The Charles Schwab Corporation released its Monthly Activity Report today. Company highlights for the month of July 2023 include:

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• Core net new assets brought to the company by new and existing clients totaled $13.7 billion. Net new assets excluding mutual fund clearing totaled $11.9 billion.
• Total client assets were $8.24 trillion as of month-end July, up 13% from July 2022 and up 3% compared to June 2023.
• Average margin balances were $63.0 billion in July, down 13% from July 2022 and up 2% compared to June 2023.

Commentary from the CFO

Chief Financial Officer Peter Crawford commented, “As we continue to progress through the Ameritrade client conversion, we are observing initial evidence of the deal-related attrition we allowed for within the transaction math outlined at the announcement back in November 2019. These temporarily lower net flows reflect our organic asset gathering being offset by expected attrition within certain client cohorts, including recently converted Ameritrade retail clients as well as a modest number of Ameritrade advisor clients ahead of their planned transition to the Schwab platform in September. Additionally, we have elected to proactively resign from certain atypical custodial relationships previously served by Ameritrade’s institutional business that are inconsistent with our approach to serving Registered Investment Advisors. We anticipate these temporary conversion-related dynamics will subside following the completion of the final transition group during the first half of 2024. Based on our experience with the first two conversion groups, as well as our latest projections, we believe that the ultimate attrition will be in-line with or slightly better than our initial estimates – approximately 4% of Ameritrade revenue prior to the deal or around 1% of combined total client assets as of December 31, 2022. With all of this in mind, Schwab’s competitive position remains strong as July new brokerage accounts increased 9% from the prior year to 303 thousand - marking the 9^th consecutive month of new accounts exceeding 300 thousand.

In addition to our overall July results demonstrating healthy client engagement and momentum, the average daily pace of client cash realignment outflows during the month remained generally consistent with prior periods, even as strong net equity purchasing persisted throughout the month. The continuation of this trend further underscores our confidence that we will see a resumption of deposit growth later this year.”

Forward-Looking Statements

This press release contains forward-looking statements relating to the Ameritrade client conversion; client attrition, including timing and estimates; net flows; competitive position; client engagement and momentum; client cash realignment pace and trends; and deposit growth. 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, the risk that Ameritrade client transitions are not completed when expected or do not result in a positive client experience; client attrition and the impact is higher than expected; client use of the company’s advisory solutions and other products and services; general market conditions, including the level of interest rates and equity valuations; client cash allocation decisions; client sensitivity to rates; level of client assets, including cash balances; competitive pressures on pricing; 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; securities lending; margin loan balances; and new or changed legislation, regulation or regulatory expectations. Other important factors include the company’s ability to successfully implement integration strategies and plans; 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; monetize client assets; and other factors set forth in the company’s most recent reports on Form 10-K and Form 10-Q.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with 34.4 million active brokerage accounts, 2.5 million corporate retirement plan participants, 1.8 million banking accounts, and $8.24 trillion in client assets as of July 31, 2023. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, asset management, custody, and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiaries, Charles Schwab & Co., Inc., TD Ameritrade, Inc., and TD Ameritrade Clearing, Inc., (members SIPC, https://www.sipc.org), and their affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent, fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its primary banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at https://www.aboutschwab.com.

TD Ameritrade, Inc. and TD Ameritrade Clearing, Inc. are separate but affiliated companies and subsidiaries of TD Ameritrade Holding Corporation. TD Ameritrade Holding Corporation is a wholly owned subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank.

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