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Schwab Reports First Quarter Net Income Up 58% Year-over-Year

Stocks in this article: SCHW

The Charles Schwab Corporation announced today that its net income for the first quarter of 2014 was $326 million, up 2% from $319 million for the fourth quarter of 2013, and up 58% from $206 million for the first quarter of 2013.

  Three Months Ended  
--March 31,-- %
Financial Highlights   2014     2013     Change
Net revenues (in millions) $ 1,478   $ 1,290 15 %
Net income (in millions) $ 326 $ 206 58 %
Diluted earnings per common share $ .24 $ .15 60 %
Pre-tax profit margin 35.3 % 25.7 %

Return on average common stockholders’ equity (annualized)

13 % 9 %

CEO Walt Bettinger said, “Our contemporary full-service investing model continued to resonate with investors during the first quarter. We gathered $34.2 billion of net new assets during the quarter, a 6% annualized organic growth rate, and 258,000 new brokerage accounts, up 6% year-over-year. Clients have now entrusted us with $2.31 trillion of assets – a record high. In addition, client trading activity rose in early 2014, as we executed an average of over 550,000 total trades a day during the first quarter, the highest quarterly volume in our history. More significantly, however, our work to build awareness of our professional advice capabilities continued during the quarter, and we ended March with approximately half of all client assets receiving some form of ongoing advisory service, with $974 billion under the guidance of an independent advisor and $159 billion enrolled in one of our retail advisory solutions, up 16% and 17%, respectively, over the first quarter of 2013. We also saw a steady pace of planning conversations, as an increasing proportion of clients engage with investing as a long-term process, not a moment in time. At quarter-end we were serving 9.2 million active brokerage accounts and 933,000 banking accounts, up 4% and 5%, respectively, from year-earlier levels.”

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