FOR IMMEDIATE RELEASE
CONTACTS: Media Dan Hubbard (415) 636-5454
Investors/Analysts Rich Fowler (415) 636-9869
SCHWAB ANNOUNCES QUARTERLY RESULTS
REVENUES GROW BY 26%
NET NEW CLIENT ASSETS TOTAL $37 BILLION
SAN FRANCISCO, July 18, 2000 - The Charles Schwab Corporation announced
today that its operating income for the quarter ended June 30, 2000 was $199
million, or $.14 per share, on revenues of $1.40 billion. In comparison,
operating income for the second quarter of 1999 was $171 million, or $.12 per
share, on revenues of $1.12 billion. For the first half of 2000, the Company's
operating income was $522 million, or $.37 per share, on revenues of $3.13
billion, compared with operating income of $332 million, or $.24 per share, on
revenues of $2.20 billion for the same period in 1999.
The Company's second quarter 2000 operating results exclude
professional fees and other costs relating to its acquisition of U.S. Trust
Corporation totaling approximately $44 million after-tax, as well as
approximately $3 million in after-tax charges for one month's amortization of
the U.S. Trust employee retention program and approximately $14 million in
after-tax charges for amortization of goodwill and other intangibles associated
with the acquisition of CyBerCorp, Inc. Including these acquisition-related
costs, reported net income was $137 million, or $.09 per share, for the quarter.
The Company's financial results have been restated to reflect the U.S. Trust
acquisition, which was accounted for as a pooling of interests. This accounting
method requires the restatement of all periods presented as if the Company and
U.S. Trust had been operating as a combined entity during such periods.
--------------------------------------------------------------------------------
Three Months Ended Six Months Ended
--June 30,-- % --June 30,-- %
Financial Highlights 2000 1999 Change 2000 1999 Change
--------------------------------------------------------------------------------
Revenues (in millions) $1,404.6 $1,116.2 26% $3,130.2 $2,196.7 42%
Operating Results (1):
Income (in millions) $198.8 $170.5 17% $521.8 $331.7 57%
Diluted earnings per share (2) $.14 $.12 17% $.37 $.24 54%
After-tax profit margin 14.2% 15.3% 16.7% 15.1%
Reported Results (3):
Net Income (in millions) $137.1 $170.5 (20)% $437.1 $331.7 32%
Diluted earnings per share (2) $.09 $.12 (25)% $.31 $.24 29%
After-tax profit margin 9.8% 15.3% 14.0% 15.1%
Return on stockholders' equity 15% 33% 27% 35%
================================================================================
(1) Excludes goodwill and intangible asset amortization, professional fees,
acquisition-related compensation expense and other expenses relating to the
acquisitions of CyBerCorp and U.S. Trust.
(2) Reflects the May 2000 three-for-two common stock split.
(3) Includes CyBerCorp and U.S. Trust acquisition-related costs.
In reviewing the second quarter, Chairman and Co-CEO Charles R. Schwab
commented, "Consistent with the seasonal patterns we've experienced in recent
years, securities market volumes slowed during the second quarter of 2000 after
reaching record levels earlier in the year. This seasonal slowdown and our
ongoing hiring program enabled the Company to significantly improve service
levels for its clients, and we achieved another quarter of strong fundamentals.
Our clients brought $37 billion in net new assets to Schwab and U.S. Trust
during the quarter and opened 400,000 new accounts. We ended the quarter with
$931 billion in client assets, up 34% from a year ago, and 7.2 million active
accounts."
"With the addition of U.S. Trust and our continued success in
attracting client assets, our balance-related revenues have increased
significantly," the Chairman said. "These revenues, which consist of asset
management and administration fees, net interest income and other non
trading-related revenues, grew by 44% over last year's second quarter and now
comprise 52% of total revenues. Our trading-related revenues, which consist of
commissions and principal transaction revenues, were up by 11% in the second
quarter versus the year-earlier period. Commissions were up by 16%, as higher
trading volumes were partially offset by increased usage of the online channel
and reduced pricing for our most actively trading clients, while principal
transaction revenues were 7% lower than their year-earlier levels due to market
pressures on trading spreads. We remained focused on expense management during
the second quarter while continuing to work towards achieving a better balance
between client service levels, employee workloads and profit margins. Our 14.2%
after-tax operating profit margin for the second quarter is comparable to our
performance in 1999."
President and Co-CEO David S. Pottruck said, "Our momentum in
reinventing full-service investing keeps building, and our combination with U.S.
Trust is introducing new benefits for our clients. Schwab and U.S. Trust staff
are working together to realize our vision of a combined organization that - in
combination with our independent fee-based investment manager (IM) alliance -
can serve the investment and wealth management needs of investors at every stage
of their financial growth. Schwab clients and prospects in need of personalized
wealth-management services can now receive referrals to U.S. Trust's investment
management, trust and private banking capabilities as part of our
AdvisorSource(TM) referral program, which includes more than 400 IMs.
Furthermore, U.S. Trust clients who want to utilize Schwab are now eligible for
access to a special version of our Signature Services(TM) offering. In addition,
through our Core and Explore(TM) asset allocation discussions and our
comprehensive Schwab Portfolio Consultations(TM), the Company's 9,000 client
contact staff completed over 90,000 Schwab-style help and advice interactions
during the second quarter. To accommodate continued growth in client demand for
personalized assistance, we opened seven new Schwab offices and two new U.S.
Trust offices during the quarter, bringing their totals to 363 and 31,
respectively. We also began work on our fifth telephone service center, located
in Austin, Texas, which is now open for training purposes and is scheduled to
begin handling calls later this year."
"Mutual fund-based investing remains an integral part of our Core and
Explore philosophy and we continue to build our offering," the President said.
"We have added four new funds to our SchwabFunds(R) family of funds which are
designed to help investors target long-term growth opportunities in the
technology, financial services, health care and communications sectors. We also
added 24 new third-party funds from 5 families to our Mutual Fund OneSource(R)
offering, bringing the total number of funds available through OneSource to
1,189, including 44 SchwabFunds. At month-end June, total client asset balances
in mutual funds at Schwab equaled $312 billion, up 29% from June 1999."
"Leveraging the best of both people and technology to provide high
quality service at a great value is the essence of Clicks and Mortar(TM) access
to financial services," Mr. Pottruck continued. "We believe our new alliance
with E-LOAN, Inc. - whereby Schwab clients have online access to E-LOAN's broad
choice of mortgage products from more than 70 lenders, as well as online rate
search and loan comparison, selection, application and tracking services, all
supported by dedicated client service representatives - could be another
exciting application of this principle. During the second quarter we also
improved our Velocity(TM) desktop trading software for more actively trading
clients by adding real-time streaming quotes, representing the first time we've
applied technology from our recent acquisition of CyBerCorp, Inc. to client
needs in other parts of the Schwab organization. In addition, we have created
and become the first client of Quris, Inc. to help support our client
communications and marketing goals through e-mail, instant messaging, wireless
devices and other evolving Internet appliances. Quris is an "electronic touch
services" firm, providing clients with customized communications solutions from
strategy development through implementation using a blend of consulting, data
analysis and technology services. We believe the potential for Internet-based
communications is extensive - we already have about 650,000 clients using our
SchwabAlerts e-mail service and they are currently receiving 3.5 million
messages each week."
Mr. Pottruck noted, "Overall, client usage of online services at Schwab
has grown to 4.1 million accounts with $413.5 billion in assets, up 46% and 65%,
respectively, from a year ago. Online trades made up 81% of all client trades
during the second quarter of 2000, up from 67% during the year-earlier period.
Our continued leadership in the online arena has been reflected in the sustained
recognition we've earned from industry observers - we have been the top- or
second-ranked online brokerage firm by Gomez Advisors, Inc. in each of the past
four quarters, and by J.D. Power and Associates in each of the past two years."
Mr. Pottruck continued, "A major component of our offering for
international clients consists of U.S.-based services for non-English speaking
investors. In addition to our existing services for Chinese-, Spanish- and
Korean-speaking clients, we now offer a Korean language Web site that provides
information about the U.S. financial markets and Schwab products and services.
Also, Charles Schwab Canada has recently launched Web-based trading in Chinese
for its clients and our Hong Kong subsidiary has just started to offer trading
in Hong Kong dollar-based securities in addition to U.S. dollar-based
securities. Overall, our international operations are now located in five
countries and the U.S., serving 434,000 client accounts with $27 billion in
assets, up 29% and 68%, respectively, over the last 12 months."
"Many of U.S. Trust's services can be provided to our IM customers to
help them broaden their offerings and provide better service to their affluent
clients," the President said. "Coupled with our other services, such as
customized Web access and dedicated service teams for their clients, we are
providing more ways to complement IMs' offerings and help them grow their
businesses. In addition, our AdvisorSource referral program continues to set new
records. Since the beginning of this year, a total of $2.4 billion in net new
customer assets have entered the program, and client assets in AdvisorSource now
total $9 billion, up 77% from last June. Overall, client assets at Schwab under
the guidance of IMs reached $237 billion as of June 30, 2000, up 32% from their
year-earlier levels. Our retirement plan business also set a record during the
second quarter by generating over $1 billion in new SchwabPlan(R) assets during
the period. Client assets in corporate retirement plans at Schwab now total $32
billion, up 27% from last year. Additionally, we have announced the formation of
the Schwab Corporate and Executive Services Group to provide a coordinated suite
of services to companies and their employees needing help in administering their
equity-related benefit plans."
"As regulatory, technological and market forces combine to hasten the
pace at which the securities markets are evolving, we continue to focus on
providing our clients with efficient, cost-effective access to those markets,"
Mr. Pottruck said. "We have bolstered our fixed income offering by forming new
alliances with eSpeed, Inc. and Valubond to enhance our individual and IM
clients' ability to analyze and trade fixed-income securities through the Schwab
Web site. In addition, our Nasdaq market-maker subsidiary, Schwab Capital
Markets L.P. (SCM), has recently implemented midpoint pricing, a service which
matches client buy and sell orders at market opening and executes them at the
midpoint between the prevailing bid and offer prices. SCM handled 8.3% of Nasdaq
share volume during the first half of 2000 as measured by Nasdaq Trader, which
is comparable to its performance during the year-earlier period. According to
AutEx(R), SCM currently handles more share volume than any other market maker in
the 25 most actively traded Nasdaq securities."
The Charles Schwab Corporation (NYSE:SCH), through Charles Schwab &
Co., Inc. (member SIPC/NYSE), U.S. Trust Corporation, CyBerCorp, Inc. and its
other operating subsidiaries, is one of the nation's largest financial services
firms serving 7.2 million active accounts with $931 billion in client assets
through 394 domestic offices, four regional client telephone service centers and
automated telephonic and online channels. The Charles Schwab, U.S. Trust and
CyBerCorp Web sites can be reached at www.schwab.com, www.ustrust.com and www.
cybercorp.com, respectively.
###
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THE CHARLES SCHWAB CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(In millions, except per share amounts)
(unaudited)
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Three Months Six Months
Ended Ended
June 30, June 30,
2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Revenues
Commissions $ 541.2 $ 467.1 $1,329.6 $ 942.5
Asset management and administration fees 389.8 295.4 761.6 575.5
Interest revenue, net of interest expense (1) 319.0 196.8 615.5 375.6
Principal transactions 127.7 136.8 373.0 268.1
Other 26.9 20.1 50.5 35.0
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Total 1,404.6 1,116.2 3,130.2 2,196.7
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Expenses Excluding Interest
Compensation and benefits 611.4 468.8 1,273.7 922.7
Compensation for acquisition-related retention programs 6.6 6.6
Occupancy and equipment 99.4 71.0 188.8 140.3
Communications 86.9 72.4 177.2 142.0
Advertising and market development 77.1 56.0 180.8 110.2
Professional services 101.0 43.8 183.2 83.5
Depreciation and amortization 62.5 42.2 117.5 79.9
Commissions, clearance and floor brokerage 34.6 25.5 77.4 51.1
Goodwill amortization 13.5 1.8 18.5 3.3
Other 58.1 52.8 141.4 115.4
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Total 1,151.1 834.3 2,365.1 1,648.4
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Income before taxes on income 253.5 281.9 765.1 548.3
Taxes on income 116.4 111.4 328.0 216.6
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Net Income $ 137.1 $ 170.5 $ 437.1 $ 331.7
========================================================================================================================
Weighted-Average Common Shares Outstanding - Diluted (2) 1,407.4 1,377.0 1,398.1 1,371.3
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Earnings Per Share (2)
Basic $ .10 $ .13 $ .33 $ .25
Diluted $ .09 $ .12 $ .31 $ .24
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Dividends Declared Per Common Share (2, 3) $ .0094 $ .0093 $ .0187 $ .0186
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(1) Interest revenue is presented net of interest expense. Interest expense for the three months ended June 30, 2000 and 1999
was $250.3 million and $206.2 million, respectively. Interest expense for the six months ended June 30, 2000 and 1999
was $554.6 million and $409.3 million, respectively.
(2) All periods have been restated for the May 2000 three-for-two common stock split.
(3) Dividends declared per common share represent dividends declared by The Charles Schwab Corporation prior to its merger
with U.S. Trust Corporation.
See Notes to Consolidated Statement of Income and Financial and Operating Highlights.
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The Charles Schwab Corporation
Financial and Operating Highlights
(Unaudited)
| 2000 | 1999 | 1998 |
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(In millions, except per share amounts Second First Fourth Third Second First Fourth Third Second
and as noted) Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Results
Revenues
Commissions $ 541.2 $ 788.4 $ 546.1 $ 386.0 $ 467.1 $ 475.4 $ 376.8 $ 339.1 $ 302.0
Asset management and administration fees 389.8 371.8 335.9 308.9 295.4 280.1 254.9 241.0 228.5
Interest revenue, net of interest expense 319.0 296.5 233.3 210.9 196.8 178.8 157.6 149.1 141.0
Principal transactions 127.7 245.3 139.4 93.0 136.8 131.3 100.2 74.9 59.0
Other 26.9 23.6 19.3 16.9 20.1 14.9 15.2 14.8 15.4
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Total 1,404.6 1,725.6 1,274.0 1,015.7 1,116.2 1,080.5 904.7 818.9 745.9
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Expenses Excluding Interest
Compensation and benefits 611.4 662.3 531.2 434.5 468.8 453.9 382.6 345.0 331.8
Compensation for acquisition-related
retention programs 6.6
Occupancy and equipment 99.4 89.4 88.0 78.6 71.0 69.3 63.3 59.5 60.0
Communications 86.9 90.3 73.0 63.5 72.4 69.6 55.5 56.0 55.7
Advertising and market development 77.1 103.7 78.3 59.3 56.0 54.2 54.4 35.4 28.8
Professional services 101.0 82.2 53.5 47.5 43.8 39.7 30.6 28.9 28.7
Depreciation and amortization 62.5 55.0 50.5 44.3 42.2 37.7 37.3 38.9 37.6
Commissions, clearance and floor brokerage 34.6 42.8 26.8 22.2 25.5 25.6 23.8 21.5 21.6
Goodwill amortization 13.5 5.0 1.5 1.6 1.8 1.5 1.3 2.3 1.4
Other 58.1 83.3 56.5 28.3 52.8 62.6 54.2 42.9 29.3
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Total 1,151.1 1,214.0 959.3 779.8 834.3 814.1 703.0 630.4 594.9
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Income before taxes on income 253.5 511.6 314.7 235.9 281.9 266.4 201.7 188.5 151.0
Taxes on income 116.4 211.6 124.2 91.7 111.4 105.2 79.6 74.8 59.4
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Net Income $ 137.1 $ 300.0 $ 190.5 $ 144.2 $ 170.5 $ 161.2 $ 122.1 $ 113.7 $ 91.6
====================================================================================================================================
Basic earnings per share (1) $ .10 $ .23 $ .15 $ .11 $ .13 $ .12 $ .10 $ .08 $ .08
Diluted earnings per share (1) $ .09 $ .22 $ .14 $ .11 $ .12 $ .12 $ .10 $ .08 $ .07
Dividends declared per common share (1, 2) $ .0094 $ .0093 $ .0094 $ .0093 $ .0093 $ .0093 $ .0093 $ .0089 $ .0089
Weighted-average common shares
outstanding - diluted (1) 1,407.4 1,390.0 1,374.2 1,375.7 1,377.0 1,365.6 1,349.0 1,339.2 1,337.9
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Performance Measures
Revenue growth over prior year's quarter 26% 60% 41% 24% 50% 53% 26% 16% 20%
After-tax profit margin - operating (3) 14.2% 18.7% 15.0% 14.2% 15.3% 14.9% 13.5% 13.9% 12.3%
After-tax profit margin - reported 9.8% 17.4% 15.0% 14.2% 15.3% 14.9% 13.5% 13.9% 12.3%
Return on stockholders' equity (4) 15% 40% 31% 25% 33% 35% 30% 30% 26%
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Financial Condition (at quarter end)
Cash and investments required to be
segregated (in billions) $ 4.8 $ 7.2 $ 8.8 $ 8.6 $ 7.6 $ 9.2 $ 10.3 $ 8.1 $ 7.2
Receivable from brokerage customers
(in billions) $ 20.3 $ 22.0 $ 17.1 $ 13.6 $ 13.3 $ 11.8 $ 9.6 $ 8.9 $ 9.0
Total assets (in billions) $ 34.9 $ 38.6 $ 34.3 $ 29.5 $ 27.8 $ 27.4 $ 26.4 $ 22.7 $ 21.9
Payable to brokerage customers
(in billions) $ 22.8 $ 26.2 $ 23.4 $ 20.4 $ 18.9 $ 19.0 $ 18.1 $ 15.3 $ 14.6
Long-term debt (in millions) $ 829 $ 718 $ 518 $ 528 $ 474 $ 414 $ 419 $ 419 $ 459
Stockholders' equity (in millions) $ 3,799 $ 3,474 $ 2,576 $ 2,357 $ 2,171 $ 1,983 $ 1,673 $ 1,551 $ 1,449
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Other
Full-time equivalent employees
(at quarter end, in thousands) 24.3 22.4 20.1 19.4 17.7 16.6 15.1 14.7 14.8
Capital expenditures - cash purchases
of equipment, office facilities and
property, net (in millions)(5) $ 149.8 $ 123.9 $ 117.4 $ 119.3 $ 74.7 $ 58.8 $ 44.1 $ 63.1 $ 51.0
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Customers' Daily Average Trading Volume
(in thousands)
Daily average revenue trades (6) 234.7 310.0 194.5 135.1 160.1 162.8 115.3 99.6 88.0
Mutual Fund OneSource(R) trades 53.3 76.6 48.4 40.3 43.6 49.9 38.5 42.3 39.4
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Daily average trades 288.0 386.6 242.9 175.4 203.7 212.7 153.8 141.9 127.4
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Daily Average Trades by Channel
(in thousands)
Online 232.2 304.0 177.4 117.8 136.7 137.4 93.4 76.9 65.9
TeleBroker(R) and VoiceBroker(TM) 8.0 13.5 9.4 7.4 9.9 11.4 8.5 9.2 8.9
Regional customer telephone service
centers, branch offices and other 47.8 69.1 56.1 50.2 57.1 63.9 51.9 55.8 52.6
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Daily average trades 288.0 386.6 242.9 175.4 203.7 212.7 153.8 141.9 127.4
====================================================================================================================================
Average Commission Per Revenue Trade (6) $ 36.65 $ 40.12 $ 43.68 $ 44.72 $ 46.44 $ 47.72 $ 51.01 $ 52.83 $ 54.12
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All periods have been restated to reflect the merger of The Charles Schwab Corporation (CSC) with U.S. Trust
Corporation (U.S. Trust).
(1) All periods have been restated for the May 2000 three-for-two common stock split.
(2) Dividends declared per common share represent dividends declared by CSC prior to its merger with U.S. Trust.
(3) Excludes goodwill and intangible asset amortization, professional fees, acquisition-related compensation expense and other
expenses relating to the acquisitions of CyBerCorp, Inc. and U.S. Trust.
(4) Calculated based on annualized quarterly net income and average stockholders' equity for the quarter.
(5) Effective with the first quarter of 1999, capital expenditures were restated to include capitalized costs of developing
software for internal use.
(6) Revenue trades include all customer trades (both domestic and international) that generate either commission revenue or
revenue from principal markups; also known as DART. Effective March 2000, includes CyBerCorp, Inc. DART.
See Notes to Consolidated Statement of Income and Financial and Operating Highlights.
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The Charles Schwab Corporation
Notes to Consolidated Statement of Income and Financial and Operating Highlights
(Unaudited)
Merger with U.S. Trust Corporation
On May 31, 2000, The Charles Schwab Corporation (CSC) completed its merger
(the Merger) with U.S. Trust Corporation (U.S. Trust). Under the terms of the
merger agreement, U.S. Trust became a wholly owned subsidiary of CSC and
U.S. Trust shareholders received 5.1405 shares of CSC's common stock for each
common share of U.S. Trust. The Merger was treated as a non-taxable stock-for-
stock exchange and U.S. Trust's shareholders received 112,000,000 shares of
CSC's common stock. The consolidated statement of income and financial and
operating highlights give retroactive effect to the Merger, which was accounted
for as a pooling of interests. The pooling of interests method of accounting
requires the restatement of all periods presented as if CSC and U.S. Trust
had been operating as a combined entity during such periods. For the nine
quarterly periods ended June 30, 2000, stockholders' equity and other per share
information reflects the accounts of CSC and its subsidiaries as if the common
stock had been issued during all of the periods presented. Dividends declared
per common share represent dividends declared by CSC prior to the Merger.
Stock Split
On May 3, 2000, the Board of Directors approved a three-for-two split of
CSC's common stock, which was effected in the form of a 50% stock dividend. The
stock dividend was distributed May 30, 2000 to stockholders of record May 12,
2000. Share and per share information presented in the consolidated statement
of income and financial and operating highlights has been restated to reflect
the common stock split, including the common shares issued to U.S. Trust share-
holders pursuant to the exchange ratio described above.
The Company
The consolidated statement of income and financial and operating highlights
include The Charles Schwab Corporation and its subsidiaries (collectively, the
Company), including Charles Schwab & Co., Inc. , U.S. Trust and Schwab Capital
Markets L.P. The consolidated statement of income and financial and operating
highlights should be read in conjunction with the consolidated financial
statements and notes thereto to be included in the Company's Current Report on
Form 8-K expected to be filed with the Securities and Exchange Commission on or
about July 18, 2000. Certain prior periods' revenues and expenses have been
reclassified to conform with the current period presentation. All material
intercompany balances and transactions have been eliminated.
**********
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The Charles Schwab Corporation
Growth in Customer Assets and Accounts
(Unaudited)
| 2000 | 1999 | 1998 |
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Second First Fourth Third Second First Fourth Third Second
(In billions, at quarter end, except as noted) Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets in Schwab customer accounts
Schwab One(R) and other cash equivalents $ 22.3 $ 26.0 $ 23.0 $ 20.1 $ 18.6 $ 18.5 $ 17.5 $ 14.7 $ 13.8
SchwabFunds(R) :
Money market funds 91.9 92.6 85.2 82.3 75.1 74.4 67.3 63.0 55.5
Equity and bond funds 24.0 23.8 22.7 18.9 18.8 16.4 14.2 11.0 11.2
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Total SchwabFunds 115.9 116.4 107.9 101.2 93.9 90.8 81.5 74.0 66.7
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Mutual Fund Marketplace(R) (1):
Mutual Fund OneSource(R)
Retail 66.7 69.7 56.7 41.7 42.5 39.0 36.9 31.5 37.3
Schwab Institutional(TM) (2) 51.0 52.4 45.6 36.6 37.6 34.2 33.0 27.5 32.0
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Total Mutual Fund OneSource 117.7 122.1 102.3 78.3 80.1 73.2 69.9 59.0 69.3
All other 78.3 78.1 74.3 66.1 68.2 61.8 59.2 51.7 58.0
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Total Mutual Fund Marketplace 196.0 200.2 176.6 144.4 148.3 135.0 129.1 110.7 127.3
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Total mutual fund assets 311.9 316.6 284.5 245.6 242.2 225.8 210.6 184.7 194.0
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Equity and other securities (1) 426.8 450.2 387.5 298.8 303.5 272.2 236.8 183.3 196.4
Fixed income securities 57.3 52.2 47.1 44.0 40.6 37.2 35.8 34.4 32.3
Margin loans outstanding (20.2) (21.8) (16.9) (13.5) (13.2) (11.7) (9.6) (8.9) (8.9)
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Total 798.1 823.2 725.2 595.0 591.7 542.0 491.1 408.2 427.6
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Assets in U.S. Trust customer accounts 133.1 129.0 120.8 103.8 103.0 102.0 103.2 89.1 92.5
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Total customer assets $931.2 $952.2 $846.0 $698.8 $694.7 $644.0 $594.3 $497.3 $520.1
====================================================================================================================================
Net growth in assets in customer accounts (3)
(for the quarter ended)
Net new customer assets $ 36.6 $ 53.3 $ 33.3 $ 24.6 $ 21.6 $ 27.4 $ 22.5 $ 18.8 $ 17.1
Net market gains (losses) (57.6) 52.9 113.9 (20.5) 29.1 22.3 74.5 (41.6) 5.3
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Net growth (decline) $(21.0) $106.2 $147.2 $ 4.1 $ 50.7 $ 49.7 $ 97.0 $(22.8) $ 22.4
====================================================================================================================================
New customer accounts
(in thousands, for the quarter ended) 400.1 497.1 392.6 283.6 424.2 390.8 398.3 279.2 348.5
Active customer accounts (in millions) (4) 7.2 7.0 6.6 6.4 6.2 5.9 5.6 5.5 5.3
====================================================================================================================================
Active online Schwab customer accounts
(in millions) (5) 4.1 3.7 3.3 3.0 2.8 2.5 2.2 2.0 1.8
Online Schwab customer assets $413.5 $417.7 $348.7 $263.6 $251.3 $219.0 $174.1 $130.5 $128.1
====================================================================================================================================
(1) Excludes money market funds and all of Schwab's proprietary money market, equity and bond funds.
(2) Represents assets invested in Mutual Fund OneSource by independent investment managers and retirement plans.
(3) Net new customer assets in 2000 include U.S. Trust. For 1999 and 1998, U.S. Trust net new assets are included in net market
gains (losses).
(4) Effective with the fourth quarter of 1998, active accounts are defined as accounts with balances or activity within the
preceding eight months instead of twelve months as previously defined. This change in definition had the effect of decreasing
the number of active accounts by approximately 200,000. Prior quarters have not been restated.
(5) Active online accounts are defined as all active accounts within a household that has had at least one online session within
the past twelve months.
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The Charles Schwab Corporation (CSC) Monthly Market Activity Report - July 2000
Investor activity for 7.2 million active retail accounts (1)
Investors' Daily
Average Trading 1999
Volume (2) (in Jun Jul Aug Sep Oct Nov Dec
thousands) --- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Daily Average
Revenue
Trades (3) 124.0 147.7 126.4 131.4 144.3 202.9 234.4
Mutual Fund
OneSource(R)
Trades (4) 36.4 42.2 38.2 40.8 42.6 49.4 53.1
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Trading Activity 160.4 189.9 164.6 172.2 186.9 252.3 287.5
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Daily Average
Share Volume
(in millions)
NYSE 733 731 719 783 897 873 894
Nasdaq 891 996 920 1,016 1,079 1,365 1,415
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Total 1,624 1,727 1,639 1,799 1,976 2,238 2,309
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Growth in
Customer Assets
(in billions
of dollars)
Net New
Assets (5) 8.1 8.9 7.9 7.8 7.6 9.5 16.2
Net Market
Gains
(Losses) 24.7 (14.6) 3.1 (9.0) 29.9 30.8 53.2
Total Customer
Assets (at
month end, in
billions of
dollars):
Schwab 591.7 587.3 594.8 595.0 627.9 663.0 725.2
U.S. Trust 103.0 101.7 105.2 103.8 108.4 113.6 120.8
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Total 694.7 689.0 700.0 698.8 736.3 776.6 846.0
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Schwab 1000
Index(R) (at
month end) 4,232 4,093 4,055 3,930 4,193 4,285 4,568
Mutual Fund Net
Buys (Sells) (7)
(in millions)
Domestic Growth 665.5 601.9 (93.6) (435.2) 719.4 1,704.1 1,517.3
International
Growth 393.7 (91.7) 128.8 349.3 471.5 407.0 784.6
Balanced (stock
and bond) 91.0 215.9 (140.0) (226.8) (38.1) (35.9) (551.2)
Bond - Taxable 29.6 167.3 (36.4) 136.4 (8.6) 57.4 (314.4)
Bond - Tax
Advantaged (31.9) 22.9 (42.0) 4.3 (47.4) (64.3) (342.5)
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--------------------------------------------
| Net new assets in 2000 include U.S. Trust. |
| For 1999, U.S. Trust net new assets are |
| included in net market gains (losses). |
--------------------------------------------
Investors' Daily % change
Average Trading 2000 ---------
Volume (2) (in Jan Feb Mar Apr May Jun Mo. Yr.*
thousands) --- --- --- --- --- --- --- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Daily Average
Revenue
Trades (3) 298.3 279.4 346.9 317.3 198.4 199.6 1% 61%
Mutual Fund
OneSource(R)
Trades (4) 80.6 76.5 73.2 69.5 46.5 46.3 -- 27%
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Trading Activity 378.9 355.9 420.1 386.8 244.9 245.9 -- 53%
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Daily Average
Share Volume
(in millions)
NYSE 1,074 1,046 1,138 1,060 905 987 9% 35%
Nasdaq 1,668 1,781 1,874 1,846 1,399 1,512 8% 70%
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Total 2,742 2,827 3,012 2,906 2,304 2,499 8% 54%
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Growth in
Customer Assets
(in billions
of dollars)
Net New
Assets (5) 17.1 14.0 22.2 7.6 12.0 17.0(6) 42% 17%(6)
Net Market
Gains
(Losses) (26.6) 37.6 41.9 (60.9) (42.8) 46.1
Total Customer
Assets (at
month end, in
billions of
dollars):
Schwab 718.1 765.5 823.2 774.9 745.8 798.1 7% 35%
U.S. Trust 118.4 122.6 129.0 124.0 122.3 133.1 9% 29%
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Total 836.5 888.1 952.2 898.9 868.1 931.2 7% 34%
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Schwab 1000
Index(R) (at
month end) 4,353 4,354 4,728 4,546 4,423 4,541 3% 7%
Mutual Fund Net
Buys (Sells) (7)
(in millions)
Domestic Growth 1,448.7 3,475.1 3,190.8 534.0 491.5 2,268.8
International
Growth 1,558.6 1,754.6 800.8 (2.8) (75.7) 577.5
Balanced (stock
and bond) (528.8) (491.8) (326.5) 177.0 (98.3) 87.5
Bond - Taxable (368.4) (48.6) (102.6) (95.4) (6.3) 249.2
Bond - Tax
Advantaged (90.2) (10.9) .2 (127.2) (89.3) 11.0
(1) Active customer accounts are defined as accounts with balances or activity within the preceding eight months.
(2) Should not be used to project earnings or to predict a trend in earnings of Charles Schwab & Co., Inc. (Schwab), its parent,
The Charles Schwab Corporation (the Company), or to predict a trend in the U.S. stock market. The Company's earnings are
directly affected by many factors not reflected above.
(3) Includes all customer trades (both domestic and international) that generate either commission revenue or revenue from
principal markups; also known as DART. Effective March 2000, includes CyBerCorp, Inc. DART, which was 18,600 in June 2000.
(4) Includes mutual fund trades executed through Schwab's Mutual Fund OneSource(R) service. Contact any Schwab representative
for complete information on this service.
(5) December 1999 includes $4.6 billion in mutual fund capital gains reinvestments.
(6) June 2000 data includes $5.8 billion of inflows related to special fiduciary services for a corporate pension plan. The
percentage increase from June 1999 to June 2000 is based only on Schwab net new assets.
(7) Represents the principal value of customer mutual fund (no-load, low-load, load) transactions handled by Schwab and U.S.
Trust, including transactions in SchwabFunds(R) and Excelsior Funds(R), respectively. Includes institutional funds available
only to Investment Managers. Excludes money market funds. Contact any Schwab representative for complete information on
purchasing mutual funds through Schwab, including a fund prospectus which describes management fees and expenses. Read the
prospectus carefully before you invest.
* June 2000 vs. June 1999 Charles Schwab & Co., Inc. Member SIPC/NYSE
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