Charles Schwab

Charles Schwab runs a large brokerage, banking, and wealth management business. Clients hold cash and investments at Schwab. Schwab earns net interest revenue on client cash that it holds on its own balance sheet. It invests this cash in securities and lends it as margin loans and bank loans.

Schwab sweeps more client cash to TD Bank under an insured deposit account agreement and earns a fee on these deposits. Schwab also earns asset-based fees on managed portfolios, mutual funds, and advisory accounts, plus trading revenue. In 2025, net interest revenue was about half of total net revenues.

Schwab still trades as if client cash could sort back into money market funds and other higher-yielding places. That is the fear that hit the whole brokerage industry in 2023. That fear has kept fading. Net interest margin rose to 3.04% in the third quarter of 2026, from 2.88% a year earlier.

Core net new assets reached a record $190.4 billion in that quarter, 38% more than a year earlier. But some client cash still moves. Total sweep cash grew in the third quarter only because of cash tied to client long/short strategies, and bank deposits fell. On October 15, 2026, management also said that 2026 revenue growth and net interest margin will be toward the low end of the ranges it gave in July.

A second worry came in September 2026. Schwab stock fell about 6% in one day on fear that AI assistants built into rival apps, such as Meta's new Muse, could weaken the loyalty that keeps clients on one brokerage's platform. For the first fear to keep fading, Schwab needs net interest margin and net new asset growth to keep showing up in its results, and sweep cash outside long/short strategies to stop falling. For the AI-loyalty fear to fade, Schwab needs to show that its own AI tools keep clients and advisors on its platform.

These tools include Charley, its assistant for retail clients, and a partnership that brings Claude to more than 16,000 independent advisor firms. The Federal Reserve raised rates in September 2026, and its officials expect one more increase this year. Higher rates help the yield on Schwab's assets, but they also make money market funds more attractive than sweep cash. The next test is the fourth quarter report, expected in mid-January 2027, when Schwab also plans to give its 2027 outlook.

If both trends keep confirming in the next two to three quarters of earnings, the market's caution looks overdone and the gap can close. If deposit competition or client movement to AI-native tools shows up instead, the discount could persist into 2027.

1. Oct 15, 2026Passed

   Q3 2026 results and fall business update: margin, new assets, client cashNet interest margin at or above the Q2 level of 3.00% and more core net new assets than a year earlier pass; a lower margin or client cash leaving sweep accounts fails.Outcome: Net interest margin rose to 3.04%, core net new assets rose 38% to a record $190.4 billion, and total sweep cash grew $7.1 billion, although only because of cash tied to client long/short strategies.
2. Q4 2026 · est.Due this quarter

   Charley AI assistant rollout and advisor AI toolsClient asset and account growth that holds up while Charley and the Claude advisor tools roll out pass; slower net new assets or account closures linked to outside AI apps fail.
3. Jan 15, 2027 · est.Pending

   Q4 2026 results and 2027 outlookA Q4 net interest margin about 0.25 to 0.30 percentage points above a year earlier, a 2027 outlook with a higher margin, and the adjusted Tier 1 leverage ratio near 7% while buybacks continue pass; a lower margin outlook, falling sweep cash outside long/short strategies, or a pause in buybacks fails.

Every passed and failed checkpoint across all picks

• October 16, 2026Schwab stock fell about 5% in the two trading days after the Q3 report and the more careful full-year guidance.
• October 15, 2026Schwab reported Q3 2026 results. Total net revenue was a record $7.17 billion, up 17% from a year earlier. Diluted earnings per share were $1.62, and $1.69 adjusted, both up 29%. Net interest margin rose to 3.04%, from 3.00% in Q2. Core net new assets were a record $190.4 billion, up 38%. Total client assets were $13.33 trillion at September 30, up 15%. Schwab bought back 4.7 million shares for $0.5 billion in the quarter.
• October 15, 2026Transactional sweep cash rose $7.1 billion in Q3 2026, to $492.8 billion at September 30. Short credits from client long/short strategies rose $19.6 billion in the same quarter, so other sweep cash fell. Bank deposits fell to $244.1 billion, from $249.7 billion at June 30.

Last earnings

October 15, 2026 (8-K on sec.gov)

Next earnings

Expected about January 15, 2027. The company has not confirmed the date.

• 10-QQuarterly report for the period ended Sep 30, 2026Filed November 6, 2026 · schw-20260930
• 8-KEarnings releaseFiled October 15, 2026 · Press release and exhibits
• 8-KOther company newsFiled August 12, 2026 · Read it on sec.gov
• 10-QQuarterly report for the period ended Jun 30, 2026Filed August 7, 2026 · schw-20260630
• 8-KEarnings releaseFiled July 21, 2026 · Press release and exhibits
• 8-KOther company newsFiled June 29, 2026 · Read it on sec.gov
• 8-KChange to shareholder rights or bylawsFiled June 1, 2026 · Read it on sec.gov
• 8-KShareholder vote resultsFiled May 22, 2026 · Read it on sec.gov
• 8-KOther company newsFiled May 21, 2026 · Read it on sec.gov
• 10-QQuarterly report for the period ended Mar 31, 2026Filed May 8, 2026 · schw-20260331

Every filing on SEC EDGAR (CIK 316709)

• Schwab holds a large fixed-income investment portfolio, built up when deposits were high. If the Federal Reserve cuts interest rates faster than expected, yields on this portfolio reprice down before deposit costs fall as much, which can compress net interest margin. The Fed raised rates 0.25 points in September 2026, and the median projection of its officials keeps rates near that level through 2027. A change in this outlook can bring the risk back.
• A large share of client cash sits in low-yielding bank sweep accounts. If money market fund yields pull further ahead of sweep rates, clients can move cash out of sweep and into higher-yielding funds. This lowers the low-cost deposit base Schwab lends against. Higher Fed rates make this gap larger. In Q3 2026, sweep cash outside client long/short strategies fell by about $12.5 billion, and bank deposits fell by $5.6 billion.
• Schwab now competes directly with other platforms on commission-free trading, crypto trading, and cash yields. Its own crypto trading service only launched in 2026, so it is unproven against established crypto-focused competitors.
• AI assistants built into other companies' apps, such as Meta's Muse, could reduce the friction that keeps clients using a single brokerage's app and tools. The market sold Schwab stock on this fear in September 2026, even with no confirmed change to Schwab's own client or asset numbers.

Schwab is a savings and loan holding company. Client money, not borrowed money, funds most of its $520.7 billion balance sheet. Read more

Yield at the current rate

1.4% (current annual rate, at today’s price)

Dividend yield

1.3% (last 12 months, at today’s price of $92.78)

Paid per share

$1.23 in the last 12 months (4 payments)

Current annual rate

$1.28 ($0.32 × 4 a year)

Payout ratio

23% of the last fiscal year’s earnings (the year that ended December 31, 2025)

Latest ex-dividend date

August 14, 2026, $0.32 per share

Dividends per share by year

From 2020 to 2025, the dividend grew by about 8.4% a year. From 2015 to 2025, the dividend grew by about 16.2% a year.

Source: company filings and market data, read on November 13, 2026. The ex-dividend date is the first day a buyer no longer gets the next payment.