Charles Schwab stock has fallen about 35% this year

  • Schwab’s unrealized losses in its bond portfolio widened to $19.4 billion in Q3 due to a selloff in the bond market.

  • The losses are in a portfolio of U.S. agency mortgage securities with a face value of $162 billion.

  • The losses have no direct impact on Schwab’s financial strength as the portfolio is classified as held to maturity.

  • Investors are concerned about the losses as they represent a missed investment opportunity and could weigh on returns for years.

  • The $19.4 billion losses exceed Schwab’s average tangible equity during Q3.

  • Some analysts apply a tax adjustment to the losses, reducing the figure to $15 billion.

  • Schwab stated it won’t need to sell its bond portfolio before maturity, preventing the losses from being realized.

  • Schwab’s earnings totaled $4.8 billion after taxes in the first three quarters of 2023.