SCHWAB CHARLES CORP Quarterly Report for Q1 Ended Mar 31, 2013

Summary

Charles Schwab Corporation (SCHW) reported its first quarter 2013 results, showing a modest increase in net revenues of 8% year-over-year, reaching $1.29 billion. This growth was driven by higher asset management and administration fees, along with an increase in net interest revenue. The company also benefited from lower net impairment losses on securities. Despite a slight increase in expenses excluding interest, SCHW managed to grow its net income by 6% to $206 million, or $0.15 per diluted share. Client activity remained strong, with net new client assets reaching $43.4 billion, marking the highest first quarter inflow since 2000. Total client assets also hit a record $2.08 trillion. However, trading revenue saw a decline of 8%, primarily due to lower daily average revenue trades, reflecting a more muted trading environment. The company's balance sheet remained robust, with total assets of $133.3 billion and total liabilities of $123.5 billion, maintaining strong liquidity and capital positions.

Key Highlights

• 1Net revenues increased by 8% to $1.29 billion, driven by asset management, administration fees, and net interest revenue.
• 2Net income grew by 6% to $206 million, resulting in diluted Earnings Per Share (EPS) of $0.15, consistent with the prior year's quarter.
• 3Client assets reached a record high of $2.08 trillion, up 14% year-over-year.
• 4Net new client assets were $43.4 billion, the highest first quarter inflow since 2000.
• 5Trading revenue decreased by 8% due to lower trading volumes, impacted by a muted market environment.
• 6Expenses excluding interest increased by 9%, primarily due to higher compensation and benefits, and advertising costs.
• 7The company maintained strong regulatory capital ratios, with Schwab Bank considered 'well capitalized'.

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