Charles Schwab (SCHW) reported first quarter net income that dropped seven percent from a year ago to $302 million. Earnings per share fell 8.3 percent to 22 cents per share. That was two cents per share lower than the average estimate from analysts, and it was a penny lower than what Schwab had initially guided. Revenue dipped 3.2 percent to $1.526 billion, which was just short of estimates of $1.539 billion.

What was the reason for the earnings drop at Schwab? Costs were higher and trading activity was lower than expected. Schwab reported $1.04 billion in expenses excluding interest, up from $956 million in the same quarter a year ago. The higher expenses were due in part to higher marketing costs surrounding the Schwab Intelligent Portfolio rollout. In addition, compensation expenses were up in the quarter. Daily Average Revenue Trades (DARTs) were down by seven percent from the same quarter last year. The trading slowdown led to an eight percent decrease in trading revenue year over year.

While the numbers did come up a bit short, it wasn’t all bad news for Schwab in the first quarter. The company brought in $34.2 billion in net new assets in the first quarter. Net new assets from retail investors totaled $12.5 billion, which is the single highest figure since the first quarter in 2008. Schwab ETF OneSource balances reached $47.1 billion as of the end of the first quarter, which is a big 65 percent jump from last year.

Joe Martinetto, CFO at Charles Schwab, said, “Even as our business growth remained strong, environmental factors contributed to a disappointing rate of revenue growth for the first quarter.”

Shares of Schwab initially traded down on this news in the market, but they quickly bounced back and are now largely unchanged since the report.

Click here for the full press release on Schwab’s first quarter earnings.