SAN FRANCISCO, April 17 /PRNewswire-FirstCall/ -- The Charles Schwab
Corporation announced today that its net income for the quarter ended March
31, 2007 was $273 million. In comparison, the company reported net income
of $243 million for the first quarter of 2006.
Three Months Ended
--March 31,-- %
Financial Highlights 2007 2006 Change
Net revenues (in millions) (1) $1,153 $1,054 9%
Net income (in millions) $273 $243 12%
Diluted earnings per share $.22 $.19 16%
Pre-tax profit margin (1) 33.9% 33.5%
Return on stockholders' equity 22% 21%
(1) From continuing operations. Amounts have been adjusted to summarize
the impact of the pending sale of U.S. Trust in income from
discontinued operations.
Chairman and CEO Charles Schwab commented, "During the first quarter,
investors faced heightened economic uncertainty and securities market
volatility. In this more challenging environment, we continued our success
in building stronger client relationships. New and existing clients brought
$33.5 billion in net new assets to Schwab during the quarter, up 27% from
last year's first quarter and our best net inflow since the third quarter
of 2000. An additional $17.8 billion in net new assets associated with the
acquisition of The 401(k) Company, which closed on March 31st, helped total
client assets rise by 16% year-over-year to a record $1.306 trillion at
March 31, 2007. Clients opened 193,000 new brokerage accounts during the
first quarter, and after five consecutive months of net account growth our
total active brokerage accounts were up 2% from last March to 6.8 million
at quarter-end. At the same time, banking accounts grew by 9% from the
first quarter of 2006 to 151,000, and we ended March 2007 with over 1
million corporate retirement plan participants served directly by Schwab,
up from just over 500,000 a year earlier."
CFO Chris Dodds said, "Continued success in building client
relationships means continued growth in less-volatile non-trading revenues,
which reached a record $951 million in the first quarter, up 15% from the
first quarter of 2006. With more predictable revenues and sustained expense
discipline, we remained focused on delivering consistently strong financial
performance -- despite reduced client trading activity late in the quarter
we were able to increase our marketing investment by 35% over last year and
still achieve a 33.9% pre-tax profit margin and $273 million in net income.
Rigorous capital management remained a priority as well -- with capital
expenditures of just $39 million and $391 million in share repurchases
during the first quarter, we achieved a 22% return on equity."
Business highlights for the first quarter (data as of quarter-end
unless otherwise noted):
Schwab Investor Services Business (includes Individual Investor and
Corporate and Retirement Services)
-- Client assets enrolled in Schwab advice offers = $51.5 billion, up 19%
year-over-year.
-- Enhanced the schwab.com website through a simplified layout and
improved tools for trading; expanded online research, including
additional news providers; and a new Retirement Assessment tool, which
helps clients evaluate investments versus pre- and in-retirement
objectives.
-- Expanded the Schwab Managed Portfolios (SMP) mutual fund wrap account
offering to include an all third-party version. Ended the first
quarter with approximately 17,600 accounts and $2.3 billion in client
assets enrolled in SMP, nearly double the year-end 2006 totals.
Schwab Institutional(R) Business
-- Expanded offerings for newly independent advisors through a
relationship with Cambridge Investment Research to house both fee- and
commission-based assets at Schwab. Also introduced start-up financing,
as well as expanded partnerships with a national insurance broker and a
major commercial real estate firm.
-- Held a series of Growth Forum workshops, which provided 120 advisory
firms with in-depth, customized guidance on marketing and business
development best practices.
Products and Infrastructure
-- For Charles Schwab Bank, N.A.:
- Balance sheet assets = $11.5 billion, up 49% year-over-year.
- Outstanding mortgage and home equity loans = $2.4 billion, up 18%
year-over-year.
- First mortgage originations during the quarter = $381 million.
-- Acquired Global Real Analytics, LLC, a leader in applied real estate
analytics and commercial real estate index products, to help develop
and manage new real estate investment products.
-- Barron's awarded third and first place, respectively, to the model
portfolios based on Schwab Equity Ratings(R) for the most recent three-
and five-year periods.
About Charles Schwab
The Charles Schwab Corporation (Nasdaq: SCHW) is a leading provider of
financial services, with more than 300 offices and 6.8 million client
brokerage accounts, 1.1 million corporate retirement plan participants,
151,000 banking accounts, and $1.3 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 its Schwab Institutional division. The Charles Schwab
Bank, N.A. (member FDIC) provides banking and mortgage services and
products. CyberTrader(R), Inc. (member SIPC, http://www.sipc.org) is an
electronic trading technology and brokerage firm providing services to
highly active, online traders. More information is available at
http://www.schwab.com.
SOURCE Charles Schwab
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Related links:
http://www.schwab.com/
CONTACT:
Media, Greg Gable, +1-415-636-5847, or
Investors/Analysts, Rich Fowler, +1-415-636-9869, both of Charles
Schwab
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