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SHORT INTEREST -579,799
SETTLEMENT DATE SHORT INTEREST AVG. DAILY SHARE VOLUME DAYS TO COVER
04/14/2023 3,041,233 531,646 5.72041
03/31/2023 3,577,032 884,281 4.04513
03/15/2023 3,295,918 756,464 4.357006
02/28/2023 2,504,705 681,965 3.672776
02/15/2023 2,718,007 571,653 4.754645
01/31/2023 3,122,028 428,966 7.278031
01/13/2023 3,200,333 485,549 6.591164
12/30/2022 3,476,840 774,042 4.491798
12/15/2022 3,193,026 392,558 8.133896
11/30/2022 3,072,937 331,143 9.279788
11/15/2022 2,927,794 674,142 4.342993
10/31/2022 3,386,460 852,573 3.972047
10/14/2022 3,003,312 540,992 5.551491
09/30/2022 3,277,284 731,894 4.477812
09/15/2022 3,898,919 555,402 7.019995
08/31/2022 3,890,919 419,363 9.278165
08/15/2022 4,077,778 497,133 8.20259
07/29/2022 4,082,714 637,557 6.403685
07/15/2022 5,921,536 488,568 12.120188
06/30/2022 4,745,754 920,704 5.154484
06/15/2022 4,193,548 709,737 5.908594
05/31/2022 4,585,921 774,856 5.918417
05/13/2022 3,974,973 1,223,575 3.248655
04/29/2022 3,638,605 934,048 3.895522
04/14/2022 3,257,981 1,270,020 2.565299
GLTA-Ts
I give up, to many before dinner cocktails lolol
GLTA-Ts
Good morning people , tradein you do have a point their in that post
Anyhow it’s to nice outside to be inside, time to plant some herbs
GoGooooooCOOP
Have a great day people-Ts
Silly: And your not making monies on this elevator ride, geeee I been on this local and express for what seems like eons now and lovein the ride, and will soon will exit EOY. and will always keep an eye on the ride
GogoooooCOOP
GLTA-Ts
Good morning people, Good morning people, Vodka, Bella, ciao, enjoy, Have a great weekend people, It’s just to nice outside to be inside,
GoGooooooCOOP
TGIF Babeeeee Ts wink smile
Good morning people, Vodka, Bella, ciao, enjoy, Have a great weekend people, It’s just to nice outside to be inside,
GoGooooooCOOP
TGIF Babeeeee Ts
Good morning people , FYI.The board leaders for yesterday was Picks with 15 posts and Lo with 10 posts for a total of 25 posts Oh well , considering the markets yesterday COOP didn’t do bad at all, hitting the gym early today ,the boss has me doing some repotting plant outside ,as it’s to nice outside to be inside
GoGooooooCOOP
Have a great day people, life issss good
GLTA-Ts
Hey Ole Cactus, that lurker is trying to put the boot to you where the needles don’t grow “ go ride ur bike”
Edit
Picks is also trying to fit his boot up their too heheheh
GoGooooooCOOP
GLTA-Ts
Seized assets from Silicon Valley Bank and Signature Bank are fetching 85 to 90 cents on the dollar
https://www.marketwatch.com/story/blackrock-starts-selling-100-billion-pile-of-fdic-assets-seized-by-silicon-valley-bank-signature-bank-ef0c7e43
Thanxs goes to LGHO on BP.
GoGooooooCOOP
GLTA-Ts
Good morning people, I guess 9/10 posts a day is considered lurking by some and the get over it and move on with ur life might be considered a lurkers creed ? lololol
Anyhow waiting and watching COOP for or IFFEN there’s any more room to play where I would feel comfortable at .
GoGooooooCOOP
Have a great day people GLTA-Ts
A top investor in Charles Schwab sold its entire $1.4 billion stake as the brokerage fell victim to the banking turmoil
Apr 14, 2023, 8:12 AM
https://markets.businessinsider.com/news/stocks/charles-schwab-investor-sold-entire-billion-stake-banking-turmoil-2023-4
A top investor in Charles Schwab dumped its entire $1.4 billion stake as the brokerage fell victim to turmoil in the banking sector, according to the Financial Times.
Florida-based GQG Partners was among Schwab's top 15 shareholders until fears of the bank's unrealized losses on its bond portfolio alongside a run on deposits took hold.
"We didn't see an existential risk but they were caught up in the sentiment around banks," Mark Barker, head of international at GQG Partners, told the Financial Times.
Banking jitters kicked off following the collapse of Silicon Valley Bank and Signature Bank, sparking a wave of mass withdrawals as depositors rushed to money-market funds they perceived a safer investment than uninsured deposits.
With all the inflows to money-market funds Charles Schwab is losing deposits revenue," said Barker.
Schwab was among one of the US lenders hit the hardest amid the turmoil, with the bank's share price dropping more than 30% since the start of March. Confidence in the bank also took a beating after Schwab revealed it has nearly $28 billion in unrealised losses across its held-to-maturity and available-for-sale bond portfolio.
Like SVB, Charles Schwab pumped billions of dollars into US Treasury securities at a time when interest rates were near-zero levels.
Given rates have surged over the past year thanks to the Federal Reserve's anti-inflation fight, those bonds have declined in value, and should the bank need to sell them, it could realize huge losses that may ultimately wipe out shareholders' equity.
With all the inflows to money-market funds Charles Schwab is losing deposits revenue," said Barker.
Schwab was among one of the US lenders hit the hardest amid the turmoil, with the bank's share price dropping more than 30% since the start of March. Confidence in the bank also took a beating after Schwab revealed it has nearly $28 billion in unrealised losses across its held-to-maturity and available-for-sale bond portfolio.
Despite last month's turbulence, Schwab reported that it logged the second-highest inflows in March in bank history, bringing in more than $54 billion of core net new client assets.
GoGooooooCOOP
GLTA-Ts
Good morning people, just doing a drivebye to do some flash reading incase as I still own my banked shs , I noticed another day of posting by the LURKER anyhow everyone have a great day
GoGooooooCOOP
GLTA-Ts
Good morning people, jhd my banked shs are a 100% free/ no cost (well time, but I like playing the game)I will sell 95% end of year and be very happy , yeah it might go wherever but in how many more YEARS,and they need SOMETHING AND IFFEN NUTTEN, I still remember NSM ‘s history, but also never fall in love with a stock IMHO
GOGOOOOOOCOOP
ITS TO NICE OUTSIDE TO BE INSIDE
GLTA-Ts
jhd , there always been monies to be made (and still)here on COOP avenue, , except people chose to throw nonsense at each other, I prefer to bank shs and will unload all freebies at whatever pps EOY. Some posters say they don’t own any shs or they sold all for a good profit and yet they are posting here for whatever, ok sure and foreget that there is still more to be made with COOP the gift that keeps on giving even in times like these in the markets , I guess I’m not getting Lol
GoGooooooCOOP
GLTA-Ts
I luvvvvvv COOP stock, the stock that JUST keeps on giving , just banked more freebies no cold meds in me this time lol , now I’m just
Good morning people, Xoom “he’s just lurking these days” lol.
GoGooooooCOOP
GLTA-Ts
Good morning people, I hope allll had a great Easter with family and friends, I need another 1/2 block on COOP Ave.,will be LURKING today lol as it’s to nice outside to be inside
GoGooooooCOOP
GLTA-Ts
Hi Split, SIPC coverage insures people for up to $500000 in cash and securities per account, NOW IFFEN THEY CAN HOLD 500, of mine only
IFFEN,
GOGOOOOOOCOOP
GLTA-Ts
Good morning people : Charles Schwab: Off-The-Charts Liquidity
Apr. 06, 2023 3:44 AM ETThe https://seekingalpha.com/article/4592577-charles-schwab-stock-off-the-charts-liquidity-hold
Recently investors sold off Charles Schwab yet again as bank contagion fears resurfaced.
Oil spiked after OPEC cut output, leading to fears that the Fed would have to start raising rates again.
That would cause even more losses on Schwab's securities.
It's true that Schwab's unrealized losses whittle its book value down to a smaller than reported figure, but the bank can cover potential withdrawals.
Schwab's liquid, uncommitted assets as a percentage of deposits are actually higher than for many other banks.
Charles Schwab (NYSE:SCHW) stock took a dip on Tuesday as economic jitters re-kindled investors' fears about bank stocks. The stock fell 3% in just one day of trading. Although no material news about Schwab was released on Tuesday, it may have gotten caught up in renewed interest rate worries. Recently, OPEC decided to cut output, which caused oil futures to spike 5% in a single day. This naturally got investors worried about more rate hikes, which in Schwab's case would be troubling, as it is sitting on a massive amount of unrealized securities losses. It reports $12.3 billion in losses in its financial statements, an amount that gets counted as equity. It also discloses $15 billion in losses on held to maturity securities; those aren't considered part of equity, but do affect liquidity. Further, Schwab has been reclassifying securities from available for sale ("AFS") to held to maturity ("HFS") in recent quarters, a behavior typical of the banks that failed in March. Basically, Schwab actually has $27.3 billion in losses rather than the claimed $12.3 billion. The AFS securities are already reported at fair value, but the HTM losses aren't. If those securities were reported at fair value they'd reduce Schwab's $36 billion in shareholder's equity to $21 billion.
These figures all look pretty alarming. However, the way the "unrealized losses" discourse played out in the media after Silicon Valley Bank collapsed was a little misleading. Media outlets like Bloomberg endlessly highlighted the banks' $620 billion in unrealized losses after SVB failed, because that bank's unrealized losses contributed to its collapse. Basically, when a bank run happens, you have to start selling securities, because your cash position gets whittled down to $0. Once you start selling, unrealized losses transform into realized losses. If your unrealized loss is big enough, it can result in you failing to pay off your depositors.
That's all well and good, but unrealized losses as a single factor, considered in themselves, do not cause banks to fail. A large enough unrealized loss can certainly cause book value to decrease, but it won't necessarily cause a failure. What matters is the amount of market value left AFTER the unrealized losses are subtracted. As it turns out, Schwab's liquidity after unrealized losses is about 67% of the value of its liabilities. So, it would take a truly colossal bank run for Schwab to go broke. That fact in itself does not make Schwab a buy, but this stock certainly doesn't look like an obvious sell either.
Charles Schwab - Liquidity Covers 67% of the Liabilities
Earlier I mentioned that Charles Schwab's liquid assets are 67% of liabilities, so I will now explain how I arrived at that figure.
On Charles Schwab's balance sheet it reports $147.8 billion worth of AFS securities and $173 billion in HTM securities, which is enough to cover almost all of the deposits. However, if you scroll a little further down the company's 10-K, you notice that there are significant amounts of unrealized losses in both categories of securities. The AFS securities are already reported at fair value, so what we see on the balance sheet there reflects economic reality. That's not the case with the HTM securities. Those are actually worth $158 billion, or $12.3 billion less than what's reported on the balance sheet.
It is true that Charles Schwab is sitting on large amounts of unrealized securities losses. However, If you look at the amount of liquid securities it has, and compare them to deposits, you quickly notice that the company's liquidity is robust.
So, Schwab has $346.1 billion in very liquid assets if everything is adjusted down to fair value. Against this, we have $515.1 billion in liabilities. So, Schwab's liquidity covers 67% of all liabilities. It also covers a whopping 94.6% of deposits, which is an unheard of figure for more conventional banks. As I wrote in a recent article on Bank of America (BAC), 50% coverage is pretty good for such banks.
The reason why I refer to liquidity as a percentage of total liabilities in Schwab's case is because it is primarily a brokerage. It has large sums of payables to brokerage clients that could cause runs on its liquidity-most of the big banks have these as well, but they're smaller in proportion to total liabilities. I think it's best to look at Schwab in terms of total liabilities instead of deposits for this reason. Certainly, it's the most prudent approach: if you simply compared Schwab's liquidity to its deposits you'd conclude it's swimming in liquidity and nearly "unsinkable," an overly euphoric conclusion that ignores earnings related risks and the ever-shrinking book value.
I noticed the lurker issss not lurking much lololol
GoGooooooCOOP
GLTA-Ts
Is 7 or 8 posts before dinner still be considered lurking lololol
I still need another block on COOP AVE.
GoGooooooCOOP
GLTA-Ts
Hi allllll I’m mostly lurking these days lololol
Ts
Edit :wrong stock lolol that’s what’s happens when you come back from the Docs and taken cold meds heheh
GoGooooooCOOP
Good morning people, Looking like another good day in the neighborhood on COOP avenue I need another block step by step
GoGooooooCOOP
Life isssss good
GLTA-Ts
Good morning people ,Lo U said/ posted “I really just lurk lately” So much for the lurking mannn you live for this message board ,otherwise what the heck would you do with alllllll your time, morning, noon and late night lol
GoGooooooCOOP
GLTA-Ts
Low ,one more thanggggg
Update Schwab Hit by Worst Month Since 1987 Amid Cash Sorting Woes
Stock tumbled 33% in March, wiping out $47 billion in value
So-called cash sorting has weighed on Schwab’s earnings power
https://ca.finance.yahoo.com/news/schwab-eyes-worst-month-since-154652896.html
Bloomberg) -- Charles Schwab Corp.’s worst month in more than 35 years has sparked a debate among analysts as to whether the brokerage giant has been unfairly punished by investors amid growing fears about the US banking sector.
There are times in markets where logic is thrown out the window and emotion takes over and I feel like this is one of those moments with Schwab,” said Adam Sarhan, founder of 50 Park Investments.
He added that the rout is a “historic buying opportunity” for the financials sector as a whole and something not seen since 2008. Other brokerage stocks were also lower, just not as much as Schwab. Interactive Brokers Group Inc. for instance, fell about 4% in March.
Schwab is facing a pair of headwinds. Its banking arm, one of the largest in the US, is dealing with some of the same issues that plagued the now-defunct Silicon Valley Bank. Like many of it peers, Schwab invested in long-dated bonds during a period of historically low interest rates and is stuck with losses on those investments as the Federal Reserve has increased interest rates over the last year.
Read more: US Banks Have $620 Billion of Unrealized Losses on Their Books
Higher rates have also created another headache for Schwab, customers seeking better returns are moving their cash deposits into higher yielding assets like money-market funds within the brokerage or elsewhere. That process — often referred to as cash sorting — has put pressure on the company’s profit outlook.
“As cash sorting occurs, that effectively hurts earnings power,” said JMP Securities analyst Devin Ryan. He added that Schwab is now paying well over 4% for deposits that it was once paying just about 0.5% for.
Read more: Flight to Money Funds Is Adding to the Strains on Small Banks
The pace at which customers are shifting their cash at Schwab spurred Morgan Stanley analyst Michael Cyprys to cut his rating on the stock for the first time since he began covering the brokerage company in 2016. Still, Bank of America’s Craig Siegenthaler, who downgraded Schwab in January, remains the only analyst with a sell-equivalent rating on the stock.
Schwab is set to report its first-quarter results before the open of trading on April 17. Its shares have fallen at least 1.5% during each of its last five sessions following its earnings release.
Buying opportunities like this are very clear in hindsight, according to Sarhan. Still, “having the courage in real time is very difficult,” he said.
Update Schwab Hit by Worst Month Since 1987 Amid Cash Sorting Woes
Stock tumbled 33% in March, wiping out $47 billion in value
So-called cash sorting has weighed on Schwab’s earnings power
https://ca.finance.yahoo.com/news/schwab-eyes-worst-month-since-154652896.html
Bloomberg) -- Charles Schwab Corp.’s worst month in more than 35 years has sparked a debate among analysts as to whether the brokerage giant has been unfairly punished by investors amid growing fears about the US banking sector.
There are times in markets where logic is thrown out the window and emotion takes over and I feel like this is one of those moments with Schwab,” said Adam Sarhan, founder of 50 Park Investments.
He added that the rout is a “historic buying opportunity” for the financials sector as a whole and something not seen since 2008. Other brokerage stocks were also lower, just not as much as Schwab. Interactive Brokers Group Inc. for instance, fell about 4% in March.
Schwab is facing a pair of headwinds. Its banking arm, one of the largest in the US, is dealing with some of the same issues that plagued the now-defunct Silicon Valley Bank. Like many of it peers, Schwab invested in long-dated bonds during a period of historically low interest rates and is stuck with losses on those investments as the Federal Reserve has increased interest rates over the last year.
Read more: US Banks Have $620 Billion of Unrealized Losses on Their Books
Higher rates have also created another headache for Schwab, customers seeking better returns are moving their cash deposits into higher yielding assets like money-market funds within the brokerage or elsewhere. That process — often referred to as cash sorting — has put pressure on the company’s profit outlook.
“As cash sorting occurs, that effectively hurts earnings power,” said JMP Securities analyst Devin Ryan. He added that Schwab is now paying well over 4% for deposits that it was once paying just about 0.5% for.
Read more: Flight to Money Funds Is Adding to the Strains on Small Banks
The pace at which customers are shifting their cash at Schwab spurred Morgan Stanley analyst Michael Cyprys to cut his rating on the stock for the first time since he began covering the brokerage company in 2016. Still, Bank of America’s Craig Siegenthaler, who downgraded Schwab in January, remains the only analyst with a sell-equivalent rating on the stock.
Schwab is set to report its first-quarter results before the open of trading on April 17. Its shares have fallen at least 1.5% during each of its last five sessions following its earnings release.
Buying opportunities like this are very clear in hindsight, according to Sarhan. Still, “having the courage in real time is very difficult,” he said.
Ts
Duhhhhhh Yikes lol. When you purchase a CD from a bank, you are entering into a contract with the bank. If the bank fails, the FDIC will reimburse you up to the FDIC insurance limit of $250,000 per depositor per bank. Even if you have multiple accounts at the same bank totaling more than $250,000, the FDIC will only insure your accounts up to this limit.
4.50/5.00 5 yr lock-in no gamble lol
You don’t buy anything do ya , ur a yell from the back of the bus n that’s ok ,no skin off my back , you buy when it’s low or you or you average down and wait
Now come back in 12 mos ok , now go play somewhere else
Good morning people, jhd when you consider the rest of the markets decline percentage wise COOP isssss really not bad , EX. BAC down 40% -/+ and this decline was before the few banks prob ,soooo it’s just time if ur not selling, as for me I’m here till end of year wherever it goes it’s alllll profit more or less of course more is always better lol AIMHO.
GoGooooooCOOP
GLTA-Ts
All & all not a bad day in th neighborhood on COOP Ave. , I still need a few more blocks for more freebies
TGIF BABEEEEEE
Have a great weekend people -Ts
Low I’ll take no risk 4.74 % on 100, for 5 to 7 year’s and for cash flow only on interest at my age ,no gamble , just for piss away fum ( oh and UTG seems to be a cheap closed end fund div cheap at the price oh and only a fool would not buy BAC at these pps , fool
Ts
Come on ole cactus , come on , more of the same is not more, it’s the same ole more , you know like sub of the merger sub of the parent ,it’s the total eclipse of ur cold heart lolololol same ole , same ole yada, yada, yada heheh
GoGooooooCOOP
It to nice outside to be inside
GLTA-Ts
Seems to do the same for ur group , as an outsider it’s fun to watch those who complain , complain lol
GoGooooooCOOP
GLTA-Ts
Berkshire Hathaway's regulatory filings don't reveal the full story.
Which stocks does Warren Buffett like the most? Obviously, Berkshire Hathaway (BRK.A 0.68%) (BRK.B 0.99%) deserves to be at the top of the list. Most of Buffett's personal net worth is invested in the company.
There's also a good case to be made that Apple (AAPL 1.98%), Bank of America (BAC 1.96%), and Chevron (CVX 0.86%) should be on the list of Buffett's favorite stocks. If you look at Berkshire's regulatory filings, they rank as the conglomerate's top three holdings. But those filings don't tell the full story.
Good morning people,FYI. Morgan Stanley Downgrades Charles Schwab for First Time, Slashes Target
Thu, March 30, 2023 at 4:53 AM EDT https://finance.yahoo.com/news/morgan-stanley-downgrades-charles-schwab-085307913.html
Bloomberg) -- Charles Schwab Corp.’s clients are pulling cash out of the firm’s low-interest-rate bank accounts at twice the rate that Morgan Stanley expected, prompting the firm’s analyst to yank his buy-equivalent rating on Schwab for the first time since he began covering the brokerage stock seven years ago.
Client money is moving from so-called sweep accounts into money market funds at a rate of $20 billion a month, analyst Michael Cyprys wrote in a report Thursday cutting the stock to equal-weight from overweight. He reduced his target for the share price over the next year to $68 from $99. Schwab’s shares, which have fallen 29% this month, slipped 2.1% to $54.05 in premarket trading.
“While clients aren’t leaving and SCHW has other sources of liquidity, earnings face more pressure than we had expected,” Cyprys wrote, lowering his forecast for profit this year and next by 30%.
The downgrade reflects the heightened risk that analysts see in financial companies like Schwab, which is struggling with some of the same forces that hammered the now-collapsed Silicon Valley Bank. Schwab invested in long-term bonds at a period of record-low interest rates and is now sitting on losses on those investments after the Federal Reserve jacked up rates.
Depositors, meanwhile, are pulling money from bank accounts in search of higher yields, depriving companies like Schwab of cheap funding and raising concern that it will have to sell bonds at a loss to cover outflows.
Schwab last week assured clients and investors that it has plenty of liquidity to meet withdrawals of bank deposits. It’s misleading to focus on paper losses, the Westlake, Texas-based firm said.
Cyprys had had an overweight rating on the stock since he began covering it in 2016. His lower price target is still 23% above Wednesday’s closing price of $55.21. He has less confidence around the timing of an improvement in the situation, he wrote. Prospects for the Fed to pause in its series of rate increases, or to cut rates, “look highly debatable,” he said.
GoGooooooCOOP
GLTA-Ts
boarddork Over a month ago I posted the Rules & Regs on that pertinent info and nobody picked up on it , Every once in a long while ole cactus gets a small ad lib line posted by him right lolol
GoGooooooCOOP
GLTA-Ts
JWW , How did this get by you ? lol. Those who invested in Mr. Cooper Group (NASDAQ:COOP) three years ago are up 473%
https://finance.yahoo.com/news/those-invested-mr-cooper-group-140308051.html
Mon, March 27, 2023 at 10:03 AM EDT·3 min read
Mr. Cooper Group Inc. (NASDAQ:COOP) shareholders have seen the share price descend 16% over the month. But over three years the performance has been really wonderful. Over that time, we've been excited to watch the share price climb an impressive 473%. So you might argue that the recent reduction in the share price is unremarkable in light of the longer term performance. Only time will tell if there is still too much optimism currently reflected in the share price.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
Check out our latest analysis for Mr. Cooper Group
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Mr. Cooper Group was able to grow its EPS at 68% per year over three years, sending the share price higher. We note that the 79% yearly (average) share price gain isn't too far from the EPS growth rate. Coincidence? Probably not. This observation indicates that the market's attitude to the business hasn't changed all that much. Au contraire, the share price change has arguably mimicked the EPS growth.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
It is of course excellent to see how Mr. Cooper Group has grown profits over the years, but the future is more important for shareholders. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
We regret to report that Mr. Cooper Group shareholders are down 18% for the year. Unfortunately, that's worse than the broader market decline of 13%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. On the bright side, long term shareholders have made money, with a gain of 18% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 2 warning signs for Mr. Cooper Group (1 shouldn't be ignored) that you should be aware of.
GoGooooooCOOP
GLTA-Ts
Good morning people FYI Charles Schwab’s growing paper losses raise questions for investors
By Bloomberg Wire
6:00 AM on Mar 28, 2023 CDT
The Westlake-based investment firm’s $7 trillion empire built on low rates is showing cracks.
https://www.dallasnews.com/business/personal-finance/2023/03/28/charles-schwabs-growing-paper-losses-raise-questions-for-investors/
On the surface, Charles Schwab Corp. being swept up in the worst U.S. banking crisis since 2008 makes little sense.
The firm, a half-century mainstay in the brokerage industry, isn’t overexposed to crypto like Silvergate Capital and Signature Bank, nor to startups and venture capital, which felled Silicon Valley Bank.
Fewer than 20% of Schwab’s depositors exceed the FDIC’s $250,000 insurance cap, compared with about 90% at SVB. And with 34 million accounts, a phalanx of financial advisers and more than $7 trillion of assets across all of its businesses, it towers over regional institutions.
Yet the questions around Westlake-based Schwab won’t go away.
Related:Charles Schwab CEO Walter Bettinger on the ‘meme stock craze’ and 1,800 open jobs in North Texas
Rather, as the crisis drags on, investors are starting to unearth risks that have been hiding in plain sight. Unrealized losses on the firm’s balance sheet, loaded with long-dated bonds, ballooned to more than $29 billion last year.
At the same time, higher interest rates are encouraging customers to move their cash out of certain accounts that underpin Schwab’s business and bolster its bottom line.
It’s another indication that the Federal Reserve’s rapid policy tightening caught the financial world flat-footed after decades of declining rates. Schwab shares have lost more than a quarter of their value since March 8, with some Wall Street analysts expecting earnings to suffer.
“In hindsight, they arguably could have had more prudent investment choices,” said Morningstar analyst Michael Wong.
CEO Walt Bettinger and the brokerage’s founder and namesake, billionaire Charles Schwab, have said the firm is healthy and prepared to withstand the broader turmoil.
The business is “misunderstood,” and it’s “misleading” to focus on paper losses, which the company may never have to incur, they said in a statement.
“There would be a sufficient amount of liquidity right there to cover if 100% of our bank’s deposits ran off,” Bettinger told the Wall Street Journal in an interview, adding that the firm could borrow from the Federal Home Loan Bank and issue certificates of deposit to address any funding shortfall.
Through a representative, Bettinger declined to comment for this story. A Schwab spokesperson declined to comment beyond the prepared statement.
The broader crisis showed signs of easing on Monday, after First Citizens BancShares Inc. agreed to buy SVB, buoying shares of financial firms including Schwab. The stock is still down 42% from its peak in February 2022, a month before the Fed started raising interest rates.
Related:Westlake’s Charles Schwab agrees to pay $186.5 million for misleading customers about fees
Unusual operation
Schwab is unusual among peers. It operates one of the largest U.S. banks, grafted onto the biggest publicly traded brokerage. Both divisions are sensitive to interest-rate fluctuations.
Like SVB, Schwab gobbled up longer-dated bonds at low yields in 2020 and 2021. That meant paper losses mounted in a short period as the Fed began boosting rates to stamp out inflation.
Three years ago, Schwab’s main bank had no unrealized losses on long-term debt that it planned to hold until maturity. By last March, the firm had more than $5 billion of such paper losses — a figure that climbed to more than $13 billion at year-end.
It shifted $189 billion of agency mortgage-backed securities from “available-for-sale” to “held-to-maturity” on its balance sheet last year, a move that effectively shields those unrealized losses from impacting stockholder equity.
“They basically saw higher interest rates coming,” said Stephen Ryan, an accounting professor at New York University’s Stern School of Business. “They didn’t know how long they would last or how big they would be, but they protected the equity by making the transfer.”
The rules governing such balance sheet moves are stringent. It means Schwab plans to hold more than $150 billion worth of debt to maturity with a weighted-average yield of 1.74%. The lion’s share of the securities — $114 billion at the end of 2022 — won’t mature for more than a decade.
The benchmark 10-year Treasury yield now is 3.5%.
GoGooooooCOOP
GLTA-Ts
Lo ."we are just going round and round with the discussion about this topic"
"the time for discussing,and posing questions about this whole affair should be over by now, after 11 years''
heheheheh
GogoooooooCOOP
GLTA-Ts