SAN FRANCISCO, July 17 /PRNewswire-FirstCall/ -- The Charles Schwab
Corporation announced today that its net income for the quarter ended June
30, 2007 was $292 million. In comparison, the company reported net income
of $273 million for the first quarter of 2007 and net income of $251
million for the second quarter of 2006. For the first half of 2007, the
Company's net income was $565 million, compared with $494 million earned
during the same period in 2006.
Three Months Ended Six Months Ended
--June 30,-- % --June 30,-- %
2007 2006 Change 2007 2006 Change
Financial Highlights
Net revenues
(in millions)(1) $1,205 $1,093 10% $2,358 $2,147 10%
Net income
(in millions) $292 $251 16% $565 $494 14%
Diluted earnings
per share $.23 $.19 21% $.45 $.38 18%
Pre-tax profit
margin (1) 35.2% 33.8% 34.6% 33.6%
Return on
stockholders'
equity 23% 22% 22% 22%
(1) From continuing operations. Amounts have been adjusted to summarize
the impact of the sale of U.S. Trust, which was completed on July 1,
2007, in income from discontinued operations.
Chairman and CEO Charles Schwab commented, "Our focus is to make
investing affordable, to reward saving, and to help clients achieve better
total outcomes. We recently made it easier to establish a relationship with
the company by lowering account opening minimums, waiving minimums
completely under certain circumstances, and eliminating all minimum balance
charges. We also raised the interest rate paid on balances in Schwab Bank
Investor Checking(TM) accounts, enabling us to deliver the combined
benefits of a fully-featured high-yield checking account and a full-service
brokerage account free of monthly service fees or minimum balance or
deposit requirements. Actions like these contribute to stronger client
relationships, and total client assets reached $1.384 trillion at month-end
June 2007, up 23% from June 2006. Clients opened 206,000 new brokerage
accounts during the second quarter, 20% more than the year-earlier period."
CFO Joe Martinetto said, "Our second quarter results reflect our
ongoing emphasis on combining the company's more predictable revenues with
sustained expense discipline to deliver consistently strong financial
performance along with great value and service for our clients. Non-trading
revenues set a new record at $1.0 billion, up 14% from a year ago, and our
pre-tax profit margin and net income improved to 35.2% and $292 million,
respectively. We also continue to emphasize rigorous capital management -
second quarter capital expenditures were $43 million, and we repurchased
$251 million of common stock during the period while developing our
recently announced $3.5 billion capital restructuring plan."
Business highlights for the second quarter (data as of quarter-end
unless otherwise noted):
Schwab Investor Services Business
* Client assets enrolled in Schwab advice offers = $55.0 billion, up
25% year-over-year.
* Introduced a high yield investor checking account. Reduced
brokerage account opening minimums and eliminated minimums for
clients who agree to small automatic monthly deposits or open a
checking account. Also lowered the minimum initial investment
requirement for Schwab Funds(R) to $100 and announced lowered and
simplified pricing for bond trades.
* Introduced Schwabmoneywise.com, a new money-mentoring web site that
offers practical guidance, tools, tips, calculators and a life
stage-based interactive game to help adults learn how to talk to
kids about money and finance.
Schwab Institutional(R) Business
* Released, as part of the GrowthPoint(TM) practice management
program, the annual Best Managed Firms white paper, focusing on time
management and best practices to improve organizational
effectiveness. Facilitated a series of regional events with over
440 participating advisors to discuss how these practices can be
applied in pursuing growth.
* Established a new advisory council for advisors turning independent.
Council members will consult with advisors considering independence
and will provide insights and feedback on Schwab Institutional's
current and potential future offerings.
Schwab Corporate and Retirement Services Business
* Completed development and implementation of the Schwab EquiView(TM)
record keeping system, designed to enhance Schwab's ability to meet
the restricted stock and equity compensation service needs of large
multinational clients.
* Launched a participant concierge team, dedicated to proactively
helping newly eligible participants take full advantage of their
company sponsored 401(k) plans, as well as assisting with other
financial needs.
Products and Infrastructure
* For Charles Schwab Bank, N.A.:
o Balance sheet assets = $12.5 billion, up 37% year-over-year.
o Outstanding mortgage and home equity loans = $2.7 billion, up
26% year-over-year.
o First mortgage originations during the quarter = $536 million.
* Launched the Schwab Fundamental US Large Company Index Fund, the
Schwab Fundamental US Small-Mid Company Index Fund, and the Schwab
Fundamental International Large Company Index Fund, which are based
on the FTSE RAFI(TM) Index Series. This series selects and weights
stocks based on four fundamental measures -- sales, cash flow, book
value, and dividends -- to provide the potential for higher
investment returns with lower volatility.
About Charles Schwab
The Charles Schwab Corporation (Nasdaq: SCHW) is a leading provider of
financial services, with more than 300 offices and 6.9 million client
brokerage accounts, 1.1 million corporate retirement plan participants,
177,000 banking accounts, and $1.4 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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