Core net new assets surged 31% YoY to $80.3 billion in Q2 2025, with new brokerage accounts increasing 11% to 1.1 million. Active brokerage accounts also grew 5% YoY to 37.5 million, demonstrating continued client trust and successful organic growth initiatives.

Assets receiving ongoing advisory services grew 15% YoY to $5.4 trillion, while bank loan balances increased 11% in the first six months of 2025, reaching $50.4 billion. This growth was primarily due to increased Pledged Asset Lines (PALs) and First Mortgages, highlighting successful diversification of revenue streams.

Schwab reduced total bank supplemental funding by $22.2 billion (44%) in the first six months of 2025. Concurrently, the company increased its common dividend by 8% to $0.27 per share and repurchased $1.8 billion in common and nonvoting common stock, signaling disciplined capital management and confidence in future cash flows.

Total expenses excluding interest increased a modest 4% YoY in Q2 2025 to $3.0 billion, despite ongoing strategic investments in business growth and client-serving capabilities. This indicates effective cost control and operational leverage, allowing for significant profit growth.

The company redeemed $2.5 billion of Series G preferred stock and repurchased $1.8 billion of common stock in the first six months of 2025, alongside an 8% increase in common dividends. This demonstrates management's commitment to returning excess capital and optimizing the capital structure.

Schwab's net interest revenue simulation shows a smaller impact from interest rate changes as of June 30, 2025, compared to December 31, 2024, primarily due to the use of cash flow hedges related to PALs. This highlights proactive use of derivatives to manage interest rate exposure.

While the SEC and FDIC withdrew several proposed rulemakings, including those on equity market structure and brokered deposits, significant pending regulatory matters remain, such as the DOL fiduciary rule and new capital requirements (AOCI inclusion, risk-weighted assets), which could impact future operations.

Schwab's EVE profile shows greater exposure to rates decreasing, and a decline in short-term interest rates could negatively impact the yield on investment and loan portfolios, compressing net interest margin. This highlights the ongoing sensitivity to interest rate fluctuations despite hedging efforts.

Despite a backdrop of tight monetary policy and geopolitical unrest, the credit quality of Schwab's bank loans portfolio, including First Mortgages and HELOCs, remains very strong. Projected loss rates were held constant compared to year-end 2024, and nonaccrual loans are minimal at $37 million.

Schwab continues to demonstrate robust market position, evidenced by a 31% YoY increase in core net new assets to $80.3 billion in Q2 2025 and an 11% rise in new brokerage accounts. This indicates continued client preference and successful attraction of new business, reinforcing its competitive advantage.

Bank deposit account fees increased 61% YoY in Q2 2025, driven by higher net yields, despite a 10% decrease in revenue per trade to $2.03. This suggests Schwab effectively manages its pricing strategies across different revenue streams to optimize overall performance and maintain competitive positioning.

Schwab's 'Through Clients' Eyes' strategy, focusing on transparency, value, and trust, continues to yield positive results, with assets receiving ongoing advisory services growing 15% YoY to $5.4 trillion. This approach fosters strong client relationships and asset retention, differentiating Schwab in a competitive market.

Total expenses excluding interest increased a modest 4% YoY in Q2 2025, reaching $3.0 billion, while total net revenues grew 25%. This indicates effective cost management and operational leverage, allowing for significant profit growth and improved efficiency.

Regulatory fees and assessments decreased 20% YoY in Q2 2025, primarily due to lower FDIC deposit insurance assessments, and depreciation and amortization declined 8% YoY. These reductions partially offset increases in compensation and professional services, contributing to overall expense management.

Expenses excluding interest as a percentage of average client assets remained stable at 0.12% for Q2 2025, consistent with the prior year. This suggests that Schwab's operations are scaling efficiently with its growing client asset base without a disproportionate increase in operational costs.

Capital expenditures rose in Q2 2025, primarily driven by higher investment in purchased software, information technology, and telecommunications equipment. This indicates a strategic focus on enhancing technological infrastructure to support business growth and client services.

Professional services expense increased 12% YoY in Q2 2025, partly due to 'increased utilization of technology and other professional services.' This suggests that technology is being leveraged to improve service delivery and support business expansion, contributing to overall efficiency.

Management explicitly states that expense increases reflect 'ongoing strategic investments to support growth of the business and enhance client-serving capabilities.' While not solely R&D, this encompasses technology-driven improvements aimed at delivering a better investing experience and maintaining competitive edge.

The Board authorized an 8% increase in the quarterly cash dividend to $0.27 per common share and executed $1.8 billion in share repurchases during the first six months of 2025, including a $1.5 billion repurchase from TD Bank. A new $20.0 billion share repurchase authorization further signals commitment to shareholder returns.

Schwab redeemed $2.5 billion of its Series G preferred stock in Q2 2025. This action, while contributing to a slight decrease in the consolidated Tier 1 Leverage Ratio to 9.8%, reflects a proactive approach to managing its capital stack and reducing preferred dividend obligations, aligning with long-term capital management objectives.

Return on average common stockholders' equity improved to 19% (annualized) in Q2 2025 from 14% in the prior year, and Return on Tangible Common Equity (ROTCE) reached 35%. These figures highlight the company's effective utilization of capital to generate strong earnings growth and shareholder value.

Schwab's banking subsidiary, CSB, continues to make significant Community Reinvestment Act (CRA) related investments, primarily in Low-Income Housing Tax Credit (LIHTC) initiatives. During the first six months of 2025, CSB recorded $94 million in amortization and recognized $126 million in tax credits and other tax benefits from these investments.

The company stated there have been no significant changes to its accounting policies or critical accounting estimates during the first six months of 2025. This indicates stable and consistent financial reporting practices, which is a positive aspect of corporate governance.

Schwab adopted ASU 2023-09, 'Income Taxes,' effective January 1, 2025, and is evaluating ASU 2024-03, 'Expense Disaggregation Disclosures,' for adoption in 2027. These updates aim to enhance transparency in financial reporting, aligning with evolving governance best practices.

Despite initial volatility, equity markets demonstrated strong performance in Q2 2025, with the S&P 500 rising 11% and NASDAQ Composite gaining 18%. The Federal Reserve maintained the target overnight rate at 4.50%, contributing to a more stable interest rate environment and sustained client engagement.

Management acknowledges 'geopolitical unrest amid a backdrop of elevated uncertainty relating to economic impacts of emerging trade policy,' which could influence market conditions and investor sentiment. This highlights a persistent external risk factor that could impact future performance.

Schwab benefited from continued growth in money market funds and increased demand for margin and bank lending, leading to a 14% increase in asset management and administration fees and an 11% rise in bank loan balances. These trends reflect a positive environment for wealth management and financial services.