10-KPeriod: FY2024

SCHWAB CHARLES CORP Annual Report, Year Ended Dec 31, 2024

Filed February 26, 2025For Securities:SCHWSCHW-PDSCHW-PJ

Summary

Charles Schwab Corporation (SCHW) reported a strong fiscal year 2024, characterized by significant growth in client assets and accounts, driven by positive market conditions and the successful completion of the Ameritrade integration. Total client assets reached $10.10 trillion, a 19% increase year-over-year, supported by $366.9 billion in core net new assets. The company saw a notable acceleration in client activity, particularly in the fourth quarter, with daily average trades increasing by 22% compared to the prior year. Financial performance benefited from this growth, with net income rising 17% to $5.9 billion and diluted earnings per share increasing 18% to $2.99. Net revenues grew 4% to $19.6 billion, with asset management and administration fees showing robust growth of 20% driven by higher money market fund balances and managed investing solutions. While net interest revenue saw a slight decline of 3% due to shifts in client cash allocations and funding costs, this was partially offset by growth in lending activities and a reduction in supplemental funding. The company also reported a significant decrease in total expenses excluding interest, down 4%, largely due to lower restructuring and integration costs as the Ameritrade integration concluded. Schwab's capital position remains strong, with its consolidated Tier 1 Leverage Ratio improving to 9.9% at year-end 2024. The company also announced a 2-cent increase in its quarterly cash dividend to $0.27 per common share, reflecting its commitment to returning capital to shareholders. A significant development was the complete divestiture of TD Bank's stake in Schwab, completed in February 2025 through a secondary offering and subsequent repurchase.

Financial Highlights

35 data points
Beta

Revenue

$19.61B

Net Income

$5.94M

0.0% Net Margin

EPS (Diluted)

$2.99

Total Assets

$479.84B

Cash & Equivalents

$42.08B

Free Cash Flow

$2.05B

Financial Statements
Beta
Revenue$19.61B
Net Income$5.94M
EPS (Basic)$3.00
EPS (Diluted)$2.99
Shares Outstanding (Basic)1.83B
Shares Outstanding (Diluted)1.83B

Key Highlights

  • 1Total client assets grew 19% to $10.10 trillion by year-end 2024.
  • 2Core net new client assets increased 20% to $366.9 billion in 2024.
  • 3Net income rose 17% year-over-year to $5.9 billion.
  • 4Diluted earnings per share (EPS) increased 18% to $2.99.
  • 5Total net revenues grew 4% to $19.6 billion, driven by asset management and administration fees (+20%).
  • 6Total expenses excluding interest decreased 4% due to lower integration and restructuring costs.
  • 7Consolidated Tier 1 Leverage Ratio improved to 9.9%.
  • 8The Ameritrade integration was fully completed in May 2024.

Frequently Asked Questions

The integration of Ameritrade was completed in May 2024. While integration costs were incurred, the company reported that client attrition was below initial estimates. The full completion is expected to yield approximately $2.0 billion in annualized run-rate cost synergies starting in 2025. The successful integration has contributed to increased client assets and accounts.

Net interest revenue decreased by 3% to $9.1 billion in 2024. This was primarily due to lower average interest-earning assets and higher rates on funding sources. However, the company saw a deceleration in client cash reallocation away from sweep products in the latter half of 2024, and growth in margin and bank lending partially offset these pressures. The net interest margin improved to 2.12% in 2024 from 1.98% in 2023 due to better yields on interest-earning assets offsetting higher funding costs.

Schwab aims to return excess capital to shareholders through dividends and share repurchases. The company has a history of consecutive quarterly dividends and targets paying out 20% to 30% of net income as dividends. Following a period of share repurchases in prior years, there were no common stock repurchases in 2024, but approximately $8.7 billion remained on its authorization. The company also recently increased its quarterly cash dividend by 8% to $0.27 per common share.

Key risks include economic and market volatility, changes in interest rates, cybersecurity threats, operational failures, credit risk, and extensive regulatory oversight. The company also notes competition and potential impacts from new legislation and regulatory changes.