Wed, Apr. 15, 9:13 AM
- Q1 net income of $302M or $0.22 per share vs. $326M and $0.24 one year ago. The results are also weaker than when the company warned on Q1 in mid-March, primarily due to the earlier timing of certain compensation expenses.
- CFO Joe Martinetto: "Environmental factors contributed to a disappointing rate of revenue growth for the first quarter," including volatile markets, flat-to-lower interest rates, and trading activity which slowed as the quarter progressed.
- Money market fund fee waivers were $184M during Q1, about the same as one year ago (this against total net income just north of $300M).
- $34.2B of core net new assets brought in during quarter, a 6% annualized growth rate. Net new assets from retail investors of $12.5B up 28% Y/Y.
- Previously: Charles Schwab misses by $0.02, misses on revenue (April 15)
- Previously: Sluggish trading has Schwab warning on Q1 results (March 13)
- SCHW flat premarket
Wed, Apr. 15, 8:52 AM
Mon, Apr. 6, 12:10 PM
- Excepting Schwab (NYSE:SCHW) which pre-announced a Q1 miss, electronic broker stocks had a good first quarter, including Interactive Brokers (NASDAQ:IBKR) up 16.7%, E*Trade (NASDAQ:ETFC) up 17.7%, Gain Capital (NYSE:GCAP) up 8.3%, and TD Ameritrade (NYSE:AMTD) up 4.1%.
- Fundamentals, however, aren't looking so strong into Q2, says Sandler O'Neill, expecting DARTs to decline about 10% in March, and noting the flatter yield curve.
- The team is still bullish, though, thanks to the longer-term optionality from rising interest rates, capital returns/deployment, and acquisitions. For E*Trade, it's capital deployment, for Schwab the ability to sweep both money-market fund and off-balance-sheet deposits into its bank, and for Ameritrade the chance to boost the buyback. For the whole group, keep M&A in mind.
Thu, Mar. 26, 9:32 AM
- Unsurprisingly, the upgrade is about interest rates, and Barclays analyst Kenneth Hill - upgrading to Overweight from Underweight - says Schwab (SCHW +0.3%) is the most heavily levered in the space to short-term rates. By Hill's calculations, the company would see about $1.6B in incremental revenues from a 100 basis point increase in the fed funds rate.
- Whether and when the short end actually goes higher by 100 basis points is another story.
Wed, Mar. 18, 2:41 PM
- The Dow and S&P 500 have each turned more than 1% higher following after the Fed cuts its projections for GDP growth, inflation, and the pace of rate hikes, but the country's yield-starved lenders don't join the party.
- The KBE is down 0.5% and the KRE by 0.9%.
- Bank of America (BAC -0.2%), Citigroup (C +0.1%), Regions Financial (RF -1.1%), KeyCorp (KEY -0.9%), First Niagara (FNFG -1.6%), U.S. Bancorp (USB +0.1%), PNC Financial (PNC +0.3%).
- Others gasping for a yield above zero: Schwab (SCHW -1.5%), E*Trade (ETFC +0.1%), Ameritrade (AMTD -0.5%).
- Previously: FOMC drops "patient," but sends dovish signal (March 18)
- Previously: Stocks stage sharp turnaround, yields dive following dovish Fed news (March 18)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KRU, RWW, KBWR, RYF, FINZ, KRS
Fri, Mar. 13, 8:57 AM
- Client trading activity so far this year is below expectations, says Schwab (NYSE:SCHW) CFO Joe Martinetto. Expense management is tracking in line with plans, but there should be a sequential rise in marketing expense this quarter alongside the launch of Schwab intelligent Portfolios.
- As such, 2015 EPS is running about one penny below last year.
- Source: Press Release
- Previously: E*Trade Februrary trading activity falls from a year ago (March 13)
Tue, Mar. 10, 2:08 PM
- Schwab (SCHW -1.2%) became the latest entrant into the robo-adviser business this week, launching Schwab Intelligent Portfolios, but is coming under some criticism for the amount of cash clients might end up - cash that would be parked at a Schwab bank where it can earn a spread.
- See: RIABiz and NYTimes
- The times piece noted cash allocations of at least 6% and all the way up to 30% would be higher than what many financial advisers recommend, and would also be a nice profit-center for the company.
- Wealthfront CEO Adam Nash - one of the startups Schwab and other big players are taking aim at - notes even a 6% cash allocation could cost clients hundreds of thousands of dollars over a career.
- "We believe that cash is a ballast for a portfolio, and the amount of cash I also think is getting exaggerated in the media,” says Schwab's Naureen Hassan, the executive in charge of Intelligent Portfolios, noting a level as high as 30% would be for someone with very short-term goals or already in retirement. The average cash holdings across portfolios, says Hassan, will be about 10% - in line current practice across RIAs.
Fri, Mar. 6, 9:46 AM
- A turnaround from the action earlier this year - financials (XLF +0.9%) are marching higher in early action as the averages slip, as nervous investors buy back in following the stress test results. Also helping are surging interest rates following the strong jobs number.
- Looking at a pretty broad screen of bank names, just two - Goldman Sachs and Zions, both of which barely passed the stress test - are lower. Among the others: Bank of America (BAC +3.7%), JPMorgan (JPM +1.1%), U.S. Bancorp (USB +1.6%), Regions FInancial (RF +2.3%), KeyCorp (KEY +2.7%), PNC Financial (PNC +2.3%), BB&T (BBT +2.4%), Fifth Third (FITB +2.2%), Comerica (CMA +3.8%), BNY Mellon (BK +2.9%).
- Among those starved for higher rates: MetLife (MET +3%), Prudential (PRU +3.3%), Lincoln National (LNC +4.1%), AIG (AIG +1.4%), Hartford (HIG +2%), E*Trade (ETFC +3.9%), Schwab (SCHW +4.4%), Ameritrade (AMTD +4.3%).
- Previously: Futures slip after jobs number as yields and dollar soar (March 6)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, IAI, SEF, IYG, IAK, FXO, FNCL, KBWB, QABA, FINU, KCE, KRU, RWW, KBWR, RYF, KBWP, KBWI, PSCF, KBWC, FINZ, KRS
Wed, Mar. 4, 11:07 AM
- The current balance of E*Trade's (NASDAQ:ETFC) home-loan portfolio is only $6B now vs. $27B as the financial crisis began to unfold, and regulators are no longer requiring the parent company to set aside capital to support the lending unit.
- There's still risk as a buyer would have to mark the loans to market, and there's currently a wide gap between carrying value and market value. "As that [gap] goes down, I would think a buyer would be more and more interested," says Compass Point's Michael Tarkan..
- TD Ameritrade (AMTD -0.5%) and Schwab (SCHW -0.9%) seem like natural potential buyers, but lenders like CIT Group (CIT -0.8%) and Capital One (COF -0.8%) might also have interest, says Sandler O'Neill's Rich Repetto. Goldman Sachs has been rumored to have sniffed around the company as well.
Wed, Feb. 18, 2:49 PM
- The financial sector had begun to turn around a dismal start to the year as February brought forth a string of hawkish Fed heads suggesting a June rate hike, but the XLF is lower by 0.8% after just-released FOMC minutes suggest markets and the hawks are getting ahead of themselves. KBE -1.7%, KRE -2%
- The TBTFs: BofA (BAC -2.2%), JPMorgan (JPM -1.4%), Wells Fargo (WFC -1.6%), Ciitgroup (C -0.8%)
- The regionals: Regions Financial (RF -1.6%), KeyCorp (KEY -1.6%), PNC Financial (PNC -1.3%), BB&T (BBT -1.5%), Fifth Third (FITB -1.6%), SunTrust (STI -1.7%), First Niagara (FNFG -2.1%), M&T (MTB -1.9%), U.S. Bancorp (USB -1.3%), First Horizon (FHN -2.7%).
- Online brokerage: Schwab (SCHW -2.3%), E*Trade (ETFC -1.7%), Ameritrade (AMTD -1.1%), Interactive Brokers (IBKR -0.9%).
- Previously: FOMC minutes: June rate hike not a slam dunk yet (Feb. 18)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, IAI, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KCE, KRU, RWW, KBWR, RYF, KBWC, FINZ, KRS
Fri, Feb. 6, 9:50 AM
- Financials have been mercilessly pounded in 2015 as hopes for higher interest rates looked like they might be dashed yet again, but today's blowout jobs number - firmly putting a June rate hike on the table - has brought in the dip-buyers.
- The major averages are flat, but the XLF is up 1.4%. The Regional Bank ETF (KRE +2%) and the Bank ETF (KBE +2.1%) are doing even better.
- Among the yield-starved banking names: Bank of America (BAC +3.1%), JPMorgan (JPM +2.6%), Citigroup (C +2%), Regions Financial (RF +4%), KeyCorp (KEY +3%), PNC Financial (PNC +2.9%), SunTrust (STI +2.3%), Zions (ZION +3.6%), Synovus (SNV +2.3%).
- Insurers: MetLife (MET +2%), Prudential (PRU +3.2%), Lincoln National (LNC +4.6%). AIG (AIG +1.5%).
- Trust banks: BNY Mellon (BK +2.7%) State Street (STT +1.9%), Northern Trust (NTRS +2.3%).
- Online brokers (currently getting killed on money-market fee rebates): Schwab (SCHW +4.5%), TD Ameritrade (AMTD +3.5%), E*Trade (ETFC +2.1%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, IAI, SEF, IYG, IAK, FXO, FNCL, KBWB, QABA, FINU, KRU, RWW, KBWR, RYF, KBWP, KBWI, PSCF, FINZ, KRS
Thu, Jan. 29, 5:11 PM
Wed, Jan. 28, 8:56 AM
- Starting Feb. 1, Schwab (NYSE:SCHW) will add 18 more ETFs to Schwab OneSource, bringing the number of ETFs available under the commission-free program to 198.
- OneSource had $38M in AUM as of year-end, with inflows of more than $10B in 2014 representing 43% of total ETF flows at the company.
- The added ETFs: IBLN, PIZ, PIE, PDP, DWAS, PAF, IGHG, ALTS, XOVR, QMEX, QKOR, QTWN, RSCO, LOWC, AGZD, HYZD, USDU, DNL
- Source: Press Release
Sat, Jan. 24, 4:48 PM
- The financial sector is off to a worse start to the year than even the energy names, with the XLF down 3.9% YTD vs. the XLE's 3.2% decline. The S&P 500 is roughly flat. The SPDR KBW Bank ETF (NYSEARCA:KBE) is off 7.5%, and the Regional Bank ETF (NYSEARCA:KRE) is lower by 6.9%.
- Q4 earnings results haven't been wonderful, but financial names had been savaged well before those reports started coming out. Instead there's a difficult regulatory regime that won't quit, and - for now - it's looking like "wait'll next year" for the rising interest rates that were supposed to drive profit margins higher. The 10-year/2-year spread - already pretty low at 150 basis points to start the year - has narrowed to 137 bps.
- A partial roll call of banks: Bank of America (NYSE:BAC) -12.1% YTD, Citigroup (NYSE:C) -10.1%, JPMorgan (NYSE:JPM) -9.4%, Morgan Stanley (NYSE:MS) -9.4%, Regions Financial (NYSE:RF) -14.7%, KeyCorp (NYSE:KEY) -4.5%, PNC Financial (NYSE:PNC) -5.4%, Bank of New York (NYSE:BK) -9.1%, Capital One (NYSE:COF) -6%, Discover (NYSE:DFS) -13.6%.
- Other spread-starved sector names: MetLife (NYSE:MET) -9.8%, AIG (NYSE:AIG) -8%, Prudential (NYSE:PRU) -10.8%, Schwab (NYSE:SCHW) -9.9%.
- Some of what's working in financials: Blackstone (NYSE:BX) +6.7%, E*Trade (NASDAQ:ETFC) +1.2%, WisdomTree (NASDAQ:WETF) +12.3%, Legg Mason +2.8%.
Fri, Jan. 16, 9:11 AM
Fri, Jan. 16, 9:09 AM
- Q4 net income of $350M or $0.25 per share vs. $319M and $0.23 one year ago. One-time items boosted earnings this year by about $20M or $0.01 per share. For the year, the company earned $1.321B, up 23% from a year ago.
- Pre-tax margin for the quarter of 35.7%; for the year of 34.9% vs. company goal of 34%.
- Asset management revenue of $641M vs. $608M in Q4 one year ago. Money market fee waivers of $193M vs. $182M a year ago.
- Net interest revenue of $584M vs. $532M.
- Trading revenue of $239M vs. $231M.
- DARTs of 315K up 17% Y/Y.
- SCHW +0.1% premarket
- Press release
SCHW vs. ETF Alternatives
Charles Schwab Corp is a savings and loan holding company, which through its subsidiaries is engaged in securities brokerage, banking and related financial services. It operates in two segments namely Investor Services and Advisor Services.
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