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(Bloomberg) — Charles Schwab Corp. fell in early trading Monday after the firm said deposits continued to erode in the first quarter and that it was halting share repurchases amid the worst US banking crisis since 2008.
Shares of the brokerage dropped 3.2% to $49.17 at 9:17 a.m. in New York. The stock had tumbled 39% this year through last week.
Customer deposits declined to $325.7 billion as of March 31, Schwab said Monday in a statement, roughly in line with analysts’ estimates. They fell 11% since the end of last year, and 30% from the same period a year ago.
The firm cited “regulatory uncertainty” for its decision to pause stock buybacks following the collapse last month of three US lenders, including Silicon Valley Bank and Signature Bank.
“Our top priority this quarter was to stay connected to our clients — to help them understand what is happening in the marketplace,” Chief Executive Officer Walt Bettinger said in the statement.
Customers continued to add money to Schwab investment products. Core net new assets totaled $132 billion, including $53 billion in March alone, the second-most ever for that month.
The Federal Reserve’s rapid interest rate hikes encouraged customers to move funds away from Schwab’s low-yielding accounts, which underpin its revenue, in search of higher-rate options elsewhere.
Schwab borrowed $45.6 billion from the Federal Home Loan Bank system in the first quarter, three times more than its fourth-quarter borrowing from the system.
Read more: Schwab Faces Fresh Risks in the Zero-Fee Landscape It Shaped
Adjusted earnings per share were 93 cents, 3 cents more than the average estimate of analysts in a Bloomberg survey. Revenue totaled $5.1 billion, compared with Wall Street’s $5.2 billion estimate.
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