SAN FRANCISCO, Oct. 15 /PRNewswire-FirstCall/ -- The Charles Schwab
Corporation announced today that its net income for the quarter ended
September 30, 2007 was $1.5 billion, including a $1.2 billion after-tax
gain on the sale of U.S. Trust. Income from continuing operations, which
excludes the impact of U.S. Trust, was $323 million for the quarter. In
comparison, the company reported income from continuing operations of $256
million and $230 million, respectively, for the second quarter of 2007 and
third quarter of 2006.
Three Months Ended Nine Months Ended
--September 30,-- % --September 30,-- %
Financial Highlights 2007 2006 Change 2007 2006 Change
Net revenues (in millions)(1) $1,291 $1,066 21% $3,649 $3,213 14%
Net income (in millions) $1,534 $ 266 N/M $2,099 $ 760 N/M
Diluted earnings per share $ 1.28 $ .21 N/M $ 1.69 $ .59 N/M
Pre-tax profit margin(1) 39.7% 35.8% 36.4% 34.4%
Return on stockholders' equity 145% 23% 67% 22%
Results from continuing
operations:
Income (in millions) $ 323 $ 230 40% $ 815 $ 667 22%
Diluted earnings per share $ .27 $ .18 50% $ .66 $ .52 27%
(1) 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.
N/M Not meaningful.
Chairman and CEO Charles Schwab commented, "We believe our progress in
building stronger relationships with our clients and helping them achieve
better financial results is reflected in our solid fundamentals during a
summer marked by significant securities market volatility -- new and
existing clients brought $37.3 billion in net new assets to Schwab during
the third quarter, up 66% from last year, and total client assets reached a
record $1.441 trillion at month-end September. In addition, clients opened
183,000 new brokerage accounts during the third quarter -- up 35% from the
year-ago period -- and we are now serving 212,000 bank accounts and 1.2
million retirement plan participants, up from 143,000 and 535,000,
respectively, last September."
CFO Joe Martinetto said, "Our non-trading revenues set another record
at $1.1 billion for the third quarter, up 19% year-over-year, helped by the
incremental interest revenue generated by temporarily investing the
proceeds from the sale of U.S. Trust. In addition, strong trading activity
pushed total revenues to $1.3 billion, up 21%. Our sustained expense
discipline enabled us to increase our third quarter marketing investment by
42% over last year and still achieve a pre-tax profit margin of 39.7%. We
also demonstrated our ongoing commitment to rigorous capital management in
recent weeks by completing a $2.1 billion stock tender offer and a $1.2
billion special cash dividend, as well as issuing $550 million in
medium-term notes and hybrid capital securities, which wrapped up our
previously announced capital restructuring."
Business highlights for the third quarter (data as of quarter-end
unless otherwise noted):
Schwab Investor Services Business (SIS)
-- Client assets enrolled in Schwab advisory solutions = $57.3 billion,
up 23% year-over-year.
-- Schwab Managed Portfolios(TM) reached $4.1 billion at September 30, up
20% from the prior quarter.
-- Enhanced StreetSmart Pro(R), Schwab's platform for active traders, by
adding new risk management tools, integrating Schwab Equity
Ratings(R), and incorporating new options trading capabilities.
-- Completed the transition of all SIS accounts into cost basis
reporting on Schwab.com, enabling clients to view gain/loss
information for the current period, as well as receive year end
gain/loss reports.
Schwab Institutional(R) Business (SI)
-- Published a book chronicling the independent advisor industry -- "The
Age of Independent Advice: The Remarkable History of the Independent
Investment -- Advisor Industry" -- as part of SI's 20th anniversary
celebration.
-- Published the second Independent Advisor Outlook Study, which measured
the current views of nearly 1,100 advisors on a variety of topics,
including the economic and political landscape, market opportunities,
and client concerns.
-- Produced the second RIA Benchmarking: Growth Trends Study, which
provides each participating advisor with a customized report that
measures growth, market and business development efforts, and
organizational structure against peer firms and the industry as a
whole.
Schwab Corporate and Retirement Services Business (SCRS)
-- The Schwab Managed Retirement Trust Funds(TM), a series of collective
trust funds designed to provide retirement plan participants with
access to non-proprietary, multi-manager target-date funds, reached
$2.4 billion at September 30, up 93% year-over-year. These funds are
available through plans administered by Schwab and other providers.
-- 401(k) plan sponsors served by Schwab earned 20 awards in the Profit
Sharing/401(k) Council of America 2007 Signature Awards program.
This marks the third consecutive year where clients served by Schwab
Education and Communications teams have earned more awards for
excellence than firms served by any other provider.
Products and Infrastructure
-- For Charles Schwab Bank, N.A.:
-- Balance sheet assets = $13.3 billion, up 33% year-over-year.
-- Outstanding mortgage and home equity loans = $3.0 billion, up 36%
year-over-year.
-- First mortgage originations during the quarter = $578 million.
-- The Charles Schwab Foundation pledged $1.25 million in charitable
contributions to Texas Tech University and the University of
California at Irvine to support and promote financial planning
education for the next generation of investment professionals.
-- Launched an enhanced college planning site on Schwab.com offering
information, guidance, and a comparison of the benefits and
limitations of different savings vehicles.
About Charles Schwab
The Charles Schwab Corporation (Nasdaq: SCHW) is a leading provider of
financial services, with more than 306 offices and 6.9 million client
brokerage accounts, 1.2 million corporate retirement plan participants,
212,000 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:
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CONTACT:
media, Greg Gable, +1-415-636-5847,
investors-analysts, Rich Fowler, +1-415-636-9869, both of Charles
Schwab
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