Strong client asset inflows and a quarter-over-quarter decline in trading revenue led to mixed third-quarter results for Charles Schwab Corp (SCHW.US).

Charles Schwab Corp (SCHW.US) released its third-quarter 2026 earnings before market open on October 15. Net revenue for the quarter was $7.171 billion, up 17% year-over-year and 1% quarter-over-quarter, a record high, but slightly below the market expectation of $7.18 billion; adjusted earnings per share were $1.69, up 29% year-over-year, above the market expectation of $1.65; on a GAAP basis, net income was $2.906 billion and diluted earnings per share were $1.62, up 29% year-over-year. In terms of revenue structure, net interest income was $3.476 billion, up 14% year-over-year and 4% quarter-over-quarter, with the net interest margin expanding quarter-over-quarter to 3.04% (2.88% in the year-ago period); asset management and administration fees were $1.913 billion, up 14% year-over-year, also a record; bank deposit account fees were $345 million, up 40% year-over-year; however, trading revenue of $1.158 billion, while up 16% year-over-year, fell 5% quarter-over-quarter, and its year-over-year growth rate was also below the market's prior expectation of 18.2%. Total expenses for the quarter (excluding interest) were $3.394 billion, up 9% year-over-year and roughly flat versus the prior quarter; the GAAP pre-tax margin was 52.7%, and the adjusted margin was 54.8%. On the client and asset side, client assets at quarter-end were $13.33 trillion, up 15% year-over-year; core net new assets were $190.4 billion, up 38% year-over-year, which the company said corresponds to an annualized growth rate of 5.8%, well above JPMorgan analyst Kenneth Worthington's October 9 estimate of about $160 billion. By business segment, Advisor Services, which serves independent investment advisors, had net new assets of $120.1 billion, up 47% year-over-year; Investor Services, which serves retail clients, had net new assets of $72.3 billion, up 37% year-over-year. A total of 1.243 million new brokerage accounts were opened during the quarter, bringing total client accounts to 48.6 million; margin balances rose 14% quarter-over-quarter to $187.9 billion, up 93% year-over-year, and average daily trades increased 44% to 10.7 million. On earnings quality, the company's adjusted figures excluded $151 million in pre-tax items ($141 million in amortization of acquired intangible assets and $10 million in merger integration costs), which accounted for the $0.07 difference between GAAP and adjusted earnings per share. On capital, the consolidated Tier 1 leverage ratio at quarter-end was 8.9% (7.0% on an adjusted basis including other comprehensive income); during the quarter the company repurchased 4.7 million shares for $500 million and declared a common stock dividend of $0.32 per shareunchanged from the prior quarter, after the company raised the dividend from $0.27 to $0.32 in the first quarter of this year. Client cash behavior is worth noting: transaction sweep cash at quarter-end was $492.8 billion, up $7.1 billion quarter-over-quarter, but client cash as a percentage of client assets fell to 8.9%, down 50 basis points year-over-year. During the quarter, the company launched the AI assistant Charley and partnered with Anthropic to provide its Claude for Financial Advisors to the independent investment advisors it serves.