CFO commentary

Schwab strives to keep our stockholders and analysts informed of the firm’s bigger financial picture. Hear from our CFO.


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Periodically, Peter Crawford, our Chief Financial Officer, will use this forum to provide insight and commentary regarding Schwab's financial picture. For any questions, please contact Investor Relations via email or call: Jeff Edwards, Managing Director: 415-667-1524.

The commentary in this section speaks only as of the date specified below. The company makes no commitment to update any of this information.

Latest Commentary

CFO Commentary

October 18, 2022

By now, you’ve had a chance to digest our recent earnings release, which discussed our strong business and financial performance in Q3.  In our conversations following the release, we heard positive feedback on those results – but also lingering questions around client cash sorting and the implications for our net interest margin and net interest revenue.

In light of these questions, we wanted to reinforce a few points.  The main takeaway is that we believe we’re in a position to grow both our net interest margin and net interest revenue from Q3 2022 to Q4 2022 and on through Q4 2023, assuming that rates follow the current forward curve.  Why is that?  Several reasons:

  • We believe we’re in the middle innings of client cash sorting, which we’re tracing from May forward (remember April outflows were driven by tax season). While sorting activity has occurred faster than we expected at the beginning of the year, that is because the Fed increased rates much faster.  That faster pace of sorting in 2022, however, does not change our view that the magnitude of sorting (relative to uninvested client cash) is unlikely to exceed our experience through the last rising rate cycle.  And contrary to some perceptions, the net reduction in client cash on our balance sheet was actually less in September than we saw in August.

  • Our deposit betas (i.e., changes in our Bank Sweep rates versus changes in the Fed Funds target rate) continue to be lower than the last cycle, and we see no reason for that to change. Clients at Schwab have access to a broad range of cash solutions (e.g., off balance sheet purchased money funds) that offer very attractive rates for their investment cash.  For everyday cash, our Bank Sweep solution provides a rate that is currently far superior to the level offered within checking accounts at the big banks.  What we have seen historically is that client interest in utilizing investment cash solutions is driven by the rate offered on those solutions and their own particular cash management priorities, rather than the specific rate offered on Bank Sweep. So while we expect to see marginal betas rise somewhat along with short-term rates, we do not anticipate a need to play 'catch up'.

  • Approximately 40% of our interest-earning assets are tied to shorter-term interest rates, and extension risk within our fixed securities portfolio is quite limited.  Despite the dramatic increase in rates over the last three months, the duration of our overall investment portfolio remains at approximately 4 years – with our AFS portfolio under 3.5 years.  This reflects our focus on buying securities with less likelihood of slower paydowns in a rising rate environment.

  • We expect to cover the vast majority of potential client cash sorting through cash on hand, cash generated from our investment portfolio, and organic cash brought to the firm as we attract new assets.

  • We have ample access to additional sources of liquidity, including FHLB advances and potential retail CD issuance.  We have used these in the past for temporary funding, and we’d expect to do so again.  But our expectation is that any temporary usage won’t account for more than a mid-single digit percentage of our interest-earning assets while in place, thereby limiting upward pressure on aggregate liability beta.

Putting all this together, we expect to continue benefitting from rising rates in coming quarters – delivering on growth and capital return as our financial formula helps build stockholder value through the cycle. We look forward to sharing our current perspectives with you at our Business Update on October 27.

Forward-Looking Statements

This commentary contains forward-looking statements relating to Schwab’s net interest margin and revenue; client cash sorting; deposit betas; investment portfolio; liquidity funding for sorting activity and impact; liability betas; benefit from rising rates; growth; returning excess capital to stockholders; and stockholder value. These forward-looking statements reflect management’s expectations as of the date hereof. Achievement of these expectations and objectives is subject to risks and uncertainties that could cause actual results to differ materially from the expressed expectations.

Important factors that may cause such differences include, but are not limited to, general market conditions, including the level of interest rates and equity valuations; client cash allocation decisions; client sensitivity to rates; competitive pressures on pricing; level of client assets, including cash balances; capital and liquidity needs and management; balance sheet positioning relative to changes in interest rates; interest earning asset mix and growth; the level and mix of client trading activity; market volatility; margin loan balances; securities lending; the migration of bank deposit account balances; and client use of the company’s advisory solutions and other products and services. Other important factors include the company’s ability to attract and retain clients and independent investment advisors and grow those relationships and client assets; develop and launch new and enhanced products, services, and capabilities, as well as enhance its infrastructure and capacity, in a timely and successful manner; hire and retain talent; support client activity levels; successfully implement integration strategies and plans; manage expenses; monetize client assets; and other factors set forth in the company’s most recent reports on Form 10-K and Form 10-Q.


Current year

August 1, 2022

As you saw in our press release, we’ve purchased approximately 15 million shares of Schwab nonvoting common stock directly from TD Bank Group (“TD Bank”) for $1 billion. Given this is our first repurchase activity in some time, I thought it might be helpful to provide a bit more perspective on the transaction. Read more >


Previous years

May 14, 2021

I wanted to share some perspective around an item in this month’s SMART report related to the number of active brokerage accounts. As you may have noticed, despite another very strong month in new account openings the number of active brokerage accounts actually declined month over month. Rest assured that this is not due to a surge in attrition of our longstanding clients, but rather a natural outcome from the combination of unprecedented volume of new accounts we opened in the first quarter and the methodology we use to screen for active accounts. Read more >

March 12, 2021

Starting in early 2020, words like “unprecedented” and “historic” became fixtures in our descriptions of the environment, and the trend has persisted thus far in 2021. As we all continue to grapple with the effects of the COVID-19 pandemic, these first few months of the new year have seen additional political and social unrest, severe weather conditions across the country, and fresh evidence of the enormous strides that Schwab and others in our industry have made in making it easier, simpler, and less expensive for individuals to invest. Read more >

October 6, 2020

Today we announced that we’ve completed the acquisition of TD Ameritrade (“TDA”) in an all-stock transaction with an estimated value of approximately $22 billion. Per the merger agreement, TD Ameritrade stockholders are entitled to receive 1.0837 Schwab shares for each TD Ameritrade share owned, which represents a 17% premium over the 30-day volume weighted average price exchange ratio as of November 20, 2019. Read more >

June 12, 2020

On May 26, 2020, we completed the acquisition of the assets of USAA’s Investment Management Company, a very important milestone for Schwab, USAA members, and the ~400 employees from USAA who joined our company. Given how much the environment has changed since we last provided specific information on this acquisition, I wanted to give you an update on certain relevant data. The transaction brought to Schwab a total of $81 billion in client assets and 1.1 million accounts, for which we paid ~$1.6 billion in cash. We also entered into a long-term referral agreement that makes Schwab the exclusive provider of wealth management and investment brokerage services for USAA members. Read more >

March 13, 2020

With global health concerns relating to COVID-19 weighing on the macroeconomic environment and driving heightened volatility in the financial markets, we thought it might be helpful to spend some time discussing the effects on client activity. Not surprisingly, our clients have turned to us for help in this environment and we’ve been there to support them. Read more >

October 1, 2019

Today, we announced our decision to reduce online trade commissions for U.S. and Canadian-listed equities and ETFs to $0, and to reduce the base charge on options to $0, as well. As noted in the press release, this action is consistent with the principles on which Chuck Schwab founded this company 50 years ago and with the “Through Clients’ Eyes” strategy we have followed ever since then – which have made the Charles Schwab Corporation so successful. Read more >

August 14, 2018

As we announced in our second quarter earnings release, we crossed the $250 billion asset threshold1 for heightened regulatory requirements, ending the period at $262 billion in consolidated assets. While we don't believe the consequences will be disruptive to our business model or our strategy, I wanted to share a brief overview of what crossing this threshold means to Schwab and how we have been preparing over the last few years. Read more >

February 14, 2018

In our January SMART report released today, we noted a $7.2 billion outflow from a mutual fund clearing services ("clearing") client. Since we expect several additional large clearing outflows in early 2018, I wanted to share some context on the business and discuss the potential effect on our reported client asset flows (noticeable) and revenues (immaterial).  Read more >

December 22, 2017

Today, President Trump signed significant tax reform legislation into law and I wanted to spend a moment focusing on the potential impacts to Schwab's effective tax rate. As you may know, we have historically paid close to the full statutory federal corporate income tax rate, so the benefits are likely to be significant – though the new law does include the disallowance of some Schwab-relevant deductions.  Read more >

February 28, 2017

Today we announced another reduction in our online equity, ETF, and option trade commission rates, following moves we announced just a few weeks ago on February 2nd.  With this second action coming right on the heels of the first, I thought it might be useful to share some context regarding how they both fit within our financial planning for 2017.  Read more >

January 19, 2016

Those of you who follow The Charles Schwab Corporation closely may receive our quarterly financial results through a wire service/email, a market data aggregator, or simply by checking our corporate website.  This morning, we began making our results available via another widely-used platform: Twitter.  You can find our page on  with the handle @CharlesSchwab.  Today's activity includes a Tweet noting the availability of fourth quarter 2015 results with a link to our press release, and follow-ups sharing the headlines from this morning's announcement.   Read more >

December 14, 2015

Today we released our November Monthly Activity Report.  While we produced another month of solid client metrics, we have no illusions about another press release stealing the show later this week.  As you know, the Federal Reserve is widely anticipated to begin raising interest rates on December 16th.  We have seen economic and employment reports meet expectations, FOMC minutes evolve, and member speeches show increasing conviction.  Read more >

September 15, 2015

We issued our SMART report for the month of August today, and between the client metrics shown there and the trading data that we've already posted it's clear we've been busy.  With the elevated market volatility late in the month, our clients made extensive use of our branches, phone-based service centers and online capabilities to help keep their investing on track.  Many of them engaged with our financial consultants and subject matter experts to ask questions about how their assets enrolled in our advisory solutions are positioned, as well as assess their holdings and determine what, if any, action should be taken.  Read more >

August 14, 2015

By now, you may have noticed that we recently made a few changes to our disclosures, and I'd like to make sure everyone is aware of these developments as well as provide context for how they help tell our story.  As a large savings and loan holding company, our required reporting has expanded significantly in recent years.  In addition, as Schwab evolves, we revisit our reporting and strive to keep it closely aligned with the everyday workings of the business.  In the second quarter of 2015, we added a new Other Regulatory Disclosures tab to our corporate website, made changes to the Asset Management and Administration Fees (AMAF) table in our earnings release package, and included some new information in our 10-Q filing.  Read more >

January 16, 2015

As we announced in our earnings release today, our Q4 '14 financial results included two nonrecurring items related to the company's non-agency residential mortgage-backed securities (RMBS) portfolio: net litigation proceeds of approximately $28 million and net losses of $8 million from selling securities totaling approximately $500 million. Taken together, these items increased pre-tax income by approximately $20 million, or $.01 per share. With the financial crisis well behind us, it's been a while since we've needed to discuss these securities, so I wanted to walk through some history and share a perspective on these recent developments.  Read more >

October 15, 2014

Concurrent with our Earnings Release today, we are inaugurating a new approach to reporting on our clients' trading activity intra-quarter.  We have retired the inclusion of trade reporting in our Monthly Market Activity Report ("SMART") and are now providing a weekly look at trading activity, including revenue, asset-based, and other trades, which is posted on the Investor Relations landing page on .  Read more >

July 16, 2014

As you look through today's earnings release, you might notice that the size of our balance sheet (shown in the Financial and Operating Highlights table on page 5) hasn't changed much since year-end 2013, continuing to hover around $144 billion. That's unusual for us–for example, the company's balance sheet grew by approximately $8 billion during the second half of 2013. Given the factors influencing this situation, I wanted to share some perspective on current client behavior and ramifications for our capital management going forward.  Read more >

March 31, 2014

As I mentioned in my last post, here are a few more thoughts on the evolution of client behavior during the market recovery, which is now a full five years along: With the S&P 500 up over 170% from its lowest point in the first quarter of 2009 and setting new records, it's not really surprising to see investors put cash back to work in the markets. There are, however, some interesting aspects to the way our clients have reallocated their holdings across products and asset classes during the recovery thus far.  Read more >

March 14, 2014

The S&P 500 Index bottomed at 676.53 on March 9, 2009, so we are now a full five years into the market recovery.  As the recovery has strengthened in recent months, we have been asked more often about individual investor engagement, with the questioner usually equating engagement with trading activity.  Read more >

January 16, 2014

This is my inaugural CFO Commentary. I expect to use this site regularly to provide perspectives on Schwab's financial picture, including color on our performance and details on topical issues. Over time, I can see sharing more significant financial information that might be better discussed in a forum like this, versus press releases or other forms of communication.  Read more >



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