EX-99.1 2 a2q24exhibit991.htm EX-99.1 Document

Exhibit 99.1
cslogoa03.jpg
SCHWAB REPORTS SECOND QUARTER RESULTS
Total Client Assets Reached A Record $9.4 Trillion, Up 17% Year-Over-Year
Core Net New Assets Rose 17% to $61.2 Billion, Highlighting Continued Momentum


WESTLAKE, Texas, July 16, 2024 – The Charles Schwab Corporation reported net income for the second quarter totaling $1.3 billion, or $.66 diluted earnings per common share. Excluding $175 million of pre-tax transaction-related and restructuring costs, adjusted (1) net income and diluted common earnings per share equaled $1.5 billion and $.73, respectively.

Client Driven
Growth
 +17%
Core Net New Asset Growth Versus 2Q23
“Schwab’s ‘no trade-offs’ value proposition continued to resonate with investors, as new brokerage accounts opened this year grew to
over 2 million and second quarter core asset gathering
equaled $61.2 billion – a year-over-year increase of 17%.”
Co-Chairman and CEO Walt Bettinger
Modern Wealth
Solutions
 +56%
YTD Inflows
to Managed Investing Solutions Versus 2023
“Client interest in our broad array of wealth solutions remained strong through June. Year-to-date enrollments are up ~30% versus the prior year period and net flows into Managed Investing solutions reached $25 billion – an increase of 56% versus the first 6 months of 2023.”
Co-Chairman and CEO Walt Bettinger
Diversified Operating Model
41.0%
2Q24 Adjusted
Pre-Tax Profit Margin (1)
“Record asset management and administration fees, along with our balanced approach to expense management, helped Schwab produce a second quarter pre-tax margin of 37.2% – 41.0% adjusted (1).”
CFO Peter Crawford
Balance Sheet
Management
9.4%
Tier 1 Leverage Ratio
5.9%
Adj. Tier 1
Leverage Ratio (1)
“Similar to prior years, our strong capital levels and all-weather model enabled us to successfully complete the 2024 Federal Reserve stress test, with Schwab notching the highest post-stress ratios among all major banks.”
CFO Peter Crawford

2Q24 Client and Business Highlights

•Sustained equity market strength and organic asset gathering pushed total client assets to a record $9.41 trillion
•Active brokerage accounts increased 4% year-over-year to 35.6 million
•Despite expected integration-related attrition, core net new assets grew 17% versus the prior year to $61.2 billion
•Client assets receiving ongoing advisory services are up 16% year-over-year, including year-to-date net flow increases into Schwab Wealth AdvisoryTM and Wasmer SchroederTM Strategies of 40% and 53%, respectively
•Margin balances totaled $71.7 billion at quarter-end, up 15% since the end of 2023
•Second quarter trading activity remained robust versus 2023 levels as client engagement in the markets persisted
•Strong year-to-date client net buying of mutual and exchange-traded funds totaled $77 billion – the 2nd highest first half ever
•Schwab ranked #1 for mobile app customer experience by Corporate Insight for the second year in a row (2)

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Three Months Ended
June 30,		%Six Months Ended
June 30,		%
Financial Highlights (1)
20242023Change20242023Change
Net revenues (in millions)$4,690 $4,656 1%$9,430 $9,772 (3)%
Net income (in millions)
GAAP$1,332 $1,294 3%$2,694 $2,897 (7)%
Adjusted (1)
$1,465 $1,494 (2)%$2,934 $3,274 (10)%
Diluted earnings per common share
GAAP$.66 $.64 3%$1.34 $1.48 (9)%
Adjusted (1)
$.73 $.75 (3)%$1.47 $1.68 (13)%
Pre-tax profit margin
GAAP37.2 %36.3 %37.6 %38.9 %
Adjusted (1)
41.0 %42.0 %40.9 %44.0 %
Return on average common
stockholders’ equity (annualized)14 %17 %15 %20 %
Return on tangible
common equity (annualized) (1)
34 %62 %36 %71 %
Note: All per-share results are rounded to the nearest cent, based on weighted-average diluted common shares outstanding.

2Q24 Financial Commentary

•Total net revenue increased by 1% year-over-year led by sustained market strength
•Net interest margin expanded to 2.03%, up 1 basis point sequentially
•Client transactional sweep cash balances ended June at $374.8 billion, reflecting clients’ April tax disbursements, slowing client cash realignment activity, and continued net securities purchases by clients
•Supplemental funding (3) finished the second quarter at $73.7 billion, up from the first quarter as we redirected some client cash from the bank to the broker-dealer to support increased margin lending
•Asset management and administration fees totaled $1.4 billion, a new quarterly record
•GAAP expenses declined by 1% versus the prior year period and included $43 million in accruals in connection with an industry-wide regulatory review of off-channel communications
•Second quarter acquisition and integration-related costs, amortization of acquired intangibles, and restructuring costs totaled $175 million, down $89 million from 2Q23. Exclusive of these items, adjusted total expenses (1) grew by 2%
•Charles Schwab Bank, SSB (CSB) capital ratios continued to build, with preliminary Tier 1 Leverage and adjusted Tier 1 Leverage (1) reaching 10.9% and 6.2%, respectively

(1) Further details on non-GAAP financial measures and a reconciliation of such measures to GAAP reported results are included on pages 10–12 of this release.
(2) Charles Schwab leads in mobile in Corporate Insight’s 2024 Brokerage Experience Benchmarks (https://corporateinsight.com/the-2024-brokerage-experience-benchmarks-find-hybrids-still-offer-best-experiences/), which evaluate the individual investor experience offered by 20 leading brokerage websites and mobile apps. This research was independently conducted by Corporate Benchmarks’ analytical frameworks that are built on over 25 years of research and provide a clear view of how the nation’s top brokerage websites and mobile apps stack up against one another in terms of functionality, design, navigation, and usability. Schwab paid a licensing fee to Corporate Insight for use of the award and logos.
(3) Supplemental funding includes repurchase agreements, Schwab Bank Certificates of Deposit (CDs), and Federal Home Loan Bank balances.

Summer Business Update
The company will host its Summer Business Update for institutional investors this morning from 7:30 a.m. - 8:30 a.m. CT, 8:30 a.m. - 9:30 a.m. ET.

Registration for this Update webcast is accessible at https://www.aboutschwab.com/schwabevents.

Forward-Looking Statements
This press release contains forward-looking statements relating to the company’s value proposition and success with investors, Ameritrade integration-related attrition, expense management and capital levels. 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

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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 35.6 million active brokerage accounts, 5.4 million workplace plan participant accounts, 1.9 million banking accounts, and $9.41 trillion in client assets. 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.

Contact Information

MEDIA
Mayura Hooper, 415-667-1525
public.relations@schwab.com

INVESTORS/ANALYSTS
Jeff Edwards, 415-667-1524
investor.relations@schwab.com
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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,
2024202320242023
Net Revenues
Interest revenue$3,817 $4,104 $7,758 $8,120 
Interest expense(1,659)(1,814)(3,367)(3,060)
Net interest revenue2,158 2,290 4,391 5,060 
Asset management and administration fees
1,383 1,173 2,731 2,291 
Trading revenue777 803 1,594 1,695 
Bank deposit account fees153 175 336 326 
Other219 215 378 400 
Total net revenues4,690 4,656 9,430 9,772 
Expenses Excluding Interest
Compensation and benefits1,450 1,498 2,988 3,136 
Professional services259 272 500 530 
Occupancy and equipment248 319 513 618 
Advertising and market development107 103 195 191 
Communications172 188 313 334 
Depreciation and amortization233 191 461 368 
Amortization of acquired intangible assets129 134 259 269 
Regulatory fees and assessments96 80 221 163 
Other249 180 435 362 
Total expenses excluding interest2,943 2,965 5,885 5,971 
Income before taxes on income1,747 1,691 3,545 3,801 
Taxes on income415 397 851 904 
Net Income1,332 1,294 2,694 2,897 
Preferred stock dividends and other121 121 232 191 
Net Income Available to Common Stockholders$1,211 $1,173 $2,462 $2,706 
Weighted-Average Common Shares Outstanding:
Basic1,828 1,820 1,827 1,827 
Diluted1,834 1,825 1,832 1,834 
Earnings Per Common Shares Outstanding (1):
Basic$.66 $.64 $1.35 $1.48 
Diluted$.66 $.64 $1.34 $1.48 
(1) The Company has voting and nonvoting common stock outstanding. As the participation rights, including dividend and liquidation rights, are identical between the voting and nonvoting stock classes, basic and diluted earnings per share are the same for each class.
        
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THE CHARLES SCHWAB CORPORATION
Financial and Operating Highlights
(Unaudited)
Q2-24 % change20242023
vs.vs.SecondFirstFourthThirdSecond
(In millions, except per share amounts and as noted)Q2-23Q1-24QuarterQuarterQuarterQuarterQuarter
Net Revenues
Net interest revenue(6)%(3)%$2,158 $2,233 $2,130 $2,237 $2,290 
Asset management and administration fees18 %3 %1,383 1,348 1,241 1,224 1,173 
Trading revenue(3)%(5)%777 817 767 768 803 
Bank deposit account fees(13)%(16)%153 183 174 205 175 
Other2 %38 %219 159 147 172 215 
Total net revenues1 %(1)%4,690 4,740 4,459 4,606 4,656 
Expenses Excluding Interest
Compensation and benefits (1)
(3)%(6)%1,450 1,538 1,409 1,770 1,498 
Professional services(5)%7 %259 241 253 275 272 
Occupancy and equipment(22)%(6)%248 265 331 305 319 
Advertising and market development4 %22 %107 88 104 102 103 
Communications(9)%22 %172 141 144 151 188 
Depreciation and amortization 22 %2 %233 228 238 198 191 
Amortization of acquired intangible assets(4)%(1)%129 130 130 135 134 
Regulatory fees and assessments20 %(23)%96 125 270 114 80 
Other (2)
38 %34 %249 186 386 173 180 
Total expenses excluding interest(1)%— 2,943 2,942 3,265 3,223 2,965 
Income before taxes on income3 %(3)%1,747 1,798 1,194 1,383 1,691 
Taxes on income5 %(5)%415 436 149 258 397 
Net Income3 %(2)%1,332 1,362 1,045 1,125 1,294 
Preferred stock dividends and other— 9 %121 111 119 108 121 
Net Income Available to Common Stockholders3 %(3)%$1,211 $1,251 $926 $1,017 $1,173 
Earnings per common share (3):
Basic3 %(4)%$.66 $.69 $.51 $.56 $.64 
Diluted3 %(3)%$.66 $.68 $.51 $.56 $.64 
Dividends declared per common share— — $.25 $.25 $.25 $.25 $.25 
Weighted-average common shares outstanding:
Basic— — 1,828 1,825 1,823 1,821 1,820 
Diluted— — 1,834 1,831 1,828 1,827 1,825 
Performance Measures
Pre-tax profit margin37.2 %37.9 %26.8 %30.0 %36.3 %
Return on average common stockholders’ equity (annualized) (4)
14 %15 %12 %14 %17 %
Financial Condition (at quarter end, in billions)
Cash and cash equivalents(47)%(20)%$25.4 $31.8 $43.3 $33.3 $47.7 
Cash and investments segregated(14)%(16)%21.7 25.9 31.8 18.6 25.1 
Receivables from brokerage clients — net12 %2 %72.8 71.2 68.7 69.1 65.2 
Available for sale securities(26)%(7)%93.6 101.1 107.6 110.3 125.8 
Held to maturity securities(8)%(2)%153.2 156.4 159.5 162.5 166.3 
Bank loans — net5 %3 %42.2 40.8 40.4 40.3 40.1 
Total assets(12)%(4)%449.7 468.8 493.2 475.2 511.5 
Bank deposits(17)%(6)%252.4 269.5 290.0 284.4 304.4 
Payables to brokerage clients(6)%(5)%80.0 84.0 84.8 72.8 84.8 
Other short-term borrowings
28 %19 %10.0 8.4 6.6 7.6 7.8 
Federal Home Loan Bank borrowings
(40)%2 %24.4 24.0 26.4 31.8 41.0 
Long-term debt— (2)%22.4 22.9 26.1 24.8 22.5 
Stockholders’ equity19 %4 %44.0 42.4 41.0 37.8 37.1 
Other
Full-time equivalent employees (at quarter end, in thousands)(12)%(1)%32.3 32.6 33.0 35.9 36.6 
Capital expenditures — purchases of equipment, office facilities, and property,
  net (in millions)		(45)%(25)%$92 $122 $199 $250 $168 
Expenses excluding interest as a percentage of average client assets (annualized)0.13 %0.14 %0.16 %0.16 %0.15 %
Clients’ Daily Average Trades (DATs) (in thousands)
4 %(8)%5,486 5,958 5,192 5,218 5,272 
Number of Trading Days2 %3 %63.0 61.0 62.5 62.5 62.0 
Revenue Per Trade (5)
(9)%— $2.25 $2.25 $2.36 $2.35 $2.46 
(1) Fourth quarter of 2023 includes $16 million in restructuring costs. Third quarter of 2023 includes $276 million in restructuring costs.
(2) Fourth quarter of 2023 includes $181 million in restructuring costs.
(3) The Company has voting and nonvoting common stock outstanding. As the participation rights, including dividend and liquidation rights, are identical between the voting and nonvoting stock classes, basic and diluted earnings per share are the same for each class.
(4) Return on average common stockholders’ equity is calculated using net income available to common stockholders divided by average common stockholders’ equity.
(5) Revenue per trade is calculated as trading revenue divided by DATs multiplied by the number of trading days.

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THE CHARLES SCHWAB CORPORATION
Net Interest Revenue Information
(In millions, except ratios or as noted)
(Unaudited)
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
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$28,839 $382 5.24 %$44,683 $547 4.84 %$31,394 $836 5.26 %$40,891 $960 4.67 %
Cash and investments segregated21,493 281 5.17 %27,399 324 4.68 %25,503 669 5.19 %33,699 756 4.46 %
Receivables from brokerage clients68,715 1,351 7.78 %60,709 1,167 7.60 %66,259 2,611 7.80 %60,626 2,251 7.39 %
Available for sale securities (1)
104,045 555 2.13 %145,032 791 2.18 %107,956 1,149 2.12 %150,382 1,616 2.15 %
Held to maturity securities154,314 658 1.70 %167,499 720 1.72 %155,862 1,348 1.73 %169,184 1,466 1.73 %
Bank loans41,562 460 4.44 %40,124 410 4.09 %41,046 900 4.40 %40,185 801 4.00 %
Total interest-earning assets418,968 3,687 3.50 %485,446 3,959 3.24 %428,020 7,513 3.49 %494,967 7,850 3.16 %
Securities lending revenue95 124 171 236 
Other interest revenue35 21 74 34 
Total interest-earning assets$418,968 $3,817 3.62 %$485,446 $4,104 3.36 %$428,020 $7,758 3.60 %$494,967 $8,120 3.27 %
Funding sources
Bank deposits$258,119 $840 1.31 %$312,543 $863 1.11 %$266,243 $1,761 1.33 %$327,739 $1,481 0.91 %
Payables to brokerage clients67,680 77 0.45 %64,892 64 0.40 %68,011 150 0.44 %70,997 139 0.40 %
Other short-term borrowings9,268 129 5.59 %7,622 97 5.08 %8,327 232 5.60 %7,272 183 5.06 %
Federal Home Loan Bank borrowings25,582 348 5.42 %46,813 606 5.13 %25,220 678 5.35 %35,697 910 5.07 %
Long-term debt22,460 208 3.70 %21,237 157 2.95 %23,730 432 3.64 %20,766 296 2.85 %
Total interest-bearing liabilities383,109 1,602 1.68 %453,107 1,787 1.57 %391,531 3,253 1.66 %462,471 3,009 1.31 %
Non-interest-bearing funding sources35,859 32,339 36,489 32,496 
Securities lending expense57 28 112 50 
Other interest expense— (1)2 1 
Total funding sources$418,968 $1,659 1.59 %$485,446 $1,814 1.49 %$428,020 $3,367 1.57 %$494,967 $3,060 1.24 %
Net interest revenue$2,158 2.03 %$2,290 1.87 %$4,391 2.03 %$5,060 2.03 %
(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, except ratios or as noted)
(Unaudited)

Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Average
Client
Assets		RevenueAverage
Fee		Average
Client
Assets		RevenueAverage
Fee		Average
Client
Assets		RevenueAverage
Fee		Average
Client
Assets		RevenueAverage
Fee
Schwab money market funds$523,665 $357 0.27 %$375,898 $252 0.27 %$511,776 $693 0.27 %$346,145 $465 0.27 %
Schwab equity and bond funds, exchange-traded funds (ETFs), and collective trust funds (CTFs) 565,848 112 0.08 %465,079 94 0.08 %552,755 219 0.08 %457,830 185 0.08 %
Mutual Fund OneSource® and other no-transaction-
  fee funds
338,198 214 0.25 %229,207 151 0.26 %326,387 423 0.26 %225,822 299 0.27 %
Other third-party mutual funds and ETFs600,902 102 0.07 %681,486 133 0.08 %603,263 208 0.07 %678,915 266 0.08 %
Total mutual funds, ETFs, and CTFs (1)
$2,028,613 785 0.16 %$1,751,670 630 0.14 %$1,994,181 1,543 0.16 %$1,708,712 1,215 0.14 %
Advice solutions (1)
Fee-based$525,689 510 0.39 %$455,859 464 0.41 %$515,911 1,013 0.39 %$449,443 917 0.41 %
Non-fee-based110,234 — — 95,427 — — 108,133 — — 94,948 — — 
Total advice solutions$635,923 510 0.32 %$551,286 464 0.34 %$624,044 1,013 0.33 %$544,391 917 0.34 %
Other balance-based fees (2)
763,750 69 0.04 %594,528 63 0.04 %741,599 138 0.04 %578,158 125 0.04 %
Other (3)
19 16 37 34 
Total asset management and administration fees$1,383 $1,173 $2,731 $2,291 
(1) Advice solutions include managed portfolios, specialized strategies, and customized investment advice such as Schwab Wealth AdvisoryTM, Schwab Managed PortfoliosTM, Managed Account Select®, Schwab Advisor Network®, Windhaven Strategies®, ThomasPartners® Strategies, Schwab Index Advantage advised retirement plan balances, Schwab Intelligent Portfolios®, Institutional Intelligent Portfolios®, Schwab Intelligent Portfolios Premium®, AdvisorDirect®, Essential Portfolios, Selective Portfolios, and Personalized Portfolios; as well as legacy non-fee advice solutions including Schwab Advisor Source and certain retirement plan balances. 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.
(2) Includes various asset-related fees, such as trust fees, 401(k) recordkeeping fees, and mutual fund clearing fees and other service fees.
(3) 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)

Q2-24 % Change20242023
vs.vs.SecondFirstFourthThirdSecond
(In billions, at quarter end, except as noted)Q2-23Q1-24QuarterQuarterQuarterQuarterQuarter
Assets in client accounts
Schwab One®, certain cash equivalents, and bank deposits
(14)%(5)%$330.7 $348.2 $368.3 $353.1 $384.4 
Bank deposit account balances(18)%(6)%84.5 90.2 97.4 99.5 102.7 
Proprietary mutual funds (Schwab Funds® and Laudus Funds®) and CTFs
Money market funds (1)
36 %3 %533.6 515.7 476.4 436.3 392.9 
Equity and bond funds and CTFs (2)
24 %4 %214.4 206.0 186.7 167.9 172.6 
Total proprietary mutual funds and CTFs32 %4 %748.0 721.7 663.1 604.2 565.5 
Mutual Fund Marketplace® (3)
Mutual Fund OneSource® and other no-transaction-fee funds
35 %5 %344.8 329.2 306.2 288.0 254.6 
Mutual fund clearing services20 %7 %264.7 248.1 233.4 216.9 220.7 
Other third-party mutual funds
2 %— 1,177.5 1,182.9 1,126.5 1,055.3 1,150.8 
Total Mutual Fund Marketplace10 %2 %1,787.0 1,760.2 1,666.1 1,560.2 1,626.1 
Total mutual fund assets16 %2 %2,535.0 2,481.9 2,329.2 2,164.4 2,191.6 
Exchange-traded funds
Proprietary ETFs (2)
19 %2 %349.6 342.9 319.4 286.2 293.2 
Other third-party ETFs26 %4 %1,738.6 1,676.6 1,521.7 1,352.6 1,381.4 
Total ETF assets25 %3 %2,088.2 2,019.5 1,841.1 1,638.8 1,674.6 
Equity and other securities22 %5 %3,648.8 3,467.7 3,163.5 2,886.4 3,002.7 
Fixed income securities10 %2 %792.0 779.0 779.7 747.4 722.6 
Margin loans outstanding14 %5 %(71.7)(68.1)(62.6)(65.1)(62.8)
Total client assets17 %3 %$9,407.5 $9,118.4 $8,516.6 $7,824.5 $8,015.8 
Client assets by business
Investor Services18 %4 %$5,055.7 $4,852.2 $4,519.1 $4,157.7 $4,267.9 
Advisor Services16 %2 %4,351.8 4,266.2 3,997.5 3,666.8 3,747.9 
Total client assets17 %3 %$9,407.5 $9,118.4 $8,516.6 $7,824.5 $8,015.8 
Net growth in assets in client accounts (for the quarter ended)
Net new assets by business
Investor Services (4)
11 %14 %$39.9 $34.9 $25.0 $28.6 $36.0 
Advisor Services (5)
(5)%(36)%34.3 53.3 41.3 19.6 36.0 
Total net new assets3 %(16)%$74.2 $88.2 $66.3 $48.2 $72.0 
Net market gains (losses)214.9 513.6 625.8 (239.5)363.8 
Net growth (decline)$289.1 $601.8 $692.1 $(191.3)$435.8 
New brokerage accounts (in thousands, for the quarter ended)
3 %(10)%985 1,094 910 894 960 
Client accounts (in thousands)
Active brokerage accounts4 %1 %35,612 35,301 34,838 34,540 34,382 
Banking accounts8 %2 %1,931 1,885 1,838 1,799 1,781 
Workplace Plan Participant Accounts (6)
7 %2 %5,363 5,277 5,221 5,141 5,003 
(1) Total client assets in purchased money market funds are located at: https://www.aboutschwab.com/investor-relations.
(2) Includes balances held on and off the Schwab platform. As of June 30, 2024, off-platform equity and bond funds, CTFs, and ETFs were $31.6 billion, $3.7 billion, and $117.3 billion, respectively.
(3) Excludes all proprietary mutual funds and ETFs.
(4) Second quarter of 2024 includes net inflows of $2.7 billion from off-platform Schwab Bank Retail CDs and an inflow of $10.3 billion from a mutual fund clearing services client. First quarter of 2024 includes net outflows of $7.4 billion from off-platform Schwab Bank Retail CDs. Fourth quarter of 2023 includes net inflows of $2.4 billion from off-platform Schwab Bank Retail CDs and outflows of $5.8 billion from an international relationship. Third quarter of 2023 includes net inflows of $3.3 billion from off-platform Schwab Bank Retail CDs. Second quarter of 2023 includes an inflow of $12.0 billion from a mutual fund clearing services client and inflows of $7.8 billion from off-platform Schwab Bank Retail CDs.
(5) Fourth quarter of 2023 includes outflows of $6.4 billion from an international relationship. Third quarter of 2023 includes an outflow of $0.8 billion from an international relationship.
(6) Beginning in the fourth quarter 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.

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The Charles Schwab Corporation Monthly Activity Report For June 2024
20232024Change
JunJulAugSepOctNovDecJanFebMarAprMayJunMo.Yr.
Market Indices (at month end)
Dow Jones Industrial Average®
34,408 35,560 34,722 33,508 33,053 35,951 37,690 38,150 38,996 39,807 37,816 38,686 39,119 1 %14 %
Nasdaq Composite®
13,788 14,346 14,035 13,219 12,851 14,226 15,011 15,164 16,092 16,379 15,658 16,735 17,733 6 %29 %
Standard & Poor’s® 500
4,450 4,589 4,508 4,288 4,194 4,568 4,770 4,846 5,096 5,254 5,036 5,278 5,460 3 %23 %
Client Assets (in billions of dollars)
Beginning Client Assets7,650.2 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 
Net New Assets (1)
33.8 12.9 8.1 27.2 5.0 19.2 42.1 14.8 31.7 41.7 10.0 31.0 33.2 7 %(2)%
Net Market Gains (Losses)331.8 212.3 (154.4)(297.4)(176.1)508.0 293.9 26.7 289.7 197.2 (280.9)327.8 168.0 
Total Client Assets (at month end)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 9,407.5 2 %17 %
Core Net New Assets (1,2)
33.8 13.7 4.9 27.1 11.3 21.7 43.1 17.2 33.4 45.0 1.0 31.1 29.1 (6)%(14)%
Receiving Ongoing Advisory Services (at month end)
Investor Services547.5 560.6 552.2 533.0 522.2 557.0 581.4 584.1 601.8 618.5 602.2 624.0 632.9 1 %16 %
Advisor Services (3)
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 4,090.0 2 %16 %
Client Accounts (at month end, in thousands)
Active Brokerage Accounts34,382 34,434 34,440 34,540 34,571 34,672 34,838 35,017 35,127 35,301 35,426 35,524 35,612 — 4 %
Banking Accounts 1,781 1,792 1,798 1,799 1,812 1,825 1,838 1,856 1,871 1,885 1,901 1,916 1,931 1 %8 %
Workplace Plan Participant Accounts (4)
5,003 5,030 5,037 5,141 5,212 5,212 5,221 5,226 5,268 5,277 5,282 5,345 5,363 — 7 %
Client Activity
New Brokerage Accounts (in thousands)315 303 311 280 284 286 340 366 345 383 361 314 310 (1)%(2)%
Client Cash as a Percentage of Client Assets (5,6)
10.5 %10.2 %10.4 %10.8 %11.2 %10.7 %10.5 %10.5 %10.2 %10.0 %10.2 %9.9 %9.7 %(20) bp(80) bp
Derivative Trades as a Percentage of Total Trades23.9 %23.0 %24.4 %24.2 %23.2 %23.1 %21.8 %21.8 %22.2 %21.9 %22.1 %21.9 %21.3 %(60) bp(260) bp
Selected Average Balances (in millions of dollars)
Average Interest-Earning Assets (7)
479,752 466,659 449,483 444,864 438,522 439,118 446,305 443,694 434,822 431,456 423,532 415,950 417,150 — (13)%
Average Margin Balances61,543 63,040 64,226 64,014 63,946 61,502 62,309 61,368 63,600 66,425 68,827 67,614 69,730 3 %13 %
Average Bank Deposit Account Balances (8)
102,917 102,566 101,928 100,404 97,893 94,991 95,518 95,553 92,075 90,774 88,819 86,844 85,195 (2)%(17)%
Mutual Fund and Exchange-Traded Fund
  Net Buys (Sells) (9,10) (in millions of dollars)
Equities9,190 7,423 (278)675 (3,039)6,099 7,903 8,182 7,624 10,379 3,472 5,734 3,379 
Hybrid(903)(407)(1,037)(828)(1,457)(1,466)(1,596)(501)(1,330)(439)(703)(558)(843)
Bonds3,302 2,515 4,696 2,723 1,094 255 6,104 7,510 9,883 7,561 5,949 5,854 6,346 
Net Buy (Sell) Activity (in millions of dollars)
Mutual Funds (9)
(4,485)(3,333)(6,476)(5,853)(12,245)(9,267)(7,406)(966)(1,348)(1,607)(4,818)(5,544)(4,254)
Exchange-Traded Funds (10)
16,074 12,864 9,857 8,423 8,843 14,155 19,817 16,157 17,525 19,108 13,536 16,574 13,136 
Money Market Funds9,112 7,911 16,869 13,388 16,976 11,670 7,745 11,717 10,129 9,085 (2,357)9,790 3,858 
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.

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THE CHARLES SCHWAB CORPORATION
Non-GAAP Financial Measures
(In millions, except ratios and per share amounts)
(Unaudited)
In addition to disclosing financial results in accordance with generally accepted accounting principles in the U.S. (GAAP), Schwab’s second quarter earnings release contains references to the non-GAAP financial measures described below. We believe these non-GAAP financial measures provide useful supplemental information about the financial performance of the Company, and facilitate meaningful comparison of Schwab’s results in the current period to both historic and future results. These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may not be comparable to non-GAAP financial measures presented by other companies.

Schwab’s use of non-GAAP measures is reflective of certain adjustments made to GAAP financial measures as described below. Beginning in the third quarter of 2023, these adjustments also include restructuring costs, which the Company began incurring in connection with its previously announced plans to streamline its operations to prepare for post-integration of Ameritrade. See Part I – Item 1 – Note 10 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 for additional information.
Non-GAAP Adjustment or MeasureDefinitionUsefulness to Investors and Uses by Management
Acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costsSchwab adjusts certain GAAP financial measures to exclude the impact of acquisition and integration-related costs incurred as a result of the Company’s acquisitions, amortization of acquired intangible assets, restructuring costs, and, where applicable, the income tax effect of these expenses.

Adjustments made to exclude amortization of acquired intangible assets are reflective of all acquired intangible assets, which were recorded as part of purchase accounting. These acquired intangible assets contribute to the Company’s revenue generation. Amortization of acquired intangible assets will continue in future periods over their remaining useful lives.		We exclude acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs for the purpose of calculating certain non-GAAP measures because we believe doing so provides additional transparency of Schwab’s ongoing operations, and is useful in both evaluating the operating performance of the business and facilitating comparison of results with prior and future periods.

Costs related to acquisition and integration or restructuring fluctuate based on the timing of acquisitions, integration and restructuring activities, thereby limiting comparability of results among periods, and are not representative of the costs of running the Company’s ongoing business. Amortization of acquired intangible assets is excluded because management does not believe it is indicative of the Company’s underlying operating performance.
Return on tangible common equityReturn on tangible common equity represents annualized adjusted net income available to common stockholders as a percentage of average tangible common equity. Tangible common equity represents common equity less goodwill, acquired intangible assets — net, and related deferred tax liabilities.Acquisitions typically result in the recognition of significant amounts of goodwill and acquired intangible assets. We believe return on tangible common equity may be useful to investors as a supplemental measure to facilitate assessing capital efficiency and returns relative to the composition of Schwab’s balance sheet.
Adjusted Tier 1 Leverage RatioAdjusted Tier 1 Leverage Ratio represents the Tier 1 Leverage Ratio as prescribed by bank regulatory guidance for the consolidated company and for CSB, adjusted to reflect the inclusion of accumulated other comprehensive income (AOCI) in the ratio.Inclusion of the impacts of AOCI in the Company’s Tier 1 Leverage Ratio provides additional information regarding the Company’s current capital position. We believe Adjusted Tier 1 Leverage Ratio may be useful to investors as a supplemental measure of the Company’s capital levels.

The Company also uses adjusted diluted EPS and return on tangible common equity as components of performance criteria for employee bonus and certain executive management incentive compensation arrangements. The Compensation Committee of CSC’s Board of Directors maintains discretion in evaluating performance against these criteria.


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THE CHARLES SCHWAB CORPORATION
Non-GAAP Financial Measures
(In millions, except ratios and per share amounts)
(Unaudited)
The tables below present reconciliations of GAAP measures to non-GAAP measures:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Total
Expenses Excluding Interest		Net
Income		Total
Expenses Excluding Interest		Net
Income		Total
Expenses Excluding Interest		Net
Income		Total
Expenses Excluding
Interest		Net
Income
Total expenses excluding interest (GAAP),
  Net income (GAAP)		$2,943 $1,332 $2,965 $1,294 $5,885 $2,694 $5,971 $2,897 
Acquisition and integration-related costs (1)
(36)36 (130)130 (74)74 (228)228 
Amortization of acquired intangible assets(129)129 (134)134 (259)259 (269)269 
Restructuring costs (2)
(10)10 — — 18 (18)— — 
Income tax effects (3)
N/A(42)N/A(64)N/A(75)N/A(120)
Adjusted total expenses (non-GAAP),
  Adjusted net income (non-GAAP)		$2,768 $1,465 $2,701 $1,494 $5,570 $2,934 $5,474 $3,274 
(1) Acquisition and integration-related costs for the three and six months ended June 30, 2024 primarily consist of $18 million and $35 million of compensation and benefits, $12 million and $29 million of professional services, and $5 million of depreciation and amortization. Acquisition and integration-related costs for the three and six months ended June 30, 2023 primarily consist of $48 million and $106 million of compensation and benefits, $41 million and $74 million of professional services, $10 million and $14 million of occupancy and equipment, and $20 million and $22 million of other.
(2) Restructuring costs for the three and six months ended June 30, 2024 reflect a change in estimate of $3 million and $34 million in compensation and benefits, offset by $1 million and $3 million of occupancy and equipment and $12 million and $13 million of other expense for the periods. There were no restructuring costs for the three and six months ended June 30, 2023.
(3) The income tax effects of the non-GAAP adjustments are determined using an effective tax rate reflecting the exclusion of non-deductible acquisition costs and are used to present the acquisition and integration-related costs, amortization of acquired intangible assets and restructuring costs on an after-tax basis.
N/A Not applicable.

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Amount% of
Total Net Revenues		Amount% of
Total Net Revenues		Amount% of
Total Net Revenues		Amount% of
Total Net Revenues
Income before taxes on income (GAAP),
  Pre-tax profit margin (GAAP)		$1,747 37.2 %$1,691 36.3 %$3,545 37.6 %$3,801 38.9 %
Acquisition and integration-related costs36 0.8 %130 2.8 %74 0.8 %228 2.3 %
Amortization of acquired intangible assets129 2.8 %134 2.9 %259 2.7 %269 2.8 %
Restructuring costs
10 0.2 %— — (18)(0.2 %)— — 
Adjusted income before taxes on income (non-GAAP),
  Adjusted pre-tax profit margin (non-GAAP)		$1,922 41.0 %$1,955 42.0 %$3,860 40.9 %$4,298 44.0 %

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
AmountDiluted
EPS		AmountDiluted
EPS		AmountDiluted
EPS		AmountDiluted
EPS
Net income available to common stockholders (GAAP),
  Earnings per common share — diluted (GAAP)		$1,211 $.66 $1,173 $.64 $2,462 $1.34 $2,706 $1.48 
Acquisition and integration-related costs36 .02 130 .07 74 .04 228 .12 
Amortization of acquired intangible assets129 .07 134 .07 259 .14 269 .15 
Restructuring costs10 .01 — — (18)(.01)— — 
Income tax effects(42)(.03)(64)(.03)(75)(.04)(120)(.07)
Adjusted net income available to common stockholders
  (non-GAAP), Adjusted diluted EPS (non-GAAP)		$1,344 $.73 $1,373 $.75 $2,702 $1.47 $3,083 $1.68 

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THE CHARLES SCHWAB CORPORATION
Non-GAAP Financial Measures
(In millions, except ratios and per share amounts)
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Return on average common stockholders’ equity (GAAP)
14 %17 %15 %20 %
Average common stockholders’ equity
$33,991 $27,556 $33,264 $27,429 
Less: Average goodwill(11,951)(11,951)(11,951)(11,951)
Less: Average acquired intangible assets — net(8,067)(8,591)(8,132)(8,657)
Plus: Average deferred tax liabilities related to goodwill
  and acquired intangible assets — net		1,747 1,834 1,753 1,837 
Average tangible common equity$15,720 $8,848 $14,934 $8,658 
Adjusted net income available to common stockholders (1)
$1,344 $1,373 $2,702 $3,083 
Return on tangible common equity (non-GAAP)34 %62 %36 %71 %
(1) See table above for the reconciliation of net income available to common stockholders to adjusted net income available to common stockholders (non-GAAP).

(Preliminary)
June 30, 2024
CSCCSB
Tier 1 Leverage Ratio (GAAP)
9.4 %10.9 %
Tier 1 Capital
$42,624 $32,091 
Plus: AOCI adjustment(16,926)(14,755)
Adjusted Tier 1 Capital25,698 17,336 
Average assets with regulatory adjustments
451,304 294,465 
Plus: AOCI adjustment(17,301)(15,251)
Adjusted average assets with regulatory adjustments$434,003 $279,214 
Adjusted Tier 1 Leverage Ratio (non-GAAP)
5.9 %6.2 %
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