Analyst Note
| Michael Wong, CFA, CPA |Wide-moat Charles Schwab booked record net income in the third quarter of 2021, as asset-related fees climbed while expenses remained well managed. The company reported net income of $1.41 billion, or $0.74 per diluted share, on $4.57 billion of net revenue. Net income was 1% higher than the prior record of $1.39 billion in the first quarter of 2021. Net revenue in the quarter was 3% lower than the first quarter of 2021 peak, as a 6% increase in net interest income to $2.03 billion and an 8% increase in asset management fees to $1.1 billion weren’t enough to offset a 21% decline in trading revenue to $964 million. We don’t anticipate making a material change to our $70 fair value estimate for Charles Schwab.