hands-on support and guidance on practice management challenges. The curriculum covers strategic planning, managing profitability, driving productivity through technology, and succession planning.

Other Institutional Services

•

401(k) plans that converted to Schwab Index Advantage™ thus far in 2012 have experienced, on average: lower fund operating expenses, from $68 to $16 per $10,000 invested; and higher advice usage, rising from 10% to 92% of participants.

•

Introduced a suite of support tools and programs to help retirement plan advisors increase productivity and build their skills in this highly regulated industry. The suite combines sophisticated investment management tools, as well as advanced fiduciary and plan design training.

Products and Infrastructure

•

For Charles Schwab Bank:

•

Balance sheet assets = $75.3 billion, up 28% year-over-year.

•

Outstanding mortgage and home equity loans = $9.3 billion, up 3% year-over-year.

•

First mortgage originations by Quicken Loans and Schwab during the quarter = $1.5 billion.

•

Delinquency, nonaccrual, and loss reserve ratios for Schwab Bank’s loan portfolio = 0.90%, 0.45% and 0.56%, respectively, at month-end September.

•

Schwab Bank High Yield Investor Checking^® accounts = 652,000, with $11.0 billion in balances.

•

Reduced the operating expense ratios (OERs) for each of the 15 Schwab ETFs™, giving them the lowest OERs in their respective Lipper categories.

•

Client assets managed by Windhaven^® = $12.5 billion, up 13% from the second quarter of 2012.

•

Total assets under management in Schwab ETFs™ = $7.6 billion. Total assets in Schwab Managed Portfolios-ETFs = $2.5 billion.

iPad is a trademark of Apple Inc., registered in the U.S. and other countries.

Supporting schedules are either attached or located at: http://www.aboutschwab.com/media/xls/q3_2012_schedule.xls

Interim Business Update

The company also announced today that it has scheduled an Interim Business Update for institutional investors on Monday, November 5, 2012. This Update, which will be held via webcast, is part of an ongoing series designed to help the investment community keep abreast of recent developments and management’s strategic focus. The program is scheduled to run from 8:00 a.m. – 9:00 a.m. PT, 11:00 a.m. – 12:00 p.m. ET. Mr. Bettinger and Mr. Martinetto will participate.

The Update will be accessible at: http://schwabevents.com/corporation

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 active brokerage accounts, 1.5 million corporate retirement plan participants, 844,000 banking accounts, and $1.89 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, http://www.sipc.org), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and mortgage services and products. More information is available at www.schwab.com and www.aboutschwab.com.

###

THE CHARLES SCHWAB CORPORATION

Consolidated Statements of Income

(In millions, except per share amounts)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net Revenues
Asset management and administration fees	$	524		$	466		$	1,504		$	1,470

Interest revenue		478			487			1,447			1,464
Interest expense		(39	)		(44	)		(116	)		(134	)

Net interest revenue		439			443			1,331			1,330

Trading revenue		204			248			666			694
Other		42			45			209			119
Provision for loan losses		(10	)		(8	)		(14	)		(13	)
Net impairment losses on securities ⁽¹⁾		(3	)		(13	)		(28	)		(22	)

Total net revenues		1,196			1,181			3,668			3,578

Expenses Excluding Interest
Compensation and benefits		442			423			1,353			1,290
Professional services		98			104			287			288
Occupancy and equipment		77			78			233			222
Advertising and market development		49			48			173			159
Communications		53			56			166			166
Depreciation and amortization		50			39			146			107
Class action litigation and regulatory reserve		—			—			—			7
Other		66			73			204			199

Total expenses excluding interest		835			821			2,562			2,438

Income before taxes on income		361			360			1,106			1,140
Taxes on income		114			140			389			439

Net Income		247			220			717			701

Preferred stock dividends		9			—			23			—

Net Income Available to Common Stockholders	$	238		$	220		$	694		$	701

Weighted-Average Common Shares Outstanding — Diluted		1,275			1,229			1,274			1,216

Earnings Per Common Share — Basic	$	.19		$	.18		$	.54		$	.58
Earnings Per Common Share — Diluted	$	.19		$	.18		$	.54		$	.57

⁽¹⁾

Net impairment losses on securities include total other-than-temporary impairment losses of $1 million and $2 million, net of $(2) million and $(11) million recognized in other comprehensive income, for the three months ended September 30, 2012 and 2011, respectively. Net impairment losses on securities include total other-than-temporary impairment losses of $15 million and $13 million, net of $(13) million and $(9) million recognized in other comprehensive income, for the nine months ended September 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)


	Q3-12 % change						2012									2011
(In millions, except per share amounts and as noted)	vs. Q3-11			vs. Q2-12			Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter
Net Revenues
Asset management and administration fees		12	%		6	%	$	524		$	496		$	484		$	458		$	466
Net interest revenue		(1	%)		(4	%)		439			458			434			395			443
Trading revenue		(18	%)		(7	%)		204			219			243			233			248
Other ⁽¹⁾		(7	%)		(65	%)		42			121			46			41			45
Provision for loan losses		25	%		150	%		(10	)		(4	)		—			(5	)		(8	)
Net impairment losses on securities		(77	%)		(57	%)		(3	)		(7	)		(18	)		(9	)		(13	)

Total net revenues		1	%		(7	%)		1,196			1,283			1,189			1,113			1,181

Expenses Excluding Interest
Compensation and benefits		4	%		(1	%)		442			446			465			442			423
Professional services		(6	%)		5	%		98			93			96			99			104
Occupancy and equipment		(1	%)		(4	%)		77			80			76			79			78
Advertising and market development		2	%		(14	%)		49			57			67			69			48
Communications		(5	%)		(4	%)		53			55			58			54			56
Depreciation and amortization		28	%		4	%		50			48			48			48			39
Other		(10	%)		(8	%)		66			72			66			70			73

Total expenses excluding interest		2	%		(2	%)		835			851			876			861			821

Income before taxes on income		—			(16	%)		361			432			313			252			360
Taxes on income ⁽²⁾		(19	%)		(27	%)		114			157			118			89			140

Net Income		12	%		(10	%)	$	247		$	275		$	195		$	163		$	220

Preferred stock dividends		N/M			(36	%)		9			14			—			—			—

Net Income Available to Common Stockholders		8	%		(9	%)	$	238		$	261		$	195		$	163		$	220


Basic earnings per common share		6	%		(5	%)	$	.19		$	.20		$	.15		$	.13		$	.18
Diluted earnings per common share		6	%		(5	%)	$	.19		$	.20		$	.15		$	.13		$	.18
Dividends declared per common share		—			—		$	.06		$	.06		$	.06		$	.06		$	.06
Weighted-average common shares outstanding – diluted		4	%		—			1,275			1,274			1,273			1,271			1,229

Performance Measures
Pre-tax profit margin								30.2	%		33.7	%		26.3	%		22.6	%		30.5	%
Return on average common stockholders’ equity (annualized) ⁽³⁾								11	%		13	%		10	%		8	%		12	%

Financial Condition (at quarter end, in billions)
Cash and investments segregated		(7	%)		10	%	$	25.0		$	22.7		$	26.9		$	26.0		$	27.0
Receivables from brokerage clients		7	%		(1	%)	$	11.9		$	12.0		$	11.2		$	11.1		$	11.1
Loans to banking clients		4	%		3	%	$	10.1		$	9.8		$	9.8		$	9.8		$	9.7
Total assets		14	%		5	%	$	117.7		$	111.8		$	111.5		$	108.6		$	102.9
Deposits from banking clients		27	%		4	%	$	68.8		$	66.3		$	62.3		$	60.9		$	54.1
Payables to brokerage clients		(5	%)		9	%	$	34.8		$	31.8		$	36.4		$	35.5		$	36.6
Long-term debt		(10	%)		(10	%)	$	1.8		$	2.0		$	2.0		$	2.0		$	2.0
Stockholders’ equity ⁽⁴⁾		23	%		4	%	$	9.5		$	9.1		$	8.3		$	7.7		$	7.7

Other
Full-time equivalent employees (at quarter end, in thousands)		(2	%)		(1	%)		13.6			13.7			14.0			14.1			13.9
Annualized net revenues per average full-time equivalent employee (in thousands)		1	%		(5	%)	$	352		$	372		$	340		$	316		$	350
Capital expenditures - cash purchases of equipment, office facilities, and property, net (in millions)		(39	%)		6	%	$	33		$	31		$	34		$	55		$	54


Clients’ Daily Average Trades (in thousands)
Revenue trades ⁽⁵⁾		(19	%)		(8	%)		261.5			285.2			318.4			307.4			323.1
Asset-based trades ⁽⁶⁾		(11	%)		(11	%)		45.2			50.6			53.7			45.9			50.6
Other trades ⁽⁷⁾		(6	%)		(4	%)		95.7			99.8			104.1			106.3			101.7

Total		(15	%)		(8	%)		402.4			435.6			476.2			459.6			475.4

Average Revenue Per Revenue Trade ⁽⁵⁾		3	%		2	%	$	12.44		$	12.15		$	12.35		$	12.21		$	12.04

⁽¹⁾	Includes a pre-tax gain of $70 million relating to a confidential resolution of a vendor dispute in the second quarter of 2012.

⁽²⁾	Includes a non-recurring state tax benefit of $20 million in the third quarter of 2012.

⁽³⁾	Return on average common stockholders’ equity is calculated using net income available to common stockholders divided by average common stockholders’ equity.

⁽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 September 30,														Nine Months Ended September 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	$	7,942	$	4		0.20	%	$	6,025	$	3		0.20	%	$	6,741	$	12		0.24	%	$	5,496	$	9		0.22	%
Cash and investments segregated		23,516		12		0.20	%		26,597		7		0.10	%		25,259		33		0.17	%		25,120		30		0.16	%
Broker-related receivables ⁽¹⁾		414		—		—			300		—		0.03	%		345		—		0.02	%		346		—		0.05	%
Receivables from brokerage clients		10,956		112		4.07	%		10,749		117		4.32	%		10,750		333		4.14	%		10,784		356		4.41	%
Securities available for sale ⁽²⁾		40,701		146		1.43	%		27,947		116		1.65	%		38,443		443		1.54	%		26,373		332		1.68	%
Securities held to maturity		15,311		95		2.47	%		15,469		128		3.28	%		15,175		302		2.66	%		16,313		413		3.38	%
Loans to banking clients		10,014		77		3.06	%		9,646		79		3.25	%		9,921		233		3.14	%		9,343		231		3.31	%
Loans held for sale ⁽¹⁾		1		—		4.06	%		49		1		4.27	%		24		1		4.12	%		63		2		4.11	%

Total interest-earning assets		108,855		446		1.63	%		96,782		451		1.85	%		106,658		1,357		1.70	%		93,838		1,373		1.96	%

Other interest revenue				32							36							90							91

Total interest-earning assets	$	108,855	$	478		1.74	%	$	96,782	$	487		2.00	%	$	106,658	$	1,447		1.81	%	$	93,838	$	1,464		2.08	%

Funding sources:
Deposits from banking clients	$	67,027	$	11		0.07	%	$	53,247	$	16		0.12	%	$	63,577	$	31		0.07	%	$	51,649	$	49		0.13	%
Payables to brokerage clients ⁽¹⁾		28,435		1		0.01	%		30,962		1		0.01	%		29,651		2		0.01	%		29,288		2		0.01	%
Long-term debt		1,923		27		5.59	%		2,003		27		5.35	%		1,974		81		5.48	%		2,004		81		5.40	%

Total interest-bearing liabilities		97,385		39		0.16	%		86,212		44		0.20	%		95,202		114		0.16	%		82,941		132		0.21	%

Non-interest-bearing funding sources		11,470							10,570							11,456							10,897
Other interest expense				—							—							2							2

Total funding sources	$	108,855	$	39		0.14	%	$	96,782	$	44		0.18	%	$	106,658	$	116		0.14	%	$	93,838	$	134		0.19	%

Net interest revenue			$	439		1.60	%			$	443		1.82	%			$	1,331		1.67	%			$	1,330		1.89	%

⁽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 September 30,																Nine Months Ended September 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	$	154,977	$	221			0.57	%	$	154,459	$	220			0.57	%	$	154,682	$	663			0.57	%	$	152,171	$	639			0.56	%
Fee waivers				(136	)							(160	)							(445	)							(400	)

Schwab money market funds		154,977		85			0.22	%		154,459		60			0.15	%		154,682		218			0.19	%		152,171		239			0.21	%
Equity and bond funds ⁽¹⁾		48,557		32			0.26	%		40,865		29			0.28	%		46,851		95			0.27	%		41,550		89			0.29	%
Mutual Fund OneSource ^®		217,540		171			0.31	%		202,862		168			0.33	%		214,972		501			0.31	%		214,284		520			0.32	%

Total mutual funds ⁽²⁾	$	421,074		288			0.27	%	$	398,186		257			0.26	%	$	416,505		814			0.26	%	$	408,005		848			0.28	%

Advice solutions⁽²⁾	$	120,112		148			0.49	%	$	108,699		129			0.47	%	$	117,536		427			0.49	%	$	110,254		392			0.48	%
Other ⁽³⁾				88								80								263								230

Total asset management and administration fees			$	524							$	466							$	1,504							$	1,470

⁽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

Growth in Client Assets and Accounts

(Unaudited)


	Q3-12 % Change						2012									2011
(In billions, at quarter end, except as noted)	vs. Q3-11			vs. Q2-12			Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter
Assets in client accounts
Schwab One^®, other cash equivalents and deposits from banking clients		14	%		6	%	$	103.7		$	98.2		$	98.8		$	96.4		$	90.9
Proprietary funds (Schwab Funds^® and Laudus Funds^®):
Money market funds		—			2	%		155.7			152.9			154.4			159.8			155.5
Equity and bond funds		41	%		7	%		48.4			45.3			45.8			38.2			34.3

Total proprietary funds		8	%		3	%		204.1			198.2			200.2			198.0			189.8

Mutual Fund Marketplace^® ⁽¹⁾
Mutual Fund OneSource^®		18	%		5	%		222.1			211.2			219.5			198.6			187.9
Mutual fund clearing services		36	%		6	%		134.4			126.4			127.0			104.2			98.6
Other third-party mutual funds		21	%		6	%		350.0			328.7			334.1			305.9			290.4

Total Mutual Fund Marketplace		22	%		6	%		706.5			666.3			680.6			608.7			576.9

Total mutual fund assets		19	%		5	%		910.6			864.5			880.8			806.7			766.7

Equity and other securities ⁽¹⁾		28	%		5	%		705.5			670.4			685.0			607.9			552.9
Fixed income securities		3	%		1	%		181.8			180.5			179.4			176.9			176.4
Margin loans outstanding		7	%		—			(11.2	)		(11.2	)		(10.5	)		(10.2	)		(10.5	)

Total client assets		20	%		5	%	$	1,890.4		$	1,802.4		$	1,833.5		$	1,677.7		$	1,576.4


Client assets by business
Investor Services		18	%		5	%	$	770.4		$	737.0		$	753.3		$	697.9		$	655.4
Advisor Services		19	%		5	%		762.3			727.6			735.9			679.0			640.1
Other Institutional Services		27	%		6	%		357.7			337.8			344.3			300.8			280.9

Total client assets by business		20	%		5	%	$	1,890.4		$	1,802.4		$	1,833.5		$	1,677.7		$	1,576.4


Net growth in assets in client accounts (for the quarter ended)
Net new assets
Investor Services⁽²⁾		(63	%)		48	%	$	4.3		$	2.9		$	5.9		$	5.3		$	11.6
Advisor Services		(10	%)		(4	%)		9.5			9.9			12.6			9.2			10.6
Other Institutional Services ⁽³⁾		(90	%)		106	%		6.6			3.2			20.4			7.0			63.8

Total net new assets		(76	%)		28	%		20.4			16.0			38.9			21.5			86.0

Net market gains (losses)		(141	%)		N/M			67.6			(47.1	)		116.9			79.8			(165.1	)

Net growth (decline)		N/M			N/M		$	88.0		$	(31.1	)	$	155.8		$	101.3		$	(79.1	)


New brokerage accounts (in thousands, for the quarter ended) ⁽⁴⁾		(61	%)		(10	%)		198			221			240			203			506

Clients (in thousands)
Active Brokerage Account(s) ⁽⁵⁾		3	%		—			8,736			8,720			8,639			8,552			8,510
Banking Accounts		10	%		3	%		844			822			801			780			769
Corporate Retirement Plan Participants		6	%		2	%		1,547			1,524			1,516			1,492			1,462

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

⁽²⁾	Includes outflows of approximately $100 million as a result of the sale of Open E Cry, LLC, in the third quarter of 2012. Includes inflows of $7.5 billion from the acquisition of optionsXpress Holdings, Inc. in the third quarter of 2011.

⁽³⁾	Includes outflows of $1.2 billion as a result of the closure of brokersXpress LLC in the third quarter of 2012. 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.

⁽⁵⁾	Active brokerage accounts were reduced by 19,000 as a result of the sale of Open E Cry, LLC, and the closure of brokersXpress LLC in the third quarter of 2012.

N/M Not meaningful

The Charles Schwab Corporation Monthly Market Activity Report For September 2012


	2011 Sep			Oct			Nov			Dec			Jan			2012 Feb			Mar			Apr			May			Jun			Jul			Aug						% change
	2011 Sep			Oct			Nov			Dec			Jan			2012 Feb			Mar			Apr			May			Jun			Jul			Aug			Sep			Mo.			Yr.
Change in Client Assets (in billions of dollars)
Net New Assets⁽¹⁾		13.7			5.0			6.0			10.5			7.1			21.3			10.5			1.0			9.2			5.8			7.4			6.9			6.1			(12	%)		(55	%)
Net Market (Losses) Gains		(91.2	)		97.4			(13.4	)		(4.2	)		58.9			43.4			14.6			(8.0	)		(78.3	)		39.2			13.5			26.3			27.8


Total Client Assets (at month end, in billions of dollars)		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			1,823.3			1,856.5			1,890.4			2	%		20	%


New Brokerage Accounts ⁽²⁾ (in thousands)		379			64			64			75			74			76			90			87			70			64			62			72			64			(11	%)		(83	%)

Clients (at month end, in thousands)
Active Brokerage Accounts ⁽³⁾		8,510			8,523			8,534			8,552			8,572			8,599			8,639			8,684			8,706			8,720			8,723			8,724			8,736			—			3	%
Banking Accounts		769			774			777			780			787			794			801			808			815			822			829			838			844			1	%		10	%
Corporate Retirement Plan Participants		1,462			1,468			1,478			1,492			1,504			1,511			1,516			1,526			1,522			1,524			1,537			1,541			1,547			—			6	%

Clients’ Daily Average Trades ⁽⁴⁾ (in thousands)		466.8			509.5			433.5			435.1			468.4			500.1			461.7			458.9			432.3			417.0			396.1			375.9			441.3			17	%		(5	%)

Market Indices (at month end)
Dow Jones Industrial Average		10,913			11,955			12,046			12,218			12,633			12,952			13,212			13,214			12,394			12,880			13,009			13,091			13,437			3	%		23	%
Nasdaq Composite		2,415			2,684			2,620			2,605			2,814			2,967			3,092			3,046			2,827			2,935			2,940			3,067			3,116			2	%		29	%
Standard & Poor’s 500		1,131			1,253			1,247			1,258			1,312			1,366			1,408			1,398			1,310			1,362			1,379			1,407			1,441			2	%		27	%

Daily Average Market Share Volume (in millions)
NYSE		4,584			4,773			4,053			3,576			3,991			3,910			3,806			3,713			3,940			3,869			3,478			3,043			3,666			20	%		(20	%)
Nasdaq		2,084			2,086			1,852			1,606			1,819			1,895			1,675			1,697			1,898			1,782			1,782			1,560			1,787			15	%		(14	%)
Total US Exchanges		8,455			8,614			7,319			6,345			6,917			6,921			6,603			6,497			7,083			6,857			6,177			5,419			6,490			20	%		(23	%)

Mutual Fund Net Buys (Sells) ⁽⁵⁾ (in millions of dollars)
Large Capitalization Stock		(226.7	)		(686.0	)		(640.2	)		(840.8	)		(2.0	)		71.5			(338.5	)		(75.8	)		(97.6	)		(428.2	)		(268.3	)		(709.6	)		(873.0	)
Small / Mid Capitalization Stock		(301.8	)		(276.2	)		(424.5	)		(483.7	)		(15.5	)		(7.9	)		(420.6	)		(175.8	)		(291.7	)		(257.5	)		(163.0	)		(203.9	)		(593.2	)
International		(378.1	)		(267.6	)		(484.2	)		(1,034.9	)		669.2			564.5			138.7			257.5			150.9			167.1			240.1			311.9			(112.7	)
Specialized		136.2			(214.2	)		266.1			(161.6	)		206.4			286.3			538.0			109.2			(54.6	)		151.5			(5.1	)		247.1			(177.5	)
Hybrid		(31.5	)		59.4			(153.3	)		158.1			730.2			535.2			669.2			313.7			164.1			(136.5	)		179.2			536.4			188.5
Taxable Bond		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			2,309.6			2,544.2			2,693.1
Tax-Free Bond		90.5			120.7			293.2			459.9			644.4			678.8			547.3			199.0			296.1			222.8			408.3			530.8			539.7
Money Market Funds		(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			722.2			1,254.5			810.5

⁽¹⁾

September 2012 includes outflows of approximately $400 million as a result of the closure of brokersXpress LLC. August 2012 includes outflows of approximately $900 million as a result of the sale of Open E Cry, LLC, and closure of brokersXpress LLC. 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.

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

⁽³⁾	September 2012 active brokerage accounts were reduced by approximately 3,000 as a result of the closure of brokersXpress LLC. August 2012 active brokerage accounts were reduced by approximately 16,000 as a result of the sale of Open E Cry, LLC, and closure of brokersXpress LLC.

⁽⁴⁾	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.

⁽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.

SCHWAB CHARLES CORP - FORM 8-K - EX-99.1 - PRESS RELEASE - October 15, 2012

Attached files

SCHWAB CHARLES CORP Reports