Charles Schwab moves to reassure investors it has plenty of liquidity and business is performing ‘exceptionally well’

Charles Schwab Corp.

moved Monday to reassure investors that it has plenty of liquidity and does not need to sell any of its held-to-maturity securities over unrealized losses. Chief Financial Officer Peter Crawford said the business is performing “exceptionally well” and that it expects first-quarter revenue to grow 10% from a year ago. The company has an estimated $100 billion of cash flow and upwards of $8 billion in potential retail CD issuances a month. The company’s approach to managing its assets is different to traditional banks, he said. “As a reminder, our banks’ loan-to-deposit ratio is approximately 10% and nearly all the loans are over-collateralized by first-lien mortgages or securities. The remainder of our assets are invested in high-quality, liquid securities in either our available-for-sale (AFS) portfolio, working capital at the parent or  broker-dealer subsidiaries, or in our HTM portfolio.” Focusing attention on HTM’s unrealized losses is flawed, as the company has no need to sell assets before they mature. “Second, by looking at unrealized losses among HTM securities, but not doing the same for traditional banks’ loan portfolios, the analysis penalizes firms like Schwab that in fact have a higher quality, more liquid, and more transparent balance sheet,” he added. The statement came after the stock was swept up in the carnage in the banking sector late last week amid the collapse of Silicon Valley Bank. The stock was down another 9% premarket Monday.