research report · SCHW

Schwab Charles Corp

Johannes Vermeer, Woman Holding a Balance, c. 1664, detail · National Gallery of Art

Viridis’s deep research report, written Nov 6, 2026 from its quarterly report (10-Q for the quarter ended Sep 30, 2026, filed Nov 6, 2026). Written and checked with Anthropic’s Claude models.

your email, no card; what you get

business trajectory

Improving

better on balance: sales, margins, cash or competitive position

financial resilience

Strong

can meet its obligations and fund its plan for two years with money it can count on, with room

Judgments of the business from its filings, not of its shares: no valuation, no advice.

bottom line

Schwab's business strengthened in the third quarter of 2026. Revenue rose 17% to $7.17 billion, the pre-tax margin widened to 52.7% from 49.2%, and core net new assets reached a record $190.4 billion.

The weak spot is funding. Client receivables (mostly margin loans) grew 37% and bank loans 35%. Client cash held on the balance sheet (bank sweep deposits plus brokerage cash) grew only 6% and has fallen $4.2 billion since December. Schwab is therefore using more higher-cost funding sources. It has also run its own capital gauge to the top of its target, and the quarter's buyback fell to $500 million from $2.7 billion a year earlier.

Regulatory capital and liquidity remain far above requirements.

what changed this quarter

  • Results vs. the third quarter of 2025: revenue $7,171M (+17%), net income $2,906M (+23%), diluted EPS $1.62 (+29%).
  • Expense guidance raised: full-year 2026 GAAP expenses now expected up about 10–11%, including Forge and volume-related costs. The 10-K had guided 5.5–6.5% before Forge costs.
  • Financing and rates: $2.6B of senior notes issued August 12 at 5.108% and 5.655%. The Federal Reserve raised rates 25 basis points in September, and the 10-year Treasury yield rose 85 basis points in the quarter.
  • Buybacks: $500M, all in September. The adjusted Tier 1 leverage ratio stood at 7.0%.

in the full report

Its findings, each with the evidence, the strongest counterpoint and what would prove it wrong:

  • Growth is broad-based and margins are widening
  • Lending is outgrowing client cash, and costlier money fills the gap
  • Part of the growth rests on a long/short product Schwab is rationing
  • Capital, not demand, now limits shareholder returns

Then its finances, the quality of its earnings, its management, the case for and against, and what to watch, its claims cited to the filings and checked against them.

read it whole

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