Abate

As Silicon Valley Bank broke and shares of regional banks fell sharply earlier this month, investors increased their inspection of Charles Schwab—and sent shares spiraling downward. Executives, including founder Chuck Schwab, acted quickly to reassure investors. Shares rebounded, but at $53, they are down 36% this year and far below their 52-week high of 93 dollars.

The big unknown for Schwab, and for shareholders, is how long cash sorting endures, which occurs when clients move their cash into higher-paying money market funds from lower-yielding bank deposits. Schwab believes it will largely abate during 2023. Sweep account outflows in February were about $5 billion lower than January, and March month-to-date daily average outflows are consistent with February, according to the company. Not all of that money is leaving Schwab; some of it is going to the company’s other cash products that pay customers better rates, but which Schwab makes less profit on.