Charles Schwab Q123 earnings are a mixed bag. First off, the positives. Net income rises by 14% from the year ago quarter to $1.6bn (Q122 $1.4bn).

In addition, Charles Schwab reports organic asset growth in excess of 7%. Meantime, revenue is ahead by 10% y-o-y with a GAAP pre-tax profit margin of 41.2%.

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“During the quarter, clients opened over 1 million new brokerage accounts. Clients entrusted us with $132bn of core net new assets,” said Charles Schwab co-chairman and CEO Walt Bettinger.

“These near-record inflows across both our primary businesses represents an annualised organic growth rate north of 7%. This helped push total client assets to $7.58trn at quarter-end.”

Schwab benefited from higher asset yields resulting from the Federal Reserve’s pronounced tightening programme. This helped expand net interest margin by 81 basis points from the first quarter of 2022. First quarter net interest revenue rises by 27% to $2.8bn.

Charles Schwab Q123 deposits down by 30% y-o-y

On the other hand, Charles Schwab total deposits are down sharply, both year-over-year and quarter-over-year. Schwab total deposits of $325.7bn are down 30% y-o-y and 11% from the end of the prior quarter.

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CEO Peter Crawford added: “In light of recent events within the US banking sector, and the resulting regulatory uncertainty, we have decided to pause our active buyback programme. That being said, opportunistic capital return is still an important component of our ‘through the cycle’ financial formula. Ultimately, we believe the current headwinds will prove transitory. We remain well positioned to deliver long-term value to our stockholders.”