“It's well understood that the temporary cost of higher funding from CDs and FHLB loans will impact our near-term revenue growth and earnings. Hopefully, it is also well understood that, as these borrowings are paid off, that will be an accelerant to our medium-term earnings.”

In context

“brilliant move to make. What we did do was to begin to build up higher levels of liquid cash in late 2021 as transitory comments about inflation from the Federal Reserve waned and in early 2022 as the Federal Reserve began discussing increases in interest rates. We increased our normal cash allocation about $60 billion. But given the pace that the Federal Reserve raised rates and therefore, the pace of the resolving client cash realigning, again, in retrospect, $60 billion was not nearly enough, and that led to our need to execute on our other liquidity measures. I started my comments by making clear that our financial model and franchise strength are intact. So the obvious question is, how this manifests itself in terms of earnings growth and our ability to deliver for our stockholders? It's well understood that the temporary cost of higher funding from CDs and FHLB loans will impact our near-term revenue growth and earnings. Hopefully, it is also well understood that, as these borrowings are paid off, that will be an accelerant to our medium-term earnings. But as client cash realigning moderates and eventually reverses and the headwinds from higher cost, temporary funding sources diminishes over the next 7 quarters, what remains? What remains is an extraordinary company. We have a diverse client base spread across approximately 35 million accounts. We have a track record of delivering exceptionally strong organic asset growth in every environment. We are completing the integration of the former Ameritrade client base and adding world-class trading capabilities, along with approximately 10 million new clients, who will be exposed to all the additional products and services that Schwab offers that were not available at Ameritrade, and millions of existing Schwab clients will be exposed to the world-class retail trading platforms that were pre”