Summary
The Charles Schwab Corporation's (SCHW) Q2 2013 report shows steady revenue growth driven by asset management and administration fees, and net interest revenue, despite a slight decrease in net income compared to the prior year. This dip in net income was primarily influenced by a significant year-over-year increase in compensation and benefits expenses, as well as the absence of a large vendor dispute resolution gain from Q2 2012. The company demonstrated strong client asset growth and account acquisition, indicating positive business momentum. Financially, SCHW maintained robust client assets at over $2 trillion and expanded its new brokerage accounts. The company's balance sheet remains strong, with significant levels of cash and investments, and well-capitalized banking and broker-dealer subsidiaries. Management highlighted ongoing efforts to manage interest rate sensitivity and navigate the current low-interest-rate environment, while also addressing regulatory changes and potential market risks.
Financial Highlights
37 data points| Revenue | $1.34B |
| Interest Expense | $26.00M |
| Net Income | $256.00M |
| EPS (Basic) | $0.18 |
| EPS (Diluted) | $0.18 |
| Shares Outstanding (Basic) | 1.28B |
| Shares Outstanding (Diluted) | 1.29B |
Key Highlights
- 1Net revenues increased by 4% to $1,337 million in Q2 2013 compared to Q2 2012, driven by growth in asset management and administration fees (+15%) and net interest revenue (+3%).
- 2Net income available to common stockholders decreased by 11% to $233 million in Q2 2013, impacted by higher operating expenses, particularly compensation and benefits, and the absence of a prior year gain.
- 3Total client assets reached $2,050.9 billion, an increase of 14% year-over-year, demonstrating continued client trust and asset gathering capabilities.
- 4New brokerage accounts grew by 10% to 243,000 in Q2 2013, indicating successful client acquisition efforts.
- 5The company's banking subsidiary, Schwab Bank, remains well-capitalized, exceeding all regulatory requirements.
- 6Subsequent to the quarter, on July 25, 2013, SCHW issued $275 million in Senior Notes maturing in 2018 with a 2.20% interest rate.
- 7Operating expenses excluding interest rose by 9% in Q2 2013, mainly due to increased compensation and benefits, advertising, and professional services costs.