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Press release from Business Wire

Schwab Reports Fourth Quarter Net Income Up 29% Year-Over-Year

<p> Sustained Client Focus and Financial Discipline Yielded Profitable Growth in 2012 </p> <p> December Core Net New Assets Total a Record $22.6 Billion </p>

Wednesday, January 16, 2013

Schwab Reports Fourth Quarter Net Income Up 29% Year-Over-Year08:45 EST Wednesday, January 16, 2013 SAN FRANCISCO (Business Wire) -- The Charles Schwab Corporation announced today that its net income for the fourth quarter of 2012 was $211 million, down 15% from $247 million for the third quarter of 2012, and up 29% from $163 million for the fourth quarter of 2011. Net income for the twelve months ended December 31, 2012 was $928 million, up 7% year-over-year. Schwab's 2012 results include an after-tax gain of approximately $44 million relating to the resolution of a vendor dispute and a non-recurring state tax benefit of approximately $20 million, which were recorded in the second and third quarters, respectively.   Three Months Ended     Twelve Months Ended       --December 31,-- % --December 31,-- % Financial Highlights   2012   2011   Change   2012   2011   Change   Net revenues (in millions) $ 1,215 $ 1,113 9 % $ 4,883 $ 4,691 4 % Net income (in millions) $ 211 $ 163 29 % $ 928 $ 864 7 % Diluted earnings per common share $ .15 $ .13 15 % $ .69 $ .70 (1 %) Pre-tax profit margin 28.3 % 22.6 % 29.7 % 29.7 % Return on average common stockholders' equity (annualized) 9 % 8 % 11 % 12 %     CEO and President Walt Bettinger commented, “Our ‘through clients' eyes' strategy helped build investor trust in Schwab and supported another year of outstanding growth for our company in 2012. Our individual client loyalty scores reached new highs during the year, and our client metrics ended strongly, with December core net new assets totaling a record $22.6 billion, 28% higher than the previous record set in March 2008. Core net new assets totaled $112.4 billion for 2012, up 37% over the prior year. We ended the year with a record $1.95 trillion in total client assets, up 16% over December 2011. We added 900,000 new brokerage accounts to our client base during 2012, and active brokerage accounts reached a record 8.8 million at year-end, up 3% year-over-year. In addition, we served 865,000 banking accounts and 1.6 million corporate retirement plan participants as of month-end December 2012, up 11% and 5%, respectively.” “By continuing to challenge the status quo in investing services we believe that both our clients and the company win,” Mr. Bettinger said. “Our progress in completing and delivering a number of significant innovations in our client service capabilities remained on track throughout 2012. For example, our new index-based 401(k) offering has 41 companies committed to participate and more than 200 actively considering enrollment; our new independent branches were open in 12 locations by year-end; and our expanded mobile and tablet solutions are already being utilized by over half a million clients.” Mr. Bettinger added, “Just as clients trust us to find a better way to serve them, our stockholders trust us to use resources effectively as we work to grow the company and its earnings. With environmental pressures continuing to slow our revenue progress in 2012, our enduring commitment to expense discipline enabled Schwab to allocate over $160 million to projects across our businesses and still deliver a 30% pre-tax profit margin for the year.” CFO Joe Martinetto noted, “In addition to successfully growing our client base in 2012, we made further progress in building non rate-sensitive sources of revenue, including an 11% increase in fees from rising balances in our proprietary advice solutions. As a result, despite further declines in interest rates and relatively muted investor trading activity, our full-year performance included increases in both net interest revenue and asset management and administration fees, and 4% overall revenue growth. Our fourth quarter results illustrate the company's improved momentum heading into 2013, with year-over-year revenue growth of 9% and a 29% increase in net income. Looking ahead, we believe that Schwab's financial story will remain driven by the three key themes of strong business growth, diversified revenue streams, and expense discipline.” Mr. Martinetto concluded, “Our work to further strengthen the company's balance sheet while maximizing its contribution to earnings power continued throughout 2012. During the fourth quarter, we acted to reduce the cost of outstanding long-term debt by redeeming the remaining $494 million of our 4.95% Senior Notes due in 2014, with the cost of the redemption offset by gains from the sale of selected investment portfolio securities. Our actions also included the issuance of $350 million of new Senior Notes with a coupon of 0.85% and a 2015 due date.” Business highlights for the fourth quarter (data as of quarter-end unless otherwise noted): Investor Services Net new accounts for the quarter totaled approximately 4,000, down 69% year-over-year. Total accounts reached 6.1 million as of December 31, 2012, up 7% year-over-year. Launched an enhanced On Investing® application for the iPad®, providing access to articles from Schwab's On Investing®magazine, Schwab's latest research, expert perspectives and investment guidance all in one place. Institutional Services Advisor Services Launched the Schwab Advisor Center® application for the iPad®, enabling advisors to view key client data such as balances, positions, and transactions while away from the office. Other Institutional Services Launched Compliance Solutions, an offering for corporate clients which combines the capabilities of both Designated Brokerage Services and recently acquired Compliance11 to create a comprehensive compliance and employee trade monitoring solution. Products and Infrastructure For Charles Schwab Bank: Balance sheet assets = $85.8 billion, up 30% year-over-year. Outstanding mortgage and home equity loans = $9.8 billion, up 8% year-over-year. First mortgage originations through its loan program during the quarter = $2.2 billion, a new record. Delinquency, nonaccrual, and loss reserve ratios for Schwab Bank's loan portfolio = 0.77%, 0.45% and 0.52%, respectively, at month-end December. Schwab Bank High Yield Investor Checking® accounts = 671,000, with $11.6 billion in balances. Client assets managed by Windhaven® totaled $13.6 billion, up 9% from the third quarter of 2012. Total assets under management in Schwab ETFs™ = $8.6 billion. Total assets in Schwab Managed Portfolios-ETFs = $2.4 billion. Completed the acquisition of ThomasPartners, Inc., a growth and dividend income-focused asset management firm with $2.4 billion in assets under management as of December 31, 2012. Launched the ETF Education Exchange™ (www.schwabetfeducationexchange.com), a new website designed to close the knowledge gap in ETFs by aggregating educational content, research and market insights from ETF industry leaders. Expanded client access to fixed income securities by adding new municipal bond issues from Piper Jaffray to Schwab's BondSource® platform. Launched a new Order and Execution Management System, which leverages optionsXpress' order routing capabilities to help create better execution opportunities for clients. iPad is a trademark of Apple Inc., registered in the U.S. and other countries. Supporting schedules are either attached or located at: www.aboutschwab.com/investor_relations/financial_reports Forward Looking Statements This press release contains forward looking statements relating to enrollment and participation in the company's new index-based 401(k) offering, growth of the company's business, revenues, earnings and expense discipline. Achievement of these expectations 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 enrollment rate in the company's index-based 401(k) offering, general market conditions, including the level of interest rates, equity valuations and trading activity; net interest margin; level of expenses; the company's ability to attract and retain clients and grow client assets/relationships; competitive pressures on rates and fees; the level of client assets, including cash balances; the company's ability to monetize client assets; the company's ability to develop and launch new products, services and capabilities in a timely and successful manner; capital needs and management; the impact of changes in market conditions on money market fund fee waivers, revenues, expenses and pre-tax margins; the effect of adverse developments in litigation or regulatory matters and the extent of any charges associated with legal matters; any adverse impact of financial reform legislation and related regulations; and other factors set forth in the company's Form 10-Q for the period ended September 30, 2012. About Charles Schwab The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with more than 300 offices and 8.8 million active brokerage accounts, 1.6 million corporate retirement plan participants, 865,000 banking accounts, and $1.95 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, www.sipc.org), and 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; compliance and trade monitoring solutions; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at www.schwab.com and www.aboutschwab.com.   THE CHARLES SCHWAB CORPORATION Consolidated Statements of Income (In millions, except per share amounts) (Unaudited)                     Three Months Ended   Twelve Months Ended December 31, December 31,     2012   2011   2012   2011     Net Revenues Asset management and administration fees $ 539 $ 458 $ 2,043 $ 1,928   Interest revenue 467 436 1,914 1,900 Interest expense   (34 )   (41 )   (150 )   (175 ) Net interest revenue 433 395 1,764 1,725   Trading revenue 202 233 868 927 Other 47 41 256 160 Provision for loan losses (2 ) (5 ) (16 ) (18 ) Net impairment losses on securities (1) (4 ) (9 ) (32 ) (31 )                   Total net revenues     1,215       1,113       4,883       4,691     Expenses Excluding Interest Compensation and benefits 450 442 1,803 1,732 Professional services 101 99 388 387 Occupancy and equipment 78 79 311 301 Advertising and market development 68 69 241 228 Communications 54 54 220 220 Depreciation and amortization 50 48 196 155 Class action litigation and regulatory reserve - - - 7 Other     70       70       274       269   Total expenses excluding interest     871       861       3,433       3,299     Income before taxes on income 344 252 1,450 1,392 Taxes on income     133       89       522       528     Net Income     211       163       928       864     Preferred stock dividends     22       -       45       -     Net Income Available to Common Stockholders   $ 189     $ 163     $ 883     $ 864     Weighted-Average Common Shares Outstanding — Diluted     1,278       1,271       1,275       1,229     Earnings Per Common Share — Basic $ .15 $ .13 $ .69 $ .70   Earnings Per Common Share — Diluted   $ .15     $ .13     $ .69     $ .70   (1)   Net impairment losses on securities include total other-than-temporary impairment losses of $0 million and $5 million, net of $(4) million and $(4) million recognized in other comprehensive income, for the three months ended December 31, 2012 and 2011, respectively. Net impairment losses on securities include total other-than-temporary impairment losses of $15 million and $18 million, net of $(17) million and $(13) million recognized in other comprehensive income, for the twelve months ended December 31, 2012 and 2011, respectively.   See Note to Consolidated Statements of Income, Financial and Operating Highlights, and Net Interest Revenue Information.     THE CHARLES SCHWAB CORPORATION Financial and Operating Highlights (Unaudited)                     Q4-12 % change 2012 2011 vs.   vs. Fourth Third Second First Fourth (In millions, except per share amounts and as noted) Q4-11 Q3-12 Quarter   Quarter   Quarter   Quarter   Quarter Net Revenues Asset management and administration fees 18 % 3 % $ 539 $ 524 $ 496 $ 484 $ 458 Net interest revenue 10 % (1 %) 433 439 458 434 395 Trading revenue (13 %) (1 %) 202 204 219 243 233 Other (1) 15 % 12 % 47 42 121 46 41 Provision for loan losses (60 %) (80 %) (2 ) (10 ) (4 ) - (5 ) Net impairment losses on securities (56 %) 33 %   (4 )     (3 )     (7 )     (18 )     (9 ) Total net revenues 9 % 2 %   1,215       1,196       1,283       1,189       1,113   Expenses Excluding Interest Compensation and benefits 2 % 2 % 450 442 446 465 442 Professional services 2 % 3 % 101 98 93 96 99 Occupancy and equipment (1 %) 1 % 78 77 80 76 79 Advertising and market development (1 %) 39 % 68 49 57 67 69 Communications - 2 % 54 53 55 58 54 Depreciation and amortization 4 % - 50 50 48 48 48 Other - 6 %   70       66       72       66       70   Total expenses excluding interest 1 % 4 %   871       835       851       876       861   Income before taxes on income 37 % (5 %) 344 361 432 313 252 Taxes on income (2) 49 % 17 %   133       114       157       118       89   Net Income 29 % (15 %) $ 211     $ 247     $ 275     $ 195     $ 163   Preferred stock dividends N/M 144 %   22       9       14       -       -   Net Income Available to Common Stockholders 16 % (21 %) $ 189     $ 238     $ 261     $ 195     $ 163   Basic earnings per common share 15 % (21 %) $ .15 $ .19 $ .20 $ .15 $ .13 Diluted earnings per common share 15 % (21 %) $ .15 $ .19 $ .20 $ .15 $ .13 Dividends declared per common share - - $ .06 $ .06 $ .06 $ .06 $ .06 Weighted-average common shares outstanding - diluted 1 % -   1,278       1,275       1,274       1,273       1,271   Performance Measures Pre-tax profit margin 28.3 % 30.2 % 33.7 % 26.3 % 22.6 % Return on average common stockholders' equity (annualized) (3)   9 %     11 %     13 %     10 %     8 % Financial Condition (at quarter end, in billions) Cash and investments segregated 10 % 14 % $ 28.5 $ 25.0 $ 22.7 $ 26.9 $ 26.0 Receivables from brokerage clients 22 % 13 % $ 13.5 $ 11.9 $ 12.0 $ 11.2 $ 11.1 Loans to banking clients 9 % 6 % $ 10.7 $ 10.1 $ 9.8 $ 9.8 $ 9.8 Total assets 23 % 14 % $ 133.6 $ 117.7 $ 111.8 $ 111.5 $ 108.6 Deposits from banking clients 30 % 15 % $ 79.4 $ 68.8 $ 66.3 $ 62.3 $ 60.9 Payables to brokerage clients 14 % 16 % $ 40.3 $ 34.8 $ 31.8 $ 36.4 $ 35.5 Long-term debt (20 %) (11 %) $ 1.6 $ 1.8 $ 2.0 $ 2.0 $ 2.0 Stockholders' equity (4) 25 % 1 % $ 9.6     $ 9.5     $ 9.1     $ 8.3     $ 7.7   Other Full-time equivalent employees (at quarter end, in thousands) (2 %) 1 % 13.8 13.6 13.7 14.0 14.1 Annualized net revenues per average full-time equivalent employee (in thousands) 12 % 1 % $ 355 $ 352 $ 372 $ 340 $ 316 Capital expenditures - cash purchases of equipment, office facilities, and property, net (in millions) (27 %) 21 % $ 40     $ 33     $ 31     $ 34     $ 55   Clients' Daily Average Trades (in thousands) (5) Revenue trades (6) (14 %) 2 % 265.7 261.5 285.2 318.4 307.4 Asset-based trades (7) 30 % 32 % 59.6 45.2 50.6 53.7 45.9 Other trades (8) 17 % 30 %   124.7       95.7       99.8       104.1       106.3   Total (2 %) 12 %   450.0       402.4       435.6       476.2       459.6   Average Revenue Per Revenue Trade(5,6) 2 % - $ 12.49     $ 12.44     $ 12.15     $ 12.35     $ 12.21     (1)   Includes a pre-tax gain of $70 million relating to a confidential resolution of a vendor dispute in the second quarter of 2012. (2) Includes a non-recurring state tax benefit of $20 million in the third quarter of 2012. (3) Return on average common stockholders' equity is calculated using net income available to common stockholders divided by average common stockholders' equity. (4) In the second quarter and first quarter of 2012, the Company issued non-cumulative perpetual preferred stock, Series B, for a total liquidation preference of $485 million and non-cumulative perpetual preferred stock, Series A, with a total liquidation preference of $400 million, respectively. (5) The fourth quarter of 2012 does not include two trading days due to weather-related market closures on October 29 and 30, 2012. (6) Includes all client trades that generate either commission revenue or revenue from principal markups (i.e., fixed income); also known as DART. (7) Includes eligible trades executed by clients who participate in one or more of the Company's asset-based pricing relationships. (8) Includes all commission free trades, including Schwab Mutual Fund OneSource® funds and ETFs, and other proprietary products. N/M Not meaningful.   See Note to Consolidated Statements of Income, Financial and Operating Highlights, and Net Interest Revenue Information.     THE CHARLES SCHWAB CORPORATION Net Interest Revenue Information (In millions) (Unaudited)         Three Months Ended Twelve Months Ended December 31, December 31, 2012   2011 2012   2011   Interest   Average   Interest   Average   Interest   Average   Interest   Average Average Revenue/ Yield/ Average Revenue/ Yield/ Average Revenue/ Yield/ Average Revenue/ Yield/     Balance   Expense   Rate Balance   Expense   Rate Balance   Expense   Rate Balance   Expense   Rate   Interest-earning assets: Cash and cash equivalents $ 8,287 $ 6 0.29 % $ 5,736 $ 4 0.28 % $ 7,130 $ 18 0.25 % $ 5,554 $ 13 0.23 % Cash and investments segregated 25,284 13 0.20 % 27,912 9 0.13 % 25,263 46 0.18 % 25,831 39 0.15 % Broker-related receivables (1) 366 - 0.11 % 203 - 0.04 % 351 - 0.04 % 310 - 0.05 % Receivables from brokerage clients 11,460 113 3.92 % 10,225 111 4.31 % 10,928 446 4.08 % 10,637 467 4.39 % Securities available for sale (2) 43,624 140 1.28 % 30,789 124 1.60 % 39,745 583 1.47 % 27,486 456 1.66 % Securities held to maturity 15,954 95 2.37 % 15,268 79 2.05 % 15,371 397 2.58 % 16,050 492 3.07 % Loans to banking clients 10,447 76 2.89 % 9,857 79 3.18 % 10,053 309 3.07 % 9,472 310 3.27 % Loans held for sale     -     -   -     74     1   3.99 %   18     1   4.12 %   65     3   4.62 % Total interest-earning assets     115,422     443   1.53 %   100,064     407   1.61 %   108,859     1,800   1.65 %   95,405     1,780   1.87 % Other interest revenue         24           29           114           120     Total interest-earning assets   $ 115,422   $ 467   1.61 % $ 100,064   $ 436   1.73 % $ 108,859   $ 1,914   1.76 % $ 95,405   $ 1,900   1.99 % Funding sources: Deposits from banking clients $ 71,411 $ 11 0.06 % $ 55,822 $ 13 0.09 % $ 65,546 $ 42 0.06 % $ 52,701 $ 62 0.12 % Payables to brokerage clients 30,368 1 0.01 % 32,079 1 0.01 % 29,831 3 0.01 % 29,992 3 0.01 % Long-term debt     1,815     22   4.82 %   2,002     27   5.35 %   1,934     103   5.33 %   2,004     108   5.39 % Total interest-bearing liabilities     103,594     34   0.13 %   89,903     41   0.18 %   97,311     148   0.15 %   84,697     173   0.20 % Non-interest-bearing funding sources 11,828 10,161 11,548 10,708 Other interest expense         -           -           2           2     Total funding sources   $ 115,422   $ 34   0.12 % $ 100,064   $ 41   0.16 % $ 108,859   $ 150   0.14 % $ 95,405   $ 175   0.18 % Net interest revenue       $433   1.49%     $395   1.57%     $1,764   1.62%     $1,725   1.81% (1)   Interest revenue was less than $500,000 in the period or periods presented. (2) Amounts have been calculated based on amortized cost.   See Note to Consolidated Statements of Income, Financial and Operating Highlights, and Net Interest Revenue Information.   Note to Consolidated Statements of Income, Financial and Operating Highlights,and Net Interest Revenue Information (Unaudited)   The Company The consolidated statements of income, financial and operating highlights, and net interest revenue information include The Charles Schwab Corporation (CSC) and its majority-owned subsidiaries (collectively referred to as the Company), including Charles Schwab & Co., Inc. and Charles Schwab Bank. Certain prior period amounts have been reclassified to conform to the 2012 presentation. The consolidated statements of income, financial and operating highlights, and net interest revenue information should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011.     THE CHARLES SCHWAB CORPORATION Asset Management and Administration Fees Information (In millions) (Unaudited)                                                     Three Months Ended Twelve Months Ended December 31, December 31, 2012   2011 2012   2011 Average     Average     Average     Average     Client Average Client Average Client Average Client Average     Assets   Revenue   Fee Assets   Revenue   Fee Assets   Revenue   Fee Assets   Revenue   Fee   Schwab money market funds before fee waivers $ 159,421 $ 228 0.57 % $ 157,863 $ 226 0.57 % $ 155,866 $ 891 0.57 % $ 153,478 $ 865 0.56 % Fee waivers         (142 )           (168 )           (587 )           (568 )     Schwab money market funds 159,421 86 0.21 % 157,863 58 0.15 % 155,866 304 0.20 % 153,478 297 0.19 % Equity and bond funds (1) 50,559 30 0.24 % 40,711 29 0.28 % 47,778 125 0.26 % 41,347 118 0.29 % Mutual Fund OneSource ®     221,338     179     0.32 %   200,779     160     0.32 %   216,564     680     0.31 %   210,907     680     0.32 % Total mutual funds (2)   $ 431,318     295     0.27 % $ 399,353     247     0.25 % $ 420,208     1,109     0.26 % $ 405,732     1,095     0.27 % Advice solutions (2) $ 125,589 153 0.48 % $ 108,048 130 0.48 % $ 119,850 580 0.48 % $ 109,703 522 0.48 % Other (3)         91             81             354             311       Total asset management and administration fees       $539           $458           $2,043           $1,928       (1)   Includes Schwab ETFs. (2) Advice solutions include separately managed accounts, customized personal advice for tailored portfolios, and specialized planning and full-time portfolio management offered through the Company's Schwab Private Client, Schwab Managed Portfolio and Managed Account Select programs. Advice solutions also includes Schwab Advisor Network, Schwab Advisor Source, and Windhaven. Average client assets for advice solutions may also include the asset balances contained in the three categories of mutual funds listed above. (3) Includes various asset based fees, such as trust fees, 401k record keeping fees, and mutual fund clearing and other service fees.   THE CHARLES SCHWAB CORPORATION Growth in Client Assets and Accounts (Unaudited)                 Q4-12 % Change 2012 2011 vs. vs. Fourth Third Second First Fourth (In billions, at quarter end, except as noted) Q4-11 Q3-12 Quarter   Quarter   Quarter   Quarter Quarter Assets in client accounts Schwab One®, other cash equivalents and deposits from banking clients 23 % 15 % $ 119.0 $ 103.7 $ 98.2 $ 98.8 $ 96.4 Proprietary funds (Schwab Funds® and Laudus Funds®): Money market funds 5 % 8 % 167.9 155.7 152.9 154.4 159.8 Equity and bond funds 30 % 2 %   49.6       48.4       45.3       45.8       38.2   Total proprietary funds 10 % 7 %   217.5       204.1       198.2       200.2       198.0   Mutual Fund Marketplace®(1) Mutual Fund OneSource® 12 % - 223.2 222.1 211.2 219.5 198.6 Mutual fund clearing services 53 % 18 % 159.1 134.4 126.4 127.0 104.2 Other third-party mutual funds 18 % 3 %   360.1       350.0       328.7       334.1       305.9   Total Mutual Fund Marketplace 22 % 5 %   742.4       706.5       666.3       680.6       608.7   Total mutual fund assets 19 % 5 %   959.9       910.6       864.5       880.8       806.7   Equity and other securities (1) 16 % - 702.4 705.5 670.4 685.0 607.9 Fixed income securities 3 % - 181.8 181.8 180.5 179.4 176.9 Margin loans outstanding 13 % 3 %   (11.5 )     (11.2 )     (11.2 )     (10.5 )     (10.2 ) Total client assets 16 % 3 % $1,951.6     $1,890.4     $1,802.4     $1,833.5     $1,677.7     Client assets by business Investor Services 11 % 1 % $ 775.4 $ 770.4 $ 737.0 $ 753.3 $ 697.9 Advisor Services 16 % 3 % 788.5 762.3 727.6 735.9 679.0 Other Institutional Services 29 % 8 %   387.7       357.7       337.8       344.3       300.8   Total client assets by business 16 % 3 % $1,951.6     $1,890.4     $1,802.4     $1,833.5     $1,677.7     Net growth in assets in client accounts (for the quarter ended) Net new assets Investor Services (2) 98 % 144 % $ 10.5 $ 4.3 $ 2.9 $ 5.9 $ 5.3 Advisor Services (3) 165 % 157 % 24.4 9.5 9.9 12.6 9.2 Other Institutional Services (4) N/M N/M   29.5       6.6       3.2       20.4       7.0   Total net new assets N/M N/M   64.4       20.4       16.0       38.9       21.5   Net market (losses) gains (104 %) (105 %)   (3.2 )     67.6       (47.1 )     116.9       79.8   Net growth (decline) (40 %) (30 %) $61.2     $88.0     $(31.1)   $155.8     $101.3     New brokerage accounts (in thousands, for the quarter ended) 19 % 22 % 241198221240203Clients (in thousands) Active Brokerage Accounts (5) 3 % 1 % 8,7878,7368,7208,6398,552 Banking Accounts 11 % 2 % 865844822801780 Corporate Retirement Plan Participants 5 % 2 %   1,571       1,547       1,524       1,516       1,492     (1)   Excludes all proprietary money market, equity, and bond funds. (2) Includes outflows of approximately $100 million as a result of the sale of Open E Cry, LLC, in the third quarter of 2012. (3) Includes inflows of approximately $900 million as a result of the acquisition of ThomasPartners, Inc., in the fourth quarter of 2012. (4) Includes inflows of $21.1 billion from mutual fund clearing services clients and outflows of $900 million related to a planned transfer from Corporate Brokerage Services in the fourth quarter of 2012. Includes outflows of $1.2 billion as a result of the closure of brokersXpress LLC in the third quarter of 2012. Includes inflows of $12.0 billion from a mutual fund clearing services client in the first quarter of 2012. (5) Removed approximately 30,000 due to escheatment and other factors in the fourth quarter of 2012. Reduced by 19,000 as a result of the sale of Open E Cry, LLC, and the closure of brokersXpress LLC in the third quarter of 2012. N/M Not meaningful Charles SchwabGreg Gable, 415-667-0473 (Media)Rich Fowler, 415-667-1841 (Investors/Analysts)