2023-04-17 08:44:36 ET
Charles Schwab ( NYSE: SCHW ) posted mixed first-quarter results Monday as rising interest rates helped expand the brokerage giant's net interest income from a year ago, all while bank deposits and trading revenue both slid. SCHW gained 1.2% in premarket trading.
"While bank deposits shrank by 11% versus the prior year-end as clients realigned their allocations across our expansive selection of transaction and investment cash solutions, we observed a decline in the average daily pace of bank sweep movements from January to March – even when allowing for a temporary spike in activity at the onset of the banking system turmoil," said CFO Peter Crawford.
He added that the company has decided to pause its active share buyback program "in light of recent events within the U.S. banking sector, and the resulting regulatory uncertainty."
Q1 adjusted EPS of $0.93 , topping the average analyst estimate of $0.90, fell from $1.07 in Q4 2022 and climbed from $0.77 in the year-ago quarter.
Net revenue of $5.12B, falling short of the $5.13B consensus, dipped from $5.50B in Q4 and rose from $4.67B in Q1 of last year.
Net interest revenue came in at $2.77B for the three months ended March 31, down from $3.03B in the prior quarter and up from $2.18B in Q1 2022.
Asset management and administration fees were $1.12B compared with $1.05B in Q4 and $1.07B a year before.
Trading revenue of $892M vs. $895M in Q4 and $963M in Q1 2022.
Bank deposit account balances of $106.5B dropped 16% from Q4 and 31% from the year-earlier period. Meantime, money market funds of $357.8B surged 28% from Q4 and 150% from a year ago.
Total expenses, excluding interest, advanced to $3.01B from $2.90B in Q4 and from $2.83B in Q1 2022.
Schwab ( SCHW ) will hold its Spring Business Update for institutional investors at 9:00 a.m. ET.
Earlier, Charles Schwab Non-GAAP EPS of $0.93 beats by $0.03, revenue of $5.12B misses by $10M .
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Charles Schwab turns in stronger than expected Q1 earnings, pauses buyback program