Schwab cleared the profit bar, with adjusted diluted EPS at $1.69 and net income at $3.02 billion, both beating analyst estimates. The stock didn't mirror the beat. At 9:33 a.m. in New York, shares were down 5.4%, leaving them off 8.2% for the year. CEO Rick Wurster told analysts the firm's "client-size strategy endures the test of time and is fueling our record performance and growth."
The softer spots were in deposits and margin. Bank deposits were $244.1 billion compared with a $250.7 billion estimate, and net interest margin was 3.04% for the quarter versus the 3.09% analysts expected. According to Chief Financial Officer Mike Verdeschi, revenue and the full-year net interest margin should expand, albeit near the bottom of the firm's outlook range.
Offsetting that, money kept coming in the door. Net new assets were $192.4 billion, topping the $175.1 billion consensus, and total client assets rose 15% to $13.33 trillion from $11.59 trillion a year earlier, slightly missing estimates.
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Wurster said the company is preventing unauthorized agents from reaching Schwab customer accounts "to protect clients and our firm." Like peers, Schwab is navigating how artificial intelligence is changing retail investing. One response is Charley, an AI assistant meant to make it easier for customers to interact with the firm. For broader context on big fortunes shaping finance chatter, Bloomberg's Billionaires Index tracks the world's wealthiest people each day.
Bigger picture, Schwab is growing client money while contending with rate pressure on deposits and margins. The Westlake, Texas-based firm also recently added a listing on the Texas Stock Exchange alongside its primary home on the New York Stock Exchange. If you bank, trade, or get advice at Schwab, that mix influences the tools you see, the service model as AI matures, and the yields your cash may earn.
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