# EDGAR Filing Document

**Accession Number:** 0000316709
**File Stem:** 0000316709-25-000051
**Filing Date:** 2025-11
**Character Count:** 303492
**Document Hash:** 41a2c93e3ea93782bb13c9c89c43f177
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000316709-25-000051.hdr.sgml**: 20251107

**ACCESSION NUMBER**: 0000316709-25-000051

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 110

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251107

**DATE AS OF CHANGE**: 20251107

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** SCHWAB CHARLES CORP
- **CENTRAL INDEX KEY:** 0000316709
- **STANDARD INDUSTRIAL CLASSIFICATION:** SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 943025021
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-09700
- **FILM NUMBER:** 251462902

**BUSINESS ADDRESS:**
- **STREET 1:** 3000 SCHWAB WAY
- **CITY:** WESTLAKE
- **STATE:** TX
- **ZIP:** 76262
- **BUSINESS PHONE:** 817-859-5000

**MAIL ADDRESS:**
- **STREET 1:** 3000 SCHWAB WAY
- **CITY:** WESTLAKE
- **STATE:** TX
- **ZIP:** 76262

?xml version='1.0' encoding='ASCII'? schw-20250930

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

Washington, D.C. 20549

**FORM 10-Q** 

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended September 30, 2025** 

**or**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from ________ to ________**

**Commission File Number: 1-9700** 

**THE CHARLES SCHWAB CORPORATION**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**94-3025021** |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

---

**3000 Schwab Way, Westlake, TX 76262** 

(Address of principal executive offices and zip code)

Registrant's telephone number, including area code: (817) 859-5000

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| <u>Title of each class</u> | <u>Trading Symbol(s)</u> | &nbsp;&nbsp;&nbsp;<u>Name of each exchange on which registered</u> |
| Common Stock – $.01 par value per share | SCHW | New York Stock Exchange |
| Depositary Shares, each representing a 1/40th ownership interest in a share of 5.95% Non-Cumulative Preferred Stock, Series D | SCHW PrD | New York Stock Exchange |
| Depositary Shares, each representing a 1/40th ownership interest in a share of 4.450% Non-Cumulative Preferred Stock, Series J | SCHW PrJ | New York Stock Exchange |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accelerated filer ☐

Non-accelerated filer ☐&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

1,776,936,770 shares of $.01 par value Common Stock outstanding on October 31, 2025

------

**THE CHARLES SCHWAB CORPORATION**

**Quarterly Report on Form 10-Q**

**For the Quarter Ended September 30, 2025**

**Index**

---

| | | | |
|:---|:---|:---|:---|
| **<u>[Part I - Financial Information](#i9899c6976cfc4f0db7ef6c830f73a25a_88)</u>** | **<u>[Part I - Financial Information](#i9899c6976cfc4f0db7ef6c830f73a25a_88)</u>** | **<u>[Part I - Financial Information](#i9899c6976cfc4f0db7ef6c830f73a25a_88)</u>** | |
| | **Item 1.** | <u>[Condensed Consolidated Financial Statements (Unaudited):](#i9899c6976cfc4f0db7ef6c830f73a25a_88)</u> | |
| | | <u>[Statements of Income](#i9899c6976cfc4f0db7ef6c830f73a25a_88)</u> | [29](#i9899c6976cfc4f0db7ef6c830f73a25a_88) |
| | | <u>[Statements of Comprehensive Income](#i9899c6976cfc4f0db7ef6c830f73a25a_91)</u> | [30](#i9899c6976cfc4f0db7ef6c830f73a25a_91) |
| | | <u>[Balance Sheets](#i9899c6976cfc4f0db7ef6c830f73a25a_94)</u> | [31](#i9899c6976cfc4f0db7ef6c830f73a25a_94) |
| | | <u>[Statements of Stockholders' Equity](#i9899c6976cfc4f0db7ef6c830f73a25a_97)</u> | [32](#i9899c6976cfc4f0db7ef6c830f73a25a_97) |
| | | <u>[Statements of Cash Flows](#i9899c6976cfc4f0db7ef6c830f73a25a_100)</u> | 33-34 |
| | | <u>[Notes](#i9899c6976cfc4f0db7ef6c830f73a25a_103)</u> | 35-67 |
| | **Item 2.** | <u>[Management's Discussion and Analysis of Financial Condition and Results of Operations](#i9899c6976cfc4f0db7ef6c830f73a25a_10)</u> | 1-28 |
| | **Item 3.** | <u>[Quantitative and Qualitative Disclosures About Market Risk](#i9899c6976cfc4f0db7ef6c830f73a25a_85)</u> | [28](#i9899c6976cfc4f0db7ef6c830f73a25a_85) |
| | **Item 4.** | <u>[Controls and Procedures](#i9899c6976cfc4f0db7ef6c830f73a25a_175)</u> | [68](#i9899c6976cfc4f0db7ef6c830f73a25a_175) |
| **<u>[Part II - Other Information](#i9899c6976cfc4f0db7ef6c830f73a25a_178)</u>** | **<u>[Part II - Other Information](#i9899c6976cfc4f0db7ef6c830f73a25a_178)</u>** | **<u>[Part II - Other Information](#i9899c6976cfc4f0db7ef6c830f73a25a_178)</u>** | |
| | **Item 1.** | <u>[Legal Proceedings](#i9899c6976cfc4f0db7ef6c830f73a25a_181)</u> | [68](#i9899c6976cfc4f0db7ef6c830f73a25a_181) |
| | **Item 1A.** | <u>[Risk Factors](#i9899c6976cfc4f0db7ef6c830f73a25a_184)</u> | [68](#i9899c6976cfc4f0db7ef6c830f73a25a_184) |
| | **Item 2.** | <u>[Unregistered Sales of Equity Securities and Use of Proceeds](#i9899c6976cfc4f0db7ef6c830f73a25a_187)</u> | [68](#i9899c6976cfc4f0db7ef6c830f73a25a_187) |
| | **Item 3.** | <u>[Defaults Upon Senior Securities](#i9899c6976cfc4f0db7ef6c830f73a25a_190)</u> | [69](#i9899c6976cfc4f0db7ef6c830f73a25a_190) |
| | **Item 4.** | <u>[Mine Safety Disclosures](#i9899c6976cfc4f0db7ef6c830f73a25a_193)</u> | [69](#i9899c6976cfc4f0db7ef6c830f73a25a_193) |
| | **Item 5.** | <u>[Other Information](#i9899c6976cfc4f0db7ef6c830f73a25a_196)</u> | [69](#i9899c6976cfc4f0db7ef6c830f73a25a_196) |
| | **Item 6.** | <u>[Exhibits](#i9899c6976cfc4f0db7ef6c830f73a25a_205)</u> | [70](#i9899c6976cfc4f0db7ef6c830f73a25a_205) |
| **<u>[Signature](#i9899c6976cfc4f0db7ef6c830f73a25a_208)</u>** | **<u>[Signature](#i9899c6976cfc4f0db7ef6c830f73a25a_208)</u>** | **<u>[Signature](#i9899c6976cfc4f0db7ef6c830f73a25a_208)</u>** | [71](#i9899c6976cfc4f0db7ef6c830f73a25a_208) |

---

------

**Part I – FINANCIAL INFORMATION**

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**

**<u>INTRODUCTION</u>**

The Charles Schwab Corporation (CSC) is a savings and loan holding company. CSC engages, through its subsidiaries (collectively referred to as Schwab or the Company), in wealth management, securities brokerage, banking, asset management, custody, and financial advisory services.

Principal business subsidiaries of CSC include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Charles Schwab & Co., Inc. (CS&Co), incorporated in 1971, a securities broker-dealer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Charles Schwab Bank, SSB (CSB), our principal banking entity; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Charles Schwab Investment Management, Inc. (CSIM), the investment advisor for Schwab's proprietary mutual funds (Schwab Funds<sup>®</sup>) and for Schwab's exchange-traded funds (Schwab ETFs).

Unless otherwise indicated, the terms "Schwab," "the Company," "we," "us," or "our" mean CSC together with its consolidated subsidiaries.

Schwab provides financial services to individuals and institutional clients through two segments – Investor Services and Advisor Services. The Investor Services segment provides retail brokerage, investment advisory, and banking and trust services to individual investors, and retirement plan and business services, as well as other corporate brokerage services, to businesses and their employees. The Advisor Services segment provides custodial, trading, banking and trust, and support services to independent registered investment advisors (RIAs), independent retirement advisors, and recordkeepers.

Schwab was founded on the belief that all Americans deserve access to a better investing experience. Although much has changed in the intervening years, our purpose remains clear – to champion every client's goals with passion and integrity. Guided by this purpose and our vision of creating the most trusted leader in investment services, management has adopted a strategy described as "Through Clients' Eyes."

This strategy emphasizes placing clients' perspectives, needs, and desires at the forefront. Because investing plays a fundamental role in building financial security, we strive to deliver a better investing experience for our clients – individual investors and the people and institutions who serve them – by disrupting longstanding industry practices on their behalf and providing superior service. We also aim to offer a broad range of products and solutions to meet client needs with a focus on transparency, value, and trust. In addition, management works to couple Schwab's scale and resources with ongoing expense discipline to keep costs low and ensure that products and solutions are affordable as well as responsive to client needs. In combination, these are the key elements of our "no trade-offs" approach to serving investors. We believe that following this strategy is the best way to maximize our market valuation and stockholder returns over time.

Management estimates that investable wealth in the United States (U.S.) (consisting of assets in defined contribution, retail wealth management and brokerage, and registered investment advisor channels, along with bank deposits) currently exceeds $75 trillion, which means the Company's $11.59 trillion in client assets leaves substantial opportunity for growth. Our strategy is based on the principle that developing trusted relationships will translate into more assets from both new and existing clients, ultimately driving more revenue, and along with expense discipline and thoughtful capital management, will generate earnings growth and build long-term stockholder value.

This Management's Discussion and Analysis should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (2024 Form 10-K).

On our website, <u>https://www.aboutschwab.com</u>, we post the following filings after they are electronically filed with or furnished to the Securities and Exchange Commission (SEC or Commission): annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. In addition, we post to the website the Dodd-Frank stress test results, our regulatory capital disclosures based on Basel III, our average liquidity coverage ratio (LCR), and our average net stable funding ratio (NSFR). The SEC maintains a website at <u>https://www.sec.gov</u> that contains reports, proxy statements, and other information that we file electronically with the Commission.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

**<u>FORWARD-LOOKING STATEMENTS</u>**

In addition to historical information, this Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are identified by words such as "believe," "anticipate," "expect," "prioritize," "will," "may," "estimate," "appear," "could," "would," "maintain," "continue," "seek," and other similar expressions. In addition, any statements that refer to expectations, strategy, objectives, projections, or other characterizations of future events or circumstances are forward-looking statements.

These forward-looking statements, which reflect management's beliefs, objectives, and expectations as of the date hereof, are estimates based on the best judgment of Schwab's senior management. These statements relate to, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Maximizing our market valuation and stockholder returns over time; and our belief that developing trusted relationships will translate into more client assets which drives revenue, and along with expense discipline and thoughtful capital management, generates earnings growth and builds stockholder value (see Introduction in Part I – Item 2);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Capital expenditures and expense management (see Results of Operations in Part I – Item 2);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net interest revenue, client cash allocation behavior, and adjustment of rates paid on client-related liabilities (see Results of Operations in Part I – Item 2);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Funding sources and uses of liquidity (see Liquidity Risk in Part I – Item 2);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Wholesale funding, funding strategy, and expectations for paydown of bank supplemental funding (see Results of Operations in Part I – Item 2, and Liquidity Risk in Part I – Item 2);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Management of interest rate risk; modeling and assumptions, the impact of changes in interest rates on net interest margin and revenue, bank deposit account fee revenue, economic value of equity (EVE), and liability and asset duration (see Risk Management in Part I – Item 2);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Capital management; long-term operating objective; and uses of capital and return of excess capital to stockholders (see Capital Management in Part I – Item 2 and Commitments and Contingencies in Part I – Item 1 – Financial Information – Notes to Condensed Consolidated Financial Statements (Item 1) – Note 10);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The acquisition of Forge Global Holdings, Inc. (Forge) and our expectation that incorporating Forge's private markets capabilities will enhance Schwab's ability to meet the evolving needs of investors across our growing client base (see Subsequent Events in Overview and Item 1 – Note 19);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The expected impact of proposed and final rules (see Current Regulatory and Other Developments in Part I – Item 2);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The expected impact of new accounting standards not yet adopted (see New Accounting Standards in Item 1 – Note 2);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The likelihood of indemnification and guarantee payment obligations and clients failing to fulfill contractual obligations (see Commitments and Contingencies in Item 1 – Note 10); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The outcome and impact of legal proceedings and regulatory matters (see Commitments and Contingencies in Item 1 – Note 10, and Legal Proceedings in Part II – Item 1).

Achievement of the expressed beliefs, objectives, and expectations described in these statements is subject to certain risks and uncertainties that could cause actual results to differ materially from the expressed beliefs, objectives, and expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or, in the case of documents incorporated by reference, as of the date of those documents.

Important factors that may cause actual results to differ include, but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• General economic and market conditions, including the level of interest rates, equity market valuations and volatility;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to attract and retain clients, develop trusted relationships, and grow client assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Client use of our advisory and lending solutions and other products and services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The level of client assets, including cash balances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Client cash allocations and sensitivity to deposit rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Competitive pressure on pricing, including deposit rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The level and mix of client trading activity, including daily average trades, margin balances, and balance sheet cash;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Regulatory guidance and adverse impacts from new or changed legislation, rulemaking or regulatory expectations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Capital and liquidity needs and management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to manage expenses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to attract and retain talent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to develop and launch new and enhanced products, services, and capabilities, as well as enhance our infrastructure, in a timely and successful manner;

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Management's ability to close the acquisition of Forge on the anticipated terms and timing; required regulatory approvals and approval by Forge's stockholders; disruptions to Forge's business as a result of the announcement and pendency of the acquisition; and the ability and timeframe to integrate the business and realize the anticipated benefits;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to monetize client assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to support client activity levels;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increased compensation and other costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Real estate and workforce decisions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The timing and scope of technology projects;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Balance sheet positioning relative to changes in interest rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Interest-earning asset mix and growth;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to access funding sources;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Prepayment levels for mortgage-backed securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Regulatory and legislative developments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adverse developments in litigation or regulatory matters and any related charges; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Potential breaches of contractual terms for which we have indemnification and guarantee obligations.

Certain of these factors, as well as general risk factors affecting the Company, are discussed in greater detail in Part I – Item 1A – Risk Factors in the 2024 Form 10-K.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

**<u>OVERVIEW</u>**

Management focuses on several client activity and financial metrics in evaluating Schwab's financial position and operating performance. Results for the third quarter and first nine months of 2025 and 2024 are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Percent<br>Change | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, | Percent<br>Change |
| | 2025 | 2024 | Percent<br>Change | 2025 | 2024 | Percent<br>Change |
| **Client Metrics** |  |  |  |  |  |  |
| Net new client assets (in billions) <sup>(1)</sup> | $134.4 | $90.8 | 48% | $340.4 | $253.2 | 34% |
| Core net new client assets (in billions) | $137.5 | $95.3 | 44% | $355.5 | $252.1 | 41% |
| Client assets (in billions, at quarter end) | $11593.9 | $9920.5 | 17% |  |  |  |
| Average client assets (in billions) | $11151.9 | $9594.9 | 16% | $10490.8 | $9162.4 | 14% |
| New brokerage accounts (in thousands) | 1143 | 972 | 18% | 3424 | 3051 | 12% |
| Active brokerage accounts (in thousands, at quarter end) | 37963 | 35982 | 6% |  |  |  |
| Assets receiving ongoing advisory services (in billions, <br> at quarter end) | $5809.2 | $5018.9 | 16% |  |  |  |
| Client cash as a percentage of client assets (at quarter end) | 9.4% | 9.5% |  |  |  |  |
| **Company Financial Information and Metrics** |  |  |  |  |  |  |
| Total net revenues | $6135 | $4847 | 27% | $17585 | $14277 | 23% |
| Total expenses excluding interest | 3114 | 3005 | 4% | 9306 | 8890 | 5% |
| Income before taxes on income | 3021 | 1842 | 64% | 8279 | 5387 | 54% |
| Taxes on income | 663 | 434 | 53% | 1886 | 1285 | 47% |
| Net income | 2358 | 1408 | 67% | 6393 | 4102 | 56% |
| Preferred stock dividends and other | 81 | 109 | (26)% | 343 | 341 | 1% |
| Net income available to common stockholders | $2277 | $1299 | 75% | $6050 | $3761 | 61% |
| Earnings per common share — diluted | $1.26 | $.71 | 77% | $3.33 | $2.05 | 62% |
| Net revenue change from prior year | 27% | 5% |  | 23% | (1)% |  |
| Pre-tax profit margin | 49.2% | 38.0% |  | 47.1% | 37.7% |  |
| Return on average common stockholders' equity (annualized) | 21% | 14% |  | 20% | 14% |  |
| Expenses excluding interest as a percentage of average client <br> assets (annualized) | 0.11% | 0.12% |  | 0.12% | 0.13% |  |
| Consolidated Tier 1 Leverage Ratio (at quarter end) | 9.7% | 9.7% |  |  |  |  |
| **Non-GAAP Financial Measures** <sup>(2)</sup> |  |  |  |  |  |  |
| Adjusted total expenses | $2987 | $2852 |  | $8921 | $8422 |  |
| Adjusted diluted earnings per common share | $1.31 | $.77 |  | $3.49 | $2.25 |  |
| Return on tangible common equity | 38% | 31% |  | 37% | 33% |  |

---

<sup>(1)</sup> The third quarter and first nine months of 2025 include net outflows of $3.1 billion and $15.1 billion, respectively, from off-platform brokered certificates of deposit (CDs) issued by CSB. The third quarter and first nine months of 2024 include net outflows of $4.4 billion and $9.1 billion, respectively, from off-platform brokered CDs issued by CSB and an outflow of $0.1 billion from an international relationship. The first nine months of 2024 also includes an inflow of $10.3 billion from a mutual fund clearing services client.

<sup>(2)</sup> See Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results.

The first nine months of 2025 continued to present a changing landscape for investors. Though macroeconomic uncertainty continued, during the third quarter of 2025, investor sentiment further improved and equity markets reached record levels. The Standard and Poor's<sup>®</sup> 500 Index rose 8% and 14% during the third quarter and first nine months of 2025, respectively, and the NASDAQ Composite<sup>®</sup> increased 11% and 17% during the third quarter and year-to-date periods. The Federal Reserve reduced the target federal funds overnight rate 25 basis points in September, representing the first such rate cut since December 2024.

Schwab saw strong client asset gathering, growth in new client accounts, and sustained client engagement continue through the first nine months of 2025. Core net new assets totaled $137.5 billion and $355.5 billion in the third quarter and first nine months of the year, respectively, increasing 44% and 41% from the comparative prior-year periods. Clients opened 1.1 million and 3.4 million new brokerage accounts in the third quarter and first nine months of the year, respectively, up 18% and 12% from the respective periods in 2024, and active brokerage accounts reached 38.0 million at the end of the third quarter of 2025, up 6% year-over-year. Though clients' daily average trades (DATs) in third quarter of 2025 declined slightly from the second quarter, client engagement with the markets remained strong. DATs were 7.4 million and 7.5 million for the third quarter and first nine months of 2025, respectively, up 30% and 31% from the same periods in 2024.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Schwab's financial performance in the third quarter and first nine months of 2025 reflected strong asset gathering, sustained client engagement and equity market appreciation, continued demand for Schwab's lending offerings and managed investing solutions, as well as reduction of higher-cost bank supplemental funding and balanced expense management. Net income was $2.4 billion and $6.4 billion in the third quarter and first nine months of 2025, respectively, growing 67% and 56% from the same prior-year periods. Diluted earnings per common share (EPS) was $1.26 and $3.33 for the third quarter and first nine months of 2025, respectively, rising 77% and 62% from the same periods in 2024. Adjusted diluted EPS <sup>(1)</sup> was $1.31 and $3.49 for the third quarter and first nine months of 2025, respectively, increasing 70% and 55% from the same periods in 2024.

Total net revenues grew 27% year-over-year in the third quarter of 2025 to reach $6.1 billion, resulting in a year-to-date total of $17.6 billion, an increase of 23% from the same period in 2024. Net interest revenue was $3.1 billion and $8.6 billion in the third quarter and first nine months of 2025, respectively, up 37% and 30% from the same periods in 2024, primarily due to lower interest expense from reductions in bank supplemental funding and lower rates on funding sources, as well as growth in bank and margin lending and higher cash and investments segregated, which more than offset lower yields on interest-earning assets due to lower market rates. Asset management and administration fees were $1.7 billion and $4.8 billion in the third quarter and first nine months of 2025, respectively, increasing 13% from both prior-year periods, due primarily to continued growth in money market funds and also higher client asset balances, reflecting asset gathering, equity market appreciation, and growth in managed investing solutions. Trading revenue was $995 million and $2.9 billion in the third quarter and first nine months of 2025, respectively, higher by 25% and 19% from comparable prior-year periods, due primarily to higher trading volume. Bank deposit account fee revenue rose to $247 million and $739 million in the third quarter and first nine months of the year, respectively, up 63% and 51% from the same periods in 2024 due primarily to higher net yields, partially offset by lower bank deposit account balances (BDA balances).

Total expenses excluding interest were $3.1 billion and $9.3 billion in the third quarter and first nine months of 2025, respectively, increasing 4% and 5% from the same periods in 2024. For the third quarter and first nine months of 2025, adjusted total expenses <sup>(1)</sup> were $3.0 billion and $8.9 billion, respectively, up 5% and 6% from the comparable prior-year periods. The increases in total expenses excluding interest and adjusted total expenses <sup>(1)</sup> reflect ongoing investments to support growth of the business and enhance client-serving capabilities while driving incremental efficiencies across the Company. The increases were primarily attributable to higher compensation and benefits expense and higher professional services expense, partially offset by lower regulatory fees and assessments, and for the quarter-to-date period, lower industry fees within other expense.

Return on average common stockholders' equity was 21% and 20% for the third quarter and first nine months of 2025, respectively, up from 14% in both comparable prior-year periods. These increases were due to higher net income, which more than offset higher average common stockholders' equity. Return on tangible common equity <sup>(1)</sup> (ROTCE) was 38% and 37% for the third quarter and first nine months of 2025, respectively, up from 31% and 33% for the same periods in the prior year, as growth in adjusted net income available to common stockholders <sup>(1)</sup> more than offset growth in average common stockholders' equity. Average common stockholders' equity increased primarily as a result of growth in retained earnings and improved average accumulated other comprehensive income (AOCI), partially offset by higher treasury stock due to common stock repurchases in 2025. The improvement in average AOCI was due to lower unrealized losses on available for sale (AFS) investment securities and securities previously transferred from AFS to held to maturity (HTM).

In the first nine months of 2025, Schwab supported strong client demand in margin and bank lending, while significantly reducing bank supplemental funding. Balance sheet assets totaled $465.3 billion as of September 30, 2025, up 1% during the third quarter and down 3% from year-end 2024. Principal and interest from our AFS and HTM securities portfolio along with normal client cash activity allowed for further reduction in bank supplemental funding, which includes brokered CDs, Federal Home Loan Bank (FHLB) borrowings, and borrowings under repurchase agreements at our banks. In September, we transferred $3.0 billion of BDA balances to our balance sheet (see Item 1 – Note 10) to accelerate the paydown of bank supplemental borrowings. In the first nine months of 2025, Schwab reduced the outstanding balance of total bank supplemental funding by $35.1 billion, or 70%, including a reduction of $12.9 billion during the third quarter. As of September 30, 2025, remaining balances totaled $14.8 billion, which is within a range generally consistent with our diversified funding strategy. Client margin loans increased during the third quarter to $97.2 billion at September 30, up 16% from year-end 2024, reflecting strong client demand amid rising equity markets and improved investor sentiment. Bank loans totaled $53.6 billion as of the end of the third quarter, increasing 18% in the first nine months of 2025 due to growth of pledged asset lines (PALs) and First Mortgages.

The Company also returned meaningful excess capital in the first nine months of 2025. During the third quarter, the Company repurchased $2.7 billion in common stock, bringing total year-to-date common stock repurchases to $4.6 billion. In addition, the Company increased its common dividend by 8% to $.27 per share in the first quarter of the year, and redeemed its Series G preferred stock for $2.5 billion in the second quarter. Inclusive of these capital actions and organic capital generation from net

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

income in the first nine months of the year, the Company's consolidated Tier 1 Leverage Ratio was 9.7% at September 30, 2025, down slightly from year-end 2024. Our consolidated adjusted Tier 1 Leverage Ratio <sup>(1)</sup> increased to 7.3%, driven by net income in the first nine months of the 2025 and improvement in AOCI.

<sup>(1)</sup> Adjusted diluted EPS, adjusted total expenses, return on tangible common equity, adjusted net income available to common stockholders, and adjusted Tier 1 Leverage Ratio are non-GAAP financial measures. See Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results.

**Subsequent Events**

On November 6, 2025, Schwab announced that it has entered into a definitive agreement to acquire Forge Global Holdings, Inc. (Forge), operator of a leading private market platform and trading marketplace, in a transaction valued at approximately $660 million. The Company anticipates that incorporating Forge's private markets capabilities will enhance Schwab's ability to meet the evolving needs of investors across our growing client base. The transaction is expected to close in the first half of 2026, subject to customary closing conditions, including approval by Forge's stockholders and regulatory approvals.

**Current Regulatory and Other Developments** 

On June 12, 2025, the SEC withdrew certain notices of proposed rulemaking issued between March 2022 and November 2023, including the SEC's December 2022 equity market structure rule proposals, "Order Competition Rule" and "Regulation Best Execution", previously referenced in Part II – Item 7 – Current Regulatory and Other Developments in our 2024 Form 10-K.

On March 3, 2025, the Federal Deposit Insurance Corporation (FDIC) withdrew certain notices of proposed rulemaking issued in 2023 and 2024, including the July 2024 proposal related to the brokered deposits framework, previously referenced in Part II – Item 7 – Current Regulatory and Other Developments in our 2024 Form 10-K.

Refer to Part II – Item 7 – Current Regulatory and Other Developments in our 2024 Form 10-K for information regarding pending regulatory matters including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The U.S. Department of Labor's April 2024 final rule significantly broadening the definition of "fiduciary" under the Employee Retirement Income Security Act of 1974 and related litigation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The FDIC's November 2023 and February 2024 special assessments on banks, including the Company's banking subsidiaries, to recover losses incurred by the Deposit Insurance Fund to protect uninsured depositors due to the March 2023 closures of two banks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The U.S. federal banking agencies' August 2023 proposed rulemaking on long-term debt requirements for certain large banking organizations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The U.S. federal banking agencies' July 2023 notice of proposed rulemaking with amendments to the regulatory capital rules, which, among other things, would require us to include AOCI in regulatory capital and to calculate our risk-weighted assets using a revised risk-based approach, a component of which is based on operational risk.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

**<u>RESULTS OF OPERATIONS</u>**

**Total Net Revenues**

The following tables present a comparison of revenue by category:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | 2025 | 2025 | 2024 | 2024 |
| Three Months Ended September 30, | Percent<br>Change | Amount | % of<br>Total Net<br>Revenues | Amount | % of<br>Total Net<br>Revenues |
| **Net interest revenue** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest revenue | 1% | $3956 | 64% | $3928 | 81% |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (47)% | (906) | (14)% | (1706) | (35)% |
| Net interest revenue | 37% | 3050 | 50% | 2222 | 46% |
| **Asset management and administration fees** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mutual funds, exchange-traded funds (ETFs), and collective trust <br> funds (CTFs) | 14% | 946 | 15% | 827 | 17% |
| &nbsp;&nbsp;&nbsp;&nbsp;Managed investing solutions | 11% | 619 | 10% | 559 | 12% |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 20% | 108 | 2% | 90 | 2% |
| Asset management and administration fees | 13% | 1673 | 27% | 1476 | 31% |
| **Trading revenue** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commissions | 17% | 453 | 7% | 388 | 8% |
| &nbsp;&nbsp;&nbsp;&nbsp;Order flow revenue | 37% | 490 | 8% | 357 | 7% |
| &nbsp;&nbsp;&nbsp;&nbsp;Principal transactions |  | 52 | 1% | 52 | 1% |
| Trading revenue | 25% | 995 | 16% | 797 | 16% |
| Bank deposit account fees | 63% | 247 | 4% | 152 | 3% |
| Other | (15)% | 170 | 3% | 200 | 4% |
| Total net revenues | 27% | $6135 | 100% | $4847 | 100% |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | 2025 | 2025 | 2024 | 2024 |
| Nine Months Ended September 30, | Percent<br>Change | Amount | % of<br>Total Net<br>Revenues | Amount | % of<br>Total Net<br>Revenues |
| **Net interest revenue** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest revenue | (2)% | $11500 | 65% | $11686 | 82% |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (42)% | (2922) | (16)% | (5073) | (36)% |
| Net interest revenue | 30% | 8578 | 49% | 6613 | 46% |
| **Asset management and administration fees** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mutual funds, ETFs, and CTFs | 14% | 2695 | 15% | 2370 | 17% |
| &nbsp;&nbsp;&nbsp;&nbsp;Managed investing solutions | 13% | 1777 | 10% | 1572 | 11% |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 14% | 301 | 2% | 265 | 2% |
| Asset management and administration fees | 13% | 4773 | 27% | 4207 | 30% |
| **Trading revenue** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commissions | 11% | 1315 | 7% | 1184 | 8% |
| &nbsp;&nbsp;&nbsp;&nbsp;Order flow revenue | 31% | 1399 | 8% | 1066 | 8% |
| &nbsp;&nbsp;&nbsp;&nbsp;Principal transactions |  | 141 | 1% | 141 | 1% |
| Trading revenue | 19% | 2855 | 16% | 2391 | 17% |
| Bank deposit account fees | 51% | 739 | 4% | 488 | 3% |
| Other | 11% | 640 | 4% | 578 | 4% |
| Total net revenues | 23% | $17585 | 100% | $14277 | 100% |

---

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

***Net Interest Revenue***

Revenue on interest-earning assets is affected by various factors, such as the composition of assets, prevailing interest rates and spreads at the time of origination or purchase, changes in interest rates on cash and cash equivalents, floating-rate securities and loans, and changes in prepayment levels for mortgage-backed and other asset-backed securities and loans. Schwab establishes the rates paid on client-related liabilities, and management expects that it will generally adjust the rates paid on these liabilities at some fraction of any movement in short-term rates. Interest expense on long-term debt, FHLB borrowings, other short-term borrowings, and other funding sources is impacted by market interest rates at the time of borrowing and changes in interest rates on floating-rate liabilities. Net interest revenue reflects the impacts of derivatives used to manage interest rate risk. See also Risk Management – Market Risk and Item 1 – Note 11 for additional information.

The Federal Reserve maintained the upper bound of the target overnight rate at 5.50% through most of 2024 before reducing the rate by 50 basis points during the third quarter of 2024 and another 50 basis points across two cuts during the fourth quarter of 2024. The Federal Reserve maintained the upper bound of the target overnight rate at 4.50% for most of the first nine months of 2025 before reducing the rate by 25 basis points in mid-September to 4.25%.

Schwab's average interest-earning assets for the third quarter and first nine months of 2025 were relatively consistent in aggregate with the same periods in 2024, while the mix of interest-earning assets shifted year-over-year to reflect higher margin and bank lending, higher cash and investments segregated, and lower balances of AFS and HTM securities. Client demand for margin and bank lending continued to be strong in the first nine months of 2025, reflecting positive equity market performance and client engagement, as margin loan balances rebounded following market volatility in late March and early April and rose further in the third quarter. Margin loan balances ended the third quarter at $97.2 billion, increasing 16% from both the second quarter of 2025 and year-end 2024, and up 33% from September 30, 2024. Total bank loans increased 6% and 18% in the third quarter and first nine months of 2025, respectively, finishing the third quarter at $53.6 billion, higher by 24% from September 30, 2024, due primarily to growth in PALs and First Mortgages.

Client cash activity during the first nine months of 2025 reflected normal cash behavior, inclusive of organic growth, engagement in equity markets, and seasonality. Bank sweep deposits and payables to brokerage clients increased by a total of $15.0 billion, or 5%, during the third quarter of 2025, $12.5 billion, or 4%, during the first nine months of 2025, and $42.6 billion, or 15%, from September 30, 2024 to September 30, 2025. Principal and interest payments on AFS and HTM securities, as well as September transfers of $3.0 billion of BDA balances to our balance sheet (see Results of Operations – Bank Deposit Account Fees and Item 1 – Note 10) supported paydowns in bank supplemental funding of $12.9 billion, or 47%, during the third quarter of 2025, and $35.1 billion, or 70%, during the first nine months of 2025. Since September 30, 2024, the Company has reduced bank supplemental funding by $50.0 billion, or 77%.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

The following table presents net interest revenue information corresponding to interest-earning assets and funding sources on the condensed consolidated balance sheets:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | 2025 | 2025 | 2025 | 2024 | 2024 | 2024 |
| Three Months Ended September 30, | Average Balance | Interest Revenue/ Expense | Average Yield/Rate | Average Balance | Interest Revenue/ Expense | Average Yield/Rate |
| **Interest-earning assets** |  |  |  |  |  |  |
| Cash and cash equivalents | $24298 | $264 | 4.26% | $27623 | $369 | 5.24% |
| Cash and investments segregated | 46046 | 494 | 4.20% | 26220 | 345 | 5.15% |
| Receivables from brokerage clients | 90121 | 1490 | 6.47% | 73102 | 1431 | 7.66% |
| Available for sale securities <sup>(1)</sup> | 69794 | 360 | 2.05% | 98645 | 531 | 2.14% |
| Held to maturity securities <sup>(1)</sup> | 137672 | 587 | 1.70% | 151004 | 650 | 1.71% |
| Bank loans | 51849 | 557 | 4.27% | 42653 | 484 | 4.52% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest-earning assets | 419780 | 3752 | 3.52% | 419247 | 3810 | 3.58% |
| Securities lending revenue |  | 183 |  |  | 87 |  |
| Other interest revenue |  | 21 |  |  | 31 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest-earning assets | $419780 | $3956 | 3.71% | $419247 | $3928 | 3.69% |
| **Funding sources** |  |  |  |  |  |  |
| Bank deposits | $229281 | $248 | 0.43% | $248405 | $841 | 1.35% |
| Payables to brokers, dealers, and clearing organizations <sup>(2)</sup> | 19131 | 188 | 3.84% | 9825 | 118 | 4.68% |
| Payables to brokerage clients | 96064 | 97 | 0.40% | 72700 | 79 | 0.43% |
| Other short-term borrowings | 7593 | 87 | 4.56% | 10821 | 150 | 5.52% |
| Federal Home Loan Bank borrowings | 7103 | 79 | 4.35% | 22621 | 310 | 5.38% |
| Long-term debt | 20204 | 207 | 4.01% | 22446 | 208 | 3.71% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing liabilities <sup>(2)</sup> | 379376 | 906 | 0.94% | 386818 | 1706 | 1.75% |
| Non-interest-bearing funding sources <sup>(2)</sup> | 40404 |  |  | 32429 |  |  |
| Other interest expense |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total funding sources | $419780 | $906 | 0.85% | $419247 | $1706 | 1.61% |
| **Net interest revenue** |  | $3050 | 2.86% |  | $2222 | 2.08% |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | 2025 | 2025 | 2025 | 2024 | 2024 | 2024 |
| Nine Months Ended September 30, | Average Balance | Interest Revenue/ Expense | Average Yield/Rate | Average Balance | Interest Revenue/ Expense | Average Yield/Rate |
| **Interest-earning assets** |  |  |  |  |  |  |
| Cash and cash equivalents | $27571 | $897 | 4.29% | $30128 | $1205 | 5.26% |
| Cash and investments segregated | 44104 | 1412 | 4.22% | 25744 | 1014 | 5.18% |
| Receivables from brokerage clients | 84317 | 4204 | 6.57% | 68557 | 4042 | 7.75% |
| Available for sale securities <sup>(1)</sup> | 77324 | 1198 | 2.06% | 104830 | 1680 | 2.13% |
| Held to maturity securities <sup>(1)</sup> | 141032 | 1811 | 1.71% | 154231 | 1998 | 1.72% |
| Bank loans | 48882 | 1568 | 4.28% | 41585 | 1384 | 4.44% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest-earning assets | 423230 | 11090 | 3.47% | 425075 | 11323 | 3.52% |
| Securities lending revenue |  | 339 |  |  | 258 |  |
| Other interest revenue |  | 71 |  |  | 105 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest-earning assets | $423230 | $11500 | 3.60% | $425075 | $11686 | 3.63% |
| **Funding sources** |  |  |  |  |  |  |
| Bank deposits | $237488 | $1010 | 0.57% | $260254 | $2602 | 1.34% |
| Payables to brokers, dealers, and clearing organizations <sup>(2)</sup> | 16673 | 492 | 3.89% | 7004 | 230 | 4.31% |
| Payables to brokerage clients | 92909 | 217 | 0.31% | 69586 | 229 | 0.44% |
| Other short-term borrowings | 7314 | 256 | 4.68% | 9164 | 382 | 5.57% |
| Federal home loan bank borrowings | 9180 | 322 | 4.62% | 24347 | 988 | 5.36% |
| Long-term debt | 21029 | 625 | 3.92% | 23299 | 640 | 3.66% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing liabilities <sup>(2)</sup> | 384593 | 2922 | 1.01% | 393654 | 5071 | 1.71% |
| Non-interest-bearing funding sources <sup>(2)</sup> | 38637 |  |  | 31421 |  |  |
| Other interest expense |  |  |  |  | 2 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total funding sources | $423230 | $2922 | 0.92% | $425075 | $5073 | 1.59% |
| **Net interest revenue** |  | $8578 | 2.68% |  | $6613 | 2.04% |

---

<sup>(1)</sup> Amounts have been calculated based on amortized cost. Interest revenue on investment securities is presented net of related premium amortization.

<sup>(2)</sup> Beginning in the fourth quarter of 2024, payables to brokers, dealers, and clearing organizations is presented separately from non-interest-bearing funding sources and included in total interest-bearing liabilities. This line item includes securities loaned and related interest expense. Prior period amounts have been reclassified to reflect this change.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Net interest revenue increased $828 million, or 37%, and $2.0 billion, or 30%, in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024. These increases were primarily due to lower balances of bank supplemental funding, lower average rates paid on funding sources, growth in margin and bank lending, and increases in securities lending, partially offset by lower yields on floating-rate assets due to lower market rates. Average interest-earning assets remained relatively flat, increasing slightly in the third quarter of 2025, and decreasing slightly in the first nine months of 2025, compared to the same periods in 2024. Both the third quarter and first nine months of 2025 saw higher balances of cash and investments segregated, growth in margin lending supported by higher payables to brokerage clients, and an increase in bank loans compared to the same periods in 2024. The decrease in average interest-earning assets during the first nine months of 2025 was due primarily to lower average balances in AFS and HTM securities, as cash inflows from investment securities were used to pay down bank supplemental funding.

Net interest margin increased to 2.86% and 2.68% in the third quarter and first nine months of 2025, respectively, compared to 2.08% and 2.04% during the same periods in 2024, as reduced balances of bank supplemental funding and lower rates paid on funding sources more than offset lower yields on floating-rate assets due to lower market interest rates.

Schwab's diversified funding strategy includes the use of wholesale funding. With the paydowns of bank supplemental funding in the first nine months of 2025, the outstanding balance of $14.8 billion is within a range generally consistent with our diversified funding strategy. Our use and the financial impacts of wholesale funding are dependent on a number of market and client activity factors. See also Risk Management – Liquidity Risk, Capital Management, Item 1 – Notes 8, 9, and 12, and Part II – Item 7 – Results of Operations – Net Interest Revenue in the 2024 Form 10-K for additional information on these and other funding sources.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

***Asset Management and Administration Fees***

The following table presents asset management and administration fees, average client assets, and average fee yields:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| Three Months Ended September 30, | 2025 | 2025 | 2025 | 2024 | 2024 | 2024 |
| Three Months Ended September 30, | Average<br>Client<br>Assets | Revenue | Average<br>Fee | Average<br>Client<br>Assets | Revenue | Average<br>Fee |
| Schwab money market funds | $663218 | $458 | 0.27% | $551945 | $379 | 0.27% |
| Schwab equity and bond funds, ETFs, and CTFs | 735519 | 132 | 0.07% | 603314 | 118 | 0.08% |
| Mutual Fund OneSource<sup>®</sup> and other no-transaction-fee (NTF) funds  | 443660 | 259 | 0.23% | 354664 | 224 | 0.25% |
| Other third-party mutual funds and ETFs  | 618032 | 97 | 0.06% | 611555 | 106 | 0.07% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total mutual funds, ETFs, and CTFs <sup>(1)</sup> | $2460429 | $946 | 0.15% | $2121478 | $827 | 0.16% |
| Managed investing solutions <sup>(1)</sup> |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Fee-based | $654220 | $619 | 0.38% | $554726 | $559 | 0.40% |
| &nbsp;&nbsp;&nbsp;Non-fee-based | 127592 |  |  | 114307 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total managed investing solutions | $781812 | $619 | 0.31% | $669033 | $559 | 0.33% |
| Other balance-based fees <sup>(2)</sup> | 922030 | 81 | 0.03% | 795737 | 72 | 0.04% |
| Other <sup>(3)</sup> |  | 27 |  |  | 18 |  |
| **Total asset management and administration fees** |  | $1673 |  |  | $1476 |  |
| Nine Months Ended September 30, |  |  |  |  |  |  |
| Schwab money market funds | $643168 | $1318 | 0.27% | $525166 | $1072 | 0.27% |
| Schwab equity and bond funds, ETFs, and CTFs | 685300 | 376 | 0.07% | 569608 | 337 | 0.08% |
| Mutual Fund OneSource and other NTF funds <sup>(4)</sup> | 384614 | 699 | 0.24% | 335813 | 647 | 0.26% |
| Other third-party mutual funds and ETFs <sup>(4)</sup> | 617441 | 302 | 0.07% | 606026 | 314 | 0.07% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total mutual funds, ETFs, and CTFs <sup>(1)</sup> | $2330523 | $2695 | 0.15% | $2036613 | $2370 | 0.16% |
| Managed investing solutions <sup>(1)</sup> |  |  |  |  |  |  |
| &nbsp;&nbsp;Fee-based | $613302 | $1777 | 0.39% | $528850 | $1572 | 0.40% |
| &nbsp;&nbsp;Non-fee-based | 122920 |  |  | 110191 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total managed investing solutions | $736222 | $1777 | 0.32% | $639041 | $1572 | 0.33% |
| Other balance-based fees <sup>(2)</sup> | 870045 | 233 | 0.04% | 759645 | 210 | 0.04% |
| Other <sup>(3)</sup> |  | 68 |  |  | 55 |  |
| **Total asset management and administration fees** |  | $4773 |  |  | $4207 |  |

---

<sup>(1)</sup> Average client assets for managed investing solutions may also include the asset balances contained in the mutual fund and/or ETF categories listed above.

<sup>(2)</sup> Includes various asset-related fees, such as trust fees, 401(k) recordkeeping fees, and mutual fund clearing fees and other service fees.

<sup>(3)</sup> Includes miscellaneous service and transaction fees relating to mutual funds and ETFs that are not balance-based.

<sup>(4)</sup> The first nine months of 2025 include transfers from other third-party mutual funds and ETFs to Mutual Fund OneSource<sup>®</sup> and other NTF funds.

Asset management and administration fees increased by $197 million, or 13%, and $566 million, or 13%, in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024. These increases were primarily a result of continued growth in Schwab money market funds amid the ongoing elevated interest rate environment. These increases were also due to growth in fee-based managed investing solutions, Mutual Fund OneSource<sup>®</sup>, and Schwab equity and bond funds, ETFs, and CTFs, reflecting the Company's asset gathering and net inflows into managed investing solutions, as well as year-over-year equity market appreciation.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

The following tables present a roll forward of client assets for the Schwab money market funds, Schwab equity and bond funds, ETFs, and CTFs, and Mutual Fund OneSource<sup>®</sup> and other NTF funds. These funds generated 51% and 50% of the asset management and administration fees earned in the third quarter and first nine months of 2025, respectively, compared with 49% in both the third quarter and first nine months of 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Schwab Money <br>Market Funds | Schwab Money <br>Market Funds | Schwab Equity and<br>Bond Funds, ETFs, and CTFs | Schwab Equity and<br>Bond Funds, ETFs, and CTFs | Mutual Fund OneSource<sup>®</sup> <br>and Other NTF funds | Mutual Fund OneSource<sup>®</sup> <br>and Other NTF funds |
| Three Months Ended September 30, | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 |
| Balance at beginning of period | $653473 | $533586 | $689355 | $564002 | $453919 | $344813 |
| Net inflows (outflows) | 6253 | 26829 | 11176 | 13238 | (7639) | (6555) |
| Net market gains (losses) and other  | 6696 | 1664 | 45165 | 37537 | 27255 | 19733 |
| Balance at end of period | $666422 | $562079 | $745696 | $614777 | $473535 | $357991 |
| Nine Months Ended September 30, |  |  |  |  |  |  |
| Balance at beginning of period | $596531 | $476409 | $627166 | $506149 | $347798 | $306222 |
| Net inflows (outflows) | 50163 | 69064 | 36379 | 29751 | (22489) | (17579) |
| Net market gains (losses) and other <sup>(1)</sup> | 19728 | 16606 | 82151 | 78877 | 148226 | 69348 |
| Balance at end of period | $666422 | $562079 | $745696 | $614777 | $473535 | $357991 |

---

<sup>(1)</sup> Includes $63.3 billion of transfers from other third-party mutual funds and ETFs to Mutual Fund OneSource<sup>®</sup> and other NTF Funds for the nine months ended September 30, 2025.

***Trading Revenue***

The following tables present trading revenue, client trading activity, and related information:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Percent<br>Change | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, | Percent<br>Change |
| | 2025 | 2024 | Percent<br>Change | 2025 | 2024 | Percent<br>Change |
| Commissions | $453 | $388 | 17% | $1315 | $1184 | 11% |
| Order flow revenue |  |  |  |  |  |  |
| &nbsp;&nbsp;Options | 299 | 250 | 20% | 837 | 740 | 13% |
| &nbsp;&nbsp;Equities | 191 | 107 | 79% | 562 | 326 | 72% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total order flow revenue | 490 | 357 | 37% | 1399 | 1066 | 31% |
| Principal transactions | 52 | 52 |  | 141 | 141 |  |
| **Total trading revenue** | $995 | $797 | 25% | $2855 | $2391 | 19% |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Percent<br>Change | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, | Percent<br>Change |
| | 2025 | 2024 | Percent<br>Change | 2025 | 2024 | Percent<br>Change |
| DATs (in thousands) | 7421 | 5697 | 30% | 7461 | 5711 | 31% |
| Product as a percentage of DATs |  |  |  |  |  |  |
| &nbsp;&nbsp;Equities | 55% | 52% |  | 55% | 52% |  |
| &nbsp;&nbsp;Derivatives | 22% | 21% |  | 21% | 22% |  |
| &nbsp;&nbsp;ETFs | 17% | 20% |  | 18% | 19% |  |
| &nbsp;&nbsp;Mutual funds | 5% | 6% |  | 5% | 6% |  |
| &nbsp;&nbsp;Fixed income | 1% | 1% |  | 1% | 1% |  |
| Number of trading days | 63.5 | 63.5 |  | 185.5 | 187.5 | (1)% |
| Revenue per trade <sup>(1)</sup> | $2.11 | $2.20 | (4)% | $2.06 | $2.23 | (8)% |

---

<sup>(1)</sup> Revenue per trade is calculated as trading revenue divided by the product of DATs multiplied by the number of trading days.

Trading revenue increased $198 million, or 25%, and $464 million, or 19%, in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024, driven by an increase in order flow and commissions revenue reflecting higher volume.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

***Bank Deposit Account Fees***

The Company earns bank deposit account fee revenue from TD Bank USA, National Association and TD Bank, National Association (together, the TD Depository Institutions), in accordance with the Second Amended and Restated Insured Deposit Account Agreement (2023 IDA agreement). These fees are affected by changes in interest rates and the composition of balances designated as fixed- and floating-rate obligation amounts. See Item 1 – Note 10 for additional information.

The following table presents bank deposit account fee revenue and related information:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Percent <br>Change | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, | Percent Change |
| | 2025 | 2024 | Percent <br>Change | 2025 | 2024 | Percent Change |
| Bank deposit account fees | $247 | $152 | 63% | $739 | $488 | 51% |
| Average bank deposit account balances | $80030 | $83099 | (4)% | $82145 | $87641 | (6)% |
| Average net yield | 1.21% | 0.72% |  | 1.19% | 0.73% |  |
| Percentage of average BDA balances designated as: |  |  |  |  |  |  |
| &nbsp;&nbsp;Fixed-rate balances | 77% | 87% |  | 78% | 88% |  |
| &nbsp;&nbsp;Floating-rate balances | 23% | 13% |  | 22% | 12% |  |

---

Bank deposit account fees increased $95 million, or 63%, and $251 million, or 51%, in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024, primarily due to a decrease in the amount paid to clients as a result of lower interest rates, partially offset by lower average BDA balances. The decrease in average BDA balances in the third quarter and first nine months of 2025 compared to the same periods in 2024 was primarily due to client cash allocation decisions in 2024 in response to elevated short-term market interest rates through most of 2024, as well as the transfer of $3.0 billion of BDA balances to Schwab's balance sheet in September 2025. Pursuant to the 2023 IDA agreement, after September 10, 2025, Schwab has broader discretion to withdraw balances, subject to certain constraints, as described in Item 1 – Note 10. Transfers of BDA balances to Schwab's balance sheet result in lower balances upon which bank deposit account fee revenue is earned but provide a source of funding to invest in interest-earning assets or pay down borrowings to increase net interest revenue.

Average net yield increased in the third quarter and first nine months of 2025 compared to the same periods in 2024 due to an increase in the average amount of floating-rate BDA balances, which was partially offset by a decrease in the average net yields on fixed-rate and floating-rate BDA balances. The percentages of BDA balances designated as fixed-rate and floating-rate obligation amounts as of September 30, 2025 were 76% and 24%, respectively.

***Other Revenue***

Other revenue includes industry fees, certain service fees, other gains and losses from the sale of assets, and the provision for credit losses on bank loans.

Other revenue decreased $30 million, or 15%, in the third quarter of 2025 compared to the same period in 2024, primarily due to lower industry fees, partially offset by higher other service fees. Effective May 14, 2025, the SEC decreased the fee rate applicable to most securities transactions to zero from the rate in effect since May 22, 2024. This change resulted in lower industry fees in the third quarter of 2025 compared to the same period in 2024. Other revenue increased $62 million, or 11%, in the first nine months of 2025 compared to the same period in 2024, primarily due to a gain from the sale of an equity investment, higher other service fees, and higher industry fees. Industry fees increased primarily due to higher DATs, partially offset by the decrease in SEC fee rates.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

***Total Expenses Excluding Interest***

The following table presents a comparison of expenses excluding interest:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Percent<br>Change | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, | Percent<br>Change |
| | 2025 | 2024 | Percent<br>Change | 2025 | 2024 | Percent<br>Change |
| Compensation and benefits |  |  |  |  |  |  |
| &nbsp;&nbsp;Salaries and wages | $952 | $893 | 7% | $2802 | $2633 | 6% |
| &nbsp;&nbsp;Incentive compensation | 424 | 384 | 10% | 1187 | 1100 | 8% |
| &nbsp;&nbsp;Employee benefits and other | 277 | 245 | 13% | 872 | 777 | 12% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total compensation and benefits | $1653 | $1522 | 9% | $4861 | $4510 | 8% |
| Professional services | 293 | 256 | 14% | 853 | 756 | 13% |
| Occupancy and equipment | 280 | 271 | 3% | 824 | 784 | 5% |
| Advertising and market development | 101 | 101 |  | 305 | 296 | 3% |
| Communications | 149 | 147 | 1% | 478 | 460 | 4% |
| Depreciation and amortization | 212 | 231 | (8)% | 644 | 692 | (7)% |
| Amortization of acquired intangible assets | 127 | 130 | (2)% | 385 | 389 | (1)% |
| Regulatory fees and assessments | 59 | 88 | (33)% | 225 | 309 | (27)% |
| Other | 240 | 259 | (7)% | 731 | 694 | 5% |
| &nbsp;&nbsp;&nbsp;Total expenses excluding interest | $3114 | $3005 | 4% | $9306 | $8890 | 5% |
| Expenses as a percentage of total net revenues |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Compensation and benefits | 27% | 31% |  | 28% | 32% |  |
| &nbsp;&nbsp;&nbsp;Advertising and market development | 2% | 2% |  | 2% | 2% |  |
| Full-time equivalent employees (in thousands) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;At quarter end | 32.7 | 32.1 | 2% |  |  |  |
| &nbsp;&nbsp;&nbsp;Average | 32.8 | 32.3 | 2% | 32.4 | 32.4 |  |

---

Expenses excluding interest increased $109 million, or 4%, and $416 million, or 5%, in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024. Adjusted total expenses, which excludes acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs, increased 5% and 6% in the third quarter and first nine months of 2025, respectively, compared to the same periods in 2024. See Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results. There were no acquisition and integration-related costs or restructuring costs in the third quarter and first nine months of 2025.

Total compensation and benefits expense increased in the third quarter and first nine months of 2025 compared to the same periods in 2024, primarily due to annual merit increases, higher incentive compensation, and higher other employee-related costs. Compensation and benefits included a $34 million benefit in the first nine months of 2024 due to a change in estimated restructuring costs. Compensation and benefits also included acquisition and integration-related costs of $9 million and $44 million in the third quarter and first nine months of 2024, respectively.

Professional services expense increased in the third quarter and first nine months of 2025 compared to the same periods in 2024, reflecting overall growth of the business and increased utilization of technology and other professional services. Professional services included acquisition and integration-related costs of $3 million and $32 million in the third quarter and first nine months of 2024, respectively.

Occupancy and equipment expense increased in the third quarter and first nine months of 2025 compared to the same periods in 2024, primarily driven by higher technology equipment and software costs, as well as building expenses, related to growth of the business, and a benefit related to property taxes reflected in 2024.

Advertising and market development expense remained consistent in the third quarter and increased in the first nine months of 2025 compared to the same periods in 2024. In the third quarter of 2025, higher digital advertising costs were largely offset by lower client promotional spending, and the increase in the first nine months of 2025 primarily reflected higher digital advertising costs.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Communications expense increased in the third quarter and first nine months of 2025 compared to the same periods in 2024. The increase in the third quarter was primarily due to higher proxy-related expenses reflecting growth in the business, partially offset by lower printing and telecommunications expenses. The increase in the year-to-date period primarily reflected higher proxy-related expenses and exchange quotation services, partially offset by lower telecommunications expenses.

Depreciation and amortization expense decreased in the third quarter and first nine months of 2025 compared to the same periods in 2024, primarily due to finance lease terminations in 2024 and lower depreciation on equipment due to abandonment of certain data centers in 2024 related to the integration of Ameritrade Holding LLC (Ameritrade Holding) and its consolidated subsidiaries (collectively, Ameritrade). Depreciation and amortization expense included acquisition and integration-related costs of $8 million and $13 million in the third quarter and first nine months of 2024, respectively.

Amortization of acquired intangible assets was largely consistent in the third quarter and first nine months of 2025 compared to the same periods in 2024.

Regulatory fees and assessments decreased in the third quarter and first nine months of 2025 compared to the same periods in 2024. The decrease in the third quarter of 2025 was primarily due to a $13 million reduction in the FDIC special assessment coupled with lower FDIC deposit insurance assessments. The decrease in the first nine months of 2025 was primarily due to a $30 million incremental FDIC special assessment in the first nine months of 2024 and the $13 million reduction in the special assessment in the third quarter of 2025, coupled with lower FDIC deposit insurance assessments reflecting a decrease in brokered CDs and a lower assessment base.

Other expense decreased in the third quarter and increased in the first nine months of 2025 compared to the same periods in 2024. The decrease in the third quarter of 2025 was primarily driven by lower industry fees, partially offset by certain higher costs in 2025 related to growth of the business and increased client trading volume. Effective May 14, 2025, the SEC decreased the fee rate applicable to most securities transactions to zero from the rate in effect since May 22, 2024, resulting in lower industry fees in the third quarter of 2025 compared to the same period in 2024. The increase in the first nine months of 2025 from the same period in 2024 was primarily due to higher industry fees in the first half of the year and certain higher costs resulting from growth of the business and increased trading volume. The increase was also partially offset by a charge recognized in the second quarter of 2024 for the SEC's industry-wide review of off-channel communications. Other expense included restructuring costs of $13 million in the first nine months of 2024.

Capital expenditures were $152 million and $135 million in the third quarter of 2025 and 2024, respectively, and $444 million and $349 million in the first nine months of 2025 and 2024, respectively. Capital expenditures increased in the third quarter and first nine months of 2025 compared to the same periods in 2024, primarily due to higher investment in purchased software and telecommunications and other equipment, partially offset by lower internally developed software for the year-to-date period. The completion of certain construction projects resulted in a decrease of building-related capital expenditures during the third quarter of 2025. As a result of higher year-to-date total net revenues and lower spending, we now estimate capital expenditures for full-year 2025 will be on the lower end of our previously disclosed expected range of approximately 3-5% of total net revenues.

***Taxes on Income***

Taxes on income were $663 million and $434 million for the third quarter of 2025 and 2024, respectively, resulting in effective tax rates of 21.9% and 23.6%, respectively. Taxes on income were $1.9 billion and $1.3 billion for the first nine months of 2025 and 2024, respectively, resulting in tax rates of 22.8% and 23.9%, respectively. The decrease in the effective tax rate in the third quarter of 2025 compared to the same period in 2024 was primarily due to a decrease in state taxes and in non-deductible FDIC deposit insurance assessments, partially offset by a decrease in certain tax credits. The decrease in the effective tax rate in the first nine months of 2025 compared to the same period in 2024 was primarily due to a decrease in the state tax rate and in non-deductible FDIC deposit insurance assessments, and an increase in equity compensation tax deduction benefits, partially offset by a decrease in certain tax credits.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

**Segment Information**

Financial information for our segments is presented in the following table <sup>(1)</sup>:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | Investor Services | Investor Services | Investor Services | Advisor Services | Advisor Services | Advisor Services | Total | Total | Total |
| Three Months Ended September 30, | Percent Change | 2025 | 2024 | Percent Change | 2025 | 2024 | Percent Change | 2025 | 2024 |
| **Net Revenues** |  |  |  |  |  |  |  |  |  |
| Net interest revenue | 36% | $2424 | $1777 | 41% | $626 | $445 | 37% | $3050 | $2222 |
| Asset management and administration fees | 14% | 1221 | 1074 | 12% | 452 | 402 | 13% | 1673 | 1476 |
| Trading revenue | 28% | 906 | 710 | 2% | 89 | 87 | 25% | 995 | 797 |
| Bank deposit account fees | 66% | 196 | 118 | 50% | 51 | 34 | 63% | 247 | 152 |
| Other | (20)% | 136 | 169 | 10% | 34 | 31 | (15)% | 170 | 200 |
| &nbsp;&nbsp;&nbsp;Total net revenues | 27% | 4883 | 3848 | 25% | 1252 | 999 | 27% | 6135 | 4847 |
| **Expenses Excluding Interest** |  |  |  |  |  |  |  |  |  |
| Compensation and benefits | 10% | $1284 | $1169 | 5% | $369 | $353 | 9% | $1653 | $1522 |
| Professional services | 16% | 235 | 202 | 7% | 58 | 54 | 14% | 293 | 256 |
| Occupancy and equipment | 4% | 220 | 211 |  | 60 | 60 | 3% | 280 | 271 |
| Advertising and market development | 2% | 60 | 59 | (2)% | 41 | 42 |  | 101 | 101 |
| Communications | 2% | 105 | 103 |  | 44 | 44 | 1% | 149 | 147 |
| Depreciation and amortization | (8)% | 161 | 175 | (9)% | 51 | 56 | (8)% | 212 | 231 |
| Amortization of acquired intangible assets | (1)% | 104 | 105 | (8)% | 23 | 25 | (2)% | 127 | 130 |
| Regulatory fees and assessments | (27)% | 51 | 70 | (56)% | 8 | 18 | (33)% | 59 | 88 |
| Other | (6)% | 207 | 221 | (13)% | 33 | 38 | (7)% | 240 | 259 |
| &nbsp;&nbsp;Total expenses excluding interest | 5% | 2427 | 2315 |  | 687 | 690 | 4% | 3114 | 3005 |
| **Income before taxes on income** | 60% | $2456 | $1533 | 83% | $565 | $309 | 64% | $3021 | $1842 |
| &nbsp;&nbsp;Net New Client Assets (in billions) <sup>(2)</sup> | 42% | $52.7 | $37.2 | 52% | $81.7 | $53.6 | 48% | $134.4 | $90.8 |
| Nine Months Ended September 30, |  |  |  |  |  |  |  |  |  |
| **Net Revenues** |  |  |  |  |  |  |  |  |  |
| Net interest revenue | 29% | $6826 | $5279 | 31% | $1752 | $1334 | 30% | $8578 | $6613 |
| Asset management and administration fees | 14% | 3479 | 3050 | 12% | 1294 | 1157 | 13% | 4773 | 4207 |
| Trading revenue | 21% | 2563 | 2115 | 6% | 292 | 276 | 19% | 2855 | 2391 |
| Bank deposit account fees | 54% | 581 | 378 | 44% | 158 | 110 | 51% | 739 | 488 |
| Other | 7% | 514 | 479 | 27% | 126 | 99 | 11% | 640 | 578 |
| &nbsp;&nbsp;Total net revenues | 24% | 13963 | 11301 | 22% | 3622 | 2976 | 23% | 17585 | 14277 |
| **Expenses Excluding Interest** |  |  |  |  |  |  |  |  |  |
| Compensation and benefits | 8% | $3760 | $3480 | 7% | $1101 | $1030 | 8% | $4861 | $4510 |
| Professional services | 13% | 680 | 602 | 12% | 173 | 154 | 13% | 853 | 756 |
| Occupancy and equipment | 6% | 647 | 610 | 2% | 177 | 174 | 5% | 824 | 784 |
| Advertising and market development | 2% | 194 | 191 | 6% | 111 | 105 | 3% | 305 | 296 |
| Communications | 5% | 338 | 321 | 1% | 140 | 139 | 4% | 478 | 460 |
| Depreciation and amortization | (11)% | 488 | 546 | 7% | 156 | 146 | (7)% | 644 | 692 |
| Amortization of acquired intangible assets | (7)% | 314 | 339 | 42% | 71 | 50 | (1)% | 385 | 389 |
| Regulatory fees and assessments | (24)% | 183 | 240 | (39)% | 42 | 69 | (27)% | 225 | 309 |
| Other | 6% | 618 | 583 | 2% | 113 | 111 | 5% | 731 | 694 |
| &nbsp;&nbsp;Total expenses excluding interest | 4% | 7222 | 6912 | 5% | 2084 | 1978 | 5% | 9306 | 8890 |
| **Income before taxes on income** | 54% | $6741 | $4389 | 54% | $1538 | $998 | 54% | $8279 | $5387 |
| &nbsp;&nbsp;Net New Client Assets (in billions) <sup>(2)</sup> | 34% | $153.4 | $114.9 | 35% | $187.0 | $138.3 | 34% | $340.4 | $253.2 |

---

<sup>(1)</sup> In connection with certain changes in Schwab's organizational management structure, in the fourth quarter of 2024, the Retirement Business Services business unit was transferred from the Advisor Services segment to the Investor Services segment. Accordingly, amounts related to the Retirement Business Services business unit are included within Investor Services for the third quarter and nine months ended September 30, 2025, and prior-year amounts have been recast to reflect this new basis of segmentation.

<sup>(2)</sup> In the third quarter and first nine months of 2025, Investor Services includes net outflows of $3.1 billion and $15.1 billion, respectively, from off-platform brokered CDs issued by CSB. In the third quarter and first nine months of 2024, Investor Services includes net outflows of $4.4 billion and $9.1 billion, respectively, from off-platform brokered CDs issued by CSB and an outflow of $0.1 billion from a large international relationship. Also, in the first nine months of 2024, Investor Services includes an inflow of $10.3 billion from a mutual fund clearing services client.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

*Segment Net Revenues*

Investor Services and Advisor Services total net revenues increased by 27% and 25%, respectively, in the third quarter of 2025, and increased by 24% and 22%, respectively, in the first nine months of 2025, compared to the same periods in 2024. Changes in Schwab's net revenues were driven by similar factors for both segments in the third quarter and first nine months of 2025 compared to the same periods in 2024. Net interest revenue increased primarily due to reductions in bank supplemental funding, lower average rates paid on funding sources, and growth of bank and margin lending balances, partially offset by lower yields on interest-earning assets. Asset management and administration fees increased primarily as a result of higher balances in money market funds, Schwab equity and bond funds, ETFs, and CTFs, and Mutual Fund OneSource<sup>®</sup>, and, additionally for Investor Services, managed investing solutions. Trading revenue increased primarily due to higher order flow revenue and commission revenue reflecting higher volume. Bank deposit account fees increased primarily due to improved net yields partially offset by lower average BDA balances. Other revenue increased for both segments in the first nine months of 2025, and in the third quarter of 2025 decreased for Investor Services while slightly increasing for Advisor Services. Both segments saw growth in other revenue due to higher industry fees in the first half of 2025, higher other service fees, and a recognized gain on the sale of an equity investment, offset by lower industry fees in the third quarter of 2025.

*Segment Expenses Excluding Interest*

Investor Services total expenses excluding interest increased by 5% and Advisor Services total expenses excluding interest remained consistent in the third quarter of 2025 compared to the same period in 2024. Investor Services and Advisor Services total expenses excluding interest increased by 4% and 5%, respectively, in the first nine months of 2025 compared to the same periods in 2024. Changes in expenses were driven by similar factors for the two segments in the third quarter and first nine months of 2025 compared to the same periods in 2024. Compensation and benefits expense increased primarily due to annual merit increases, higher incentive compensation, and higher employee-related costs. Professional services expense increased due to overall growth of the business and increased utilization of technology and other professional services. Occupancy and equipment expense increased in the first nine months of 2025 primarily due to higher technology equipment and software costs related to growth of the business and a property tax benefit reflected in 2024, while in the third quarter of 2025, both segments were relatively flat. Regulatory fees and assessments decreased during the third quarter and first nine months of 2025 compared to the same periods in 2024, primarily due to lower FDIC assessments.

**<u>RISK MANAGEMENT</u>** 

Schwab's business activities expose it to a variety of risks, including operational, compliance, credit, market, and liquidity risks. The Company has a comprehensive risk management program to identify and manage these risks and their associated potential for financial and reputational impact.

For a discussion of our risk management programs, see Part II – Item 7 – Risk Management in the 2024 Form 10-K.

**Market Risk**

Market risk is the potential for changes in earnings or the value of financial instruments held by Schwab as a result of fluctuations in interest rates, equity prices, or market conditions. Schwab is exposed to market risk primarily from changes in interest rates within our interest-earning assets relative to changes in the costs of funding sources that finance these assets.

To manage interest rate risk, we have established policies and procedures, which include setting limits on net interest revenue risk and EVE risk. To remain within these limits, we manage the maturity, repricing, and cash flow characteristics of the investment portfolios. Management monitors established guidelines to stay within the Company's risk appetite. The Company utilizes interest rate swap derivative instruments to assist with managing interest rate risk, the effects of which are incorporated into the Company's net interest revenue and EVE analyses. For further information on our interest rate risk management strategies utilizing interest rate swaps, see Item 1 – Note 11.

Our measurement of interest rate risk involves assumptions that are inherently uncertain and, as a result, cannot precisely estimate the impact of changes in interest rates on net interest revenue, bank deposit account fees, or EVE. Actual results may differ from simulated results due to balance growth or decline and the timing, magnitude, and frequency of interest rate changes, as well as changes in market conditions and management strategies, including changes in asset and liability mix. Financial instruments are also subject to the risk that valuations will be negatively affected by changes in demand and the underlying market for a financial instrument.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

We are indirectly exposed to option, futures, and equity market fluctuations in connection with client option and futures accounts, securities collateralizing margin loans to brokerage customers, and client securities loaned out as part of the brokerage securities lending activities. Equity market valuations may also affect the level of brokerage client trading activity, margin borrowing, and overall client engagement with Schwab. Additionally, we earn mutual fund and ETF service fees and asset management fees based upon daily balances of certain client assets. Fluctuations in these client asset balances caused by changes in equity valuations directly impact the amount of fee revenue we earn. Our market risk related to financial instruments held for trading is not material.

*Net Interest Revenue Simulation*

For our net interest revenue sensitivity analysis, we use net interest revenue simulation modeling techniques to evaluate and manage the effect of changing interest rates. The simulations include all balance sheet interest rate-sensitive assets and liabilities, and include derivative instruments. Key assumptions include the projection of interest rate scenarios with rate floors, rates and balances of non-maturity client cash held on the balance sheet, prepayment speeds of mortgage-related investments, repricing of financial instruments, and reinvestment of matured or paid-down securities and loans. We use both proprietary and independent third-party models to simulate net interest revenue sensitivity and related analyses. Fixed income analytical vendors provide term structure models, prepayment speed models for mortgage-backed securities and mortgage loans, and cash flow projections based on interest income, contractual maturities, and prepayments. The Company's net interest revenue sensitivity analyses utilize gradual parallel increases/decreases in interest rates over a twelve month period, though we also regularly simulate the effects of non-parallel shifts and instantaneous shifts of interest rates on net interest revenue.

Net interest revenue is affected by various factors, such as the distribution and composition of interest-earning assets and interest-bearing liabilities, the spread between yields earned on interest-earning assets and rates paid on interest-bearing liabilities, which may reprice at different times or by different amounts, and the spread between short- and long-term interest rates. Interest-earning assets include investment securities, margin loans, bank loans, cash and investments segregated, and cash and cash equivalents. These assets are sensitive to changes in interest rates and changes in prepayment levels that tend to increase in a declining rate environment and decrease in a rising rate environment. Because we establish the rates paid on certain brokerage client cash balances and bank deposits and the rates charged on certain margin and bank loans, and control the composition of our investment securities, we have some ability to manage our net interest spread, depending on competitive factors and market conditions. When we have liquidity needs that exceed our primary sources of funding, the Company has needed to utilize higher-cost funding sources, which can reduce net interest margin and net interest revenue.

Higher prevailing short-term interest rates generally improve yields on shorter duration interest-earning assets. During periods of rapidly rising interest rates, clients tend to reallocate cash out of sweep products into higher-yielding, off-balance sheet, fixed income investments and money market funds within Schwab's product offerings. This can result in lower interest-earning assets and/or may require supplemental funding with higher funding costs, which therefore tend to constrain net interest revenue when interest rates are moving rapidly higher. A decline in short-term interest rates could negatively impact the yield on the Company's investment and loan portfolios to a greater degree than any offsetting reduction in interest expense from funding sources, compressing net interest margin.

Net interest revenue sensitivity analyses assume both statically and dynamically-sized balance sheet composition. Statically-sized balance sheet modeling assumes the asset and liability structure of the consolidated balance sheet would not be changed as a result of the simulated changes in interest rates. While this approach is useful to isolate the impact of changes in interest rates on a statically-sized asset and liability structure, it does not capture changes to client cash allocations. We therefore also conduct dynamically-sized balance sheet compositions as a function of interest rates. Dynamic net interest revenue simulations assume runoff of bank deposit and payables to brokerage client balances is supplemented with wholesale borrowing when needed to fund assets through the simulation horizon. We also conduct similar simulations on EVE to capture the impact of client cash allocation changes on our balance sheet. As we actively manage the consolidated balance sheet and interest rate exposure, we have taken and would typically seek to take steps to manage additional interest rate exposure that could result from changes in the interest rate environment.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

The following table assumes a statically-sized balance sheet with simulated changes to net interest revenue over the next twelve months beginning September 30, 2025 and December 31, 2024 of a gradual increase or decrease in market interest rates relative to prevailing market rates at the end of each reporting period:

---

| | | |
|:---|:---|:---|
| | September 30, 2025 | December 31, 2024 |
| Increase of 200 basis points | 8.5% | 8.6% |
| Increase of 100 basis points | 4.6% | 4.6% |
| Increase of 50 basis points | 2.3% | 2.5% |
| Decrease of 50 basis points | (2.1)% | (2.3)% |
| Decrease of 100 basis points | (4.2)% | (4.6)% |
| Decrease of 200 basis points | (8.2)% | (9.3)% |

---

The Company's simulated incremental increases and decreases in market interest rates had a smaller impact on net interest revenue as of September 30, 2025 compared to December 31, 2024, primarily due to the use of cash flow hedges related to Schwab's PALs beginning in the second quarter of 2025, and lower cash balances.

*Effective Duration*

Effective duration measures price sensitivity relative to a change in prevailing interest rates, taking account of amortizing cash flows and prepayment optionality for mortgage-related securities and loans. Duration is measured in years and commonly interpreted as the average timing of principal and interest cash flows. We seek to manage the Company's asset duration in relation to management's estimate of the Company's liability duration. The Company's liability duration is impacted by the composition of funding sources, and typically decreases in periods of rising market interest rates and increases in periods of declining market interest rates. The Company also utilizes derivative hedging instruments such as interest rate swaps in managing its asset and liability duration.

The following table presents the Company's estimated effective durations, which reflect anticipated future payments, by category:

---

| | | |
|:---|:---|:---|
| | September 30, 2025 | September 30, 2024 |
| | In years | In years |
| Estimated effective duration, exclusive of derivatives: |  |  |
| &nbsp;&nbsp;Consolidated total assets | 2.0 | 2.3 |
| &nbsp;&nbsp;AFS investment securities portfolio | 2.5 | 2.3 |
| &nbsp;&nbsp;AFS and HTM investment securities portfolio | 4.0 | 3.9 |
| &nbsp;&nbsp;Pledged asset lines <sup>(1)</sup> | 0.1 |  |
| &nbsp;&nbsp;Long-term debt CSC Senior Notes | 2.9 | 3.4 |
| Estimated effective duration, inclusive of derivatives <sup>(2)</sup>: |  |  |
| &nbsp;&nbsp;Consolidated total assets | 2.0 | 2.3 |
| &nbsp;&nbsp;AFS investment securities portfolio | 2.0 | 2.0 |
| &nbsp;&nbsp;AFS and HTM investment securities portfolio | 3.8 | 3.8 |
| &nbsp;&nbsp;Pledged asset lines <sup>(1)</sup> | 1.3 |  |
| &nbsp;&nbsp;Long-term debt CSC Senior Notes | 1.6 | 3.4 |

---

<sup>(1)</sup> The duration of PALs was less than 0.1 years at September 30, 2024.

<sup>(2)</sup> See Item 1 – Note 11 for additional discussion of the Company's derivatives.

AFS and HTM securities comprised approximately 43% and 51% of the Company's consolidated total assets as of September 30, 2025 and 2024, respectively. The estimated effective duration of the remaining balance sheet assets, excluding the effect of hedging, in aggregate was less than one year as of both September 30, 2025 and 2024.

*Economic Value of Equity Simulation*

Management also uses EVE simulations to measure interest rate risk. EVE sensitivity measures the long-term impact of interest rate changes on the net present value of assets and liabilities, and includes the impact of derivative instruments. While EVE does not have a direct accounting relationship, the measure aims to capture a theoretical value of assets and liabilities under a variety of interest rate environments. EVE is calculated by subjecting the balance sheet to hypothetical instantaneous shifts in the level of interest rates. This analysis is highly dependent upon asset and liability assumptions based on historical and certain

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

expected behaviors. Key assumptions in our EVE calculation include projection of interest rate scenarios with rate floors, prepayment speeds of mortgage-related investments, term structure models of interest rates, behavior of non-maturity client cash held on the balance sheet, and pricing assumptions. We use both proprietary and independent third-party models to simulate EVE sensitivity and related analyses. We develop and maintain client credits and deposits run-off models internally based on historical experience and prevailing client cash realignment behaviors. We rely on third-party models for interest rate term structure modeling, prepayment speed modeling for mortgage-backed securities and mortgage loans, and cash flow projections based on interest income, and contractual maturities.

Schwab's EVE profile is characterized by a more stable asset duration relative to liabilities in both higher and lower interest rate environments. Currently, the EVE exposure to rates increasing or decreasing in a similar magnitude shows that there is greater exposure to rates decreasing.

*Bank Deposit Account Fees Simulation*

Consistent with the presentation on the consolidated statement of income, the sensitivity of bank deposit account fee revenue to interest rate changes is assessed separately from the net interest revenue simulation described above. As of September 30, 2025 and December 31, 2024, simulated changes in bank deposit account fee revenue from gradual changes in market interest rates relative to prevailing market rates, under the interest rate scenarios described above for net interest revenue, did not have a significant impact on the Company's total net revenues.

Our net interest revenue, EVE, and bank deposit account fee revenue simulations reflect the assumption of non-negative investment yields.

**Liquidity Risk**

Liquidity risk is the potential that Schwab will be unable to sell assets or meet cash flow obligations when they come due without incurring unacceptable losses.

Due to its role as a source of financial strength, CSC's liquidity needs are primarily driven by the liquidity and capital needs of: CS&Co, our principal broker-dealer subsidiary; the capital needs of the banking subsidiaries; principal and interest due on corporate debt; and dividend payments on CSC's preferred and common stock. The liquidity needs of our broker-dealer subsidiary are primarily driven by client activity, including trading and margin lending activities, and capital expenditures. The capital needs of the banking subsidiaries are primarily driven by client deposit levels and other borrowings. We have established liquidity policies to support the successful execution of business strategies, while ensuring ongoing and sufficient liquidity to meet operational needs and satisfy applicable regulatory requirements under both normal and stressed conditions. We seek to maintain client confidence in the balance sheet and the safety of client assets by maintaining liquidity and diversity of funding sources to allow the Company to meet its obligations. To this end, we have established limits and contingency funding plans to support liquidity levels during both business as usual and stressed conditions.

We employ a variety of metrics to monitor and manage liquidity. We conduct regular liquidity stress testing to develop a view of liquidity risk exposures and to ensure our ability to maintain sufficient liquidity during market-related or company-specific liquidity stress events. Liquidity sources are also tested periodically and results are reported to the Financial Risk Oversight Committee. A number of early warning indicators are monitored to help identify emerging liquidity stresses in the market or within the organization and are reviewed with management periodically.

*Funding Sources*

Schwab's primary source of funds is cash generated by client activity which includes bank deposits and cash balances in client brokerage accounts. These funds are used to purchase investment securities and extend loans to clients. Other sources of funds may include cash flows from operations, maturities and sales of investment securities, repayments on loans, securities lending of assets held in client brokerage accounts, FHLB borrowings, borrowings under repurchase agreements with external financial institutions and the Fixed Income Clearing Corporation (FICC), issuance of CDs, cash provided by securities issuances by CSC in the capital markets, and other facilities described below.

To meet daily funding needs, we maintain liquidity in the form of overnight cash deposits and short-term investments. For unanticipated liquidity needs, we also maintain a buffer of highly liquid investments, including U.S. Treasury securities.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Our clients' bank deposits and brokerage cash balances primarily originate from our 38.0 million active brokerage accounts. More than 80% of our bank deposits qualified for FDIC insurance as of September 30, 2025. Our clients' allocation of cash held on our balance sheet as bank deposits or payables to brokerage clients is sensitive to interest rate levels, with clients typically increasing their utilization of investment cash solutions, such as purchased money market funds and certain fixed income products when those yields are higher than those of cash sweep features.

As a participant in the financial services industry, Schwab relies on access to external financing in the normal course of business. Schwab's use of external debt facilities may arise from timing differences between cash flow requirements, such as client cash outflows, cash flows from operations, payments on interest-earning assets, movements of cash to meet regulatory brokerage client cash segregation requirements, and general corporate purposes. Rollover risk is the risk that we will not be able to refinance or payoff borrowings as they mature. We maintain policies and procedures necessary to access funding, and test borrowing procedures on a periodic basis. We manage rollover risk on borrowings, taking into account expected principal paydowns on our investment and loan portfolios along with expected deposit flows.

The following table describes certain external debt facilities available at September 30, 2025:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| Description | Borrower | Outstanding | Available | Available | Maturity of Amounts Outstanding | Weighted-Average Interest Rate on Amounts Outstanding |
| FHLB secured credit facilities | Banking subsidiaries | $850 | $75342 | <sup>(1)</sup> | February 2026 | 4.11% |
| Federal Reserve discount window | Banking subsidiaries |  | 29706 | <sup>(1)</sup> | N/A |  |
| Repurchase agreements | Banking subsidiaries, CSC | 3995 |  | <sup>(2)</sup> | October 2025 - November 2025 | 4.45% |
| Unsecured uncommitted lines of credit with<br> various external banks | CSC, CS&Co |  | 1692 |  | N/A |  |
| Unsecured commercial paper | CSC | 800 | 4200 | <sup>(3)</sup> | October 2025 - November 2025 | 4.52% |
| Secured uncommitted lines of credit with <br> various external banks | CS&Co | 1750 |  | <sup>(4)</sup> | December 2025 - January 2026 | 4.51% |

---

<sup>(1)</sup> Amounts shown as available from the FHLB and Federal Reserve facilities represent remaining capacity based on assets pledged as of September 30, 2025. Incremental borrowing capacity may be made available by pledging additional assets, subject to applicable facility terms. See below and Item 1 – Note 9 for additional information.

<sup>(2)</sup> Secured borrowing capacity is made available based on our borrower's ability to provide collateral deemed acceptable by each respective counterparty. See below and Item 1 – Note 12 for additional information.

<sup>(3)</sup> Outstanding balance of unsecured commercial paper as of September 30, 2025 represents the gross par value before discount of $4 million.

<sup>(4)</sup> Secured borrowing capacity is made available based on CS&Co's ability to provide acceptable collateral to the lenders as determined by the credit agreements.

N/A Not applicable.

Available borrowing capacity from the FHLB and Federal Reserve facilities maintained by our banking subsidiaries is dependent on the value of assets pledged and the terms of the borrowing arrangements. As of September 30, 2025, the Company had additional investment securities with a par value of approximately $99 billion, or a fair value of approximately $93 billion, available to be pledged to obtain additional capacity. Additional details regarding availability and use of these facilities is described below.

Amounts available under secured credit facilities with the FHLB are dependent on the value of our First Mortgages, home equity lines of credit (HELOCs), and the value of certain of our investment securities that are pledged as collateral. These credit facilities are also available as backup financing in the event the outflow of client cash from the banking subsidiaries' respective balance sheets is greater than maturities and paydowns on investment securities and bank loans. CSC's banking subsidiaries must each maintain positive tangible capital, as defined by the Federal Housing Finance Agency, in order to place new draws upon these credit facilities, and the Company manages capital with consideration of minimum tangible capital ratios at our banking subsidiaries. Tangible capital pursuant to the requirements of the FHLB borrowing facilities for our banking subsidiaries is common equity less goodwill and intangible assets.

Our banking subsidiaries also have access to short-term secured funding through the Federal Reserve discount window. Amounts available under the Federal Reserve discount window are dependent on the value of certain investment securities that are pledged as collateral. Our banking subsidiaries may also engage with external financial institutions and the FICC in repurchase agreements collateralized by investment securities as another source of short-term liquidity.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

In addition, our banking subsidiaries are counterparties to the Standing Repo Facility with the Federal Reserve Bank of New York; other than de minimis tests performed to satisfy the Federal Reserve Bank of New York's testing requirements, this facility was not used during the first nine months of 2025 and there were no amounts outstanding at September 30, 2025. CSC maintains standing bilateral repurchase agreements with external banks. Other than de minimis tests, these facilities were not used during the first nine months of 2025 and there were no amounts outstanding under these facilities at September 30, 2025.

CSC's ratings for Commercial Paper Notes were P1 by Moody's Investor Service (Moody's), A2 by Standard & Poor's Rating Group (Standard & Poor's), and F1 by Fitch Ratings, Inc. (Fitch) at September 30, 2025.

CSC has a universal automatic shelf registration statement on file with the SEC, which enables it to issue debt, equity, and other securities.

CS&Co maintains unsecured uncommitted bank credit lines with a group of banks as a source of short-term liquidity, which can also be accessed by CSC. CS&Co also maintains secured uncommitted lines of credit, under which CS&Co may borrow on a short-term basis and pledge either client margin securities or firm securities as collateral, based on the terms of the agreements. Additionally, CS&Co is able to lend eligible securities held in client brokerage accounts in exchange for cash collateral as a source of short-term liquidity. As of September 30, 2025, liabilities for securities loaned totaled $21.7 billion and are included in payables to brokers, dealers, and clearing organizations on the condensed consolidated balance sheet. As of September 30, 2025, $18.7 billion of securities loaned had overnight and continuous remaining contractual maturities; $3.0 billion of securities loaned had contractual maturities of 35 - 95 days and had a weighted-average interest rate of 4.46%. See Item 1 – Note 12 for additional information on securities lending activities.

CSB issues brokered CDs as a supplemental funding source. The following table provides information about brokered CDs issued by CSB and outstanding as of September 30, 2025:

---

| | | | |
|:---|:---|:---|:---|
| | Amount Outstanding | Maturity | Weighted-Average Interest Rate |
| Brokered CDs | $9936 | October 2025 - January 2026 | 4.21% |

---

*Cash Flow Activity*

The Company's cash and cash equivalents decreased $11.5 billion from year-end 2024 to $30.6 billion at September 30, 2025; cash and cash equivalents, including amounts restricted, decreased $10.6 billion from year-end 2024 to $54.9 billion at September 30, 2025. These decreases reflected a reduction of bank supplemental funding of $35.1 billion, maturities of long-term debt of $2.2 billion, repurchases of common and nonvoting common stock for $4.6 billion, and the redemption of Series G preferred stock for $2.5 billion. Bank deposits decreased during the first nine months of 2025 by $20.1 billion primarily due to a decrease of $17.8 billion in brokered CDs and a $1.4 billion decrease in deposits swept from brokerage accounts. The Company reduced FHLB borrowings and other short-term borrowings by a net total of $15.3 billion. Partially offsetting the repayment of borrowings and other financing activities, net investing cash inflows were $25.7 billion, driven by net inflows of $34.1 billion from our AFS and HTM securities partially offset by net outflows of $8.4 billion due to strong growth in bank loans; net cash inflows from operations totaled $10.1 billion.

*Liquidity Coverage Ratio*

Schwab is subject to the full LCR rule, which requires the Company to hold high quality liquid assets (HQLA) in an amount equal to at least 100% of the Company's projected net cash outflows over a prospective 30-calendar-day period of acute liquidity stress, calculated on each business day. See Part I – Item 1 – Business – Regulation in the 2024 Form 10-K for additional information. The Company was in compliance with the LCR rule at September 30, 2025, and the table below presents information about our average daily LCR:

---

| | | |
|:---|:---|:---|
| | Average for the Three Months Ended | Average for the Three Months Ended |
| | September 30, 2025 | June 30, 2025 |
| Total eligible HQLA | $53281 | $54707 |
| Net cash outflows | 39814 | 38361 |
| LCR | 134% | 143% |

---

To support growth in margin loan balances at our broker-dealer subsidiary while meeting our LCR requirements, the Company may issue commercial paper, draw on secured lines of credit, or engage in securities lending, in addition to capital markets

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

issuances. In managing compliance with our LCR requirements, the broker-dealer subsidiary may also retain client cash balances rather than sweeping such balances to our banking subsidiaries.

*Net Stable Funding Ratio*

Schwab is subject to disclosure requirements under the NSFR rule, which requires the semi-annual public disclosure of its NSFR levels. The NSFR rule stipulates that the Company's available stable funding (ASF) must be at least 100% of the Company's required stable funding (RSF). ASF is calculated by assessing the stability of the Company's funding sources and RSF is calculated by evaluating the characteristics of the Company's assets, derivatives, and off-balance-sheet exposures. The Company was in compliance with the NSFR rule at September 30, 2025.

*Long-Term Borrowings*

The Company's long-term debt is primarily comprised of Senior Notes and totaled $20.2 billion and $22.4 billion at September 30, 2025 and December 31, 2024, respectively.

The following table provides information about our Senior Notes outstanding at September 30, 2025:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| September 30, 2025 | Par <br>Outstanding | Maturity | Weighted-Average<br>Interest Rate <sup>(1)</sup> | Moody's | Standard<br>& Poor's | Fitch |
| CSC Senior Notes | $20119 | 2026 - 2034 | 3.66% | A2 | A- | A |
| Ameritrade Holding Senior Notes | 81 | 2027 - 2029 | 3.13% | A2 | A- |  |

---

<sup>(1)</sup> Weighted-average interest rates presented here exclude the impact of derivatives. See Item 1 – Note 11 for information on the Company's hedging of Senior Notes.

*New Debt Issuances*

There were no new debt issuances of senior unsecured obligations in the first nine months of 2025.

*Equity Issuances and Redemptions*

There were no new issuances of preferred stock in the first nine months of 2025.

On June 2, 2025, the Company redeemed all of the 24,580 outstanding shares of its fixed-rate reset non-cumulative perpetual preferred stock, Series G, and the corresponding 2,457,964 depositary shares. The depositary shares were redeemed at a redemption price of $1,000 per depositary share for a total of $2.5 billion.

Schwab enters into guarantees and other similar arrangements in the ordinary course of business. For information on these arrangements, see Item 1 – Notes 6, 7, 9, 10, and 12. Pursuant to the 2023 IDA agreement, certain brokerage accounts are required to be swept off-balance sheet to the TD Depository Institutions. See Item 1 – Note 10 for additional information.

Additional information regarding our sources and uses of liquidity and management of liquidity risk is included in Part II – Item 7 – Risk Management – Liquidity Risk in our 2024 Form 10-K. See also Item 1 – Condensed Consolidated Statements of Cash Flows, Item 1 – Note 8 for the Company's bank deposits, Item 1 – Note 9 for the Company's debt and borrowing facilities, Item 1 – Note 12 for the Company's securities lending activities, and Item 1 – Note 14 for the Company's equity outstanding balances and activity.

**<u>CAPITAL MANAGEMENT</u>** 

Schwab seeks to manage capital to a level and composition sufficient to support execution of our business strategy, inclusive of balance sheet growth, financial support to our subsidiaries, sustained access to the capital markets, and regulatory capital requirements. Schwab also seeks to return excess capital to stockholders. We may return excess capital through dividends, repurchases of common shares, preferred stock redemptions, and repurchases of our preferred stock represented by depositary shares. Schwab's primary sources of capital are funds generated by the operations of subsidiaries and securities issuances by CSC in the capital markets. To ensure that Schwab has sufficient capital to absorb unanticipated losses or declines in asset values, we have adopted a policy to remain well capitalized even in stressed scenarios.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

**Regulatory Capital Requirements** 

CSC and certain subsidiaries, including our banking and broker-dealer subsidiaries, are subject to various capital requirements set by regulatory agencies as discussed in further detail in Part II – Item 7 – Capital Management of the 2024 Form 10-K and in Item 1 – Note 17. As of September 30, 2025, CSC and our banking subsidiaries are considered well capitalized, and CS&Co is in compliance with its net capital requirements.

The following table details the capital ratios for CSC (consolidated) and CSB:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | September 30, 2025 | September 30, 2025 | December 31, 2024 | December 31, 2024 |
| | CSC | CSB | CSC | CSB |
| **Total stockholders' equity** | $49384 | $21328 | $48375 | $19700 |
| Less: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock | 6763 |  | 9191 |  |
| Common Equity Tier 1 Capital before regulatory adjustments | $42621 | $21328 | $39184 | $19700 |
| Less: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Goodwill, net of associated deferred tax liabilities | $11720 | $13 | $11746 | $13 |
| &nbsp;&nbsp;&nbsp;Other intangible assets, net of associated deferred tax liabilities | 5917 |  | 6232 |  |
| &nbsp;&nbsp;&nbsp;Deferred tax assets, net of valuation allowances and deferred tax liabilities | 50 | 41 | 50 | 41 |
| &nbsp;&nbsp;AOCI adjustment <sup>(1)</sup> | (11794) | (10240) | (14839) | (12938) |
| Common Equity Tier 1 Capital | $36728 | $31514 | $35995 | $32584 |
| Tier 1 Capital | $43491 | $31514 | $45186 | $32584 |
| Total Capital | 43552 | 31537 | 45218 | 32606 |
| Risk-Weighted Assets | 111898 | 77218 | 113648 | 78134 |
| Average Assets with regulatory adjustments | 447094 | 253874 | 458119 | 280701 |
| Total Leverage Exposure | 450445 | 256117 | 461200 | 282629 |
| Common Equity Tier 1 Capital/Risk-Weighted Assets | 32.8% | 40.8% | 31.7% | 41.7% |
| Tier 1 Capital/Risk-Weighted Assets | 38.9% | 40.8% | 39.8% | 41.7% |
| Total Capital/Risk-Weighted Assets | 38.9% | 40.8% | 39.8% | 41.7% |
| Tier 1 Leverage Ratio | 9.7% | 12.4% | 9.9% | 11.6% |
| Supplementary Leverage Ratio | 9.7% | 12.3% | 9.8% | 11.5% |

---

<sup>(1)</sup> Changes in market interest rates can result in unrealized gains or losses on AFS securities, which are included in AOCI. As a Category III banking organization, CSC has elected to exclude most components of AOCI from regulatory capital.

The Company's consolidated Tier 1 Leverage Ratio was 9.7% at September 30, 2025, down slightly from 9.8% at June 30, 2025 and 9.9% at year-end 2024. These changes reflect returns of excess capital, partially offset by organic growth from net income and lower average assets in the third quarter and first nine months of 2025. The Company repurchased $2.7 billion of common stock in the third quarter and $4.6 billion total voting and nonvoting common stock in the first nine months of 2025. The Company also increased its common dividend by 8% to $.27 per share in the first quarter and redeemed its Series G preferred stock for $2.5 billion in the second quarter of 2025. CSB's Tier 1 Leverage Ratio increased from 12.2% at June 30, 2025 and 11.6% at year-end 2024, ending the third quarter of 2025 at 12.4%, primarily as a result of lower total assets as well as net income during the third quarter and first nine months of 2025.

As a supplemental measure of capital, the Company utilizes an adjusted Tier 1 Leverage Ratio, which is a non-GAAP financial measure that includes AOCI in the ratio. The primary component of AOCI for Schwab is unrealized gains and losses on our AFS investment securities portfolio and on securities transferred from AFS to the HTM category.

The Company maintains a long-term operating objective for its consolidated adjusted Tier 1 Leverage Ratio of 6.75% - 7.00%. As of September 30, 2025, our adjusted Tier 1 Leverage Ratio was 7.3% for CSC (consolidated) and 8.7% for CSB (see Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results).

The Company continues to manage its capital as described above and in Part II – Item 7 – Capital Management of the 2024 Form 10-K. In evaluating returns of excess capital to stockholders, we will consider the amount of bank supplemental funding outstanding, and may choose to utilize the liquidity we would otherwise use for capital returns to repay outstanding bank supplemental funding balances.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

***Dividends***

On January 29, 2025, the Board of Directors of the Company declared a two cent, or 8%, increase in the quarterly cash dividend to $.27 per common share.

Cash dividends paid and per share amounts for the first nine months of 2025 and 2024 are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | 2025 | 2025 | 2024 | 2024 |
| Nine Months Ended September 30, | Cash Paid | Per Share <br>Amount | Cash Paid | Per Share <br>Amount |
| Common and Nonvoting Common Stock <sup>(1)</sup> | $1477 | $.81 | $1379 | $.75 |
| Preferred Stock: |  |  |  |  |
| &nbsp;&nbsp;Series D <sup>(2)</sup> | 33 | 44.64 | 33 | 44.64 |
| &nbsp;&nbsp;Series F <sup>(3)</sup> | 12 | 2500.00 | 12 | 2500.00 |
| &nbsp;&nbsp;Series G <sup>(4)</sup> | 66 | 2687.50 | 99 | 4031.25 |
| &nbsp;&nbsp;Series H <sup>(2)</sup> | 67 | 3000.00 | 67 | 3000.00 |
| &nbsp;&nbsp;Series I <sup>(2)</sup> | 62 | 3000.00 | 62 | 3000.00 |
| &nbsp;&nbsp;Series J <sup>(2)</sup> | 20 | 33.39 | 20 | 33.39 |
| &nbsp;&nbsp;Series K <sup>(2)</sup> | 28 | 3750.00 | 28 | 3750.00 |

---

<sup>(1)</sup> The Company had no nonvoting common stock outstanding as of the record date for the Company's 2025 dividends and accordingly, no dividends were paid on nonvoting common stock during the nine months ended September 30, 2025.

<sup>(2)</sup> Dividends paid quarterly.

<sup>(3)</sup> Dividends paid semi-annually until December 1, 2027 and quarterly thereafter.

<sup>(4)</sup> Series G was redeemed on June 2, 2025. Prior to redemption, dividends were paid quarterly. The final dividend was paid on June 2, 2025.

***Share Repurchases***

On February 12, 2025, TD Group US Holdings LLC, an affiliate of TD Bank, completed a secondary public offering of the Company's common shares through which TD Group US Holdings LLC sold 133.8 million shares of the Company's common stock and 31.7 million shares of the Company's nonvoting common stock, which automatically converted into common stock, for an aggregate amount of $13.1 billion. The Company did not receive any of the proceeds from the sale of shares.

Concurrent with the completion of the secondary offering, and pursuant to a repurchase agreement dated February 9, 2025, the Company repurchased directly from TD Group US Holdings LLC its remaining 19.2 million shares of nonvoting common stock at a price of $77.982 per share for an aggregate repurchase amount of $1.5 billion, which settled on February 12, 2025. The shares of nonvoting common stock automatically converted into common stock upon repurchase and are now held in treasury stock, reducing the number of shares outstanding. These shares were purchased under CSC's $15.0 billion share repurchase authorization.

Through the completion of the secondary offering and the Company's repurchase of nonvoting common stock, TD Bank disposed of all of its common shares of CSC and the Company has no remaining nonvoting common stock outstanding.

CSC repurchased an additional 3.9 million shares of its common stock for $351 million during the three months ended June 30, 2025. These shares were purchased under CSC's $15.0 billion share repurchase authorization. On July 24, 2025, CSC publicly announced that its Board of Directors terminated the $15.0 billion share repurchase authorization and replaced it with a new authorization to repurchase up to $20.0 billion of common stock. The new share repurchase authorization does not have an expiration date. During the three months ended September 30, 2025, CSC repurchased 28.9 million shares of its common stock under the new authorization for $2.7 billion. As of September 30, 2025, approximately $17.3 billion remained on the new authorization.

There were no repurchases of CSC's common stock during the three and nine months ended September 30, 2024.

Common stock repurchases, net of issuances, are subject to a nondeductible 1% excise tax which is recognized as a direct and incremental cost associated with these transactions. The tax is recorded as part of the cost basis of the treasury stock repurchased, resulting in no impact to the condensed consolidated statements of income.

See Item 1 – Note 14 for additional information.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

**<u>OTHER</u>**

**Foreign Exposure** 

At September 30, 2025, Schwab had exposure to non-sovereign financial and non-financial institutions in foreign countries. At September 30, 2025, the fair value of these holdings totaled $15.0 billion, with the top three exposures being to issuers and counterparties domiciled in France at $8.4 billion, the United Kingdom at $5.1 billion, and Japan at $600 million. At December 31, 2024, the fair value of these holdings totaled $10.6 billion, with the top three exposures being to issuers and counterparties domiciled in France at $5.1 billion, the United Kingdom at $2.1 billion, and Canada at $889 million. In addition, Schwab had outstanding margin loans to foreign residents of $4.2 billion and $3.5 billion at September 30, 2025 and December 31, 2024, respectively.

**<u>CRITICAL ACCOUNTING ESTIMATES</u>**

Certain of our accounting policies that involve a higher degree of judgment and complexity are discussed in Part II – Item 7 – Critical Accounting Estimates in the 2024 Form 10-K. There have been no changes to critical accounting estimates during the first nine months of 2025.

**<u>NON-GAAP FINANCIAL MEASURES</u>**

In addition to disclosing financial results in accordance with generally accepted accounting principles in the U.S. (GAAP), Management's Discussion and Analysis of Financial Condition and Results of Operations contain references to the non-GAAP financial measures described below. We believe these non-GAAP financial measures provide useful supplemental information about the financial performance of the Company, and facilitate meaningful comparison of Schwab's results in the current period to both historic and future results. These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may not be comparable to non-GAAP financial measures presented by other companies.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

Schwab's use of non-GAAP measures is reflective of certain adjustments made to GAAP financial measures as described below.

---

| | | |
|:---|:---|:---|
| **Non-GAAP Adjustment or Measure** | **Definition** | **Usefulness to Investors and Uses by Management** |
| Acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs | Schwab adjusts certain GAAP financial measures to exclude the impact of acquisition and integration-related costs incurred as a result of the Company's acquisitions, amortization of acquired intangible assets, restructuring costs, and, where applicable, the income tax effect of these expenses. <br>Adjustments made to exclude amortization of acquired intangible assets are reflective of all acquired intangible assets, which were recorded as part of purchase accounting. These acquired intangible assets contribute to the Company's revenue generation. Amortization of acquired intangible assets will continue in future periods over their remaining useful lives. | We exclude acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs for the purpose of calculating certain non-GAAP measures because we believe doing so provides additional transparency of Schwab's ongoing operations, and is useful in both evaluating the operating performance of the business and facilitating comparison of results with prior and future periods. <br>Costs related to acquisition and integration or restructuring fluctuate based on the timing of acquisitions, integration and restructuring activities, thereby limiting comparability of results among periods, and are not representative of the costs of running the Company's ongoing business. Amortization of acquired intangible assets is excluded because management does not believe it is indicative of the Company's underlying operating performance. |
| Return on tangible common equity | Return on tangible common equity represents annualized adjusted net income available to common stockholders as a percentage of average tangible common equity. Tangible common equity represents common equity less goodwill, acquired intangible assets – net, and related deferred tax liabilities. | Acquisitions typically result in the recognition of significant amounts of goodwill and acquired intangible assets. We believe return on tangible common equity may be useful to investors as a supplemental measure to facilitate assessing capital efficiency and returns relative to the composition of Schwab's balance sheet. |
| Adjusted Tier 1 Leverage Ratio | Adjusted Tier 1 Leverage Ratio represents the Tier 1 Leverage Ratio as prescribed by bank regulatory guidance for the consolidated company and for CSB, adjusted to reflect the inclusion of AOCI in the ratio. | Inclusion of the impacts of AOCI in the Company's Tier 1 Leverage Ratio provides additional information regarding the Company's current capital position. We believe Adjusted Tier 1 Leverage Ratio may be useful to investors as a supplemental measure of the Company's capital levels. |

---

The Company also uses adjusted diluted EPS and return on tangible common equity as components of performance criteria for employee bonus and certain executive management incentive compensation arrangements. The Compensation Committee of CSC's Board of Directors maintains discretion in evaluating performance against these criteria. Additionally, the Company uses adjusted Tier 1 Leverage Ratio in managing capital, including its use of the measure as its long-term operating objective.

The following tables present reconciliations of GAAP measures to non-GAAP measures:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, |
| | 2025 | 2024 | 2025 | 2024 |
| **Total expenses excluding interest (GAAP)** | $3114 | $3005 | $9306 | $8890 |
| &nbsp;&nbsp;Amortization of acquired intangible assets | (127) | (130) | (385) | (389) |
| &nbsp;&nbsp;Acquisition and integration-related costs <sup>(1)</sup> |  | (23) |  | (97) |
| &nbsp;&nbsp;Restructuring costs <sup>(2)</sup> |  |  |  | 18 |
| **Adjusted total expenses (non-GAAP)** | $2987 | $2852 | $8921 | $8422 |

---

<sup>(1)</sup> There were no acquisition and integration-related costs for the three and nine months ended September 30, 2025. Acquisition and integration-related costs for the three and nine months ended September 30, 2024 primarily consist of $9 million and $44 million of compensation and benefits, $3 million and $32 million of professional services, and $8 million and $13 million of depreciation and amortization.

<sup>(2)</sup> There were no restructuring costs for the three and nine months ended September 30, 2025 and three months ended September 30, 2024. Restructuring costs for the nine months ended September 30, 2024 reflect a benefit due to a change in estimate of $34 million in compensation and benefits, offset by $3 million of occupancy and equipment expense and $13 million of other expense.

------

**THE CHARLES SCHWAB CORPORATION**

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

(Tabular Amounts in Millions, Except Ratios, or as Noted)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, |
| | 2025 | 2025 | 2024 | 2024 | 2025 | 2025 | 2024 | 2024 |
| | Amount | Diluted <br>EPS | Amount | Diluted <br>EPS | Amount | Diluted <br>EPS | Amount | Diluted <br>EPS |
| **Net income available to common stockholders (GAAP), <br> Earnings per common share — diluted (GAAP)** | $2277 | $1.26 | $1299 | $.71 | $6050 | $3.33 | $3761 | $2.05 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of acquired intangible assets | 127 | .07 | 130 | .07 | 385 | .21 | 389 | .21 |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition and integration-related costs |  |  | 23 | .01 |  |  | 97 | .05 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restructuring costs |  |  |  |  |  |  | (18) | (.01) |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax effects <sup>(1)</sup> | (29) | (.02) | (36) | (.02) | (92) | (.05) | (111) | (.05) |
| **Adjusted net income available to common stockholders <br> (non-GAAP), Adjusted diluted EPS (non-GAAP)** | $2375 | $1.31 | $1416 | $.77 | $6343 | $3.49 | $4118 | $2.25 |

---

<sup>(1)</sup> The income tax effects of the non-GAAP adjustments are determined using an effective tax rate reflecting the exclusion of non-deductible acquisition costs and are used to present the acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs on an after-tax basis.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, |
| | 2025 | 2024 | 2025 | 2024 |
| **Return on average common stockholders' equity (GAAP)** | 21% | 14% | 20% | 14% |
| &nbsp;&nbsp;&nbsp;Average common stockholders' equity | $42655 | $36393 | $40903 | $34895 |
| &nbsp;&nbsp;&nbsp;&nbsp;Less: Average goodwill | (11951) | (11951) | (11951) | (11951) |
| &nbsp;&nbsp;&nbsp;&nbsp;Less: Average acquired intangible assets — net | (7423) | (7938) | (7552) | (8067) |
| &nbsp;&nbsp;&nbsp;&nbsp;Plus: Average deferred tax liabilities related to goodwill and <br>&nbsp;&nbsp;&nbsp;&nbsp;acquired intangible assets — net | 1695 | 1735 | 1695 | 1747 |
| &nbsp;&nbsp;&nbsp;Average tangible common equity | $24976 | $18239 | $23095 | $16624 |
| &nbsp;&nbsp;Adjusted net income available to common stockholders <sup>(1)</sup> | $2375 | $1416 | $6343 | $4118 |
| **Return on tangible common equity (non-GAAP)** | 38% | 31% | 37% | 33% |

---

<sup>(1)</sup> See table above for the reconciliation of net income available to common stockholders to adjusted net income available to common stockholders (non-GAAP).

---

| | | | | |
|:---|:---|:---|:---|:---|
| | September 30, 2025 | September 30, 2025 | December 31, 2024 | December 31, 2024 |
| | CSC | CSB | CSC | CSB |
| **Tier 1 Leverage Ratio (GAAP)** | 9.7% | 12.4% | 9.9% | 11.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier 1 Capital | $43491 | $31514 | $45186 | $32584 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Plus: AOCI adjustment | (11826) | (10272) | (14839) | (12938) |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjusted Tier 1 Capital | 31665 | 21242 | 30347 | 19646 |
| &nbsp;&nbsp;&nbsp;&nbsp;Average assets with regulatory adjustments | 447094 | 253874 | 458119 | 280701 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Plus: AOCI adjustment | (12176) | (10613) | (14831) | (13037) |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjusted average assets with regulatory adjustments | $434918 | $243261 | $443288 | $267664 |
| **Adjusted Tier 1 Leverage Ratio (non-GAAP)** | 7.3% | 8.7% | 6.8% | 7.3% |

---

**Item 3. Quantitative and Qualitative Disclosures About Market Risk**

For discussion of the quantitative and qualitative disclosures about market risk, see Risk Management in Item 2.

------

**Part I - FINANCIAL INFORMATION**

**Item 1. Condensed Consolidated Financial Statements**

**THE CHARLES SCHWAB CORPORATION**

**Condensed Consolidated Statements of Income**

(In Millions, Except Per Share Amounts)

(Unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, |
| | 2025 | 2024 | 2025 | 2024 |
| **Net Revenues** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest revenue | $3956 | $3928 | $11500 | $11686 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (906) | (1706) | (2922) | (5073) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net interest revenue | 3050 | 2222 | 8578 | 6613 |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset management and administration fees | 1673 | 1476 | 4773 | 4207 |
| &nbsp;&nbsp;&nbsp;&nbsp;Trading revenue | 995 | 797 | 2855 | 2391 |
| &nbsp;&nbsp;&nbsp;&nbsp;Bank deposit account fees | 247 | 152 | 739 | 488 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 170 | 200 | 640 | 578 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total net revenues | 6135 | 4847 | 17585 | 14277 |
| **Expenses Excluding Interest** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Compensation and benefits | 1653 | 1522 | 4861 | 4510 |
| &nbsp;&nbsp;&nbsp;&nbsp;Professional services | 293 | 256 | 853 | 756 |
| &nbsp;&nbsp;&nbsp;&nbsp;Occupancy and equipment | 280 | 271 | 824 | 784 |
| &nbsp;&nbsp;&nbsp;&nbsp;Advertising and market development | 101 | 101 | 305 | 296 |
| &nbsp;&nbsp;&nbsp;&nbsp;Communications | 149 | 147 | 478 | 460 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 212 | 231 | 644 | 692 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of acquired intangible assets | 127 | 130 | 385 | 389 |
| &nbsp;&nbsp;&nbsp;&nbsp;Regulatory fees and assessments | 59 | 88 | 225 | 309 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 240 | 259 | 731 | 694 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total expenses excluding interest | 3114 | 3005 | 9306 | 8890 |
| Income before taxes on income | 3021 | 1842 | 8279 | 5387 |
| Taxes on income | 663 | 434 | 1886 | 1285 |
| **Net Income** | 2358 | 1408 | 6393 | 4102 |
| Preferred stock dividends and other | 81 | 109 | 343 | 341 |
| **Net Income Available to Common Stockholders** | $2277 | $1299 | $6050 | $3761 |
| **Weighted-Average Common Shares Outstanding:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | 1806 | 1829 | 1815 | 1827 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | 1811 | 1834 | 1820 | 1833 |
| **Earnings Per Common Shares Outstanding** <sup>(1)</sup>**:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | $1.26 | $.71 | $3.33 | $2.06 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | $1.26 | $.71 | $3.33 | $2.05 |

---

<sup>(1)</sup> For additional information on earnings per common shares outstanding for both voting and nonvoting common stock, see Note 16.

*See Notes to Condensed Consolidated Financial Statements.*

------

**THE CHARLES SCHWAB CORPORATION**

**Condensed Consolidated Statements of Comprehensive Income**

(In Millions)

(Unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, |
| | 2025 | 2024 | 2025 | 2024 |
| Net income | $2358 | $1408 | $6393 | $4102 |
| Other comprehensive income (loss), before tax: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in net unrealized gain (loss) on available for sale securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net unrealized gain (loss) | 592 | 2434 | 2270 | 2807 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other reclassifications included in other revenue | 10 | 10 | 50 | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in net unrealized gain (loss) on held to maturity securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of amounts previously recorded upon transfer to held to maturity<br> from available for sale | 545 | 576 | 1644 | 1723 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in net unrealized gain (loss) on derivatives designated as cash flow <br> hedging instruments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net unrealized gain (loss) | 11 |  | (4) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reclassifications included in interest revenue | 28 |  | 45 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | (1) | 11 | 5 | 1 |
| **Other comprehensive income (loss), before tax** | 1185 | 3031 | 4010 | 4561 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax effect | (392) | (713) | (960) | (1048) |
| **Other comprehensive income (loss), net of tax** | 793 | 2318 | 3050 | 3513 |
| **Comprehensive Income (Loss)** | $3151 | $3726 | $9443 | $7615 |

---

*See Notes to Condensed Consolidated Financial Statements.*

------

**THE CHARLES SCHWAB CORPORATION**

**Condensed Consolidated Balance Sheets**

(In Millions, Except Per Share and Share Amounts)

(Unaudited)

---

| | | |
|:---|:---|:---|
| | September 30, 2025 | December 31, 2024 |
| **Assets** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $30572 | $42083 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and investments segregated and on deposit for regulatory purposes (including resale <br>&nbsp;&nbsp;&nbsp;&nbsp;agreements of $22,245 and $10,075 at September 30, 2025 and December 31, 2024, <br>&nbsp;&nbsp;&nbsp;&nbsp;respectively) | 47754 | 38221 |
| &nbsp;&nbsp;&nbsp;&nbsp;Receivables from brokers, dealers, and clearing organizations | 4728 | 2440 |
| &nbsp;&nbsp;&nbsp;&nbsp;Receivables from brokerage clients — net | 93788 | 85374 |
| &nbsp;&nbsp;&nbsp;&nbsp;Available for sale securities (amortized cost of $66,698 and $89,704 at September 30, 2025 and <br>&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2024, respectively; including assets pledged of $311 and $378, respectively) | 62308 | 82994 |
| &nbsp;&nbsp;&nbsp;&nbsp;Held to maturity securities (including assets pledged of $2,047 and $5,920 at <br>&nbsp;&nbsp;&nbsp;&nbsp;September 30, 2025 and December 31, 2024, respectively) | 136693 | 146453 |
| &nbsp;&nbsp;&nbsp;&nbsp;Bank loans — net | 53570 | 45215 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equipment, office facilities, and property — net | 3136 | 3338 |
| &nbsp;&nbsp;&nbsp;&nbsp;Goodwill | 11951 | 11951 |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquired intangible assets — net | 7360 | 7743 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | 13395 | 14031 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $465255 | $479843 |
| **Liabilities and Stockholders' Equity** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Bank deposits | $239057 | $259121 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payables to brokers, dealers, and clearing organizations | 22407 | 13336 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payables to brokerage clients | 115397 | 101559 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 11420 | 12325 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other short-term borrowings | 6541 | 5999 |
| &nbsp;&nbsp;&nbsp;&nbsp;Federal Home Loan Bank borrowings | 850 | 16700 |
| &nbsp;&nbsp;&nbsp;&nbsp;Long-term debt | 20199 | 22428 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 415871 | 431468 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred stock — $.01 par value per share; aggregate liquidation preference of $6,871 and<br>&nbsp;&nbsp;&nbsp;&nbsp;$9,329 at September 30, 2025 and December 31, 2024, respectively | 6763 | 9191 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock — 3 billion shares authorized; $.01 par value per share; 2,074,188,875 and <br>&nbsp;&nbsp;&nbsp;&nbsp;2,023,295,180 shares issued at September 30, 2025 and December 31, 2024, respectively | 21 | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nonvoting common stock — 300 million shares authorized; $.01 par value per share; <br>&nbsp;&nbsp;&nbsp;&nbsp;no shares issued at September 30, 2025 and 50,893,695 shares issued at December 31, 2024 |  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 27910 | 27639 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 42170 | 37568 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Treasury stock, at cost — 287,497,378 and 242,977,194 shares at September 30, 2025<br>&nbsp;&nbsp;&nbsp;&nbsp;and December 31, 2024, respectively | (15682) | (11196) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) | (11798) | (14848) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 49384 | 48375 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and stockholders' equity** | $465255 | $479843 |

---

*See Notes to Condensed Consolidated Financial Statements.*

------

**THE CHARLES SCHWAB CORPORATION**

**Condensed Consolidated Statements of Stockholders**' **Equity**

(In Millions)

(Unaudited)

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | | | | | | | | | Accumulated Other Comprehensive Income (Loss) | |
| | Preferred Stock | Common Stock | Common Stock | Nonvoting<br>Common Stock | Nonvoting<br>Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock, <br>at cost | Accumulated Other Comprehensive Income (Loss) | Total |
| | Preferred Stock | Shares | Amount | Shares | Amount | Additional Paid-in Capital | Retained Earnings | Treasury Stock, <br>at cost | Accumulated Other Comprehensive Income (Loss) | Total |
| Balance at June 30, 2024 | $9191 | 2023 | $20 | 51 | $1 | $27470 | $35458 | $(11251) | $(16936) | $43953 |
| Net income |  |  |  |  |  |  | 1408 |  |  | 1408 |
| Other comprehensive income (loss), net of tax |  |  |  |  |  |  |  |  | 2318 | 2318 |
| Dividends declared on preferred stock |  |  |  |  |  |  | (103) |  |  | (103) |
| Dividends declared on common stock — $.25 <br>&nbsp;&nbsp;&nbsp;&nbsp;per share |  |  |  |  |  |  | (460) |  |  | (460) |
| Stock option exercises and other |  |  |  |  |  | (6) |  | 16 |  | 10 |
| Share-based compensation |  |  |  |  |  | 59 |  |  |  | 59 |
| Other |  |  |  |  |  | 25 |  | 5 |  | 30 |
| Balance at September 30, 2024 | $9191 | 2023 | $20 | 51 | $1 | $27548 | $36303 | $(11230) | $(14618) | $47215 |
| Balance at June 30, 2025 | $6763 | 2074 | $21 |  | $— | $27813 | $40374 | $(12929) | $(12591) | $49451 |
| Net income |  |  |  |  |  |  | 2358 |  |  | 2358 |
| Other comprehensive income (loss), net of tax |  |  |  |  |  |  |  |  | 793 | 793 |
| Dividends declared on preferred stock |  |  |  |  |  |  | (70) |  |  | (70) |
| Dividends declared on common stock — $.27<br>&nbsp;&nbsp;&nbsp;&nbsp;per share |  |  |  |  |  |  | (492) |  |  | (492) |
| Repurchase of common stock, inclusive of tax |  |  |  |  |  |  |  | (2777) |  | (2777) |
| Stock option exercises and other |  |  |  |  |  | 13 |  | 19 |  | 32 |
| Share-based compensation |  |  |  |  |  | 56 |  |  |  | 56 |
| Other |  |  |  |  |  | 28 |  | 5 |  | 33 |
| Balance at September 30, 2025 | $6763 | 2074 | $21 |  | $— | $27910 | $42170 | $(15682) | $(11798) | $49384 |

---

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | | | | | | | | | Accumulated Other Comprehensive Income (Loss) | |
| | Preferred Stock | Common Stock | Common Stock | Nonvoting<br>Common Stock | Nonvoting<br>Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock, <br>at cost | Accumulated Other Comprehensive Income (Loss) | Total |
| | Preferred Stock | Shares | Amount | Shares | Amount | Additional Paid-in Capital | Retained Earnings | Treasury Stock, <br>at cost | Accumulated Other Comprehensive Income (Loss) | Total |
| Balance at December 31, 2023 | $9191 | 2023 | $20 | 51 | $1 | $27330 | $33901 | $(11354) | $(18131) | $40958 |
| Net income |  |  |  |  |  |  | 4102 |  |  | 4102 |
| Other comprehensive income (loss), net of tax |  |  |  |  |  |  |  |  | 3513 | 3513 |
| Dividends declared on preferred stock |  |  |  |  |  |  | (321) |  |  | (321) |
| Dividends declared on common stock — $.75<br>&nbsp;&nbsp;&nbsp;&nbsp;per share |  |  |  |  |  |  | (1379) |  |  | (1379) |
| Stock option exercises and other |  |  |  |  |  | (122) |  | 175 |  | 53 |
| Share-based compensation |  |  |  |  |  | 249 |  |  |  | 249 |
| Other |  |  |  |  |  | 91 |  | (51) |  | 40 |
| Balance at September 30, 2024 | $9191 | 2023 | $20 | 51 | $1 | $27548 | $36303 | $(11230) | $(14618) | $47215 |
| Balance at December 31, 2024 | $9191 | 2023 | $20 | 51 | $1 | $27639 | $37568 | $(11196) | $(14848) | $48375 |
| Net income |  |  |  |  |  |  | 6393 |  |  | 6393 |
| Other comprehensive income (loss), net of tax |  |  |  |  |  |  |  |  | 3050 | 3050 |
| Redemption of preferred stock | (2428) |  |  |  |  |  | (30) |  |  | (2458) |
| Dividends declared on preferred stock |  |  |  |  |  |  | (288) |  |  | (288) |
| Dividends declared on common stock — $.81 <br>&nbsp;&nbsp;&nbsp;&nbsp;per share |  |  |  |  |  |  | (1477) |  |  | (1477) |
| Repurchase of common stock, inclusive of tax |  |  |  |  |  |  |  | (3130) |  | (3130) |
| Repurchase of nonvoting common stock, inclusive of tax |  | 19 |  | (19) |  |  |  | (1512) |  | (1512) |
| Conversion of nonvoting common stock to common stock |  | 32 | 1 | (32) | (1) |  |  |  |  |  |
| Stock option exercises and other |  |  |  |  |  | (76) |  | 217 |  | 141 |
| Share-based compensation |  |  |  |  |  | 237 |  |  |  | 237 |
| Other |  |  |  |  |  | 110 | 4 | (61) |  | 53 |
| Balance at September 30, 2025 | $6763 | 2074 | $21 |  | $— | $27910 | $42170 | $(15682) | $(11798) | $49384 |

---

*See Notes to Condensed Consolidated Financial Statements.*

------

**THE CHARLES SCHWAB CORPORATION**

**Condensed Consolidated Statements of Cash Flows** <sup>(1)</sup>

(in Millions)

(Unaudited)

---

| | | |
|:---|:---|:---|
| | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, |
| | 2025 | 2024 |
| **Cash Flows from Operating Activities** |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $6393 | $4102 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash provided by (used for) operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation | 259 | 267 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 644 | 692 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of acquired intangible assets | 385 | 389 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision (benefit) for deferred income taxes | 397 | (163) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Premium amortization, net, on available for sale and held to maturity securities | 524 | 618 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 525 | 370 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net change in: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments segregated and on deposit for regulatory purposes | (8671) | (818) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receivables from brokers, dealers, and clearing organizations | (2288) | (119) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receivables from brokerage clients | (8509) | (5387) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (1038) | 288 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payables to brokers, dealers, and clearing organizations | 9071 | 9776 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payables to brokerage clients | 13838 | 4378 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | (1456) | (896) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used for) operating activities | 10074 | 13497 |
| **Cash Flows from Investing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of available for sale securities | (2746) | (2250) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sales of available for sale securities | 5411 | 2929 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal payments on available for sale securities | 20405 | 19582 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of held to maturity securities | (676) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal payments on held to maturity securities | 11707 | 10888 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in bank loans | (8426) | (2935) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of equipment, office facilities, and property | (390) | (366) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of FHLB stock | (589) | (786) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sales of FHLB stock | 1262 | 1005 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of Federal Reserve stock | (9) | (134) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sales of Federal Reserve stock | 8 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other investing activities | (268) | (236) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used for) investing activities | 25689 | 27697 |
| **Cash Flows from Financing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in bank deposits | (20064) | (43491) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from FHLB borrowings | 16760 | 20001 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments of FHLB borrowings | (32610) | (23801) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from other short-term borrowings | 27528 | 18225 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments of other short-term borrowings | (27023) | (14185) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments of long-term debt | (2243) | (3676) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Redemption of preferred stock | (2458) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repurchases of common stock and nonvoting common stock | (4581) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends paid | (1765) | (1700) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from stock options exercised | 141 | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other financing activities | (97) | (90) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used for) financing activities | (46412) | (48664) |
| **Increase (Decrease) in Cash and Cash Equivalents, including Amounts Restricted** | (10649) | (7470) |
| **Cash and Cash Equivalents, including Amounts Restricted at Beginning of Year** | 65514 | 74473 |
| **Cash and Cash Equivalents, including Amounts Restricted at End of Period** | $54865 | $67003 |

---

*Continued on following page.*

------

**THE CHARLES SCHWAB CORPORATION**

**Condensed Consolidated Statements of Cash Flows** <sup>(1)</sup>

(in Millions)

(Unaudited)

*Continued from previous page.*

---

| | | |
|:---|:---|:---|
| | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, |
| | 2025 | 2024 |
| **Supplemental Cash Flow Information** |  |  |
| Non-cash investing activity: |  |  |
| &nbsp;&nbsp;&nbsp;Changes in accrued equipment, office facilities, and property purchases | $54 | $(17) |
| Non-cash financing activity: |  |  |
| &nbsp;&nbsp;&nbsp;Common stock repurchased during the period but settled after period end | $20 | $— |
| Other Supplemental Cash Flow Information: |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid during the period for: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest | $3572 | $5213 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income taxes | $955 | $1313 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amounts included in the measurement of lease liabilities | $186 | $193 |
| &nbsp;&nbsp;&nbsp;Leased assets obtained in exchange for new operating lease liabilities | $239 | $126 |
|  | September 30, 2025 | September 30, 2024 |
| **Reconciliation of cash, cash equivalents and amounts reported within the balance sheet** <sup>(2)</sup> |  |  |
| Cash and cash equivalents | $30572 | $34850 |
| Restricted cash and cash equivalents amounts included in cash and investments segregated<br> and on deposit for regulatory purposes | 24293 | 32153 |
| **Total cash and cash equivalents, including amounts restricted shown in the<br> statement of cash flows** | $54865 | $67003 |

---

<sup>(1)</sup> Certain prior year amounts have been reclassified to conform to the current year presentation. See Note 1 for additional information.

<sup>(2)</sup> For more information on the nature of restrictions on restricted cash and cash equivalents, see Note 17.

*See Notes to Condensed Consolidated Financial Statements.*

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

**1.&nbsp;&nbsp;&nbsp;&nbsp;Introduction and Basis of Presentation**

The Charles Schwab Corporation (CSC) is a savings and loan holding company. CSC engages, through its subsidiaries (collectively referred to as Schwab or the Company), in wealth management, securities brokerage, banking, asset management, custody, and financial advisory services.

Principal business subsidiaries of CSC include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Charles Schwab & Co., Inc. (CS&Co), incorporated in 1971, a securities broker-dealer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Charles Schwab Bank, SSB (CSB), our principal banking entity; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Charles Schwab Investment Management, Inc. (CSIM), the investment advisor for Schwab's proprietary mutual funds (Schwab Funds<sup>®</sup>) and for Schwab's exchange-traded funds (Schwab ETFs).

Unless otherwise indicated, the terms "Schwab," "the Company," "we," "us," or "our" mean CSC together with its consolidated subsidiaries.

These unaudited condensed consolidated financial statements have been prepared in conformity with GAAP, which require management to make certain estimates and assumptions that affect the reported amounts in the accompanying financial statements and in the related disclosures. These estimates are based on information available as of the date of the condensed consolidated financial statements. While management makes its best judgment, actual amounts or results could differ from these estimates. In the opinion of management, all normal, recurring adjustments have been included for a fair statement of this interim financial information.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, included in Schwab's 2024 Form 10-K.

*Reclassifications*: Beginning in the fourth quarter of 2024, receivables from brokers, dealers, and clearing organizations and payables to brokers, dealers, and clearing organizations are presented separately from other assets and accrued expenses and other liabilities, respectively, in the consolidated balance sheets. Correspondingly, interest expense related to securities lending is now presented as interest expense on payables to brokers, dealers, and clearing organizations. Prior period amounts have been reclassified to reflect these changes. Corresponding presentation changes have been made to the condensed consolidated statements of cash flows and related notes also impacted.

The significant accounting policies are included in Item 8 – Note 2 in the 2024 Form 10-K. There have been no significant changes to these accounting policies during the first nine months of 2025.

**2.&nbsp;&nbsp;&nbsp;&nbsp;New Accounting Standards**

*Adoption of New Accounting Standards*

---

| | | | |
|:---|:---|:---|:---|
| **Standard** | **Description** | **Date of Adoption** | **Effects on the Financial Statements or Other Significant Matters** |
| Accounting Standards Update (ASU) 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" | Expands annual income tax disclosures, primarily by enhancing the rate reconciliation table and requiring additional disaggregated information about income taxes paid.<br>Adoption allows retrospective or prospective application.  | January 1, 2025 | The Company does not expect this guidance will have a material impact on its financial statements or related disclosures. This guidance will be reflected in the annual financial statements for 2025. |

---

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

*New Accounting Standards Not Yet Adopted*

---

| | | | |
|:---|:---|:---|:---|
| **Standard** | **Description** | **Required Date of Adoption** | **Effects on the Financial Statements or Other Significant Matters** |
| ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" | Requires additional disclosures about certain expenses including, but not limited to, employee compensation, depreciation, amortization of intangible assets, and selling expenses. Also requires annual disclosure of how selling expenses are defined.<br>Adoption allows retrospective or prospective application, with early adoption permitted. | January 1, 2027 (applies to the annual financial statements for 2027 and interim periods thereafter) | The Company is evaluating the impact of this guidance on its financial statement disclosures. |
| ASU 2025-06, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software" | Removes references to prescriptive and sequential software development stages. Requires an entity to begin capitalizing software costs when both of the following occur: 1) management has authorized and committed to funding the software project, and 2) it is probable that the project will be completed and the software will be used to perform the function intended. <br>Adoption allows retrospective, prospective, or modified transition application, with early adoption permitted. | January 1, 2028 (applies to the annual financial statements and interim periods within those annual reporting periods) | The Company is evaluating the impact of this guidance on its financial statements. |

---

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

**3.&nbsp;&nbsp;&nbsp;&nbsp;Revenue Recognition**

Disaggregation of Schwab's revenue by major source is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, |
| | 2025 | 2024 | 2025 | 2024 |
| **Net interest revenue** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $264 | $369 | $897 | $1205 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and investments segregated | 494 | 345 | 1412 | 1014 |
| &nbsp;&nbsp;&nbsp;&nbsp;Receivables from brokerage clients | 1490 | 1431 | 4204 | 4042 |
| &nbsp;&nbsp;&nbsp;&nbsp;Available for sale securities | 360 | 531 | 1198 | 1680 |
| &nbsp;&nbsp;&nbsp;&nbsp;Held to maturity securities | 587 | 650 | 1811 | 1998 |
| &nbsp;&nbsp;&nbsp;&nbsp;Bank loans | 557 | 484 | 1568 | 1384 |
| &nbsp;&nbsp;&nbsp;&nbsp;Securities lending revenue | 183 | 87 | 339 | 258 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other interest revenue | 21 | 31 | 71 | 105 |
| &nbsp;&nbsp;Interest revenue | 3956 | 3928 | 11500 | 11686 |
| &nbsp;&nbsp;&nbsp;&nbsp;Bank deposits | (248) | (841) | (1010) | (2602) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payables to brokers, dealers, and clearing organizations <sup>(1)</sup> | (188) | (118) | (492) | (230) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payables to brokerage clients | (97) | (79) | (217) | (229) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other short-term borrowings | (87) | (150) | (256) | (382) |
| &nbsp;&nbsp;&nbsp;&nbsp;Federal Home Loan Bank borrowings | (79) | (310) | (322) | (988) |
| &nbsp;&nbsp;&nbsp;&nbsp;Long-term debt | (207) | (208) | (625) | (640) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other interest expense |  |  |  | (2) |
| &nbsp;&nbsp;Interest expense | (906) | (1706) | (2922) | (5073) |
| Net interest revenue | 3050 | 2222 | 8578 | 6613 |
| **Asset management and administration fees** |  |  |  |  |
| &nbsp;&nbsp;Mutual funds, ETFs, and CTFs | 946 | 827 | 2695 | 2370 |
| &nbsp;&nbsp;Managed investing solutions | 619 | 559 | 1777 | 1572 |
| &nbsp;&nbsp;Other | 108 | 90 | 301 | 265 |
| Asset management and administration fees | 1673 | 1476 | 4773 | 4207 |
| **Trading revenue** |  |  |  |  |
| &nbsp;&nbsp;Commissions | 453 | 388 | 1315 | 1184 |
| &nbsp;&nbsp;Order flow revenue | 490 | 357 | 1399 | 1066 |
| &nbsp;&nbsp;Principal transactions | 52 | 52 | 141 | 141 |
| Trading revenue | 995 | 797 | 2855 | 2391 |
| Bank deposit account fees | 247 | 152 | 739 | 488 |
| Other | 170 | 200 | 640 | 578 |
| Total net revenues | $6135 | $4847 | $17585 | $14277 |

---

<sup>(1)</sup> Beginning in the fourth quarter of 2024, this line item includes interest expense related to securities loaned. Prior period amounts have been reclassified to reflect this change. See Note 1 for additional information.

For a summary of revenue provided by our reportable segments, see Note 18. The recognition of revenue is not impacted by the operating segment in which revenue is generated.

*Contract balances*: Receivables from contracts with customers within the scope of Accounting Standards Codification (ASC) 606 *Revenue From Contracts With Customers* (ASC 606), are included in other assets on the condensed consolidated balance sheets, and totaled $823 million and $694 million at September 30, 2025 and December 31, 2024, respectively.

The Company had net contract assets of $199 million and $216 million at September 30, 2025 and December 31, 2024, respectively, related to the buy down of fixed-rate obligation amounts pursuant to the 2023 IDA agreement. These amounts are included in other assets on the condensed consolidated balance sheets and are amortized on a straight-line basis over the remaining contractual term as a reduction to bank deposit account fee revenue. For additional discussion of the 2023 IDA agreement, see Note 10.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

*Unsatisfied performance obligations*: We do not have any unsatisfied performance obligations other than those that are subject to an elective practical expedient under ASC 606. The practical expedient applies to and is elected for contracts where we recognize revenue at the amount to which we have the right to invoice for services performed.

**4.&nbsp;&nbsp;&nbsp;&nbsp;Receivables from and Payables to Brokers, Dealers, and Clearing Organizations**

Receivables from and payables to brokers, dealers, and clearing organizations are detailed below:

---

| | | |
|:---|:---|:---|
|  | September 30, 2025 | December 31, 2024 |
| **Receivables** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Securities borrowed | $2342 | $695 |
| &nbsp;&nbsp;&nbsp;&nbsp;Receivables from clearing organizations | 2313 | 1670 |
| &nbsp;&nbsp;&nbsp;&nbsp;Receivables for securities failed to deliver | 45 | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other receivables from broker-dealers | 28 | 35 |
| Receivables from brokers, dealers, and clearing organizations | $4728 | $2440 |
| **Payables** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deposits for securities loaned | $21690 | $13068 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payables for securities failed to receive | 262 | 104 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other payables to broker-dealers | 240 | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payables to clearing organizations | 215 | 127 |
| Payables to brokers, dealers, and clearing organizations | $22407 | $13336 |

---

See Note 12 for additional information regarding securities lending and borrowing activities.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

**5.&nbsp;&nbsp;&nbsp;&nbsp;Investment Securities**

The amortized cost, gross unrealized gains and losses, and fair value of the Company's AFS and HTM investment securities are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| September 30, 2025 | Amortized<br>Cost | Gross<br>Unrealized<br>Gains | Gross<br>Unrealized<br>Losses | Fair<br>Value |
| **Available for sale securities** |  |  |  |  |
| U.S. agency mortgage-backed securities | $48011 | $— | $3555 | $44456 |
| U.S. Treasury securities | 8009 | 3 | 226 | 7786 |
| Corporate debt securities <sup>(1)</sup> | 5502 |  | 411 | 5091 |
| Asset-backed securities <sup>(2)</sup> | 4429 |  | 148 | 4281 |
| U.S. state and municipal securities | 597 |  | 35 | 562 |
| Non-agency commercial mortgage-backed securities | 121 |  | 8 | 113 |
| Other | 21 |  | 2 | 19 |
| Unallocated portfolio layer method (PLM) fair value basis adjustments <sup>(3)</sup> | 8 |  | 8 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total available for sale securities | $66698 | $3 | $4393 | $62308 |
| **Held to maturity securities** |  |  |  |  |
| U.S. agency mortgage-backed securities | $136693 | $1672 | $10106 | $128259 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total held to maturity securities | $136693 | $1672 | $10106 | $128259 |
| December 31, 2024 |  |  |  |  |
| **Available for sale securities** |  |  |  |  |
| U.S. agency mortgage-backed securities | $57262 | $— | $5429 | $51833 |
| U.S. Treasury securities | 14939 | 1 | 471 | 14469 |
| Corporate debt securities <sup>(1)</sup> | 10166 |  | 587 | 9579 |
| Asset-backed securities <sup>(2)</sup> | 6106 |  | 196 | 5910 |
| U.S. state and municipal securities | 603 |  | 54 | 549 |
| Foreign government agency securities | 533 |  | 6 | 527 |
| Non-agency commercial mortgage-backed securities | 121 |  | 12 | 109 |
| Other | 21 |  | 3 | 18 |
| Unallocated PLM fair value basis adjustments <sup>(3)</sup> | (47) |  | (47) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total available for sale securities | $89704 | $1 | $6711 | $82994 |
| **Held to maturity securities** |  |  |  |  |
| U.S. agency mortgage-backed securities | $146453 | $146 | $13994 | $132605 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total held to maturity securities | $146453 | $146 | $13994 | $132605 |

---

<sup>(1)</sup> As of September 30, 2025 and December 31, 2024, approximately 15% and 35%, respectively, of the total AFS in corporate debt securities were issued by institutions in the financial services industry. Approximately 25% and 16% of the holdings of these securities were issued by institutions in the information technology industry as of September 30, 2025 and December 31, 2024, respectively. Approximately 24% and 18% of the holdings of these securities were issued by companies in the consumer staples industry as of September 30, 2025 and December 31, 2024, respectively.

<sup>(2)</sup> Approximately 71% and 62% of asset-backed securities held as of September 30, 2025 and December 31, 2024, respectively, were Federal Family Education Loan Program Asset-Backed Securities. Asset-backed securities collateralized by credit card receivables represented approximately 21% and 25% of the asset-backed securities held as of September 30, 2025 and December 31, 2024, respectively.

<sup>(3)</sup> This represents the amount of PLM fair value hedge basis adjustments related to AFS securities hedged in a closed portfolio. See Note 11 for more information on PLM hedge accounting.

At September 30, 2025, our banking subsidiaries had pledged investment securities with a fair value of $60.7 billion (collateral value of $56.3 billion) as collateral to secure borrowing capacity on secured credit facilities with the FHLB (see Note 9). Our banking subsidiaries also pledge investment securities as collateral to secure borrowing capacity at the Federal Reserve discount window, and had pledged securities with a fair value of $30.8 billion (collateral value of $29.7 billion) as collateral for this facility at September 30, 2025. The Company also pledges investment securities issued by federal agencies to secure certain trust deposits. The fair value and collateral value of these pledged securities was $1.7 billion at September 30, 2025.

At September 30, 2025, our banking subsidiaries had pledged HTM securities as collateral under repurchase agreements with external financial institutions and the FICC. HTM securities pledged were U.S. agency mortgage-backed securities with an aggregate amortized cost of $4.1 billion, of which $2.0 billion may be sold, repledged, or otherwise used by the counterparties. See Notes 9 and 12 for additional information on these repurchase agreements.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

At September 30, 2025, the Company had pledged AFS securities consisting of U.S. Treasury securities with an aggregate fair value of $311 million as initial margin on interest rate swaps (see Notes 11 and 12). All of Schwab's interest rate swaps are cleared through central counterparty (CCP) clearing houses which require the Company to post initial margin as collateral against potential losses. Initial margin is posted through futures commission merchants (FCM) which serve as the intermediary between the CCPs and Schwab. The FCM agreements governing our swaps allow for securities pledged as initial margin to be sold, repledged, or otherwise used by the FCM.

AFS securities with unrealized losses, aggregated by category and period of continuous unrealized loss, are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Less than 12 months | Less than 12 months | 12 months or longer | 12 months or longer | Total | Total |
| September 30, 2025 | Fair<br>Value | Unrealized<br>Losses | Fair<br>Value | Unrealized<br>Losses | Fair<br>Value | Unrealized<br>Losses |
| **Available for sale securities** |  |  |  |  |  |  |
| U.S. agency mortgage-backed securities <sup>(1)</sup>  | $4 | $— | $44416 | $3555 | $44420 | $3555 |
| U.S. Treasury securities <sup>(1)</sup> | 757 |  | 5380 | 226 | 6137 | 226 |
| Corporate debt securities |  |  | 5092 | 411 | 5092 | 411 |
| Asset-backed securities <sup>(1)</sup> | 114 |  | 4164 | 148 | 4278 | 148 |
| U.S. state and municipal securities | 27 | 3 | 535 | 32 | 562 | 35 |
| Non-agency commercial mortgage-backed securities |  |  | 113 | 8 | 113 | 8 |
| Other |  |  | 19 | 2 | 19 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total <sup>(2)</sup> | $902 | $3 | $59719 | $4382 | $60621 | $4385 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| December 31, 2024 |  |  |  |  |  |  |
| **Available for sale securities** |  |  |  |  |  |  |
| U.S. agency mortgage-backed securities | $— | $| $51833 | $5429 | $51833 | $5429 |
| U.S. Treasury securities <sup>(1)</sup> | 243 |  | 12727 | 471 | 12970 | 471 |
| Corporate debt securities |  |  | 9579 | 587 | 9579 | 587 |
| Asset-backed securities <sup>(1)</sup> | 12 |  | 5888 | 196 | 5900 | 196 |
| U.S. state and municipal securities |  |  | 549 | 54 | 549 | 54 |
| Foreign government agency securities |  |  | 527 | 6 | 527 | 6 |
| Non-agency commercial mortgage-backed securities |  |  | 109 | 12 | 109 | 12 |
| Other |  |  | 18 | 3 | 18 | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total <sup>(2)</sup> | $255 | $| $81230 | $6758 | $81485 | $6758 |

---

<sup>(1)</sup> Unrealized losses less than 12 months amounts were less than $500 thousand.

<sup>(2)</sup> For purposes of this table, unrealized losses on AFS securities excludes the unallocated PLM fair value hedge basis adjustments of $8 million and $(47) million at September 30, 2025 and December 31, 2024, respectively.

At September 30, 2025, substantially all rated securities in the investment portfolios were investment grade. U.S. agency mortgage-backed securities do not have explicit credit ratings; however, management considers these to be of the highest credit quality and rating given the guarantee of principal and interest by the U.S. government or U.S. government-sponsored enterprises.

For a description of management's quarterly evaluation of AFS securities in unrealized loss positions, see Item 8 – Note 2 in the 2024 Form 10-K. No amounts were recognized as credit loss expense and no securities were written down to fair value through earnings for the nine months ended September 30, 2025 and the year ended December 31, 2024. None of the Company's AFS securities held as of September 30, 2025 and December 31, 2024 had an allowance for credit losses. All HTM securities as of September 30, 2025 and December 31, 2024 were U.S. agency mortgage-backed securities and therefore had no allowance for credit losses because expected nonpayment of the amortized cost basis is zero.

The Company had $372 million and $455 million of accrued interest for AFS and HTM securities as of September 30, 2025 and December 31, 2024, respectively. These amounts are excluded from the amortized cost basis and fair market value of AFS and HTM securities and included in other assets on the condensed consolidated balance sheets. There were no writeoffs of accrued interest receivable on AFS and HTM securities during the nine months ended September 30, 2025, or for the year ended December 31, 2024.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

The following table presents the Company's estimated effective duration, which reflects anticipated future payments, by category at September 30, 2025:

---

| | |
|:---|:---|
| | In years |
| Estimated effective duration, exclusive of derivatives: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;AFS investment securities portfolio | 2.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;AFS and HTM investment securities portfolio | 4.0 |
| Estimated effective duration, inclusive of derivatives <sup>(1)</sup>: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;AFS investment securities portfolio | 2.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;AFS and HTM investment securities portfolio | 3.8 |

---

<sup>(1)</sup> See Note 11 for additional discussion of the Company's derivatives.

In the table below, mortgage-backed securities and other asset-backed securities have been allocated to maturity groupings based on final contractual maturities. As borrowers may have the right to call or prepay certain obligations underlying our investment securities, actual maturities may differ from the scheduled contractual maturities presented below.

The maturities of AFS and HTM investment securities are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| September 30, 2025 | Within<br>1 year | After 1 year<br>through<br>5 years | After 5 years<br>through<br>10 years | After<br>10 years | Total |
| **Available for sale securities** |  |  |  |  |  |
| U.S. agency mortgage-backed securities | $1433 | $7445 | $14476 | $21102 | $44456 |
| U.S. Treasury securities | 4021 | 3765 |  |  | 7786 |
| Corporate debt securities | 877 | 3744 | 470 |  | 5091 |
| Asset-backed securities | 132 | 1001 | 446 | 2702 | 4281 |
| U.S. state and municipal securities | 2 | 231 | 318 | 11 | 562 |
| Non-agency commercial mortgage-backed securities |  |  |  | 113 | 113 |
| Other |  |  |  | 19 | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total fair value | $6465 | $16186 | $15710 | $23947 | $62308 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total amortized cost <sup>(1)</sup> | $6543 | $17192 | $16981 | $25974 | $66690 |
| **Held to maturity securities** |  |  |  |  |  |
| U.S. agency mortgage-backed securities | $588 | $19789 | $26519 | $81363 | $128259 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total fair value | $588 | $19789 | $26519 | $81363 | $128259 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total amortized cost | $592 | $20357 | $27439 | $88305 | $136693 |

---

<sup>(1)</sup> For purposes of this table, the amortized cost of AFS securities excludes the unallocated PLM fair value hedge basis adjustments of $8 million at September 30, 2025.

Proceeds and gross realized gains and losses from sales of AFS investment securities are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, |
| | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, |
| | 2025 | 2024 | 2025 | 2024 |
| Proceeds | $1206 | $886 | $5411 | $2929 |
| Gross realized gains |  |  |  |  |
| Gross realized losses | 10 | 10 | 50 | 30 |

---

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

**6.&nbsp;&nbsp;&nbsp;&nbsp;Bank Loans and Related Allowance for Credit Losses**

The composition of bank loans and delinquency analysis by portfolio segment and class of financing receivable is as follows:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| September 30, 2025 | Current | 30-59 days<br>past due | 60-89 days<br>past due | <u>></u>90 days past<br>due and other<br>nonaccrual loans <sup>(3)</sup> | Total past due<br>and other<br>nonaccrual loans | Total<br>loans | Allowance<br>for credit<br>losses | Total<br>bank<br>loans – net |
| Residential real estate: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;First Mortgages <sup>(12)</sup> | $29304 | $18 | $6 | $33 | $57 | $29361 | $15 | $29346 |
| &nbsp;&nbsp;HELOCs <sup>(12)</sup> | 417 | 1 |  | 3 | 4 | 421 | 1 | 420 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total residential real estate | 29721 | 19 | 6 | 36 | 61 | 29782 | 16 | 29766 |
| Pledged asset lines | 23380 | 4 | 3 | 3 | 10 | 23390 |  | 23390 |
| Other | 419 |  |  | 1 | 1 | 420 | 6 | 414 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total bank loans | $53520 | $23 | $9 | $40 | $72 | $53592 | $22 | $53570 |
| December 31, 2024 |  |  |  |  |  |  |  |  |
| Residential real estate: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;First Mortgages <sup>(12)</sup> | $27321 | $37 | $6 | $25 | $68 | $27389 | $14 | $27375 |
| &nbsp;&nbsp;HELOCs <sup>(12)</sup> | 421 |  |  | 3 | 3 | 424 | 1 | 423 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total residential real estate | 27742 | 37 | 6 | 28 | 71 | 27813 | 15 | 27798 |
| Pledged asset lines | 17010 | 8 |  | 6 | 14 | 17024 |  | 17024 |
| Other | 398 |  |  | 1 | 1 | 399 | 6 | 393 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total bank loans | $45150 | $45 | $6 | $35 | $86 | $45236 | $21 | $45215 |

---

<sup>(1)</sup> First Mortgages and HELOCs include unamortized premiums and discounts and direct origination costs of $125 million and $112 million at September 30, 2025 and December 31, 2024, respectively.

<sup>(2)</sup> At September 30, 2025 and December 31, 2024, 41% and 42%, respectively, of the First Mortgage and HELOC portfolios were concentrated in California. These loans have performed in a manner consistent with the portfolio as a whole.

<sup>(3)</sup> There were no loans accruing interest that were contractually 90 days or more past due at September 30, 2025 or December 31, 2024.

At September 30, 2025, CSB had pledged the full balance of First Mortgages and HELOCs pursuant to a blanket lien status collateral arrangement to secure borrowing capacity on a secured credit facility with the FHLB (see Note 9).

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

Changes in the allowance for credit losses on bank loans were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | First Mortgages | HELOCs | Total residential real estate | Pledged asset lines | Other | Total |
| Balance at June 30, 2024 | $14 | $1 | $15 | $— | $5 | $20 |
| Charge-offs |  |  |  |  |  |  |
| Recoveries |  |  |  |  |  |  |
| Provision for credit losses |  |  |  |  |  |  |
| Balance at September 30, 2024 | $14 | $1 | $15 | $— | $5 | $20 |
| Balance at June 30, 2025 | $15 | $1 | $16 | $— | $6 | $22 |
| Charge-offs |  |  |  |  |  |  |
| Recoveries |  |  |  |  |  |  |
| Provision for credit losses |  |  |  |  |  |  |
| Balance at September 30, 2025 | $15 | $1 | $16 | $— | $6 | $22 |
| Balance at December 31, 2023 | $32 | $2 | $34 | $— | $4 | $38 |
| Charge-offs |  |  |  |  |  |  |
| Recoveries |  |  |  |  |  |  |
| Provision for credit losses | (18) | (1) | (19) |  | 1 | (18) |
| Balance at September 30, 2024 | $14 | $1 | $15 | $— | $5 | $20 |
| Balance at December 31, 2024 | $14 | $1 | $15 | $— | $6 | $21 |
| Charge-offs |  |  |  |  |  |  |
| Recoveries |  |  |  |  |  |  |
| Provision for credit losses | 1 |  | 1 |  |  | 1 |
| Balance at September 30, 2025 | $15 | $1 | $16 | $— | $6 | $22 |

---

Consistent with Schwab's loan charge-off policy for PALs as disclosed in Item 8 – Note 2 of the 2024 Form 10-K, the Company charges off any unsecured balances no later than 90 days past due. As of September 30, 2025, substantially all PALs are also subject to the collateral maintenance practical expedient under ASC 326 *Financial Instruments — Credit Losses*. All PALs were fully collateralized by securities with fair values in excess of borrowings as of September 30, 2025 and December 31, 2024, and no allowance for credit losses for PALs as of those dates was required.

The U.S. economy saw lower hiring, a modest inflation gain at the end of the third quarter of 2025, and continued to face a moderately restrictive monetary policy and geopolitical unrest amid a backdrop of elevated uncertainty relating to economic impacts of emerging trade policy. Management's macroeconomic outlook reflects sustained current benchmark lending rates, with a softening labor market and modest home price appreciation. Though higher mortgage rates are easing demand and reducing borrower affordability, we expect constrained housing supply to keep home prices relatively stable. Furthermore, credit quality metrics in the Company's bank loans portfolio remain very strong. As a result of these factors, we held projected loss rates constant at September 30, 2025, as compared to December 31, 2024.

Bank loan-related nonperforming assets consisted of nonaccrual loans of $40 million and $35 million at September 30, 2025 and December 31, 2024, respectively. Nonaccrual loans include nonaccrual troubled debt restructurings recorded prior to the adoption of ASU 2022-02, "*Financial Instruments — Credit Losses*: *Troubled Debt Restructurings and Vintage Disclosures"* on January 1, 2023. At both September 30, 2025 and December 31, 2024, loan modifications to borrowers experiencing financial difficulty were not material.

***Credit Quality***

In addition to monitoring delinquency, Schwab monitors the credit quality of First Mortgages and HELOCs by stratifying the portfolios by the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Year of origination;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Borrower Fair Isaac Corporation (FICO) scores at origination (Origination FICO);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Updated borrower FICO scores (Updated FICO);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Loan-to-value (LTV) ratios at origination (Origination LTV); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Estimated Current LTV ratios (Estimated Current LTV).

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

Borrowers' FICO scores are provided by an independent third-party credit reporting service and are generally updated quarterly. The Origination LTV and Estimated Current LTV for a HELOC include any first lien mortgage outstanding on the same property at the time of the HELOC's origination. The Estimated Current LTV for each loan is updated on a monthly basis by reference to a home price appreciation index.

The credit quality indicators of the Company's First Mortgages and HELOCs are detailed below:

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | First Mortgages Amortized Cost Basis by Origination Year | First Mortgages Amortized Cost Basis by Origination Year | First Mortgages Amortized Cost Basis by Origination Year | First Mortgages Amortized Cost Basis by Origination Year | First Mortgages Amortized Cost Basis by Origination Year | First Mortgages Amortized Cost Basis by Origination Year | | | | |
| September 30, 2025 | 2025 | 2024 | 2023 | 2022 | 2021 | pre-2021 | Total First Mortgages | Revolving HELOCs amortized cost basis | HELOCs converted to term loans | Total HELOCs |
| Origination FICO |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;<620 | $— | $— | $— | $3 | $1 | $1 | $5 | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;620 – 679 | 19 | 23 | 4 | 24 | 28 | 22 | 120 |  | 1 | 1 |
| &nbsp;&nbsp;&nbsp;680 – 739 | 363 | 306 | 230 | 680 | 1032 | 513 | 3124 | 50 | 25 | 75 |
| &nbsp;&nbsp;&nbsp;≥740 | 3716 | 2777 | 1667 | 4631 | 9274 | 4047 | 26112 | 251 | 94 | 345 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $4098 | $3106 | $1901 | $5338 | $10335 | $4583 | $29361 | $301 | $120 | $421 |
| Origination LTV |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;≤70% | $2738 | $2130 | $1286 | $3960 | $8990 | $3753 | $22857 | $284 | $84 | $368 |
| &nbsp;&nbsp;&nbsp;>70% – ≤90% | 1360 | 976 | 615 | 1378 | 1345 | 829 | 6503 | 17 | 35 | 52 |
| &nbsp;&nbsp;&nbsp;>90% – ≤100% |  |  |  |  |  | 1 | 1 |  | 1 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $4098 | $3106 | $1901 | $5338 | $10335 | $4583 | $29361 | $301 | $120 | $421 |
| Updated FICO |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;<620 | $3 | $4 | $5 | $26 | $28 | $23 | $89 | $3 | $4 | $7 |
| &nbsp;&nbsp;&nbsp;620 – 679 | 36 | 34 | 34 | 64 | 103 | 64 | 335 | 6 | 6 | 12 |
| &nbsp;&nbsp;&nbsp;680 – 739 | 355 | 248 | 167 | 491 | 790 | 352 | 2403 | 41 | 20 | 61 |
| &nbsp;&nbsp;&nbsp;≥740 | 3704 | 2820 | 1695 | 4757 | 9414 | 4144 | 26534 | 251 | 90 | 341 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $4098 | $3106 | $1901 | $5338 | $10335 | $4583 | $29361 | $301 | $120 | $421 |
| Estimated Current LTV <sup>(1)</sup> | Estimated Current LTV <sup>(1)</sup> |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;≤70% | $2567 | $2205 | $1552 | $4796 | $10225 | $4570 | $25915 | $298 | $120 | $418 |
| &nbsp;&nbsp;&nbsp;>70% – ≤90% | 1527 | 901 | 345 | 534 | 109 | 13 | 3429 | 3 |  | 3 |
| &nbsp;&nbsp;&nbsp;>90% – ≤100% | 4 |  | 4 | 8 | 1 |  | 17 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $4098 | $3106 | $1901 | $5338 | $10335 | $4583 | $29361 | $301 | $120 | $421 |
| Gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| Percent of Loans on <br> Nonaccrual Status | 0.01% | 0.05% | 0.11% | 0.14% | 0.11% | 0.24% | 0.11% | 0.06% | 2.01% | 0.71% |

---

<sup>(1)</sup> Represents the LTV for the full line of credit (drawn and undrawn) for revolving HELOCs.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | First Mortgages Amortized Cost Basis by Origination Year | First Mortgages Amortized Cost Basis by Origination Year | First Mortgages Amortized Cost Basis by Origination Year | First Mortgages Amortized Cost Basis by Origination Year | First Mortgages Amortized Cost Basis by Origination Year | | | | |
| December 31, 2024 | 2024 | 2023 | 2022 | 2021 | pre-2021 | Total First Mortgages | Revolving HELOCs amortized cost basis | HELOCs converted to term loans | Total HELOCs |
| Origination FICO |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;<620 | $1 | $— | $2 | $1 | $2 | $6 | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;620 – 679 | 24 | 4 | 26 | 29 | 28 | 111 |  | 1 | 1 |
| &nbsp;&nbsp;&nbsp;680 – 739 | 361 | 249 | 724 | 1091 | 576 | 3001 | 47 | 30 | 77 |
| &nbsp;&nbsp;&nbsp;≥740 | 3203 | 1895 | 4902 | 9796 | 4475 | 24271 | 241 | 105 | 346 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $3589 | $2148 | $5654 | $10917 | $5081 | $27389 | $288 | $136 | $424 |
| Origination LTV |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;≤70% | $2471 | $1445 | $4197 | $9479 | $4159 | $21751 | $267 | $95 | $362 |
| &nbsp;&nbsp;&nbsp;>70% – ≤90% | 1118 | 703 | 1457 | 1438 | 920 | 5636 | 21 | 40 | 61 |
| &nbsp;&nbsp;&nbsp;>90% – ≤100% |  |  |  |  | 2 | 2 |  | 1 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $3589 | $2148 | $5654 | $10917 | $5081 | $27389 | $288 | $136 | $424 |
| Updated FICO |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;<620 | $— | $3 | $25 | $15 | $21 | $64 | $1 | $5 | $6 |
| &nbsp;&nbsp;&nbsp;620 – 679 | 34 | 31 | 74 | 97 | 74 | 310 | 6 | 7 | 13 |
| &nbsp;&nbsp;&nbsp;680 – 739 | 339 | 191 | 574 | 871 | 435 | 2410 | 48 | 24 | 72 |
| &nbsp;&nbsp;&nbsp;≥740 | 3216 | 1923 | 4981 | 9934 | 4551 | 24605 | 233 | 100 | 333 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $3589 | $2148 | $5654 | $10917 | $5081 | $27389 | $288 | $136 | $424 |
| Estimated Current LTV <sup>(1)</sup> | Estimated Current LTV <sup>(1)</sup> |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;≤70% | $2402 | $1660 | $4942 | $10747 | $5057 | $24808 | $285 | $136 | $421 |
| &nbsp;&nbsp;&nbsp;>70% – ≤90% | 1187 | 487 | 693 | 166 | 20 | 2553 | 3 |  | 3 |
| &nbsp;&nbsp;&nbsp;>90% – ≤100% |  | 1 | 17 | 3 | 4 | 25 |  |  |  |
| &nbsp;&nbsp;&nbsp;>100% |  |  | 2 | 1 |  | 3 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $3589 | $2148 | $5654 | $10917 | $5081 | $27389 | $288 | $136 | $424 |
| Gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| Percent of Loans on <br> Nonaccrual Status | 0.01% | 0.12% | 0.16% | 0.04% | 0.18% | 0.09% | 0.07% | 2.33% | 0.71% |

---

<sup>(1)</sup> Represents the LTV for the full line of credit (drawn and undrawn) for revolving HELOCs.

At September 30, 2025, $25.1 billion of First Mortgage loans had adjustable interest rates. Substantially all of these mortgages have initial fixed interest rates for three to ten years and interest rates that typically adjust every six to twelve months pursuant to the terms of the loan thereafter. Approximately 24% of the balance of these mortgages consisted of loans with interest-only payment terms. The interest rates on approximately 71% of the balance of these interest-only loans are not scheduled to reset for three or more years.

At September 30, 2025 and December 31, 2024, Schwab had $211 million and $171 million, respectively, of accrued interest on bank loans, which is excluded from the amortized cost basis of bank loans and included in other assets on the condensed consolidated balance sheets.

The HELOC product has a 30-year loan term with an initial draw period of ten years from the date of origination. After the initial draw period, the balance outstanding at such time is converted to a 20-year amortizing loan. The interest rate during the initial draw period and the 20-year amortizing period is a floating-rate based on the prime rate plus a margin.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

The following table presents when current outstanding HELOCs will convert to amortizing loans:

---

| | |
|:---|:---|
| September 30, 2025 | Balance |
| Converted to an amortizing loan by period end <sup>(1)</sup> | $120 |
| Within 1 year | 15 |
| > 1 year – 3 years | 38 |
| > 3 years – 5 years | 48 |
| > 5 years | 200 |
| &nbsp;&nbsp;&nbsp;Total | $421 |

---

<sup>(1)</sup> Includes $3 million and $11 million of HELOCs converted to amortizing loans during the three and nine months ended September 30, 2025, respectively.

At September 30, 2025, $328 million of the HELOC portfolio was secured by second liens on the associated properties. Second lien mortgage loans typically possess a higher degree of credit risk given the subordination to the first lien holder in the event of default. In addition to the credit monitoring activities described previously, Schwab also monitors credit risk by reviewing the delinquency status of the first lien loan on the associated property. At September 30, 2025, the borrowers on approximately 64% of HELOC loan balances outstanding only paid the minimum amount due.

**7.&nbsp;&nbsp;&nbsp;&nbsp;Variable Interest Entities**

As of September 30, 2025 and December 31, 2024, substantially all of Schwab's involvement with variable interest entities (VIEs) is through CSB's Community Reinvestment Act (CRA) related investments and most of these are related to Low-Income Housing Tax Credit (LIHTC) investments. As part of CSB's community reinvestment initiatives, CSB invests in funds that make equity investments in multifamily affordable housing properties and receives tax credits and other tax benefits for these investments. During the three months ended September 30, 2025 and 2024, CSB recorded amortization of $48 million and $37 million, respectively, and recognized tax credits and other tax benefits of $62 million and $48 million, respectively, associated with these investments. During the nine months ended September 30, 2025 and 2024, CSB recorded amortization of $142 million and $117 million, respectively, and recognized tax credits and other tax benefits of $188 million and $150 million, respectively, associated with these investments. The amortization, as well as the tax credits and other tax benefits, are included in taxes on income on the condensed consolidated statements of income. Tax credits and other tax benefits are reflected as cash flows from operating activities on the condensed consolidated statements of cash flows.

***Aggregate assets, liabilities, and maximum exposure to loss***

The aggregate assets, liabilities, and maximum exposure to loss from those VIEs in which Schwab holds a variable interest, but is not the primary beneficiary, are summarized in the table below:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | September 30, 2025 | September 30, 2025 | September 30, 2025 | December 31, 2024 | December 31, 2024 | December 31, 2024 |
| | Aggregate<br>assets | Aggregate<br>liabilities | Maximum<br>exposure<br>to loss | Aggregate<br>assets | Aggregate<br>liabilities | Maximum<br>exposure<br>to loss |
| LIHTC investments <sup>(1)</sup> | $2032 | $1109 | $2032 | $1729 | $947 | $1729 |
| Other investments <sup>(2)</sup> | 248 |  | 341 | 224 |  | 340 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $2280 | $1109 | $2373 | $1953 | $947 | $2069 |

---

<sup>(1)</sup> Aggregate assets and aggregate liabilities are included in other assets and accrued expenses and other liabilities, respectively, on the condensed consolidated balance sheets.

<sup>(2)</sup> Other investments include non-LIHTC CRA investments that are accounted for as loans at amortized cost, equity method investments, AFS securities, or using the adjusted cost method. Aggregate assets are included in AFS securities, bank loans – net, or other assets on the condensed consolidated balance sheets.

Schwab's maximum exposure to loss would result from the loss of the investments, including any committed amounts. Schwab's funding of these remaining commitments is dependent upon the occurrence of certain conditions, and Schwab expects to pay substantially all of these commitments between 2025 and 2028. During the nine months ended September 30, 2025 and year ended December 31, 2024, Schwab did not provide or intend to provide financial or other support to the VIEs that it was not contractually required to provide.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

**8.&nbsp;&nbsp;&nbsp;&nbsp;Bank Deposits**

Bank deposits consist of interest-bearing and non-interest-bearing deposits as follows:

---

| | | |
|:---|:---|:---|
| | September 30, 2025 | December 31, 2024 |
| Interest-bearing deposits: |  |  |
| &nbsp;&nbsp;Deposits swept from brokerage accounts | $209205 | $210575 |
| &nbsp;&nbsp;Checking | 15124 | 15593 |
| &nbsp;&nbsp;Time certificates of deposit <sup>(1)</sup> | 9936 | 27701 |
| &nbsp;&nbsp;Savings and other | 3569 | 4015 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing deposits | 237834 | 257884 |
| Non-interest-bearing deposits | 1223 | 1237 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total bank deposits | $239057 | $259121 |

---

<sup>(1)</sup> Time certificates of deposit consist of brokered CDs. The weighted-average interest rates on outstanding time certificates of deposit at September 30, 2025 and December 31, 2024 were 4.21% and 4.90%, respectively. As of September 30, 2025 and December 31, 2024, there were no time deposits that were in excess of FDIC insurance limits or otherwise uninsured.

Time certificates of deposit outstanding at September 30, 2025 mature between October 2025 and January 2026.

**9.&nbsp;&nbsp;&nbsp;&nbsp;Borrowings**

***CSC Senior Notes***

CSC's Senior Notes are unsecured obligations. CSC may redeem some or all of the Senior Notes of each series prior to their maturity, subject to certain restrictions, and the payment of an applicable make-whole premium in certain instances. Interest is payable semi-annually for the fixed-rate Senior Notes and quarterly for the floating-rate Senior Notes. Interest for the fixed-to-floating rate Senior Notes is payable semi-annually during the fixed-rate period of the notes and quarterly during the floating-rate period of the notes.

***Ameritrade Holding Senior Notes***

Ameritrade Holding's Senior Notes are unsecured obligations. Ameritrade Holding may redeem some or all of the Senior Notes of each series prior to their maturity, subject to certain restrictions, and the payment of an applicable make-whole premium in certain instances. Interest is payable semi-annually for the fixed-rate Senior Notes.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

The following table lists long-term debt by instrument outstanding as of September 30, 2025 and December 31, 2024:

---

| | | | |
|:---|:---|:---|:---|
| | Date of Issuance | Principal Amount Outstanding | Principal Amount Outstanding |
| | Date of Issuance | September 30, 2025 | December 31, 2024 |
| CSC Fixed-rate Senior Notes: |  |  |  |
| &nbsp;&nbsp;3.000% due March 10, 2025 | 03/10/15 | $— | $375 |
| &nbsp;&nbsp;4.200% due March 24, 2025 | 03/24/20 |  | 600 |
| &nbsp;&nbsp;3.625% due April 1, 2025 | 09/24/21 |  | 418 |
| &nbsp;&nbsp;3.850% due May 21, 2025 | 05/22/18 |  | 750 |
| &nbsp;&nbsp;3.450% due February 13, 2026 | 11/13/15 | 350 | 350 |
| &nbsp;&nbsp;0.900% due March 11, 2026 | 12/11/20 | 1250 | 1250 |
| &nbsp;&nbsp;1.150% due May 13, 2026 | 05/13/21 | 1000 | 1000 |
| &nbsp;&nbsp;5.875% due August 24, 2026 | 08/24/23 | 1000 | 1000 |
| &nbsp;&nbsp;3.200% due March 2, 2027 | 03/02/17 | 650 | 650 |
| &nbsp;&nbsp;2.450% due March 3, 2027 | 03/03/22 | 1500 | 1500 |
| &nbsp;&nbsp;3.300% due April 1, 2027 | 09/24/21 | 744 | 744 |
| &nbsp;&nbsp;3.200% due January 25, 2028 | 12/07/17 | 700 | 700 |
| &nbsp;&nbsp;2.000% due March 20, 2028 | 03/18/21 | 1250 | 1250 |
| &nbsp;&nbsp;4.000% due February 1, 2029 | 10/31/18 | 600 | 600 |
| &nbsp;&nbsp;3.250% due May 22, 2029 | 05/22/19 | 600 | 600 |
| &nbsp;&nbsp;2.750% due October 1, 2029 | 09/24/21 | 475 | 475 |
| &nbsp;&nbsp;4.625% due March 22, 2030 | 03/24/20 | 500 | 500 |
| &nbsp;&nbsp;1.650% due March 11, 2031 | 12/11/20 | 750 | 750 |
| &nbsp;&nbsp;2.300% due May 13, 2031 | 05/13/21 | 750 | 750 |
| &nbsp;&nbsp;1.950% due December 1, 2031 | 08/26/21 | 850 | 850 |
| &nbsp;&nbsp;2.900% due March 3, 2032 | 03/03/22 | 1000 | 1000 |
| CSC Floating-rate Senior Notes: |  |  |  |
| &nbsp;&nbsp;SOFR + 0.520% due May 13, 2026 | 05/13/21 | 500 | 500 |
| &nbsp;&nbsp;SOFR + 1.050% due March 3, 2027 | 03/03/22 | 500 | 500 |
| CSC Fixed-to-Floating rate Senior Notes: |  |  |  |
| &nbsp;&nbsp;5.643% due May 19, 2029 <sup>(1)</sup> | 05/19/23 | 1200 | 1200 |
| &nbsp;&nbsp;6.196% due November 17, 2029 <sup>(2)</sup> | 11/17/23 | 1300 | 1300 |
| &nbsp;&nbsp;5.853% due May 19, 2034 <sup>(3)</sup> | 05/19/23 | 1300 | 1300 |
| &nbsp;&nbsp;6.136% due August 24, 2034 <sup>(4)</sup> | 08/24/23 | 1350 | 1350 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total CSC Senior Notes |  | 20119 | 22262 |
| Ameritrade Holding Fixed-rate Senior Notes: |  |  |  |
| &nbsp;&nbsp;3.625% due April 1, 2025 | 10/22/14 |  | 82 |
| &nbsp;&nbsp;3.300% due April 1, 2027 | 04/27/17 | 56 | 56 |
| &nbsp;&nbsp;2.750% due October 1, 2029 | 08/16/19 | 25 | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Ameritrade Holding Senior Notes |  | 81 | 163 |
| Finance lease liabilities |  | 30 | 49 |
| Unamortized premium — net |  | 37 | 54 |
| Debt issuance costs |  | (74) | (93) |
| Fair value hedging basis adjustments <sup>(5)</sup> |  | 6 | (7) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total long-term debt |  | $20199 | $22428 |

---

<sup>(1)</sup> The May 2029 fixed-to-floating rate Senior Notes bear interest at a fixed rate of 5.643%, payable semi-annually, until the interest reset date on May 19, 2028. On and after this date, these notes will bear interest at an annual floating rate of SOFR plus 2.210%, payable quarterly.

<sup>(2)</sup> The November 2029 fixed-to-floating rate Senior Notes bear interest at a fixed rate of 6.196%, payable semi-annually, until the interest reset date on November 17, 2028. On and after this date, these notes will bear interest at an annual floating rate of SOFR plus 1.878%, payable quarterly.

<sup>(3)</sup> The May 2034 fixed-to-floating rate Senior Notes bear interest at a fixed rate of 5.853%, payable semi-annually, until the interest reset date on May 19, 2033. On and after this date, these notes will bear interest at an annual floating rate of SOFR plus 2.500%, payable quarterly.

<sup>(4)</sup> The August 2034 fixed-to-floating rate Senior Notes bear interest at a fixed rate of 6.136%, payable semi-annually, until the interest reset date on August 24, 2033. On and after this date, these notes will bear interest at an annual floating rate of SOFR plus 2.010%, payable quarterly.

<sup>(5)</sup> This represents the amount of fair value hedge basis adjustments related to Senior Notes hedged. See Note 11 for more information on hedging of Senior Notes.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

Annual maturities on all long-term debt outstanding at September 30, 2025 are as follows:

---

| | |
|:---|:---|
| | Maturities |
| 2025 | $5 |
| 2026 | 4112 |
| 2027 | 3463 |
| 2028 | 1950 |
| 2029 | 4200 |
| Thereafter | 6500 |
| &nbsp;&nbsp;Total maturities | 20230 |
| Unamortized premium — net | 37 |
| Debt issuance costs | (74) |
| Fair value hedging basis adjustments <sup>(1)</sup> | 6 |
| &nbsp;&nbsp;&nbsp;Total long-term debt | $20199 |

---

<sup>(1)</sup> This represents the amount of fair value hedge basis adjustments related to long-term debt hedged. See Note 11 for more information on hedging of long-term debt.

*FHLB borrowings*: Our banking subsidiaries maintain secured credit facilities with the FHLB. Amounts available under these facilities are dependent on the amount of bank loans and the value of certain investment securities that are pledged as collateral. There was $850 million and $16.7 billion outstanding under these facilities as of September 30, 2025 and December 31, 2024, respectively, and these borrowings had a weighted-average interest rate of 4.11% and 5.11%, respectively. As of September 30, 2025 and December 31, 2024, the collateral pledged provided additional borrowing capacity of $75.3 billion and $59.8 billion, respectively.

*Other short-term borrowings*: Total other short-term borrowings outstanding at September 30, 2025 and December 31, 2024 were $6.5 billion and $6.0 billion, respectively, and had a weighted-average interest rate of 4.48% and 5.21%, respectively. Additional information regarding our other short-term borrowings facilities is described below.

The Company may engage with external financial institutions and the FICC in repurchase agreements collateralized by investment securities as another source of short-term liquidity. The Company had $4.0 billion and $5.5 billion outstanding pursuant to such repurchase agreements at September 30, 2025 and December 31, 2024, respectively. Repurchase agreements outstanding at September 30, 2025 mature between October 2025 and November 2025.

Our banking subsidiaries have access to funding through the Federal Reserve discount window. Amounts available are dependent upon the value of certain investment securities that are pledged as collateral. As of September 30, 2025 and December 31, 2024, our collateral pledged provided total borrowing capacity of $29.7 billion and $30.5 billion, respectively, of which no amounts were outstanding at the end of either period.

CSC has the ability to issue up to $5.0 billion of commercial paper notes with maturities of up to 270 days. There was $800 million gross par value before discount of $4 million outstanding at September 30, 2025, and no amounts outstanding at December 31, 2024. CSC and CS&Co also have access to unsecured uncommitted lines of credit with external banks with total borrowing capacity of $1.7 billion; no amounts were outstanding as of September 30, 2025 or December 31, 2024.

CS&Co maintains secured uncommitted lines of credit, under which CS&Co may borrow on a short-term basis and pledge either client margin securities or firm securities as collateral, based on the terms of the agreements, under which there was $1.8 billion and $500 million outstanding at September 30, 2025 and December 31, 2024, respectively.

Annual maturities on FHLB borrowings and other short-term borrowings outstanding at September 30, 2025 are as follows:

---

| | | | |
|:---|:---|:---|:---|
| | 2025 | 2026 | Total |
| FHLB borrowings | $— | $850 | $850 |
| Other short-term borrowings | 5541 | 1000 | 6541 |
| &nbsp;&nbsp;Total | $5541 | $1850 | $7391 |

---

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

**10.&nbsp;&nbsp;&nbsp;&nbsp;Commitments and Contingencies**

*Loan portfolio*: CSB provides a co-branded loan origination program for CSB clients (the Program) with Rocket Mortgage, LLC. Pursuant to the Program, Rocket Mortgage, LLC originates and services First Mortgages and HELOCs for CSB clients. Under the Program, CSB purchases certain First Mortgages and HELOCs that are originated by Rocket Mortgage, LLC. CSB purchased First Mortgages of $1.7 billion and $1.1 billion during the third quarter of 2025 and 2024, respectively, and $4.4 billion and $2.6 billion during the first nine months of 2025 and 2024, respectively. CSB purchased HELOCs with commitments of $52 million and $38 million during the third quarter of 2025 and 2024, respectively, and $181 million and $121 million during the first nine months of 2025 and 2024, respectively.

The Company's commitments to extend credit on lines of credit and to purchase First Mortgages are as follows:

---

| | | |
|:---|:---|:---|
| | September 30, 2025 | December 31, 2024 |
| Commitments to extend credit related to unused HELOCs and other lines of credit | $1819 | $1895 |
| Commitments to purchase First Mortgage loans | 1215 | 511 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $3034 | $2406 |

---

*Guarantees and indemnifications*: Schwab has clients that sell (i.e., write) listed option contracts that are cleared by the Options Clearing Corporation – a clearing house that establishes margin requirements on these transactions. We satisfy the margin requirements of these transactions through pledging certain client securities. For additional information on these pledged securities, refer to Note 12. In connection with its securities lending activities, Schwab is required to provide collateral to certain brokerage clients. The Company satisfies the collateral requirements by providing cash as collateral.

The Company also provides guarantees to securities clearing houses and exchanges under standard membership agreements, which require members to guarantee the performance of other members. Under the agreements, if another member becomes unable to satisfy its obligations to the clearing houses and exchanges, other members would be required to meet shortfalls. The Company's liability under these arrangements is not quantifiable and may exceed the amounts it has posted as collateral. The Company also engages third-party firms to clear clients' futures and options on futures transactions and to facilitate clients' foreign exchange trading, and has agreed to indemnify these firms for any losses that they may incur from the client transactions introduced to them by the Company. The potential requirement for the Company to make payments under these arrangements is remote. Accordingly, no liability has been recognized for these guarantees and indemnifications.

*IDA agreement*: The 2023 IDA agreement with the TD Depository Institutions specifies responsibilities, including certain contingent obligations, of the Company. Pursuant to the 2023 IDA agreement, uninvested cash within eligible brokerage client accounts is swept off-balance sheet to deposit accounts at the TD Depository Institutions. Schwab provides recordkeeping and support services to the TD Depository Institutions with respect to the deposit accounts for which Schwab receives an aggregate monthly fee. Under the 2023 IDA agreement, the service fee on client cash deposits held at the TD Depository Institutions is 15 basis points. The Company's ability to migrate these balances to its balance sheet is dependent on multiple factors including having sufficient capital levels to sustain these incremental deposits and certain binding limitations specified in the 2023 IDA agreement.

The 2023 IDA agreement extends the term to sweep balances to the TD Depository Institutions through July 1, 2034, and requires that Schwab maintain certain minimum and maximum insured deposit account balances (IDA balances). Pursuant to the terms of the agreement, after September 10, 2025, withdrawals of IDA balances are permitted at Schwab's discretion, subject to an obligation to maintain IDA balances above a minimum of $60 billion, with a maximum of $90 billion. In accordance with the agreement, in September 2025, Schwab moved $3.0 billion of IDA balances to its balance sheet.

Designation of deposit balances for investment in fixed- or floating-rate instruments under the 2023 IDA agreement is at Schwab's sole discretion with certain limitations on the amount of fixed-rate obligation amounts. If IDA balances decline below the required IDA balance minimum as described above, Schwab would be required to make a nonperformance payment to the TD Depository Institutions pursuant to the terms of the 2023 IDA agreement.

As of September 30, 2025, the total ending IDA balance was $78.6 billion, of which $59.7 billion was fixed-rate obligation amounts and $18.9 billion was floating-rate obligation amounts. As of December 31, 2024, the total ending IDA balance was $87.6 billion, of which $66.6 billion was fixed-rate obligation amounts and $21.0 billion was floating-rate obligation amounts.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

*Legal contingencies*: Schwab is subject to claims and lawsuits in the ordinary course of business, including arbitrations, class actions and other litigation, some of which include claims for substantial or unspecified damages. The Company is also the subject of inquiries, investigations, and proceedings by regulatory and other governmental agencies.

Predicting the outcome of a litigation or regulatory matter is inherently difficult, requiring significant judgment and evaluation of various factors, including the procedural status of the matter and any recent developments; prior experience and the experience of others in similar cases; available defenses, including potential opportunities to dispose of a case on the merits or procedural grounds before trial (e.g., motions to dismiss or for summary judgment); the progress of fact discovery; the opinions of counsel and experts regarding potential damages; and potential opportunities for settlement and the status of any settlement discussions. It may not be reasonably possible to estimate a range of potential liability until the matter is closer to resolution – pending, for example, further proceedings, the outcome of key motions or appeals, or discussions among the parties. Numerous issues may have to be developed, such as discovery of important factual matters and determination of threshold legal issues, which may include novel or unsettled questions of law. Reserves are established or adjusted or further disclosure and estimates of potential loss are provided as the matter progresses and more information becomes available.

Schwab believes it has strong defenses in all significant matters currently pending and is contesting liability and any damages claimed. Nevertheless, some of these matters may result in adverse judgments or awards, including penalties, injunctions or other relief, and the Company may also determine to settle a matter because of the uncertainty and risks of litigation. Described below are any matters in which there is a reasonable possibility that a material loss could be incurred or where the matter may otherwise be of significant interest to stockholders. Unless otherwise noted, the Company is unable to provide a reasonable estimate of any potential liability given the stage of proceedings in the matter. With respect to all other pending matters, based on current information and consultation with counsel, it does not appear reasonably possible that the outcome of any such matter would be material to the financial condition, operating results, or cash flows of the Company.

<u>Corrente Antitrust Litigation</u>: On June 6, 2022, CSC was sued in the U.S. District Court for the Eastern District of Texas on behalf of a putative class of customers who purchased or sold securities through CS&Co or TD Ameritrade, Inc. (now Ameritrade of New York, Inc.) from October 26, 2020 to the present. The lawsuit alleges that CSC's acquisition of Ameritrade violated Section 7 of the Clayton Act because it has resulted in an anticompetitive market for the execution of retail customer orders. Plaintiffs seek unspecified damages, as well as injunctive and other relief. A motion by the Company to dismiss the lawsuit was denied by the court on February 24, 2023. On December 12, 2024, the parties filed a joint stipulation proposing a settlement of the lawsuit on a class basis under which defendants would commit to certain non-monetary undertakings and payments of plaintiffs' attorneys' fees and costs in an amount that would be immaterial. Approval of the settlement remains pending with the court.

**11.&nbsp;&nbsp;&nbsp;&nbsp;Derivative Instruments and Hedging Activities**

***Risk Management Objective of Using Derivatives***

The Company utilizes derivative instruments to manage interest rate risk exposures that arise from business activities related to changes in fair values or the receipt and payment of future known and uncertain cash amounts due to changes in interest rates. The Company uses derivative instruments to manage changes in the fair values of, as well as changes in the amounts and/or timing of known or expected cash receipts and payments related to, our AFS investment portfolio, PALs, and Senior Notes.

For a description of how the Company accounts for derivative instruments, see Item 8 – Note 2 in the 2024 Form 10-K. For additional information on the basis of presentation for derivative instruments on the Company's condensed consolidated balance sheets and related offsetting considerations, see Note 12. Cash flows associated with derivative instruments are reflected as cash flows from operating activities in the condensed consolidated statements of cash flows consistent with the treatment and nature of the items being hedged.

***Fair Value Hedges of Interest Rate Risk***

The Company is exposed to changes in the fair value of its fixed-rate AFS securities and Senior Notes, as well as its fixed-to-floating rate Senior Notes during the fixed-rate period, due to changes in benchmark interest rates. The Company uses cleared interest rate swaps to manage its exposure to changes in fair value of these instruments attributable to changes in the designated benchmark interest rate. Cleared interest rate swaps designated as fair value hedges of AFS securities involve the payment of fixed-rate amounts to a CCP in exchange for the Company receiving floating-rate payments over the life of the agreements.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

Cleared interest rate swaps designated as fair value hedges of Senior Notes involve the receipt of fixed-rate amounts from a CCP in exchange for the Company's floating-rate payments over the life of the agreements.

The Company had outstanding interest rate swaps with aggregate notional amounts of $40.8 billion and $30.9 billion at September 30, 2025 and December 31, 2024, respectively, that were designated as fair value hedges of interest rate risk. The notional amount is the basis upon which the pay-fixed/receive-float and receive-fixed/pay-float payments are determined; however, the amount is not exchanged.

***Cash Flow Hedges of Interest Rate Risk***

Beginning in the second quarter of 2025, the Company uses cleared interest rate swaps designated as cash flows hedges as part of its interest rate risk management strategy to add stability to interest revenue and to manage its exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of fixed-rate amounts from a CCP in exchange for the Company's floating-rate payments over the life of the agreements without exchange of the underlying notional amount. Such derivatives are used to hedge the variable cash flows associated with Schwab's PALs.

The Company had outstanding interest rate swaps with aggregate notional amounts of $16.1 billion at September 30, 2025 that were designated as cash flow hedges of interest rate risk.

***Fair Values of Derivative Instruments***

The table below presents the gross fair values of the Company's interest rate swaps designated as hedging instruments on the condensed consolidated balance sheets:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | September 30, 2025 | September 30, 2025 | December 31, 2024 | December 31, 2024 |
| | Assets | Liabilities | Assets | Liabilities |
| Interest rate swaps <sup>(12)</sup> | $— | $— | $— | $— |

---

<sup>(1)</sup> Derivative assets are included in other assets and derivative liabilities are included in accrued expenses and other liabilities on the condensed consolidated balance sheets. Derivative assets and liabilities as of September 30, 2025 and December 31, 2024 were less than $500 thousand.

<sup>(2)</sup> Includes reductions related to variation margin settlements. Settlements on derivative positions cleared through CCPs are reflected as reductions to the associated derivative asset and liability balances. As of September 30, 2025, there was a $69 million reduction of derivative assets and a $139 million reduction of derivative liabilities related to variation margin settlements. As of December 31, 2024, there was a $295 million reduction of derivative assets and a $10 million reduction of derivative liabilities related to variation margin settlements.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

***Effects of Fair Value Hedge Accounting***

The following amounts are included on the condensed consolidated balance sheets related to fair value hedges:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Carrying Amount of the Hedged <br>Assets/(Liabilities) | Carrying Amount of the Hedged <br>Assets/(Liabilities) | Cumulative Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged <br>Assets and Liabilities | Cumulative Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged <br>Assets and Liabilities |
| | September 30, 2025 | December 31, 2024 | September 30, 2025 | December 31, 2024 |
| Line item in which the hedged item is included: |  |  |  |  |
| &nbsp;&nbsp;Available for sale securities <sup>(12)</sup> | $14389 | $15686 | $113 | $(292) |
| &nbsp;&nbsp;Long-term debt <sup>(3)</sup> | $(18733) | $(14908) | $— | $7 |

---

<sup>(1)</sup> Includes the amortized cost basis of closed portfolios of AFS securities used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period. At September 30, 2025 and December 31, 2024, the amortized cost basis of the closed portfolios used in these hedging relationships was $2.6 billion and $2.5 billion, respectively, of which $2.1 billion and $2.0 billion was designated in a portfolio layer hedging relationship at September 30, 2025 and December 31, 2024, respectively. The cumulative basis adjustments associated with these hedging relationships were an increase of $8 million and a reduction of $47 million of the amortized cost basis of the closed portfolios at September 30, 2025 and December 31, 2024, respectively.

<sup>(2)</sup> Excludes the amortized cost and fair value hedging adjustment of AFS securities for which hedge accounting has been discontinued. The cumulative amount of fair value hedging adjustments remaining for these securities was a reduction of the amortized cost basis of $141 million at September 30, 2025 and $2 million at December 31, 2024, which are recorded in AFS securities on the condensed consolidated balance sheets and amortized to interest revenue as a yield adjustment over the lives of the securities.

<sup>(3)</sup> Excludes the carrying amount and fair value hedging adjustment of long-term debt for which hedge accounting has been discontinued. The cumulative amount of fair value hedging adjustments remaining for long-term debt was an increase of the carrying amount of $5 million at September 30, 2025, which is recorded in long-term debt on the condensed consolidated balance sheets and amortized to interest expense over the lives of the borrowings.

The table below presents the effect of the Company's interest rate swaps designated as fair value hedges on the condensed consolidated statements of income:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Location and Amount of Gain (Loss) Recognized in Income | Location and Amount of Gain (Loss) Recognized in Income | Location and Amount of Gain (Loss) Recognized in Income | Location and Amount of Gain (Loss) Recognized in Income |
| | Interest Revenue | Interest Revenue | Interest Expense | Interest Expense |
| Three Months Ended September 30, | 2025 | 2024 | 2025 | 2024 |
| Gain (loss) on fair value hedging relationships: |  |  |  |  |
| &nbsp;&nbsp;Hedged items | $(3) | $216 | $4 | $— |
| Derivatives designated as hedging instruments <sup>(1)</sup> | 3 | (214) | (4) |  |
| Nine Months Ended September 30, | 2025 | 2024 | 2025 | 2024 |
| Gain (loss) on fair value hedging relationships: |  |  |  |  |
| &nbsp;&nbsp;Hedged items | $252 | $19 | $(12) | $— |
| Derivatives designated as hedging instruments <sup>(1)</sup> | (252) | (19) | 14 |  |

---

<sup>(1)</sup> Interest revenue excludes net income (expense) from periodic interest accruals and receipts (payments) of $2 million and $34 million for the three and nine months ended September 30, 2025, respectively, and $20 million and $36 million for the three and nine months ended September 30, 2024, respectively. Interest expense excludes net income (expense) from periodic interest accruals and receipts (payments) of $(20) million and $(44) million, respectively, for the three and nine months ended September 30, 2025. We began designating swaps as fair value hedges of Senior Notes in the fourth quarter of 2024. As such, there was no impact to interest expense from periodic interest accruals and receipts (payments) for the three and nine months ended September 30, 2024.

***Effects of Cash Flow Hedge Accounting***

The table below presents the effect of the Company's interest rate swaps designated as cash flow hedges on AOCI and the condensed consolidated statements of income:

---

| | | |
|:---|:---|:---|
| | Three Months Ended | Nine Months Ended |
| | September 30, 2025 | September 30, 2025 |
| Gain (loss) recognized in other comprehensive income <sup>(1)</sup> | $11 | $(4) |
| Gain (loss) reclassified from AOCI to interest revenue | (28) | (45) |

---

<sup>(1)</sup> Included in net unrealized gain (loss) on derivatives designated as cash flow hedging instruments on the condensed consolidated statements of comprehensive income.

For the twelve months following September 30, 2025, the Company estimates that an additional $11 million will be reclassified from AOCI as a reduction to interest revenue.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

**12.&nbsp;&nbsp;&nbsp;&nbsp;Financial Instruments Subject to Off-Balance Sheet Credit Risk**

*Resale agreements*: Schwab enters into collateralized resale agreements principally with other broker-dealers, which could result in losses in the event the counterparty fails to purchase the securities held as collateral for the cash advanced and the fair value of the securities declines. To mitigate this risk, Schwab requires that the counterparty deliver securities to a custodian, to be held as collateral, with a fair value at or in excess of the resale price. Schwab also sets standards for the credit quality of the counterparty, monitors the fair value of the underlying securities as compared to the related receivable, including accrued interest, and requires additional collateral where deemed appropriate. The collateral provided under these resale agreements is utilized to meet obligations under broker-dealer client protection rules, which place limitations on our ability to access such segregated securities. For Schwab to repledge or sell this collateral, we would be required to deposit cash and/or securities of an equal amount into our segregated reserve bank accounts in order to meet our segregated cash and investments requirement. Schwab's resale agreements as of September 30, 2025 and December 31, 2024 were not subject to master netting arrangements.

*Securities lending*: Schwab loans brokerage client securities temporarily to other broker-dealers and clearing houses in connection with its securities lending activities and receives cash as collateral for the securities loaned. Increases in security prices may cause the fair value of the securities loaned to exceed the amount of cash received as collateral. In the event a counterparty to these transactions does not return the loaned securities or provide additional cash collateral, we may be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy our client obligations. Schwab mitigates this risk by requiring credit approvals for counterparties, monitoring the fair value of securities loaned, and requiring additional cash as collateral when necessary. In addition, most of our securities lending transactions are through a program with a clearing organization, which guarantees the return of cash to us. We also borrow securities from other broker-dealers to fulfill short sales by brokerage clients and deliver cash to the lender in exchange for the securities. The fair value of these borrowed securities was $2.3 billion and $674 million at September 30, 2025 and December 31, 2024, respectively. Our securities lending transactions are subject to enforceable master netting arrangements with other broker-dealers; however, we do not net securities lending transactions. Therefore, amounts related to securities loaned and securities borrowed are presented gross in the condensed consolidated balance sheets.

*Repurchase agreements*: Schwab enters into collateralized repurchase agreements with external financial institutions and the FICC in which the Company sells securities and agrees to repurchase these securities on a specified future date at a stated repurchase price. These repurchase agreements are collateralized by investment securities with a fair value equal to or in excess of the secured borrowing liability. Decreases in security prices posted as collateral for repurchase agreements may require Schwab to transfer cash and/or additional securities deemed acceptable by the counterparty. To mitigate this risk, Schwab monitors the fair value of underlying securities pledged as collateral compared to the related liability. Our collateralized repurchase agreements with each external financial institution are considered to be enforceable master netting arrangements. However, we do not net these arrangements. As such, the secured short-term borrowings associated with these collateralized repurchase agreements are presented gross in the condensed consolidated balance sheets.

*Interest rate swaps*: Schwab uses interest rate swaps to manage certain interest rate risk exposures. Schwab's interest rate swaps are cleared through CCPs which require the Company to post initial margin as collateral against potential losses. Schwab pledges investment securities as collateral in order to meet the CCP's initial margin requirements. Initial margin is posted through FCMs which serve as the intermediary between CCPs and Schwab. Our interest rate swaps are subject to enforceable master netting arrangements allowing a right of setoff within each FCM-CCP relationship; however, we do not net these positions. Therefore, interest rate swaps are presented gross in the condensed consolidated balance sheets. See Note 11 for additional information on the Company's interest rate swaps.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

The following table presents information about our interest rate swaps, resale agreements, securities lending, repurchase agreements, and other activity depicting the potential effect of rights of setoff between these recognized assets and liabilities:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | Gross<br>Assets/<br>Liabilities | Gross Amounts<br>Offset in the<br>Condensed<br>Consolidated<br>Balance Sheets | Net Amounts<br>Presented in the<br>Condensed<br>Consolidated<br>Balance Sheets | Gross Amounts Not Offset in the<br>Condensed Consolidated<br>Balance Sheets | Gross Amounts Not Offset in the<br>Condensed Consolidated<br>Balance Sheets | Gross Amounts Not Offset in the<br>Condensed Consolidated<br>Balance Sheets | Net<br>Amount |
| | Gross<br>Assets/<br>Liabilities | Gross Amounts<br>Offset in the<br>Condensed<br>Consolidated<br>Balance Sheets | Net Amounts<br>Presented in the<br>Condensed<br>Consolidated<br>Balance Sheets | Counterparty<br>Offsetting | Collateral | Collateral | Net<br>Amount |
| September 30, 2025 |  |  |  |  |  |  |  |
| **Assets** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Resale agreements <sup>(1)</sup> | $22245 | $— | $22245 | $— | $(22245) | <sup>(2)</sup> | $— |
| &nbsp;&nbsp;Securities borrowed <sup>(3)</sup> | 2342 |  | 2342 | (1615) | (713) |  | 14 |
| &nbsp;&nbsp;Interest rate swaps <sup>(4)</sup> |  |  |  |  |  | <sup>(5)</sup> |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $24587 | $— | $24587 | $(1615) | $(22958) |  | $14 |
| **Liabilities** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Repurchase agreements <sup>(6)</sup> | $3995 | $— | $3995 | $— | $(3995) |  | $— |
| &nbsp;&nbsp;Securities loaned <sup>(7)</sup> | 21690 |  | 21690 | (1615) | (19449) |  | 626 |
| &nbsp;&nbsp;Secured short-term borrowings <sup>(8)</sup> | 1750 |  | 1750 |  | (1750) |  |  |
| &nbsp;&nbsp;Interest rate swaps <sup>(4)</sup> |  |  |  |  |  | <sup>(5)</sup> |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $27435 | $— | $27435 | $(1615) | $(25194) |  | $626 |
| December 31, 2024 |  |  |  |  |  |  |  |
| **Assets** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Resale agreements <sup>(1)</sup> | $10075 | $— | $10075 | $— | $(10075) | <sup>(2)</sup> | $— |
| &nbsp;&nbsp;Securities borrowed <sup>(3)</sup> | 695 |  | 695 | (617) | (77) |  | 1 |
| &nbsp;&nbsp;Interest rate swaps <sup>(4)</sup> |  |  |  |  |  | <sup>(5)</sup> |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $10770 | $— | $10770 | $(617) | $(10152) |  | $1 |
| **Liabilities** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Repurchase agreements <sup>(6)</sup> | $5499 | $— | $5499 | $— | $(5499) |  | $— |
| &nbsp;&nbsp;Securities loaned <sup>(7)</sup> | 13068 |  | 13068 | (617) | (11795) |  | 656 |
| &nbsp;&nbsp;Secured short-term borrowings <sup>(8)</sup> | 500 |  | 500 |  | (500) |  |  |
| &nbsp;&nbsp;Interest rate swaps <sup>(4)</sup> |  |  |  |  |  | <sup>(5)</sup> |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $19067 | $— | $19067 | $(617) | $(17794) |  | $656 |

---

<sup>(1)</sup> Included in cash and investments segregated and on deposit for regulatory purposes in the condensed consolidated balance sheets.

<sup>(2)</sup> Actual collateral was greater than or equal to the value of the related assets. At September 30, 2025 and December 31, 2024, the fair value of collateral received in connection with resale agreements that are available to be repledged or sold was $22.7 billion and $10.3 billion, respectively.

<sup>(3)</sup> Included in receivables from brokers, dealers, and clearing organizations in the condensed consolidated balance sheets.

<sup>(4)</sup> Derivative assets are included in other assets and derivative liabilities are included in accrued expenses and other liabilities in the condensed consolidated balance sheets. Derivative assets and liabilities as of September 30, 2025 and December 31, 2024 were less than $500 thousand.

<sup>(5)</sup> At September 30, 2025 and December 31, 2024, the fair value of initial margin pledged as collateral related to interest rate swaps was $311 million and $378 million, respectively. See Notes 5 and 11 for additional information.

<sup>(6)</sup> Included in other short-term borrowings in the condensed consolidated balance sheets. Actual collateral value was greater than or equal to the value of the related liabilities. At September 30, 2025 and December 31, 2024, the fair value of collateral pledged in connection with repurchase agreements was $4.2 billion and $5.9 billion, respectively. See Note 9 for additional information.

<sup>(7)</sup> Included in payables to brokers, dealers, and clearing organizations in the condensed consolidated balance sheets. Securities loaned are predominantly comprised of equity securities held in client brokerage accounts. At September 30, 2025, $18.7 billion of securities loaned had overnight and continuous remaining contractual maturities and $3.0 billion of securities loaned had contractual maturities of 35 - 95 days. At December 31, 2024, $8.8 billion of securities loaned had overnight and continuous remaining contractual maturities and $4.3 billion of securities loaned had contractual maturities of 35 - 95 days. The cash collateral received from counterparties under securities lending transactions was equal to or greater than the market value of the securities loaned at September 30, 2025 and December 31, 2024.

<sup>(8)</sup> Included in other short-term borrowings in the condensed consolidated balance sheets. See below for collateral pledged and Note 9 for additional information. 

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

*Margin lending*: Clients with margin loans have agreed to allow Schwab to pledge collateralized securities in their brokerage accounts in accordance with federal regulations. The following table summarizes the fair value of client securities that were available, under such regulations, that could have been used as collateral, as well as the fair value of securities that we had pledged to third parties under such regulations and from securities borrowed transactions:

---

| | | |
|:---|:---|:---|
| | September 30, 2025 | December 31, 2024 |
| Fair value of client securities available to be pledged | $134727 | $116258 |
| &nbsp;&nbsp;&nbsp;Fair value of securities pledged for: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fulfillment of requirements with the Options Clearing Corporation <sup>(1)</sup> | $41004 | $24011 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fulfillment of client short sales | 12117 | 5179 |
| &nbsp;&nbsp;&nbsp;&nbsp;Securities lending to other broker-dealers | 20768 | 12282 |
| &nbsp;&nbsp;&nbsp;&nbsp;Collateral for secured short-term borrowings | 2048 | 618 |
| &nbsp;&nbsp;&nbsp;Total collateral pledged to third parties | $75937 | $42090 |

---

Note: Excludes amounts available and pledged for securities lending from fully-paid client securities. The fair value of fully-paid client securities available and pledged was $237 million and $105 million at September 30, 2025 and December 31, 2024, respectively.

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Securities pledged to fulfill client margin requirements for open option contracts established with the Options Clearing Corporation.

**13.&nbsp;&nbsp;&nbsp;&nbsp;Fair Values of Assets and Liabilities**

***Assets and Liabilities Measured at Fair Value on a Recurring Basis***

Schwab's assets and liabilities measured at fair value on a recurring basis include: certain cash equivalents, certain investments segregated and on deposit for regulatory purposes, AFS securities, certain other assets, interest rate swaps, and certain accrued expenses and other liabilities. The Company uses the market approach to determine the fair value of assets and liabilities. When available, the Company uses quoted prices in active markets to measure the fair value of assets and liabilities. Quoted prices for investments in exchange-traded securities represent end-of-day close prices published by exchanges. Quoted prices for money market funds and other mutual funds represent reported net asset values. When utilizing market data and bid-ask spread, the Company uses the price within the bid-ask spread that best represents fair value. When quoted prices in active markets do not exist, the Company uses prices obtained from independent third-party pricing services to measure the fair value of investment assets, and we generally obtain prices from three independent third-party pricing sources for such assets recorded at fair value.

Our primary independent pricing service provides prices for our fixed income investments such as commercial paper; certificates of deposit; U.S. government and agency securities; state and municipal securities; corporate debt securities; asset-backed securities; foreign government agency securities; and non-agency commercial mortgage-backed securities. Such prices are based on observable trades, broker/dealer quotes, and discounted cash flows that incorporate observable information such as yields for similar types of securities (a benchmark interest rate plus observable spreads) and weighted-average maturity for the same or similar "to-be-issued" securities. We compare the prices obtained from the primary independent pricing service to the prices obtained from the additional independent pricing services to determine if the price obtained from the primary independent pricing service is reasonable. Schwab does not adjust the prices received from independent third-party pricing services unless such prices are inconsistent with the definition of fair value and result in material differences in the amounts recorded.

Liabilities measured at fair value on a recurring basis include interest rate swaps, securities sold but not yet purchased, and repurchase liabilities related to client-held fractional shares of equities, ETFs, and other securities, which are included in other assets on the condensed consolidated balance sheets. The fair values of securities sold but not yet purchased are based on quoted market prices or other observable market data. The Company has elected the fair value option pursuant to ASC 825 *Financial Instruments* for the repurchase liabilities to match the measurement and accounting of the related client-held fractional shares. The fair values of the repurchase liabilities are based on quoted market prices or other observable market data consistent with the related client-held fractional shares. Unrealized gains and losses on client-held fractional shares offset the unrealized gains and losses on the corresponding repurchase liabilities, resulting in no impact to the condensed consolidated statements of income. The Company's liabilities to repurchase client-held fractional shares do not have credit risk, and, as a result, the Company has not recognized any gains or losses in the condensed consolidated statements of income or comprehensive income attributable to instrument-specific credit risk for these repurchase liabilities. The repurchase liabilities are included in accrued expenses and other liabilities on the condensed consolidated balance sheets.

The fair values of interest rate swaps are based on market observable interest rate yield curves. Fair value measurements are priced considering the coupon rate of the fixed leg of the contract and the variable coupon rate on the floating leg of the

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

contract. Valuation is based on both spot and forward rates on the swap yield curve. See Note 11 for additional information on the Company's interest rate swaps.

For a description of the fair value hierarchy and Schwab's fair value methodologies, see Item 8 – Note 2 in the 2024 Form 10-K. The Company did not adjust prices received from the primary independent third-party pricing service at September 30, 2025 or December 31, 2024.

***Assets and Liabilities Measured at Fair Value on a Recurring Basis***

The following tables present the fair value hierarchy for assets and liabilities measured at fair value on a recurring basis:

---

| | | | | |
|:---|:---|:---|:---|:---|
| September 30, 2025 | Level 1 | Level 2 | Level 3 | Balance at<br>Fair Value |
| Cash equivalents: |  |  |  |  |
| &nbsp;&nbsp;Money market funds | $10954 | $— | $— | $10954 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total cash equivalents | 10954 |  |  | 10954 |
| Investments segregated and on deposit for regulatory purposes: |  |  |  |  |
| &nbsp;&nbsp;U.S. government securities |  | 22910 |  | 22910 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total investments segregated and on deposit for regulatory purposes |  | 22910 |  | 22910 |
| Available for sale securities: |  |  |  |  |
| &nbsp;&nbsp;U.S. agency mortgage-backed securities |  | 44456 |  | 44456 |
| &nbsp;&nbsp;U.S. Treasury securities |  | 7786 |  | 7786 |
| &nbsp;&nbsp;Corporate debt securities |  | 5091 |  | 5091 |
| &nbsp;&nbsp;Asset-backed securities |  | 4281 |  | 4281 |
| &nbsp;&nbsp;U.S. state and municipal securities |  | 562 |  | 562 |
| &nbsp;&nbsp;Non-agency commercial mortgage-backed securities |  | 113 |  | 113 |
| &nbsp;&nbsp;Other |  | 19 |  | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total available for sale securities |  | 62308 |  | 62308 |
| Other assets: |  |  |  |  |
| &nbsp;&nbsp;Other securities owned: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity, corporate debt, and other securities | 1637 | 106 |  | 1743 |
| &nbsp;&nbsp;&nbsp;&nbsp;Mutual funds and ETFs | 1219 |  |  | 1219 |
| &nbsp;&nbsp;&nbsp;&nbsp;State and municipal debt obligations |  | 38 |  | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. government securities |  | 13 |  | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other securities owned | 2856 | 157 |  | 3013 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total other assets | 2856 | 157 |  | 3013 |
| &nbsp;&nbsp;Total assets | $13810 | $85375 | $— | $99185 |
| Accrued expenses and other liabilities: |  |  |  |  |
| &nbsp;&nbsp;Other | $2647 | $35 | $— | $2682 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total accrued expenses and other liabilities | 2647 | 35 |  | 2682 |
| &nbsp;&nbsp;&nbsp;Total liabilities | $2647 | $35 | $— | $2682 |

---

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
| December 31, 2024 | Level 1 | Level 2 | Level 3 | Balance at<br>Fair Value |
| Cash equivalents: |  |  |  |  |
| &nbsp;&nbsp;Money market funds | $11005 | $— | $— | $11005 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total cash equivalents | 11005 |  |  | 11005 |
| Investments segregated and on deposit for regulatory purposes: |  |  |  |  |
| &nbsp;&nbsp;U.S. government securities |  | 25740 |  | 25740 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total investments segregated and on deposit for regulatory purposes |  | 25740 |  | 25740 |
| Available for sale securities: |  |  |  |  |
| &nbsp;&nbsp;U.S. agency mortgage-backed securities |  | 51833 |  | 51833 |
| &nbsp;&nbsp;U.S. Treasury securities |  | 14469 |  | 14469 |
| &nbsp;&nbsp;Corporate debt securities |  | 9579 |  | 9579 |
| &nbsp;&nbsp;Asset-backed securities |  | 5910 |  | 5910 |
| &nbsp;&nbsp;U.S. state and municipal securities |  | 549 |  | 549 |
| &nbsp;&nbsp;Foreign government agency securities |  | 527 |  | 527 |
| &nbsp;&nbsp;Non-agency commercial mortgage-backed securities |  | 109 |  | 109 |
| &nbsp;&nbsp;Other |  | 18 |  | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total available for sale securities |  | 82994 |  | 82994 |
| Other assets: |  |  |  |  |
| &nbsp;&nbsp;Other securities owned: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity, corporate debt, and other securities | 1395 | 73 |  | 1468 |
| &nbsp;&nbsp;&nbsp;&nbsp;Mutual funds and ETFs | 1019 |  |  | 1019 |
| &nbsp;&nbsp;&nbsp;&nbsp;State and municipal debt obligations |  | 38 |  | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. government securities |  | 18 |  | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other securities owned | 2414 | 129 |  | 2543 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total other assets | 2414 | 129 |  | 2543 |
| &nbsp;&nbsp;Total assets | $13419 | $108863 | $— | $122282 |
| Accrued expenses and other liabilities: |  |  |  |  |
| &nbsp;&nbsp;Other | $2161 | $37 | $— | $2198 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total accrued expenses and other liabilities | 2161 | 37 |  | 2198 |
| &nbsp;&nbsp;Total liabilities | $2161 | $37 | $— | $2198 |

---

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

***Fair Value of Other Financial Instruments***

The following tables present the fair value hierarchy for other financial instruments:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| September 30, 2025 | Carrying<br>Amount | Level 1 | Level 2 | Level 3 | Balance at<br>Fair Value |
| **Assets** |  |  |  |  |  |
| Cash and cash equivalents | $19618 | $19618 | $— | $— | $19618 |
| Cash and investments segregated and on deposit for <br> regulatory purposes | 24729 | 2594 | 22135 |  | 24729 |
| Receivables from brokers, dealers, and clearing organizations | 4728 |  | 4728 |  | 4728 |
| Receivables from brokerage clients — net | 93754 |  | 93754 |  | 93754 |
| Held to maturity securities: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. agency mortgage-backed securities | 136693 |  | 128259 |  | 128259 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total held to maturity securities | 136693 |  | 128259 |  | 128259 |
| Bank loans — net: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;First Mortgages | 29346 |  | 27134 |  | 27134 |
| &nbsp;&nbsp;&nbsp;HELOCs | 420 |  | 438 |  | 438 |
| &nbsp;&nbsp;&nbsp;Pledged asset lines | 23390 |  | 23390 |  | 23390 |
| &nbsp;&nbsp;&nbsp;Other | 414 |  | 413 |  | 413 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total bank loans — net | 53570 |  | 51375 |  | 51375 |
| Other assets | 723 |  | 723 |  | 723 |
| **Liabilities** |  |  |  |  |  |
| Bank deposits | $239057 | $— | $239057 | $— | $239057 |
| Payables to brokers, dealers, and clearing organizations | 22407 |  | 22407 |  | 22407 |
| Payables to brokerage clients | 115397 |  | 115397 |  | 115397 |
| Accrued expenses and other liabilities | 1359 |  | 1359 |  | 1359 |
| Other short-term borrowings | 6541 |  | 6541 |  | 6541 |
| Federal Home Loan Bank borrowings | 850 |  | 850 |  | 850 |
| Long-term debt | 20169 |  | 20002 |  | 20002 |

---

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| December 31, 2024 | Carrying<br>Amount | Level 1 | Level 2 | Level 3 | Balance at<br>Fair Value |
| **Assets** |  |  |  |  |  |
| Cash and cash equivalents | $31078 | $31078 | $— | $— | $31078 |
| Cash and investments segregated and on deposit for <br> regulatory purposes | 12416 | 2401 | 10015 |  | 12416 |
| Receivables from brokers, dealers, and clearing organizations | 2440 |  | 2440 |  | 2440 |
| Receivables from brokerage clients — net | 85343 |  | 85343 |  | 85343 |
| Held to maturity securities: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. agency mortgage-backed securities | 146453 |  | 132605 |  | 132605 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total held to maturity securities | 146453 |  | 132605 |  | 132605 |
| Bank loans — net: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;First Mortgages | 27375 |  | 24336 |  | 24336 |
| &nbsp;&nbsp;&nbsp;HELOCs | 423 |  | 441 |  | 441 |
| &nbsp;&nbsp;&nbsp;Pledged asset lines | 17024 |  | 17024 |  | 17024 |
| &nbsp;&nbsp;&nbsp;Other | 393 |  | 393 |  | 393 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total bank loans — net | 45215 |  | 42194 |  | 42194 |
| Other assets | 1405 |  | 1405 |  | 1405 |
| **Liabilities** |  |  |  |  |  |
| Bank deposits | $259121 | $— | $259121 | $— | $259121 |
| Payables to brokers, dealers, and clearing organizations | 13336 |  | 13336 |  | 13336 |
| Payables to brokerage clients | 101559 |  | 101559 |  | 101559 |
| Accrued expenses and other liabilities | 1076 |  | 1076 |  | 1076 |
| Other short-term borrowings | 5999 |  | 5999 |  | 5999 |
| Federal Home Loan Bank borrowings | 16700 |  | 16700 |  | 16700 |
| Long-term debt | 22379 |  | 21621 |  | 21621 |

---

**14.&nbsp;&nbsp;&nbsp;&nbsp;Stockholders' Equity**

***Common and Nonvoting Common Stock***

On February 12, 2025, TD Group US Holdings LLC, an affiliate of TD Bank, completed a secondary public offering of the Company's common shares through which TD Group US Holdings LLC sold 133.8 million shares of the Company's common stock and 31.7 million shares of the Company's nonvoting common stock, which automatically converted into common stock. The offering was completed at a price of $79.25 per share, for an aggregate amount of $13.1 billion. The Company did not receive any of the proceeds from this sale.

Concurrent with the completion of the secondary offering, and pursuant to a repurchase agreement dated February 9, 2025, the Company repurchased directly from TD Group US Holdings LLC its remaining 19.2 million shares of nonvoting common stock at a price of $77.982 per share for an aggregate repurchase amount of $1.5 billion, which settled on February 12, 2025. The shares of nonvoting common stock automatically converted into common stock upon repurchase and are now held in treasury stock, reducing the number of shares outstanding. These shares were purchased under CSC's $15.0 billion share repurchase authorization.

Through the completion of the secondary offering and the Company's repurchase of nonvoting common stock, TD Bank disposed of all of its common shares of CSC and as of February 12, 2025, the Company had no remaining nonvoting common stock outstanding.

CSC repurchased an additional 3.9 million shares of its common stock for $351 million during the three months ended June 30, 2025. These shares were purchased under CSC's $15.0 billion share repurchase authorization. On July 24, 2025, CSC publicly announced that its Board of Directors terminated the $15.0 billion share repurchase authorization and replaced it with a new authorization to repurchase up to $20.0 billion of common stock. The new share repurchase authorization does not have an expiration date. During the three months ended September 30, 2025, CSC repurchased 28.9 million shares of its common stock under the new authorization for $2.7 billion. As of September 30, 2025 approximately $17.3 billion remained on the new authorization.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

There were no repurchases of CSC's common stock during the three and nine months ended September 30, 2024.

Common stock repurchases, net of issuances, are subject to a nondeductible excise tax which is recognized as a direct and incremental cost associated with these transactions. The tax is recorded as part of the cost basis of the treasury stock repurchased, resulting in no impact to the condensed consolidated statements of income.

***Preferred Stock***

On June 2, 2025, the Company redeemed all of the 24,580 outstanding shares of its fixed-rate reset non-cumulative perpetual preferred stock, Series G, and the corresponding 2,457,964 depositary shares, each representing a 1/100th interest in a share of the Series G preferred stock. The depositary shares were redeemed at a redemption price of $1,000 per depositary share for a total of $2.5 billion. The difference between the total redemption price and the prior carrying value of the Series G preferred stock resulted in a $30 million deemed dividend that was included in the calculation of EPS.

There were no redemptions of CSC's preferred stock during the three and nine months ended September 30, 2024.

The Company's preferred stock issued and outstanding is as follows:

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | | | Liquidation Preference Per Share | | | | Dividend Rate in Effect at September 30, 2025 | Earliest Redemption Date | Date at Which Dividend Rate Resets or Becomes Floating | Reset / Floating-Rate | Margin Over Reset / Floating-Rate |
| | Shares Issued and Outstanding (in ones) at | Shares Issued and Outstanding (in ones) at | Liquidation Preference Per Share | Carrying Value at | Carrying Value at | | Dividend Rate in Effect at September 30, 2025 | Earliest Redemption Date | Date at Which Dividend Rate Resets or Becomes Floating | Reset / Floating-Rate | Margin Over Reset / Floating-Rate |
| | September 30, 2025 <sup>(1)</sup> | December 31, 2024 <sup>(1)</sup> | Liquidation Preference Per Share | September 30, 2025 | December 31, 2024 | Issue Date | Dividend Rate in Effect at September 30, 2025 | Earliest Redemption Date | Date at Which Dividend Rate Resets or Becomes Floating | Reset / Floating-Rate | Margin Over Reset / Floating-Rate |
| Fixed-rate: |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Series D | 750000 | 750000 | $1000 | $728 | $728 | 03/07/16 | 5.95% | 06/01/21 | N/A | N/A | N/A |
| &nbsp;&nbsp;Series J | 600000 | 600000 | 1000 | 584 | 584 | 03/30/21 | 4.450% | 06/01/26 | N/A | N/A | N/A |
| Fixed-to-floating rate/Fixed-rate reset: | Fixed-to-floating rate/Fixed-rate reset: | Fixed-to-floating rate/Fixed-rate reset: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Series F | 4884 | 4884 | 100000 | 481 | 481 | 10/31/17 | 5.000% | 12/01/27 | 12/01/27 | 3M LIBOR <sup>(5)</sup> | 2.575% |
| &nbsp;&nbsp;Series G <sup>(2)</sup> |  | 24580 |  |  | 2428 | 04/30/20 |  |  |  |  |  |
| &nbsp;&nbsp;Series H <sup>(3)</sup> | 22267 | 22267 | 100000 | 2200 | 2200 | 12/11/20 | 4.000% | 12/01/30 | 12/01/30 | 10-Year Treasury | 3.079% |
| &nbsp;&nbsp;Series I <sup>(4)</sup> | 20554 | 20554 | 100000 | 2030 | 2030 | 03/18/21 | 4.000% | 06/01/26 | 06/01/26 | 5-Year Treasury | 3.168% |
| &nbsp;&nbsp;Series K <sup>(4)</sup> | 7500 | 7500 | 100000 | 740 | 740 | 03/04/22 | 5.000% | 06/01/27 | 06/01/27 | 5-Year Treasury | 3.256% |
| Total preferred <br> stock | 1405205 | 1429785 |  | $6763 | $9191 |  |  |  |  |  |  |

---

<sup>(1)</sup> Represented by depositary shares.

<sup>(2)</sup> Series G was redeemed on June 2, 2025.

<sup>(3)</sup> The dividend rate for Series H resets on each ten-year anniversary from the first reset date.

<sup>(4)</sup> The dividend rate for Series I and Series K resets on each five-year anniversary from the first reset date.

<sup>(5)</sup> The reset/floating-rate for Series F will be determined by the calculation agent prior to the commencement of the floating-rate period using what the calculation agent determines to be the industry-accepted substitute or successor base rate to LIBOR.

N/A Not applicable.

Dividends declared on the Company's preferred stock are as follows:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, |
| | 2025 | 2025 | 2024 | 2024 | 2025 | 2025 | 2024 | 2024 |
| | Total <br>Declared | Per Share <br>Amount | Total <br>Declared | Per Share <br>Amount | Total <br>Declared | Per Share <br>Amount | Total <br>Declared | Per Share <br>Amount |
| Series D <sup>(1)</sup> | $11.2 | $14.88 | $11.2 | $14.88 | $33.5 | $44.64 | $33.5 | $44.64 |
| Series F <sup>(2)</sup> |  |  |  |  | 12.2 | 2500.00 | 12.2 | 2500.00 |
| Series G <sup>(3)</sup> |  |  | 33.0 | 1343.75 | 66.0 | 2687.50 | 99.0 | 4031.25 |
| Series H <sup>(1)</sup> | 22.2 | 1000.00 | 22.2 | 1000.00 | 66.7 | 3000.00 | 66.7 | 3000.00 |
| Series I <sup>(1)</sup> | 20.6 | 1000.00 | 20.6 | 1000.00 | 61.8 | 3000.00 | 61.8 | 3000.00 |
| Series J <sup>(1)</sup> | 6.7 | 11.13 | 6.7 | 11.13 | 20.1 | 33.39 | 20.1 | 33.39 |
| Series K <sup>(1)</sup> | 9.3 | 1250.00 | 9.3 | 1250.00 | 28.1 | 3750.00 | 28.1 | 3750.00 |
| Total | $70.0 |  | $103.0 |  | $288.4 |  | $321.4 |  |

---

<sup>(1)</sup> Dividends paid quarterly.

<sup>(2)</sup> Dividends paid semi-annually until December 1, 2027 and quarterly thereafter.

<sup>(3)</sup> Series G was redeemed on June 2, 2025. Prior to redemption, dividends were paid quarterly. The final dividend was paid on June 2, 2025.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

**15.&nbsp;&nbsp;&nbsp;&nbsp;Accumulated Other Comprehensive Income**

AOCI represents cumulative gains and losses that are not reflected in earnings. AOCI balances and the components of other comprehensive income (loss) are as follows:

---

| | |
|:---|:---|
| | Total AOCI |
| Balance at June 30, 2024 | $(16936) |
| Available for sale securities: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized gain (loss), net of tax expense (benefit) of $577 | 1857 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other reclassifications included in other revenue, net of tax expense (benefit) of $2 | 8 |
| Held to maturity securities: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of amounts previously recorded upon transfer from available for sale, net of tax expense (benefit) of $134 | 442 |
| Other <sup>(1)</sup> | 11 |
| Balance at September 30, 2024 | $(14618) |
| Balance at June 30, 2025 | $(12591) |
| Available for sale securities: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized gain (loss), net of tax expense (benefit) of $173 | 419 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other reclassifications included in other revenue, net of tax expense (benefit) of $2 | 8 |
| Held to maturity securities: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of amounts previously recorded upon transfer from available for sale, net of tax expense (benefit) of $207 | 338 |
| Derivatives designated as cash flow hedging instruments: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized gain (loss), net of tax expense (benefit) of $3 | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reclassifications included in interest revenue, net of tax expense (benefit) of $7 | 21 |
| Other <sup>(1)</sup> | (1) |
| Balance at September 30, 2025 | $(11798) |
| Balance at December 31, 2023 | $(18131) |
| Available for sale securities: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized gain (loss), net of tax expense (benefit) of $654 | 2153 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other reclassifications included in other revenue, net of tax expense (benefit) of $7 | 23 |
| Held to maturity securities: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of amounts previously recorded upon transfer from available for sale, net of tax expense (benefit) of $387 | 1336 |
| Other <sup>(1)</sup> | 1 |
| Balance at September 30, 2024 | $(14618) |
| Balance at December 31, 2024 | $(14848) |
| Available for sale securities: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized gain (loss), net of tax expense (benefit) of $542 | 1728 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other reclassifications included in other revenue, net of tax expense (benefit) of $12 | 38 |
| Held to maturity securities: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of amounts previously recorded upon transfer from available for sale, net of tax expense (benefit) of $396 | 1248 |
| Derivatives designated as cash flow hedging instruments: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized gain (loss), net of tax expense (benefit) of $(1) | (3) |
| &nbsp;&nbsp;&nbsp;&nbsp;Reclassifications included in interest revenue, net of tax expense (benefit) of $11 | 34 |
| Other <sup>(1)</sup> | 5 |
| Balance at September 30, 2025 | $(11798) |

---

<sup>(1)</sup> Tax expense (benefit) was less than $500 thousand.

As of September 30, 2025, the total remaining unamortized loss on securities transferred from AFS to HTM included in AOCI was $8.5 billion net of tax effect ($11.1 billion pre-tax). This loss is being amortized over the remaining lives of the securities, offsetting amortization of the securities' premiums or discounts, and resulting in no impact to net income.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

**16.&nbsp;&nbsp;&nbsp;&nbsp;Earnings Per Common Share**

As described in Note 14, TD Bank disposed of all of its common shares of CSC during the first quarter of 2025, including its holdings of nonvoting common stock. As of February 12, 2025, the Company had no remaining nonvoting common stock outstanding and accordingly, no dividends were paid on nonvoting common stock during the nine months ended September 30, 2025.

For the computations of basic and diluted EPS, undistributed net income of the Company was allocated on a proportionate basis to the voting and nonvoting common stock, as the distribution rights of the two classes were identical. Diluted EPS was calculated using the treasury stock method for outstanding stock options and non-vested restricted stock units and the if-converted method for the nonvoting common stock, which assumed conversion of all outstanding nonvoting common stock to common stock. For further details surrounding the EPS computations, see Item 8 – Note 26 in the 2024 Form 10-K.

The computations of basic and diluted EPS for common stock and nonvoting common stock for the three and nine months ended September 30, 2025 are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, |
| | 2025 | 2025 | 2025 | 2025 | 2025 | 2025 |
| | Common <br>Stock | Nonvoting<br>Common Stock | Consolidated <br>Common Stock | Common <br>Stock | Nonvoting<br>Common Stock | Consolidated <br>Common Stock |
| Basic earnings per share: |  |  |  |  |  |  |
| Numerator |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income | $2358 | $— | $2358 | $6373 | $20 | $6393 |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred stock dividends and other <sup>(1)</sup> | (81) |  | (81) | (342) | (1) | (343) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income available to common stockholders | $2277 | $— | $2277 | $6031 | $19 | $6050 |
| Denominator |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Weighted-average common shares outstanding — basic | 1806 |  | 1806 | 1807 | 51 | 1815 |
| Basic earnings per share | $1.26 | $— | $1.26 | $3.33 | $.37 | $3.33 |
| Diluted earnings per share: |  |  |  |  |  |  |
| Numerator |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income available to common stockholders | $2277 | $— | $2277 | $6031 | $19 | $6050 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reallocation of net income available to common <br> stockholders as a result of conversion of nonvoting <br> to voting shares |  |  |  | 19 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Allocation of net income available to common stockholders: | $2277 | $— | $2277 | $6050 | $19 | $6050 |
| Denominator |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Weighted-average common shares outstanding — basic | 1806 |  | 1806 | 1807 | 51 | 1815 |
| &nbsp;&nbsp;&nbsp;&nbsp;Conversion of nonvoting shares to voting shares |  |  |  | 8 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock equivalent shares related to stock <br> incentive plans | 5 |  | 5 | 5 |  | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Weighted-average common shares outstanding — <br>&nbsp;&nbsp;&nbsp;&nbsp;diluted <sup>(2)</sup> | 1811 |  | 1811 | 1820 | 51 | 1820 |
| Diluted earnings per share | $1.26 | $— | $1.26 | $3.33 | $.37 | $3.33 |

---

<sup>(1)</sup> Includes preferred stock dividends and undistributed earnings and dividends allocated to non-vested restricted stock units.

<sup>(2)</sup> Antidilutive stock options and restricted stock units excluded from the calculation of diluted EPS totaled 9 million and 13 million for the three and nine months ended September 30, 2025, respectively.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

As of September 30, 2024, the Company had voting and nonvoting common stock outstanding. The computations of basic and diluted EPS for the two classes for the three and nine months ended September 30, 2024 are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three Months Ended<br>September 30, | Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | Nine Months Ended<br>September 30, |
| | 2024 | 2024 | 2024 | 2024 |
| | Common <br>Stock | Nonvoting<br>Common Stock | Common <br>Stock | Nonvoting<br>Common Stock |
| Basic earnings per share: |  |  |  |  |
| Numerator |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income | $1369 | $39 | $3988 | $114 |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred stock dividends and other <sup>(1)</sup> | (106) | (3) | (332) | (9) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income available to common stockholders | $1263 | $36 | $3656 | $105 |
| Denominator |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Weighted-average common shares outstanding — basic | 1778 | 51 | 1776 | 51 |
| Basic earnings per share | $.71 | $.71 | $2.06 | $2.06 |
| Diluted earnings per share: |  |  |  |  |
| Numerator |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income available to common stockholders | $1263 | $36 | $3656 | $105 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reallocation of net income available to common stockholders as a result of <br>&nbsp;&nbsp;&nbsp;&nbsp;conversion of nonvoting to voting shares | 36 |  | 105 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Allocation of net income available to common stockholders: | $1299 | $36 | $3761 | $105 |
| Denominator |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Weighted-average common shares outstanding — basic | 1778 | 51 | 1776 | 51 |
| &nbsp;&nbsp;&nbsp;&nbsp;Conversion of nonvoting shares to voting shares | 51 |  | 51 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock equivalent shares related to stock incentive plans | 5 |  | 6 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Weighted-average common shares outstanding — diluted <sup>(2)</sup> | 1834 | 51 | 1833 | 51 |
| Diluted earnings per share | $.71 | $.71 | $2.05 | $2.05 |

---

<sup>(1)</sup> Includes preferred stock dividends and undistributed earnings and dividends allocated to non-vested restricted stock units.

<sup>(2)</sup> Antidilutive stock options and restricted stock units excluded from the calculation of diluted EPS totaled 14 million and 18 million for the three and nine months ended September 30, 2024, respectively.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

**17.&nbsp;&nbsp;&nbsp;&nbsp;Regulatory Requirements**

At September 30, 2025, CSC and its banking subsidiaries met all of their respective capital requirements. Regulatory capital and ratios for CSC (consolidated) and CSB are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Actual | Actual | Minimum to be<br>Well Capitalized | Minimum to be<br>Well Capitalized | Minimum Capital Requirement | Minimum Capital Requirement |
| September 30, 2025 | Amount | Ratio | Amount | Ratio | Amount | Ratio <sup>(1)</sup> |
| **CSC** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common Equity Tier 1 Risk-Based Capital | $36728 | 32.8% | N/A |  | $5035 | 4.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier 1 Risk-Based Capital | 43491 | 38.9% | N/A |  | 6714 | 6.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Risk-Based Capital | 43552 | 38.9% | N/A |  | 8952 | 8.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier 1 Leverage | 43491 | 9.7% | N/A |  | 17884 | 4.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Supplementary Leverage Ratio | 43491 | 9.7% | N/A |  | 13513 | 3.0% |
| **CSB** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common Equity Tier 1 Risk-Based Capital | $31514 | 40.8% | $5019 | 6.5% | $3475 | 4.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier 1 Risk-Based Capital | 31514 | 40.8% | 6177 | 8.0% | 4633 | 6.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Risk-Based Capital | 31537 | 40.8% | 7722 | 10.0% | 6177 | 8.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier 1 Leverage | 31514 | 12.4% | 12694 | 5.0% | 10155 | 4.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Supplementary Leverage Ratio | 31514 | 12.3% | N/A |  | 7684 | 3.0% |
| December 31, 2024 |  |  |  |  |  |  |
| **CSC** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common Equity Tier 1 Risk-Based Capital | $35995 | 31.7% | N/A |  | $5114 | 4.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier 1 Risk-Based Capital | 45186 | 39.8% | N/A |  | 6819 | 6.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Risk-Based Capital | 45218 | 39.8% | N/A |  | 9092 | 8.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier 1 Leverage | 45186 | 9.9% | N/A |  | 18325 | 4.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Supplementary Leverage Ratio | 45186 | 9.8% | N/A |  | 13836 | 3.0% |
| **CSB** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common Equity Tier 1 Risk-Based Capital | $32584 | 41.7% | $5079 | 6.5% | $3516 | 4.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier 1 Risk-Based Capital | 32584 | 41.7% | 6251 | 8.0% | 4688 | 6.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Risk-Based Capital | 32606 | 41.7% | 7813 | 10.0% | 6251 | 8.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier 1 Leverage | 32584 | 11.6% | 14035 | 5.0% | 11228 | 4.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Supplementary Leverage Ratio | 32584 | 11.5% | N/A |  | 8479 | 3.0% |

---

<sup>(1)</sup> Under risk-based capital rules, CSC and CSB are also required to maintain additional capital buffers above the regulatory minimum risk-based capital ratios. As of September 30, 2025, CSC was subject to a stress capital buffer of 2.5%. In addition, CSB is required to maintain a capital conservation buffer of 2.5%. CSC and CSB are also required to maintain a countercyclical capital buffer above the regulatory minimum risk-based capital ratios, which was zero for both periods presented. If a buffer falls below the minimum requirement, CSC and CSB would be subject to increasingly strict limits on capital distributions and discretionary bonus payments to executive officers. At September 30, 2025, the minimum capital ratio requirements for both CSC and CSB, inclusive of their respective buffers, were 7.0%, 8.5%, and 10.5% for Common Equity Tier 1 Risk-Based Capital, Tier 1 Risk-Based Capital, and Total Risk-Based Capital, respectively.

N/A Not applicable.

Based on its regulatory capital ratios at September 30, 2025, CSB is considered well capitalized (the highest category) under its respective regulatory capital rules. There are no conditions or events since September 30, 2025 that management believes have changed CSB's capital category.

CSC's other banking subsidiaries are Charles Schwab Premier Bank, SSB (CSPB) and Charles Schwab Trust Bank (Trust Bank). CSPB is a Texas-chartered state savings bank that provides banking and custody services, and Trust Bank is a Nevada state-chartered savings bank that provides trust and custody services. At September 30, 2025, the balance sheets of CSPB and Trust Bank consisted primarily of investment securities, and the entities held total assets of $25.1 billion and $9.7 billion, respectively. Based on their regulatory capital ratios, at September 30, 2025, CSPB and Trust Bank are considered well capitalized under their respective regulatory capital rules.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

Net capital and net capital requirements for CS&Co are as follows:

---

| | | |
|:---|:---|:---|
| | September 30, 2025 | December 31, 2024 |
| **CS&Co** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net capital | $11977 | $11112 |
| &nbsp;&nbsp;&nbsp;&nbsp;Minimum dollar requirement | 0.250 | 0.250 |
| &nbsp;&nbsp;&nbsp;&nbsp;2% of aggregate debit balances | 2567 | 2049 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net capital in excess of required net capital | 9410 | 9063 |

---

Pursuant to the SEC's Customer Protection Rule and other applicable regulations, Schwab had cash and investments segregated for the exclusive benefit of clients at September 30, 2025. The SEC's Customer Protection Rule requires broker-dealers to segregate client fully-paid securities and cash balances not collateralizing margin positions and not swept to money market funds or bank deposit accounts. Amounts included in cash and investments segregated and on deposit for regulatory purposes represent actual balances on deposit. Cash and cash equivalents included in cash and investments segregated and on deposit for regulatory purposes are presented as part of Schwab's cash balances in the condensed consolidated statements of cash flows.

**18.&nbsp;&nbsp;&nbsp;&nbsp;Segment Information**

Schwab's two reportable segments are Investor Services and Advisor Services. Schwab structures the operating segments according to its clients and the services provided to those clients. The Investor Services segment provides retail brokerage, investment advisory, and banking and trust services to individual investors, and retirement plan and business services, as well as other corporate brokerage services, to businesses and their employees. The Advisor Services segment provides custodial, trading, banking and trust, and support services to independent RIAs, independent retirement advisors, and recordkeepers. Revenues and expenses are attributed to the two segments based on which segment services the client. Schwab's chief operating decision makers (CODMs) are the President and Chief Executive Officer, and the Managing Director and Chief Financial Officer.

The accounting policies of the segments are the same as those described in Item 8 – Note 2 in the 2024 Form 10-K. For the computation of its segment information, Schwab utilizes an activity-based costing model to allocate traditional income statement line item expenses (e.g., compensation and benefits, depreciation and amortization, and professional services) to the business activities driving segment expenses (e.g., client service, opening new accounts, or business development) and a funds transfer pricing methodology to allocate certain revenues.

The CODMs evaluate the performance of the segments on a pre-tax basis and use income before taxes on income to allocate resources, including employees and capital, to the segments during the annual budgeting process. The CODMs consider budget-to-actual variances on a monthly basis when making decisions about allocating resources to the segments throughout the year. Segment assets and liabilities are not used for evaluating segment performance or in deciding how to allocate resources to segments. There are no revenues from transactions between the segments.

------

**THE CHARLES SCHWAB CORPORATION**

**Notes to Condensed Consolidated Financial Statements**

(Tabular Amounts in Millions, Except Per Share Data, Ratios, or as Noted)

(Unaudited)

Financial information for the segments is presented in the following table <sup>(1)</sup>:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | Investor Services | Investor Services | Advisor Services | Advisor Services | Total | Total |
| Three Months Ended September 30, | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 |
| **Net Revenues** |  |  |  |  |  |  |
| Net interest revenue | $2424 | $1777 | $626 | $445 | $3050 | $2222 |
| Asset management and administration fees | 1221 | 1074 | 452 | 402 | 1673 | 1476 |
| Trading revenue | 906 | 710 | 89 | 87 | 995 | 797 |
| Bank deposit account fees | 196 | 118 | 51 | 34 | 247 | 152 |
| Other | 136 | 169 | 34 | 31 | 170 | 200 |
| &nbsp;&nbsp;&nbsp;Total net revenues | 4883 | 3848 | 1252 | 999 | 6135 | 4847 |
| **Expenses Excluding Interest** |  |  |  |  |  |  |
| Compensation and benefits | 1284 | 1169 | 369 | 353 | 1653 | 1522 |
| Professional services | 235 | 202 | 58 | 54 | 293 | 256 |
| Occupancy and equipment | 220 | 211 | 60 | 60 | 280 | 271 |
| Advertising and market development | 60 | 59 | 41 | 42 | 101 | 101 |
| Communications | 105 | 103 | 44 | 44 | 149 | 147 |
| Depreciation and amortization | 161 | 175 | 51 | 56 | 212 | 231 |
| Amortization of acquired intangible assets | 104 | 105 | 23 | 25 | 127 | 130 |
| Regulatory fees and assessments | 51 | 70 | 8 | 18 | 59 | 88 |
| Other | 207 | 221 | 33 | 38 | 240 | 259 |
| &nbsp;&nbsp;Total expenses excluding interest | 2427 | 2315 | 687 | 690 | 3114 | 3005 |
| **Income before taxes on income** | $2456 | $1533 | $565 | $309 | $3021 | $1842 |
| Nine Months Ended September 30, |  |  |  |  |  |  |
| **Net Revenues** |  |  |  |  |  |  |
| Net interest revenue | $6826 | $5279 | $1752 | $1334 | $8578 | $6613 |
| Asset management and administration fees | 3479 | 3050 | 1294 | 1157 | 4773 | 4207 |
| Trading revenue | 2563 | 2115 | 292 | 276 | 2855 | 2391 |
| Bank deposit account fees | 581 | 378 | 158 | 110 | 739 | 488 |
| Other | 514 | 479 | 126 | 99 | 640 | 578 |
| &nbsp;&nbsp;&nbsp;Total net revenues | 13963 | 11301 | 3622 | 2976 | 17585 | 14277 |
| **Expenses Excluding Interest** |  |  |  |  |  |  |
| Compensation and benefits | 3760 | 3480 | 1101 | 1030 | 4861 | 4510 |
| Professional services | 680 | 602 | 173 | 154 | 853 | 756 |
| Occupancy and equipment | 647 | 610 | 177 | 174 | 824 | 784 |
| Advertising and market development | 194 | 191 | 111 | 105 | 305 | 296 |
| Communications | 338 | 321 | 140 | 139 | 478 | 460 |
| Depreciation and amortization | 488 | 546 | 156 | 146 | 644 | 692 |
| Amortization of acquired intangible assets | 314 | 339 | 71 | 50 | 385 | 389 |
| Regulatory fees and assessments | 183 | 240 | 42 | 69 | 225 | 309 |
| Other | 618 | 583 | 113 | 111 | 731 | 694 |
| &nbsp;&nbsp;&nbsp;Total expenses excluding interest | 7222 | 6912 | 2084 | 1978 | 9306 | 8890 |
| **Income before taxes on income** | $6741 | $4389 | $1538 | $998 | $8279 | $5387 |

---

 <sup>(1)</sup> In connection with certain changes in Schwab's organizational management structure, in the fourth quarter of 2024, the Retirement Business Services business unit was transferred from the Advisor Services segment to the Investor Services segment. Accordingly, amounts related to the Retirement Business Services business unit are included within Investor Services for the third quarter and nine months ended September 30, 2025, and prior-year amounts have been recast to reflect this new basis of segmentation.

**19.**&nbsp;&nbsp;&nbsp;&nbsp;**Subsequent Events**

On November 6, 2025, Schwab announced that it has entered into a definitive agreement to acquire Forge Global Holdings, Inc. (Forge), operator of a leading private market platform and trading marketplace, in a transaction valued at approximately $660 million. The Company anticipates that incorporating Forge's private markets capabilities will enhance Schwab's ability to meet the evolving needs of investors across our growing client base. The transaction is expected to close in the first half of 2026, subject to customary closing conditions, including approval by Forge's stockholders and regulatory approvals.

------

**THE CHARLES SCHWAB CORPORATION**

**Item 4. &nbsp;&nbsp;&nbsp;&nbsp;Controls and Procedures**

*Evaluation of disclosure controls and procedures*: The management of the Company, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of September 30, 2025. Based on this evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were effective as of September 30, 2025.

*Changes in internal control over financial reporting*: No change in the Company's internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) was identified during the quarter ended September 30, 2025, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

**PART II - OTHER INFORMATION**

**Item 1. &nbsp;&nbsp;&nbsp;&nbsp;Legal Proceedings**

For a discussion of legal proceedings, see Part I – Item 1 – Note 10.

**Item 1A. &nbsp;&nbsp;&nbsp;&nbsp;Risk Factors**

During the first nine months of 2025, there have been no material changes to the risk factors in Part I – Item 1A – Risk Factors in the 2024 Form 10-K.

**Item 2. &nbsp;&nbsp;&nbsp;&nbsp;Unregistered Sales of Equity Securities and Use of Proceeds**

**Issuer Purchases of Equity Securities**

On July 27, 2022, CSC publicly announced that its Board of Directors authorized the repurchase of up to $15.0 billion of common stock. On July 24, 2025, CSC publicly announced that its Board of Directors terminated the existing share repurchase authorization and replaced it with a new authorization to repurchase up to $20.0 billion of common stock. The new authorization does not have an expiration date. See also Part I – Item 1 – Note 14.

The following table summarizes purchases made by or on behalf of CSC of its common stock for each calendar month in the third quarter of 2025 (in millions, except number of shares, which are in thousands, and per share amounts):

---

| | | | | |
|:---|:---|:---|:---|:---|
| Month | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Publicly Announced Program |
| July: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Share repurchase program |  | $— |  | $20000 |
| &nbsp;&nbsp;Employee transactions <sup>(1)</sup> | 15 | $91.22 | N/A | N/A |
| August: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Share repurchase program | 13773 | $96.55 | 13773 | $18670 |
| &nbsp;&nbsp;Employee transactions <sup>(1)</sup> | 18 | $97.97 | N/A | N/A |
| September: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Share repurchase program | 15136 | $93.80 | 15136 | $17250 |
| &nbsp;&nbsp;Employee transactions <sup>(1)</sup> | 2 | $95.12 | N/A | N/A |
| &nbsp;&nbsp;Total: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Share repurchase program | 28909 | $95.11 | 28909 | $17250 |
| &nbsp;&nbsp;Employee transactions <sup>(1)</sup> | 35 | $95.01 | N/A | N/A |

---

<sup>(1)</sup> Includes restricted shares withheld (under the terms of grants under employee stock incentive plans) to offset tax withholding obligations that occur upon vesting and release of restricted shares. CSC may receive shares delivered or attested to pay the exercise price and/or to satisfy tax withholding obligations by employees who exercise stock options granted under employee stock incentive plans, which are commonly referred to as stock swap exercises.

N/A Not applicable.

------

**THE CHARLES SCHWAB CORPORATION**

**Item 3. &nbsp;&nbsp;&nbsp;&nbsp;Defaults Upon Senior Securities**

None.

**Item 4. &nbsp;&nbsp;&nbsp;&nbsp;Mine Safety Disclosures**

Not applicable.

**Item 5. &nbsp;&nbsp;&nbsp;&nbsp;Other Information**

During the three months ended September 30, 2025, no director or officer of the Company adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement as defined in Item 408 of Regulation S-K.

------

**THE CHARLES SCHWAB CORPORATION**

**Item 6. &nbsp;&nbsp;&nbsp;&nbsp;Exhibits**

The following exhibits are filed as part of this Quarterly Report on Form 10-Q:

---

| | | |
|:---|:---|:---|
| Exhibit<br>Number | Exhibit |  |
| 31.1 | <u>[Certification Pursuant to Rule 13a-14(a)/15d-14(a), As Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.](schw-093025xex31110q.htm)</u> |  |
| 31.2 | <u>[Certification Pursuant to Rule 13a-14(a)/15d-14(a), As Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.](schw-093025xex31210q.htm)</u> |  |
| 32.1 | <u>[Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.](schw-093025xex32110q.htm)</u> | (1) |
| 32.2 | <u>[Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.](schw-093025xex32210q.htm)</u> | (1) |
| 101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | (2) |
| 101.SCH | Inline XBRL Taxonomy Extension Schema | (2) |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation | (2) |
| 101.DEF | Inline XBRL Extension Definition | (2) |
| 101.LAB | Inline XBRL Taxonomy Extension Label | (2) |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation | (2) |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |  |
| (1) | *Furnished as an exhibit to this Quarterly Report on Form 10-Q.* |  |
| (2) | *Attached as Exhibit 101 to this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2025 are the following materials formatted in Inline XBRL (Extensible Business Reporting Language) (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Stockholders' Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.* | *Attached as Exhibit 101 to this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2025 are the following materials formatted in Inline XBRL (Extensible Business Reporting Language) (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Stockholders' Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.* |

---

------

**THE CHARLES SCHWAB CORPORATION**

**SIGNATURE**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| | | **THE CHARLES SCHWAB CORPORATION** |
| | | (Registrant) |
| Date: | November 7, 2025 | /s/ Michael Verdeschi |
| | | Michael Verdeschi |
| | | Managing Director and Chief Financial Officer |

---

## Exhibit 31.1

**THE CHARLES SCHWAB CORPORATION** 

 **EXHIBIT 31.1**

**CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED PURSUANT TO**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Richard A. Wurster, certify that:

1.&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this Quarterly Report on Form 10-Q of The Charles Schwab Corporation;

2.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)&nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)&nbsp;&nbsp;&nbsp;&nbsp;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | November 7, 2025 | /s/ Richard A. Wurster |
| | | Richard A. Wurster |
| | | President and Chief Executive Officer |

---

## Exhibit 31.2

**THE CHARLES SCHWAB CORPORATION**

**EXHIBIT 31.2**

**CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED PURSUANT TO**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Michael Verdeschi, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of The Charles Schwab Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)&nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)&nbsp;&nbsp;&nbsp;&nbsp;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | November 7, 2025 | /s/ Michael Verdeschi |
| | | Michael Verdeschi |
| | | Managing Director and Chief Financial Officer |

---

## Exhibit 32.1

**THE CHARLES SCHWAB CORPORATION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**EXHIBIT 32.1**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,** 

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of The Charles Schwab Corporation (the Company) on Form 10-Q for the quarter ended September 30, 2025 (the Report), I, Richard A. Wurster, President and Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

---

| | | |
|:---|:---|:---|
| /s/ Richard A. Wurster | Date: | November 7, 2025 |
| Richard A. Wurster | | |
| President and Chief Executive Officer | | |

---

A signed original of this written statement required by Section 906 has been provided to The Charles Schwab Corporation and will be retained by The Charles Schwab Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

## Exhibit 32.2

**THE CHARLES SCHWAB CORPORATION**

 **EXHIBIT 32.2**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,** 

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of The Charles Schwab Corporation (the Company) on Form 10-Q for the quarter ended September 30, 2025 (the Report), I, Michael Verdeschi, Managing Director and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

---

| | | |
|:---|:---|:---|
| /s/ Michael Verdeschi | Date: | November 7, 2025 |
| Michael Verdeschi | | |
| Managing Director and Chief Financial Officer | | |

---

A signed original of this written statement required by Section 906 has been provided to The Charles Schwab Corporation and will be retained by The Charles Schwab Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

<br>