SCHW · Forward model · Bank deposit account fees · Bear case

The June quarter was the peak: its record 11.9 million daily average trades ran 44% above the 8.3 million of 2025 Q4. Trading reverts toward that 2025 Q4 level rather than holding even the guided 10.6 million; the net interest margin stops at the guided 3.25%-3.30% exit and then gives it back as the forward curve's cuts arrive and deposit betas stop being zero (Schwab's own sensitivity table puts each 25bp move in the Fed funds target at roughly $250M-$300M of annualized net interest revenue, at a zero deposit beta); and the market re-rates Schwab toward a money-centre-bank multiple. Implemented as a -1.0% sequential growth tilt, a -3.0 point margin delta, a 13x P/E exit (9.921x on pre-tax) and a 10.5% cost of equity. WHAT THIS CASE DOES NOT ASSUME is a capital event: the $20.0B buyback authorisation is not withdrawn and the 8.7% consolidated Tier 1 Leverage Ratio is not in question. Result: $65.41 a share, -39.46%, an implied 4.640x tangible book - almost exactly the 4.952x that a 30% through-cycle ROTCE justifies at a 9.25% cost of equity, so the bear is not an outlier. It is what Schwab is worth if the 44% ROTCE is a cycle rather than a level.