EX-99.1 2 a3q24exhibit991.htm EX-99.1 Document

Exhibit 99.1
cslogoa03.jpg
SCHWAB REPORTS THIRD QUARTER RESULTS
Total Client Assets Increased 27% Year-Over-Year to a Record $9.92 Trillion
Core Net New Assets Equaled $95.3 Billion, Year-To-Date Exceeds $250 Billion
Quarterly Net Revenues Grew 5% Year-Over-Year to $4.8 Billion

WESTLAKE, Texas, October 15, 2024 – The Charles Schwab Corporation reported net income for the third quarter totaling $1.4 billion, or $.71 diluted earnings per common share. Excluding $153 million of pre-tax transaction-related costs, adjusted (1) net income and diluted common earnings per share equaled $1.5 billion and $.77, respectively.

Client Driven
Growth
 $95.3B
3Q24 Core
Net New Assets
“Our momentum with clients continues to build following the successful completion of the Ameritrade conversion earlier this year. Third quarter net asset gathering of over $95 billion pushed year-to-date core net new assets to $252 billion – up 10% versus 2023 year-to-date.”
Co-Chairman and CEO Walt Bettinger
Modern Wealth
Solutions
 $40B
YTD Net Inflows to
Schwab’s Managed Investing Solutions
“Record YTD flows into Schwab Wealth AdvisoryTM helped Managed Investing net flows reach $40 billion – an increase of 65% versus 2023 year-to-date. Converted Retail Ameritrade client interest in wealth solutions remains robust, accounting for approximately 35% of these flows.”
Co-Chairman and CEO Walt Bettinger
Diversified Operating Model
41.2%
3Q24 Adjusted
Pre-Tax Profit Margin (1)
“Third quarter revenue increased 5% versus 3Q23, driven by sustained investor engagement and market performance. The combination of growing revenue and expense discipline yielded a 38.0% pre-tax profit margin – 41.2% adjusted (1).”
CFO Mike Verdeschi
Balance Sheet
Management
$8.9B
3Q24 Reduction in Bank Supplemental Funding (2)
“Client transactional sweep cash grew by $9 billion sequentially, including net inflows of $17 billion in September. This build in client cash on the balance sheet helped us reduce Bank Supplemental Funding by $8.9 billion sequentially.”
CFO Mike Verdeschi

3Q24 Client and Business Highlights

•Healthy net asset gathering and equity market resilience resulted in record total client assets of $9.92 trillion
•Active brokerage accounts reached 36.0 million, up 4% versus September 2023
•Core net new assets equaled $95.3 billion, bringing the year-to-date total to $252.1 billion – a 10% increase versus 2023 year-to-date
•Assets receiving ongoing advisory services are up 6% sequentially and up 26% versus September 2023, including record net flows into Schwab Wealth AdvisoryTM
•Margin balances grew sequentially by 2% to $73.0 billion, up 17% from year-end 2023
•Trading activity increased relative to the prior quarter as client engagement remained strong
•Schwab ranked #1 by J.D. Power in Participant Satisfaction with Retirement Plan Digital Experiences (3)
•Charles Schwab Bank rated #1 in Investor’s Business Daily Most Trusted Financial Companies survey (4)

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Three Months Ended
September 30,		%Nine Months Ended
September 30,		%
Financial Highlights
20242023Change20242023Change
Net revenues (in millions)$4,847 $4,606 5%$14,277 $14,378 (1)%
Net income (in millions)
GAAP$1,408 $1,125 25%$4,102 $4,022 2%
Adjusted
$1,525 $1,518 —$4,459 $4,792 (7)%
Diluted earnings per common share
GAAP$.71 $.56 27%$2.05 $2.03 1%
Adjusted
$.77 $.77 —$2.25 $2.45 (8)%
Pre-tax profit margin
GAAP38.0 %30.0 %37.7 %36.1 %
Adjusted
41.2 %41.3 %41.0 %43.1 %
Return on average common
stockholders’ equity (annualized)14 %14 %14 %18 %
Return on tangible
common equity (annualized) (1)
31 %58 %33 %66 %
Note: Items labeled “adjusted” are non-GAAP financial measures; 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. All per-share results are rounded to the nearest cent, based on weighted-average diluted common shares outstanding.

3Q24 Financial Commentary

•Net revenues grew on both a year-over-year and sequential basis, up 5% and 3%, respectively
•Sequential net interest margin expanded modestly to 2.08%
•Client transactional sweep cash balances finished September at $384.0 billion, a sequential increase of $9.2 billion
•Bank Supplemental Funding (2) declined sequentially by $8.9 billion to $64.8 billion at September month-end
•Asset management and administration fees achieved a new quarterly record of $1.5 billion
•Trading revenue increased 4% versus 3Q23 as a result of higher volumes and changes in trading mix
•GAAP expenses for the quarter declined 7% versus 3Q23
•Third quarter acquisition and integration-related costs, amortization of acquired intangibles, and restructuring costs equaled $153 million, or a decline of $367 million versus 3Q23; exclusive of these items, adjusted total expenses (1) increased by 6%
•Capital ratios across the firm continue to build – including preliminary consolidated Tier 1 Leverage and adjusted Tier 1 Leverage (1) reaching 9.7% and 6.7%, 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) Bank Supplemental Funding includes repurchase agreements at the banks, Schwab Bank Certificates of Deposit (CDs), and Federal Home Loan Bank balances.
(3) Charles Schwab received the highest score in the J.D. Power 2021-2022, and 2024 U.S. Retirement Plan Digital Satisfaction Studies, which measures group retirement plan participant satisfaction with plan provider digital experiences. Visit https://www.jdpower.com/business/awards for more details. Use of study results in promotional materials is subject to a license fee.
(4) The Investor’s Business Daily Most Trusted Bank accolade/recognition was published by Investor’s Business Daily on September 20, 2024, and is licensed for a 15-month timeframe. The criteria, evaluation, and ranking were determined by Investor’s Business Daily in conjunction with its research partner, TechnoMetrica Market Intelligence, and were based on consumer surveys conducted May-July 2024. (https://www.investors.com/news/most-trusted-financial-companies-top-30-list-2024/) Schwab paid a licensing fee to York Graphic Services, LLC. for uses of the award and logos through January 4, 2026.

Fall Business Update
The company will host its Fall 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 asset gathering and the company’s momentum with clients; client interest in wealth solutions; the company’s diversified operating model; and capital ratios. 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
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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 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 36.0 million active brokerage accounts, 5.4 million workplace plan participant accounts, 2.0 million banking accounts, and $9.92 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, 817-854-6177
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
September 30,		Nine Months Ended
September 30,
2024202320242023
Net Revenues
Interest revenue$3,928 $4,028 $11,686 $12,148 
Interest expense(1,706)(1,791)(5,073)(4,851)
Net interest revenue2,222 2,237 6,613 7,297 
Asset management and administration fees
1,476 1,224 4,207 3,515 
Trading revenue797 768 2,391 2,463 
Bank deposit account fees152 205 488 531 
Other200 172 578 572 
Total net revenues4,847 4,606 14,277 14,378 
Expenses Excluding Interest
Compensation and benefits1,522 1,770 4,510 4,906 
Professional services256 275 756 805 
Occupancy and equipment271 305 784 923 
Advertising and market development101 102 296 293 
Communications147 151 460 485 
Depreciation and amortization231 198 692 566 
Amortization of acquired intangible assets130 135 389 404 
Regulatory fees and assessments88 114 309 277 
Other259 173 694 535 
Total expenses excluding interest3,005 3,223 8,890 9,194 
Income before taxes on income1,842 1,383 5,387 5,184 
Taxes on income434 258 1,285 1,162 
Net Income1,408 1,125 4,102 4,022 
Preferred stock dividends and other109 108 341 299 
Net Income Available to Common Stockholders$1,299 $1,017 $3,761 $3,723 
Weighted-Average Common Shares Outstanding:
Basic1,829 1,821 1,827 1,825 
Diluted1,834 1,827 1,833 1,832 
Earnings Per Common Shares Outstanding (1):
Basic$.71 $.56 $2.06 $2.04 
Diluted$.71 $.56 $2.05 $2.03 
(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)
Q3-24 % change20242023
vs.vs.ThirdSecondFirstFourthThird
(In millions, except per share amounts and as noted)Q3-23Q2-24QuarterQuarterQuarterQuarterQuarter
Net Revenues
Net interest revenue(1)%3 %$2,222 $2,158 $2,233 $2,130 $2,237 
Asset management and administration fees21 %7 %1,476 1,383 1,348 1,241 1,224 
Trading revenue4 %3 %797 777 817 767 768 
Bank deposit account fees(26)%(1)%152 153 183 174 205 
Other16 %(9)%200 219 159 147 172 
Total net revenues5 %3 %4,847 4,690 4,740 4,459 4,606 
Expenses Excluding Interest
Compensation and benefits (1)
(14)%5 %1,522 1,450 1,538 1,409 1,770 
Professional services(7)%(1)%256 259 241 253 275 
Occupancy and equipment(11)%9 %271 248 265 331 305 
Advertising and market development(1)%(6)%101 107 88 104 102 
Communications(3)%(15)%147 172 141 144 151 
Depreciation and amortization 17 %(1)%231 233 228 238 198 
Amortization of acquired intangible assets(4)%1 %130 129 130 130 135 
Regulatory fees and assessments(23)%(8)%88 96 125 270 114 
Other (2)
50 %4 %259 249 186 386 173 
Total expenses excluding interest(7)%2 %3,005 2,943 2,942 3,265 3,223 
Income before taxes on income33 %5 %1,842 1,747 1,798 1,194 1,383 
Taxes on income68 %5 %434 415 436 149 258 
Net Income25 %6 %1,408 1,332 1,362 1,045 1,125 
Preferred stock dividends and other1 %(10)%109 121 111 119 108 
Net Income Available to Common Stockholders28 %7 %$1,299 $1,211 $1,251 $926 $1,017 
Earnings per common share (3):
Basic27 %8 %$.71 $.66 $.69 $.51 $.56 
Diluted27 %8 %$.71 $.66 $.68 $.51 $.56 
Dividends declared per common share— — $.25 $.25 $.25 $.25 $.25 
Weighted-average common shares outstanding:
Basic— — 1,829 1,828 1,825 1,823 1,821 
Diluted— — 1,834 1,834 1,831 1,828 1,827 
Performance Measures
Pre-tax profit margin38.0 %37.2 %37.9 %26.8 %30.0 %
Return on average common stockholders’ equity (annualized) (4)
14 %14 %15 %12 %14 %
Financial Condition (at quarter end, in billions)
Cash and cash equivalents5 %37 %$34.9 $25.4 $31.8 $43.3 $33.3 
Cash and investments segregated81 %55 %33.7 21.7 25.9 31.8 18.6 
Receivables from brokerage clients — net7 %2 %74.0 72.8 71.2 68.7 69.1 
Available for sale securities(18)%(4)%90.0 93.6 101.1 107.6 110.3 
Held to maturity securities(8)%(2)%149.9 153.2 156.4 159.5 162.5 
Bank loans — net7 %3 %43.3 42.2 40.8 40.4 40.3 
Total assets(2)%4 %466.1 449.7 468.8 493.2 475.2 
Bank deposits(13)%(2)%246.5 252.4 269.5 290.0 284.4 
Payables to brokerage clients23 %12 %89.2 80.0 84.0 84.8 72.8 
Other short-term borrowings 39 %6 %10.6 10.0 8.4 6.6 7.6 
Federal Home Loan Bank borrowings(29)%(7)%22.6 24.4 24.0 26.4 31.8 
Long-term debt(10)%— 22.4 22.4 22.9 26.1 24.8 
Stockholders’ equity25 %7 %47.2 44.0 42.4 41.0 37.8 
Other
Full-time equivalent employees (at quarter end, in thousands)(11)%(1)%32.1 32.3 32.6 33.0 35.9 
Capital expenditures — purchases of equipment, office facilities, and property,
  net (in millions)		(46)%47 %$135 $92 $122 $199 $250 
Expenses excluding interest as a percentage of average client assets (annualized)0.12 %0.13 %0.14 %0.16 %0.16 %
Clients’ Daily Average Trades (DATs) (in thousands)
9 %4 %5,697 5,486 5,958 5,192 5,218 
Number of Trading Days2 %1 %63.5 63.0 61.0 62.5 62.5 
Revenue Per Trade (5)
(6)%(2)%$2.20 $2.25 $2.25 $2.36 $2.35 
(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 the product of 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
September 30,		Nine Months Ended
September 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$27,623 $369 5.24 %$34,391 $459 5.22 %$30,128 $1,205 5.26 %$38,700 $1,419 4.83 %
Cash and investments segregated26,220 345 5.15 %21,987 285 5.08 %25,744 1,014 5.18 %29,752 1,041 4.61 %
Receivables from brokerage clients73,102 1,431 7.66 %63,760 1,282 7.87 %68,557 4,042 7.75 %61,682 3,533 7.55 %
Available for sale securities (1)
98,645 531 2.14 %129,545 724 2.22 %104,830 1,680 2.13 %143,360 2,340 2.17 %
Held to maturity securities151,004 650 1.71 %163,904 706 1.72 %154,231 1,998 1.72 %167,405 2,172 1.73 %
Bank loans42,653 484 4.52 %40,177 426 4.23 %41,585 1,384 4.44 %40,183 1,227 4.08 %
Total interest-earning assets419,247 3,810 3.58 %453,764 3,882 3.37 %425,075 11,323 3.52 %481,082 11,732 3.23 %
Securities lending revenue87 105 258 341 
Other interest revenue31 41 105 75 
Total interest-earning assets$419,247 $3,928 3.69 %$453,764 $4,028 3.50 %$425,075 $11,686 3.63 %$481,082 $12,148 3.35 %
Funding sources
Bank deposits$248,405 $841 1.35 %$290,853 $911 1.24 %$260,254 $2,602 1.34 %$315,309 $2,392 1.01 %
Payables to brokerage clients72,700 79 0.43 %63,731 66 0.41 %69,586 229 0.44 %68,548 205 0.40 %
Other short-term borrowings10,821 150 5.52 %7,315 97 5.26 %9,164 382 5.57 %7,286 280 5.13 %
Federal Home Loan Bank borrowings22,621 310 5.38 %36,287 477 5.18 %24,347 988 5.36 %35,896 1,387 5.11 %
Long-term debt22,446 208 3.71 %23,492 193 3.30 %23,299 640 3.66 %21,685 489 3.01 %
Total interest-bearing liabilities376,993 1,588 1.67 %421,678 1,744 1.64 %386,650 4,841 1.67 %448,724 4,753 1.41 %
Non-interest-bearing funding sources42,254 32,086 38,425 32,358 
Securities lending expense118 46 230 96 
Other interest expense— 1 2 2 
Total funding sources$419,247 $1,706 1.61 %$453,764 $1,791 1.56 %$425,075 $5,073 1.59 %$481,082 $4,851 1.35 %
Net interest revenue$2,222 2.08 %$2,237 1.94 %$6,613 2.04 %$7,297 2.00 %
(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
September 30,		Nine Months Ended
September 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$551,945 $379 0.27 %$414,074 $270 0.26 %$525,166 $1,072 0.27 %$368,788 $735 0.27 %
Schwab equity and bond funds, exchange-traded funds (ETFs), and collective trust funds (CTFs) 603,314 118 0.08 %485,326 99 0.08 %569,608 337 0.08 %466,995 284 0.08 %
Mutual Fund OneSource® and other no-transaction-
  fee funds
354,664 224 0.25 %255,039 170 0.26 %335,813 647 0.26 %235,561 469 0.27 %
Other third-party mutual funds and ETFs611,555 106 0.07 %632,902 127 0.08 %606,026 314 0.07 %663,577 393 0.08 %
Total mutual funds, ETFs, and CTFs (1)
$2,121,478 $827 0.16 %$1,787,341 $666 0.15 %$2,036,613 $2,370 0.16 %$1,734,921 $1,881 0.14 %
Advice solutions (1)
Fee-based$554,726 $559 0.40 %$468,305 $476 0.40 %$528,850 $1,572 0.40 %$455,730 $1,393 0.41 %
Non-fee-based114,307 — — 97,957 — — 110,191 — — 95,951 — — 
Total advice solutions$669,033 $559 0.33 %$566,262 $476 0.33 %$639,041 $1,572 0.33 %$551,681 $1,393 0.34 %
Other balance-based fees (2)
795,737 72 0.04 %610,450 64 0.04 %759,645 210 0.04 %588,922 189 0.04 %
Other (3)
18 18 55 52 
Total asset management and administration fees$1,476 $1,224 $4,207 $3,515 
(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)

Q3-24 % Change20242023
vs.vs.ThirdSecondFirstFourthThird
(In billions, at quarter end, except as noted)Q3-23Q2-24QuarterQuarterQuarterQuarterQuarter
Assets in client accounts
Schwab One®, certain cash equivalents, and bank deposits
(5)%1 %$334.1 $330.7 $348.2 $368.3 $353.1 
Bank deposit account balances(16)%(1)%84.0 84.5 90.2 97.4 99.5 
Proprietary mutual funds (Schwab Funds® and Laudus Funds®) and CTFs
Money market funds (1)
29 %5 %562.1 533.6 515.7 476.4 436.3 
Equity and bond funds and CTFs (2)
36 %7 %228.9 214.4 206.0 186.7 167.9 
Total proprietary mutual funds and CTFs31 %6 %791.0 748.0 721.7 663.1 604.2 
Mutual Fund Marketplace® (3)
Mutual Fund OneSource® and other no-transaction-fee funds
24 %4 %358.0 344.8 329.2 306.2 288.0 
Mutual fund clearing services29 %6 %280.8 264.7 248.1 233.4 216.9 
Other third-party mutual funds
17 %5 %1,236.5 1,177.5 1,182.9 1,126.5 1,055.3 
Total Mutual Fund Marketplace20 %5 %1,875.3 1,787.0 1,760.2 1,666.1 1,560.2 
Total mutual fund assets23 %5 %2,666.3 2,535.0 2,481.9 2,329.2 2,164.4 
Exchange-traded funds
Proprietary ETFs (2)
35 %10 %385.9 349.6 342.9 319.4 286.2 
Other third-party ETFs40 %9 %1,888.2 1,738.6 1,676.6 1,521.7 1,352.6 
Total ETF assets39 %9 %2,274.1 2,088.2 2,019.5 1,841.1 1,638.8 
Equity and other securities33 %5 %3,839.6 3,648.8 3,467.7 3,163.5 2,886.4 
Fixed income securities6 %— 795.4 792.0 779.0 779.7 747.4 
Margin loans outstanding12 %2 %(73.0)(71.7)(68.1)(62.6)(65.1)
Total client assets27 %5 %$9,920.5 $9,407.5 $9,118.4 $8,516.6 $7,824.5 
Client assets by business
Investor Services28 %5 %$5,305.9 $5,055.7 $4,852.2 $4,519.1 $4,157.7 
Advisor Services26 %6 %4,614.6 4,351.8 4,266.2 3,997.5 3,666.8 
Total client assets27 %5 %$9,920.5 $9,407.5 $9,118.4 $8,516.6 $7,824.5 
Net growth in assets in client accounts (for the quarter ended)
Net new assets by business
Investor Services (4)
28 %(8)%$36.7 $39.9 $34.9 $25.0 $28.6 
Advisor Services (5)
176 %58 %54.1 34.3 53.3 41.3 19.6 
Total net new assets88 %22 %$90.8 $74.2 $88.2 $66.3 $48.2 
Net market gains (losses)422.2 214.9 513.6 625.8 (239.5)
Net growth (decline)$513.0 $289.1 $601.8 $692.1 $(191.3)
New brokerage accounts (in thousands, for the quarter ended)
9 %(1)%972 985 1,094 910 894 
Client accounts (in thousands)
Active brokerage accounts4 %1 %35,982 35,612 35,301 34,838 34,540 
Banking accounts9 %1 %1,954 1,931 1,885 1,838 1,799 
Workplace Plan Participant Accounts (6)
5 %— 5,388 5,363 5,277 5,221 5,141 
(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 September 30, 2024, off-platform equity and bond funds, CTFs, and ETFs were $34.4 billion, $4.1 billion, and $129.3 billion, respectively.
(3) Excludes all proprietary mutual funds and ETFs.
(4) Third quarter of 2024 includes net outflows of $4.4 billion from off-platform Schwab Bank Retail CDs and an outflow of $0.1 billion from an international relationship. 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.
(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. Third quarter 2023 has been recast to reflect this change.

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The Charles Schwab Corporation Monthly Activity Report For September 2024
20232024Change
SepOctNovDecJanFebMarAprMayJunJulAugSepMo.Yr.
Market Indices (at month end)
Dow Jones Industrial Average®
33,508 33,053 35,951 37,690 38,150 38,996 39,807 37,816 38,686 39,119 40,843 41,563 42,330 2 %26 %
Nasdaq Composite®
13,219 12,851 14,226 15,011 15,164 16,092 16,379 15,658 16,735 17,733 17,599 17,714 18,189 3 %38 %
Standard & Poor’s® 500
4,288 4,194 4,568 4,770 4,846 5,096 5,254 5,036 5,278 5,460 5,522 5,648 5,762 2 %34 %
Client Assets (in billions of dollars)
Beginning Client Assets8,094.7 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 9,572.1 9,737.7 
Net New Assets (1)
27.2 5.0 19.2 42.1 14.8 31.7 41.7 10.0 31.0 33.2 29.0 31.5 30.3 (4)%11 %
Net Market Gains (Losses)(297.4)(176.1)508.0 293.9 26.7 289.7 197.2 (280.9)327.8 168.0 135.6 134.1 152.5 
Total Client Assets (at month end)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 9,572.1 9,737.7 9,920.5 2 %27 %
Core Net New Assets (1,2)
27.1 11.3 21.7 43.1 17.2 33.4 45.0 1.0 31.1 29.1 29.0 32.8 33.5 2 %24 %
Receiving Ongoing Advisory Services (at month end)
Investor Services533.0 522.2 557.0 581.4 584.1 601.8 618.5 602.2 624.0 632.9 649.1 663.7 675.1 2 %27 %
Advisor Services (3)
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 4,185.4 4,268.1 4,343.8 2 %26 %
Client Accounts (at month end, in thousands)
Active Brokerage Accounts34,540 34,571 34,672 34,838 35,017 35,127 35,301 35,426 35,524 35,612 35,743 35,859 35,982 — 4 %
Banking Accounts 1,799 1,812 1,825 1,838 1,856 1,871 1,885 1,901 1,916 1,931 1,937 1,940 1,954 1 %9 %
Workplace Plan Participant Accounts (4)
5,141 5,212 5,212 5,221 5,226 5,268 5,277 5,282 5,345 5,363 5,382 5,373 5,388 — 5 %
Client Activity
New Brokerage Accounts (in thousands)280 284 286 340 366 345 383 361 314 310 327 324 321 (1)%15 %
Client Cash as a Percentage of Client Assets (5)
10.8 %11.2 %10.7 %10.5 %10.5 %10.2 %10.0 %10.2 %9.9 %9.7 %9.6 %9.5 %9.5 %— (130) bp
Derivative Trades as a Percentage of Total Trades24.2 %23.2 %23.1 %21.8 %21.8 %22.2 %21.9 %22.1 %21.9 %21.3 %21.2 %20.8 %21.5 %70 bp(270) bp
Selected Average Balances (in millions of dollars)
Average Interest-Earning Assets (6)
444,864 438,522 439,118 446,305 443,694 434,822 431,456 423,532 415,950 417,150 417,379 420,191 420,203 — (6)%
Average Margin Balances64,014 63,946 61,502 62,309 61,368 63,600 66,425 68,827 67,614 69,730 73,206 73,326 72,755 (1)%14 %
Average Bank Deposit Account Balances (7)
100,404 97,893 94,991 95,518 95,553 92,075 90,774 88,819 86,844 85,195 83,979 82,806 82,336 (1)%(18)%
Mutual Fund and Exchange-Traded Fund
  Net Buys (Sells) (8,9) (in millions of dollars)
Equities675 (3,039)6,099 7,903 8,182 7,624 10,379 3,472 5,734 3,379 10,908 5,609 5,217 
Hybrid(828)(1,457)(1,466)(1,596)(501)(1,330)(439)(703)(558)(843)(1,155)(1,377)(432)
Bonds2,723 1,094 255 6,104 7,510 9,883 7,561 5,949 5,854 6,346 8,651 10,919 11,015 
Net Buy (Sell) Activity (in millions of dollars)
Mutual Funds (8)
(5,853)(12,245)(9,267)(7,406)(966)(1,348)(1,607)(4,818)(5,544)(4,254)(4,679)(4,003)(1,261)
Exchange-Traded Funds (9)
8,423 8,843 14,155 19,817 16,157 17,525 19,108 13,536 16,574 13,136 23,083 19,154 17,061 
Money Market Funds13,388 16,976 11,670 7,745 11,717 10,129 9,085 (2,357)9,790 3,858 9,110 8,048 9,672 
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 outflow from a large international relationship of $0.1 billion in August and an inflow of $10.3 billion from a mutual fund clearing services client in April. 2023 also 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. September 2023 has 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; client cash excludes brokered CDs issued by Charles Schwab Bank.
(6) Represents average total interest-earning assets on the Company’s balance sheet.
(7) Represents average clients’ uninvested cash sweep account balances held in deposit accounts at third-party financial institutions.
(8) 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.
(9) 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 third 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 June 30, 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 Ratio
Adjusted Tier 1 Leverage Ratio represents the Tier 1 Leverage Ratio as prescribed by bank regulatory guidance for the consolidated company and for Charles Schwab Bank, SSB (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. Additionally, the Company uses adjusted Tier 1 Leverage Ratio in managing capital, including its use of the measure as its long-term operating objective.


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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 September 30,Nine Months Ended September 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)		$3,005 $1,408 $3,223 $1,125 $8,890 $4,102 $9,194 $4,022 
Acquisition and integration-related costs (1)
(23)23 (106)106 (97)97 (334)334 
Amortization of acquired intangible assets(130)130 (135)135 (389)389 (404)404 
Restructuring costs (2)
— — (279)279 18 (18)(279)279 
Income tax effects (3)
N/A(36)N/A(127)N/A(111)N/A(247)
Adjusted total expenses (non-GAAP),
  Adjusted net income (non-GAAP)		$2,852 $1,525 $2,703 $1,518 $8,422 $4,459 $8,177 $4,792 
(1) Acquisition and integration-related costs for the three and nine months ended September 30, 2024 primarily consist of $9 million and $44 million of compensation and benefits, $3 million and $32 million of professional services, and $8 million and $13 million of depreciation and amortization. Acquisition and integration-related costs for the three and nine months ended September 30, 2023 primarily consist of $52 million and $158 million of compensation and benefits, $37 million and $111 million of professional services, $7 million and $21 million of occupancy and equipment, and $4 million and $26 million of other.
(2) Restructuring costs for the nine months ended September 30, 2024 reflect a change in estimate of $34 million in compensation and benefits, offset by $3 million of occupancy and equipment and $13 million of other. Restructuring costs for the three and nine months ended September 30, 2023 primarily consist of $276 million of compensation and benefits.
(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 September 30,Nine Months Ended September 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)		$1,842 38.0 %$1,383 30.0 %$5,387 37.7 %$5,184 36.1 %
Acquisition and integration-related costs23 0.5 %106 2.3 %97 0.7 %334 2.3 %
Amortization of acquired intangible assets130 2.7 %135 2.9 %389 2.7 %404 2.8 %
Restructuring costs
— — 279 6.1 %(18)(0.1)%279 1.9 %
Adjusted income before taxes on income (non-GAAP),
  Adjusted pre-tax profit margin (non-GAAP)		$1,995 41.2 %$1,903 41.3 %$5,855 41.0 %$6,201 43.1 %

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
AmountDiluted
EPS		AmountDiluted
EPS		AmountDiluted
EPS		AmountDiluted
EPS
Net income available to common stockholders (GAAP),
  Earnings per common share — diluted (GAAP)		$1,299 $.71 $1,017 $.56 $3,761 $2.05 $3,723 $2.03 
Acquisition and integration-related costs23 .01 106 .06 97 .05 334 .18 
Amortization of acquired intangible assets130 .07 135 .07 389 .21 404 .22 
Restructuring costs— — 279 .15 (18)(.01)279 .15 
Income tax effects(36)(.02)(127)(.07)(111)(.05)(247)(.13)
Adjusted net income available to common stockholders
  (non-GAAP), Adjusted diluted EPS (non-GAAP)		$1,416 $.77 $1,410 $.77 $4,118 $2.25 $4,493 $2.45 

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THE CHARLES SCHWAB CORPORATION
Non-GAAP Financial Measures
(In millions, except ratios and per share amounts)
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Return on average common stockholders’ equity (GAAP)
14 %14 %14 %18 %
Average common stockholders’ equity
$36,393 $28,274 $34,895 $27,747 
Less: Average goodwill(11,951)(11,951)(11,951)(11,951)
Less: Average acquired intangible assets — net(7,938)(8,457)(8,067)(8,589)
Plus: Average deferred tax liabilities related to goodwill
  and acquired intangible assets — net		1,735 1,822 1,747 1,830 
Average tangible common equity$18,239 $9,688 $16,624 $9,037 
Adjusted net income available to common stockholders (1)
$1,416 $1,410 $4,118 $4,493 
Return on tangible common equity (non-GAAP)31 %58 %33 %66 %
(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)
September 30, 2024
CSCCSB
Tier 1 Leverage Ratio (GAAP)
9.7 %11.2 %
Tier 1 Capital
$43,692 $32,225 
Plus: AOCI adjustment(14,620)(12,669)
Adjusted Tier 1 Capital29,072 19,556 
Average assets with regulatory adjustments
450,752 287,924 
Plus: AOCI adjustment(15,353)(13,480)
Adjusted average assets with regulatory adjustments$435,399 $274,444 
Adjusted Tier 1 Leverage Ratio (non-GAAP)
6.7 %7.1 %
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