SCHWAB CHARLES CORP Quarterly Report for Q3 Ended Sep 30, 2011

Summary

The Charles Schwab Corporation (SCHW) reported a strong financial performance for the third quarter and first nine months of 2011, demonstrating significant year-over-year growth in net revenues and net income. This growth was driven by an increase in net interest revenue and trading revenue, reflecting higher average balances of interest-earning assets and increased trading volumes. The company successfully integrated the acquisition of optionsXpress Holdings, Inc. in September 2011, adding to its scale and capabilities, particularly for active traders. Despite a challenging macroeconomic environment with weakened equity markets and low interest rates, Schwab maintained a robust client engagement, evidenced by substantial net new client assets and a significant increase in daily average trades. The company also highlighted its strong regulatory capital position and sound liquidity management, positioning it well for future growth.

Key Highlights

• 1Net revenues increased by 11% to $1.18 billion for the three months ended September 30, 2011, compared to the same period in 2010.
• 2Net income grew significantly by 77% to $220 million for the three months ended September 30, 2011, compared to $124 million in the prior year.
• 3Diluted Earnings Per Share (EPS) rose to $0.18 for the quarter, up from $0.10 in the same quarter of 2010.
• 4The company completed the acquisition of optionsXpress Holdings, Inc. on September 1, 2011, for $714 million, expanding its market reach.
• 5Total client assets reached $1.58 trillion as of September 30, 2011, a 7% increase year-over-year.
• 6Daily average client trades increased by 35% to 475,400 in the third quarter of 2011, indicating strong client activity.
• 7Schwab Bank maintained its 'well capitalized' status, with strong regulatory capital ratios.

Frequently Asked Questions