SCHWAB CHARLES CORP - Annual Report: 2024 (Form 10-K)

Total net revenues4 %$19,606 100 %$18,837 100 %$20,762 100 %

(1) Managed investing solutions was formerly referred to as “Advice solutions”.

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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

Schwab’s primary interest-earning assets include cash and cash equivalents; cash and investments segregated; margin loans, which constitute the majority of receivables from brokerage clients; investment securities; and bank loans. Schwab’s interest-bearing liabilities are comprised of bank deposits, which include brokered CDs issued by CSB; payables to brokerage clients; payables to brokers, dealers, and clearing organizations; FHLB borrowings, other short-term borrowings (e.g., commercial paper, repurchase agreements, other secured borrowings); and long-term debt. Schwab deploys the funds from these sources into the assets outlined above. Net interest revenue also includes amounts earned and expenses incurred on securities lending and borrowing activities conducted by our broker-dealer subsidiary using assets held in client brokerage accounts.

As Schwab builds its client base, we attract new client sweep cash, which is a primary driver of funding balance sheet growth. We do not use short-term, wholesale borrowings to support our long-term investment activity, but may use such funding for short-term liquidity purposes or to provide temporary funding as we have in recent years. Non-interest-bearing funding sources include stockholders’ equity, certain client cash balances, and other miscellaneous liabilities.

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. See also Risk Management – Market Risk.

Interest rates increased significantly beginning late in the first quarter of 2022 through the third quarter of 2023. Short-term rates were near zero until the Federal Reserve began an aggressive tightening cycle in March 2022, ultimately increasing the federal funds target overnight rate eleven times between March 2022 and July 2023 for a total increase of 525 basis points. 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 and another 50 basis points across two cuts during the fourth quarter of 2024. Long-term rates increased throughout 2022 and 2023, generally at a slower pace, thus leading to an inverted yield curve. Long-term rates continued to increase during 2024, primarily in the fourth quarter of 2024 while short-term rates declined, resulting in an upward sloping yield curve as of year-end 2024.

Average interest-earning assets decreased $45.6 billion in 2024 from 2023; however, Schwab saw strong client demand for margin and bank lending, which grew by 34% and 12%, respectively. Even as higher interest rates continued for much of the year, the pace of clients’ reallocation of cash from sweep products to higher-yielding investment solutions further decelerated in 2024, particularly in the second half of the year. Bank sweep deposits and payables to brokerage clients increased by a total of $9.8 billion, or 4%, during the third quarter, and $30.1 billion, or 11%, in the fourth quarter of 2024, inclusive of typical seasonal cash inflows near year-end. Deceleration of client cash reallocation activity, along with principal and interest payments on the AFS and HTM securities portfolios, supported a reduction in bank supplemental funding of $14.9 billion, or 23%, during the fourth quarter and $29.7 billion, or 37%, for the full year ended December 31, 2024.

Schwab’s average interest-earning assets in 2023 were lower compared with 2022, primarily due to clients’ reallocation of cash from sweep products to higher-yielding investment solutions in the second half of 2022 and during 2023, which resulted primarily from the rapid increases to the federal funds overnight rate. These changes in client cash allocations reduced average balances of bank deposits and payables to brokerage clients. To support this client cash allocation activity, the Company utilized bank supplemental funding beginning in the fourth quarter of 2022 and throughout 2023, including drawing upon FHLB secured lending facilities, engaging with external financial institutions in repurchase agreements at its banking subsidiaries, and issuing brokered CDs. The average pace of client cash allocation out of sweep products into higher-yielding investment solutions decreased significantly beginning in the second quarter of 2023, and, apart from an increase in August following the Federal Reserve’s July rate increase, continued to decline during the second half of 2023. In the fourth quarter of 2023, the Company saw bank deposits and payables to brokerage clients increase by a total of $17.5 billion, or 5%, due in part to typical seasonal cash inflows near year-end.

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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 consolidated balance sheets:


Year Ended December 31,	2024						2023						2022
	Average Balance		Interest Revenue/ Expense		Average Yield/ Rate		Average Balance		Interest Revenue/ Expense		Average Yield/ Rate		Average Balance		Interest Revenue/ Expense		Average Yield/ Rate
Interest-earning assets
Cash and cash equivalents	$	29,676	$	1,539	5.10	%	$	37,846	$	1,894	4.94	%	$	57,163	$	812	1.40	%
Cash and investments segregated	28,450		1,443		4.99	%	28,259		1,355		4.73	%	49,430		691		1.38	%

Receivables from brokerage clients	70,811		5,420		7.53	%	61,914		4,793		7.64	%	75,614		3,321		4.33	%
Available for sale securities (1)	101,659		2,166		2.12	%	137,178		2,987		2.17	%	260,392		4,139		1.58	%
Held to maturity securities (1)	152,566		2,636		1.72	%	165,634		2,872		1.73	%	112,357		1,688		1.50	%
Bank loans	42,255		1,867		4.42	%	40,234		1,664		4.14	%	38,816		1,083		2.79	%
Total interest-earning assets	425,417		15,071		3.51	%	471,065		15,565		3.28	%	593,772		11,734		1.96	%
Securities lending revenue			330						419						471
Other interest revenue			136						127						22
Total interest-earning assets	$	425,417	$	15,537	3.61	%	$	471,065	$	16,111	3.39	%	$	593,772	$	12,227	2.04	%
Funding sources
Bank deposits (2)	$	256,212	$	3,152	1.23	%	$	306,505	$	3,363	1.10	%	$	424,168	$	723	0.17	%
Payables to brokers, dealers, and clearing organizations (3)	8,522		372		4.30	%	4,477		147		3.23	%	5,884		48		0.81	%
Payables to brokerage clients	72,776		272		0.37	%	66,842		271		0.41	%	97,825		123		0.13	%
Other short-term borrowings	9,146		504		5.51	%	7,144		375		5.25	%	2,719		48		1.75	%
Federal Home Loan Bank borrowings	23,102		1,245		5.32	%	34,821		1,810		5.14	%	2,274		106		4.59	%
Long-term debt	23,083		846		3.66	%	22,636		715		3.16	%	20,714		498		2.40	%
Total interest-bearing liabilities (3)	392,841		6,391		1.62	%	442,425		6,681		1.51	%	553,584		1,546		0.28	%
Non-interest-bearing funding sources (3)	32,576						28,640						40,188

Series KMarch 4, 2022$740

On November 1, 2022, the Company redeemed all of the outstanding shares of its fixed-to-floating rate non-cumulative perpetual preferred stock, Series A at a redemption price of $1,000 per share for a total of $400 million. On December 1, 2022, the Company redeemed all of the fixed-to-floating rate non-cumulative perpetual preferred stock, Series E, and the corresponding depositary shares. The depositary shares were redeemed at a redemption price of $1,000 per depositary share for a total of $600 million.

See also Item 8 – Consolidated Statements of Cash Flows, Item 8 – Note 12 for the Company’s bank deposits, Item 8 – Note 13 for the Company’s outstanding debt and borrowing facilities, Item 8 – Note 18 for the Company’s securities lending activities, and Item 8 – Note 20 for equity outstanding balances and activity.

Contractual Obligations

Schwab’s principal contractual obligations as of December 31, 2024 include payments on brokered CDs; payments on FHLB borrowings, other short-term borrowings, and long-term debt; lease payments including legally-binding minimum lease payments for leases signed but not yet commenced; credit-related financial instruments, representing our banking subsidiaries’ commitments to extend credit to banking clients, purchase mortgage loans, and fund CRA investments; and purchase obligations for services such as advertising and marketing, telecommunications, hardware- and software-related agreements, and professional services. For information on our contractual obligations for brokered CDs, FHLB borrowings, other short-term borrowings, long-term debt, leases, and credit-related financial instruments, see Item 8 – Notes 12, 13, 14, and 15. As of December 31, 2024, the Company had total short-term purchase obligations of $726 million and total long-term purchase obligations of $499 million.

Schwab also enters into guarantees and other similar arrangements in the ordinary course of business. For information on these arrangements, see Item 8 – Notes 6, 7, 11, 13, 15, and 18. Pursuant to the 2023 IDA agreement, certain brokerage client deposits are required to be swept off-balance sheet to the TD Depository Institutions. See Item 8 – Note 15 for additional information on the 2023 IDA agreement.

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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)

CAPITAL MANAGEMENT

Schwab seeks to manage capital to a level and composition sufficient to support execution of our business strategy, inclusive of balance sheet growth over time, 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 such activities as 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. Internal guidelines are set, for both CSC and its regulated subsidiaries, to ensure capital levels are in line with our strategy and regulatory requirements. Capital forecasts are reviewed monthly at Asset-Liability Management Committee meetings and regularly at meetings of the Board of Directors. A number of early warning indicators are monitored to help identify potential developments that could negatively impact capital. In addition, we monitor the subsidiaries’ capital levels and requirements. Subject to regulatory capital requirements and any required approvals, any excess capital held by subsidiaries is transferred to CSC in the form of dividends and returns of capital. At the banking subsidiaries, dividends and returns of capital are managed with consideration of minimum tangible common equity and regulatory capital requirements. When subsidiaries have need of additional capital, funds are provided by CSC as equity investments and also as subordinated loans. The details and method used for each cash infusion are based on an analysis of the particular entity’s needs and financing alternatives. The amounts and structure of infusions take into consideration maintenance of regulatory capital requirements, debt/equity ratios, and equity double leverage ratios.

Schwab conducts regular capital stress testing to assess the potential financial impacts of various adverse macroeconomic and company-specific events to which the Company could be subjected. The objective of the capital stress testing is (1) to explore various potential outcomes – including rare and extreme events and (2) to assess impacts of potential stressful outcomes on both capital and liquidity (see also Risk Management – Liquidity Risk for discussion of liquidity stress testing). Additionally, we have a comprehensive Capital Contingency Plan to provide action plans for certain low probability/high impact capital events that the Company might face. The Capital Contingency Plan is issued under the authority of the Financial Risk Oversight Committee and provides guidelines for sustained capital events. It does not specifically address every contingency, but is designed to provide a framework for responding to any capital stress. The results of the stress testing indicate there are two scenarios which could stress the Company’s capital: (1) inflows of balance sheet cash during a period of very low interest rates and (2) outflows of balance sheet cash when other sources of financing are not available and the Company is required to sell assets at a loss to fund the outflows. The Capital Contingency Plan is reviewed annually and updated as appropriate.

For additional information, see Business – Regulation in Part I – Item 1.

Regulatory Capital Requirements

CSC is subject to capital requirements set by the Federal Reserve and is required to serve as a source of strength for our banking subsidiaries and to provide financial assistance if our banking subsidiaries experience financial distress. Schwab is required to maintain a Tier 1 Leverage Ratio for CSC of at least 4%. Due to the relatively low credit risk of our balance sheet assets and risk-based capital ratios at CSC and CSB that are in excess of regulatory requirements, the Tier 1 Leverage Ratio is the most restrictive capital constraint on CSC’s asset growth.

Our banking subsidiaries are subject to capital requirements set by their regulators that are substantially similar to those imposed on CSC by the Federal Reserve. Our banking subsidiaries’ failure to remain well capitalized could result in certain mandatory and possibly additional discretionary actions by the regulators that could have a direct material effect on the banks. Schwab’s principal banking subsidiary, CSB, is required to maintain a Tier 1 Leverage Ratio of at least 5% to be well capitalized, but seeks to maintain a ratio of at least 6.5%. Based on its regulatory capital ratios at December 31, 2024, CSB is considered well capitalized.

In July 2023, the Federal Reserve issued a notice of proposed changes to the regulatory capital rules that would require us to include AOCI in regulatory capital, phased in over a three-year transition period, beginning July 1, 2025 (see Current Regulatory and Other Developments). In anticipation of the rules being adopted, the Company’s capital management for CSC (consolidated), CSB, and our other banking subsidiaries now incorporates measures that are inclusive of AOCI. During the second quarter of 2024, Schwab updated its long-term operating objective to be its consolidated adjusted Tier 1 Leverage Ratio of 6.75% - 7.00%. See below and Non-GAAP Financial Measures for additional information.

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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 banking subsidiaries are required to provide notice to, and may be required to obtain approval from, the Federal Reserve and the banking subsidiaries’ state regulators in order to declare and pay dividends to CSC. In future periods, we may be required to obtain approval from the Federal Reserve for our banking subsidiaries to declare and pay dividends in excess of the amount of recent net income and retained earnings.

As a broker-dealer, CS&Co is subject to regulatory requirements of the Uniform Net Capital Rule, which are intended to ensure the general financial soundness and liquidity of broker-dealers. These regulations prohibit our broker-dealer subsidiary from paying cash dividends, making unsecured advances and loans to CSC and employees, and repaying subordinated borrowings from CSC, if such payment would result in a net capital amount below prescribed thresholds. At December 31, 2024, CS&Co was in compliance with its net capital requirements.

In addition to the capital requirements above, Schwab’s subsidiaries are subject to other regulatory requirements intended to ensure financial soundness and liquidity. See Item 8 – Notes 20 and 24 for additional information on the components of stockholders’ equity and information on the capital requirements of significant subsidiaries and CSC (consolidated).

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


December 31,	2024						2023
	CSC			CSB			CSC			CSB
Total stockholders’ equity	$	48,375		$	19,700		$	40,958		$	16,079
Less:
Preferred stock	9,191			—			9,191			—
Common Equity Tier 1 Capital before regulatory adjustments	$	39,184		$	19,700		$	31,767		$	16,079
Less:
Goodwill, net of associated deferred tax liabilities	$	11,746		$	13		$	11,782		$	13
Other intangible assets, net of associated deferred tax liabilities	6,232			—			6,664			—
Deferred tax assets, net of valuation allowances and deferred tax liabilities	50			41			41			35
AOCI adjustment (1)	(14,839)			(12,938)			(18,131)			(15,746)
Common Equity Tier 1 Capital	$	35,995		$	32,584		$	31,411		$	31,777
Tier 1 Capital	$	45,186		$	32,584		$	40,602		$	31,777
Total Capital	45,218			32,606			40,645			31,816
Risk-Weighted Assets	113,648			78,134			128,230			83,809
Average Assets with regulatory adjustments	458,119			280,701			476,069			315,851
Total Leverage Exposure	461,200			282,629			479,302			318,007
Common Equity Tier 1 Capital/Risk-Weighted Assets	31.7		%	41.7		%	24.5		%	37.9		%
Tier 1 Capital/Risk-Weighted Assets	39.8		%	41.7		%	31.7		%	37.9		%
Total Capital/Risk-Weighted Assets	39.8		%	41.7		%	31.7		%	38.0		%
Tier 1 Leverage Ratio	9.9		%	11.6		%	8.5		%	10.1		%
Supplementary Leverage Ratio	9.8		%	11.5		%	8.5		%	10.0		%

(1) 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 increased to 9.9% at December 31, 2024 from 8.5% at year-end 2023. This increase was due primarily to a decrease in the Company’s total assets and the benefit of net income earned during the year. Total balance sheet assets decreased $13.3 billion, or 3%, during 2024, primarily driven by decreases of $30.8 billion in total bank deposits and $9.7 billion in FHLB borrowings due to repayments, offset by an increase in payables to brokerage clients and payables to brokers, dealers, and clearing organizations totaling $23.5 billion. CSB’s Tier 1 Leverage Ratio also increased from year-end 2023, ending 2024 at 11.6%, primarily as a result of lower total assets and 2024 net income.

In light of the Federal Reserve’s 2023 regulatory capital rule proposal, which, among other things, would require the Company to include AOCI in regulatory capital, the Company has developed an adjusted Tier 1 Leverage Ratio, which is a non-GAAP and non-regulatory capital 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.

During the second quarter of 2024, Schwab updated its long-term operating objective to be its consolidated adjusted Tier 1 Leverage Ratio of 6.75% - 7.00%. As of December 31, 2024, our adjusted Tier 1 Leverage Ratio, which includes AOCI in the

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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)

ratio, was 6.8% for CSC (consolidated) and 7.3% for CSB (see Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results). The Company is continuing to accrete capital organically, and will continue to manage its capital as described above. 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. See also below and Item 8 – Note 28 for additional information regarding share repurchase activity subsequent to December 31, 2024.

IDA Agreement

Certain brokerage client deposits are swept off-balance sheet to the TD Depository Institutions pursuant to the 2023 IDA agreement. During 2024 and 2023, Schwab did not move IDA balances to its balance sheet. The Company’s overall capital management strategy includes supporting migration of IDA balances in future periods as available pursuant to the terms of the 2023 IDA agreement. The Company’s ability to migrate these balances to its balance sheet is dependent upon multiple factors including having sufficient capital levels to sustain these incremental deposits. See Item 8 – Note 15 for further information on the 2023 IDA agreement.

Dividends

Since the initial dividend in 1989, and as of December 31, 2024, CSC has paid 143 consecutive quarterly dividends and has increased the quarterly dividend rate 28 times, resulting in a 19% compounded annual growth rate, excluding the special cash dividend of $1.00 per common share in 2007. While the payment and amount of dividends are at the discretion of the Board of Directors, subject to certain regulatory and other restrictions, CSC currently targets its common and nonvoting common stock cash dividend at approximately 20% to 30% of net income.

The Board of Directors of the Company declared a quarterly cash dividend increase per common share during 2023 as shown below:


Date of Declaration	Quarterly Cash Increase Per Common Share		% Increase		New Quarterly Dividend Per Common Share
January 26, 2023	$	.03	14	%	$	.25

In addition, 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.

The following table details CSC’s cash dividends paid and per share amounts:


Year Ended December 31,	2024				2023
	Cash Paid		Per Share Amount		Cash Paid		Per Share Amount
Common and Nonvoting Common Stock	$	1,838	$	1.00	$	1,838	$	1.00
Preferred Stock:
Series D (1)	45		59.52		45		59.52
Series F (2)	24		5,000.00		24		5,000.00
Series G (1)	132		5,375.00		132		5,375.00
Series H (1)	89		4,000.00		90		4,000.00
Series I (1)	83		4,000.00		83		4,000.00
Series J (1)	27		44.52		27		44.52
Series K (1)	37		5,000.00		37		5,000.00

(1) Dividends are paid quarterly.

(2) Dividends are paid semi-annually until December 1, 2027 and quarterly thereafter.

Share Repurchases

On July 27, 2022, CSC publicly announced that its Board of Directors approved a share repurchase authorization to repurchase up to $15.0 billion of common stock, replacing the previous and now terminated share repurchase authorization of up to $4.0 billion of common stock. The share repurchase authorization does not have an expiration date. There were no repurchases of CSC’s common stock during the year ended December 31, 2024. CSC repurchased 37 million shares of its common stock for

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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)

$2.8 billion during the year ended December 31, 2023. As of December 31, 2024, approximately $8.7 billion remained on the authorization.

Subsequent to December 31, 2024, pursuant to a repurchase agreement dated February 9, 2025, on February 12, 2025, the Company repurchased directly from TD Group US Holdings LLC 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. The Company completed this repurchase under its share repurchase authorization, and following the repurchase, approximately $7.2 billion remains on the authorization. See Item 8 – Note 28 for additional information.

There were no repurchases of CSC’s preferred stock during the year ended December 31, 2024. During the year ended December 31, 2023, the Company repurchased 11,620 depositary shares representing interests in Series F preferred stock for $11 million, 42,036 depositary shares representing interests in Series G preferred stock for $42 million, 273,251 depositary shares representing interests in Series H preferred stock for $235 million, and 194,567 depositary shares representing interests in Series I preferred stock for $179 million on the open market. The repurchase prices are inclusive of $3 million of dividends accrued by the stockholders as of the repurchase date.

Share repurchases, net of issuances, are subject to a nondeductible 1% excise tax which was recognized as a direct and incremental cost associated with these transactions. For repurchases of common stock, the tax is recorded as part of the cost basis of the treasury stock repurchased, resulting in no impact to the consolidated statement of income. For repurchases of preferred stock, the tax impact is included within preferred stock dividends and other on the consolidated statement of income.

FOREIGN EXPOSURE

At December 31, 2024, Schwab had exposure to non-sovereign financial and non-financial institutions in foreign countries, as well as agencies of foreign governments. 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. At December 31, 2023, the fair value of these holdings totaled $12.8 billion, with the top three exposures being to issuers and counterparties domiciled in the United Kingdom at $5.0 billion, France at $3.2 billion, and Canada at $1.5 billion. In addition, Schwab had outstanding margin loans to foreign residents of $3.5 billion and $2.5 billion at December 31, 2024 and 2023, respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Schwab uses the market approach to determine the fair value of certain financial assets and liabilities recorded at fair value, and to determine fair value disclosures. See Item 8 – Notes 2 and 19 for more information on our assets and liabilities recorded at fair value.

CRITICAL ACCOUNTING ESTIMATES

The consolidated financial statements of Schwab have been prepared in accordance with GAAP. Item 8 – Note 2 contains more information on our significant accounting policies made in applying these accounting principles.

While the majority of the revenues, expenses, assets, and liabilities are not based on estimates, there are certain accounting principles that require management to make estimates regarding matters that are uncertain and susceptible to change where such change may result in a material adverse impact on Schwab’s financial position and financial results. These critical accounting estimates are described below. Management regularly reviews the estimates and assumptions used in the preparation of the financial statements for reasonableness and adequacy.

Management has discussed the development and selection of these critical accounting estimates with the Audit Committee of the Board of Directors. Additionally, management has reviewed with the Audit Committee the Company’s significant estimates discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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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 Taxes

Schwab estimates income tax expense based on amounts expected to be owed to the various tax jurisdictions in which we operate, including federal, state, and local domestic jurisdictions, and immaterial amounts owed to several foreign jurisdictions. The estimated income tax expense is reported in the consolidated statements of income in taxes on income. Accrued taxes are reported in other assets or accrued expenses and other liabilities on the consolidated balance sheets and represent the net estimated amount due to or to be received from taxing jurisdictions either currently or deferred to future periods. Deferred taxes arise from differences between assets and liabilities measured for financial reporting purposes versus income tax reporting purposes. Deferred tax assets are recognized if, in management’s judgment, their realizability is determined to be more likely than not. Uncertain tax positions that meet the more likely than not recognition threshold are measured to determine the amount of benefit to recognize. An uncertain tax position is measured at the largest amount of benefit management believes is more likely than not to be realized upon settlement. In estimating accrued taxes, we assess the relative merits and risks of the appropriate tax treatment considering statutory, judicial, and regulatory guidance in the context of the tax position. Because of the complexity of tax laws and regulations, interpretation can be difficult and subject to legal judgment given specific facts and circumstances.

Changes in the estimate of accrued taxes occur periodically due to changes in tax rates, interpretations of tax laws, the status of examinations being conducted by various taxing authorities, and newly enacted statutory, judicial, and regulatory guidance that impacts the relative merits and risks of tax positions. These changes, when they occur, affect accrued taxes and can be significant to the operating results of the Company. See Item 8 – Note 23 for more information on the Company’s income taxes.

Legal and Regulatory Reserves

Reserves for legal and regulatory claims and proceedings reflect an estimate of probable losses for each matter, after considering, among other factors, the progress of the case, prior experience and the experience of others in similar cases, available defenses, and the opinions and views of legal counsel. In many cases, including most class action lawsuits, it is not possible to determine whether a loss will be incurred, or to estimate the range of that loss, until the matter is close to resolution, in which case no accrual is made until that time. Reserves are adjusted as more information becomes available. Significant judgment is required in making these estimates, and the actual cost of resolving a matter may ultimately differ materially from the amount reserved. See Item 8 – Note 15 for more information on the Company’s contingencies related to legal and regulatory reserves.

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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)

NON-GAAP FINANCIAL MEASURES

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.

Schwab’s use of non-GAAP measures is reflective of certain adjustments made to GAAP financial measures as described below. Beginning in the third quarter of 2023, these adjustments also include restructuring costs, which the Company began incurring in connection with its previously announced plans to streamline its operations to prepare for post-integration of Ameritrade. See Item 8 – Note 16 for additional information.


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. 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. 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.

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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 reconciliations of GAAP measures to non-GAAP measures:


	Year Ended December 31,
	2024		2023		2022
Total expenses excluding interest (GAAP)	$	11,914	$	12,459	$	11,374
Acquisition and integration-related costs (1)	(117)		(401)		(392)
Amortization of acquired intangible assets	(519)		(534)		(596)
Restructuring costs (2)	(9)		(495)		—
Adjusted total expenses (non-GAAP)	$	11,269	$	11,029	$	10,386

(1) Acquisition and integration-related costs for 2024 primarily consist of $54 million of compensation and benefits, $36 million of professional services, and $19 million of depreciation and amortization. Acquisition and integration-related costs for 2023 primarily consist of $187 million of compensation and benefits, $135 million of professional services, $28 million of occupancy and equipment, and $27 million of other expense. Acquisition and integration-related costs for 2022 primarily consist of $220 million of compensation and benefits, $140 million of professional services, and $21 million of occupancy and equipment.

(2) Restructuring costs for 2024 reflect a change in estimate of $34 million in compensation and benefits, offset by $5 million of occupancy and equipment and $37 million of other expense. Restructuring costs for 2023 primarily consist of $292 million of compensation and benefits, $17 million of occupancy and equipment, and $181 million of other expense. There were no restructuring costs for 2022.

With the Ameritrade integration and restructuring programs complete as of December 31, 2024, non-GAAP adjustments to total expenses excluding interest in 2025 are anticipated to be solely comprised of amortization of acquired intangible assets, which is estimated to be $512 million for 2025.


	Year Ended December 31,
	2024				2023				2022
	Amount		Diluted EPS		Amount		Diluted EPS		Amount		Diluted EPS
Net income available to common stockholders (GAAP), Earnings per common share — diluted (GAAP)	$	5,478	$	2.99	$	4,649	$	2.54	$	6,635	$	3.50
Acquisition and integration-related costs	117		.06		401		.22		392		.21
Amortization of acquired intangible assets	519		.28		534		.29		596		.31
Restructuring costs	9		—		495		.27		—		—
Income tax effects (1)	(154)		(.08)		(338)		(.19)		(237)		(.12)
Adjusted net income available to common stockholders (non-GAAP), Adjusted diluted EPS (non-GAAP)	$	5,969	$	3.25	$	5,741	$	3.13	$	7,386	$	3.90

(1) 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.


	Year Ended December 31,
	2024			2023			2022
Return on average common stockholders’ equity (GAAP)	15		%	16		%	18		%
Average common stockholders’ equity	$	35,475		$	29,334		$	36,605
Less: Average goodwill	(11,951)			(11,951)			(11,952)
Less: Average acquired intangible assets — net	(8,002)			(8,524)			(9,084)
Plus: Average deferred tax liabilities related to goodwill and acquired intangible assets — net	1,741			1,805			1,870
Average tangible common equity	$	17,263		$	10,664		$	17,439
Adjusted net income available to common stockholders (1)	$	5,969		$	5,741		$	7,386
Return on tangible common equity (non-GAAP)	35		%	54		%	42		%

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

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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)


	December 31, 2024						December 31, 2023
	CSC			CSB			CSC			CSB
Tier 1 Leverage Ratio (GAAP)	9.9		%	11.6		%	8.5		%	10.1		%
Tier 1 Capital	$	45,186		$	32,584		$	40,602		$	31,777
Plus: AOCI adjustment	(14,839)			(12,938)			(18,131)			(15,746)
Adjusted Tier 1 Capital	30,347			19,646			22,471			16,031
Average assets with regulatory adjustments	458,119			280,701			476,069			315,851
Plus: AOCI adjustment	(14,831)			(13,037)			(19,514)			(17,194)
Adjusted average assets with regulatory adjustments	$	443,288		$	267,664		$	456,555		$	298,657
Adjusted Tier 1 Leverage Ratio (non-GAAP)	6.8		%	7.3		%	4.9		%	5.4		%

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

For a discussion of the quantitative and qualitative disclosures about market risk, see Risk Management in Part II – Item 7.

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THE CHARLES SCHWAB CORPORATION

Item 8. Financial Statements and Supplementary Data

TABLE OF CONTENTS


Consolidated Statements of Income		64
Consolidated Statements of Comprehensive Income		65
Consolidated Balance Sheets		66
Consolidated Statements of Stockholders’ Equity		67
Consolidated Statements of Cash Flows		68
Notes to Consolidated Financial Statements		70
Note 1.	Introduction and Basis of Presentation	70
Note 2.	Summary of Significant Accounting Policies	71
Note 3.	Revenue Recognition	81
Note 4.	Receivables from and Payables to Brokers, Dealers, and Clearing Organizations	82
Note 5.	Receivables from and Payables to Brokerage Clients	82
Note 6.	Investment Securities	83
Note 7.	Bank Loans and Related Allowance for Credit Losses	86
Note 8.	Equipment, Office Facilities, and Property	90
Note 9.	Goodwill and Acquired Intangible Assets	90
Note 10.	Other Assets	91
Note 11.	Variable Interest Entities	92
Note 12.	Bank Deposits	92
Note 13.	Borrowings	93
Note 14.	Leases	96
Note 15.	Commitments and Contingencies	97
Note 16.	Exit and Other Related Liabilities	99
Note 17.	Derivative Instruments and Hedging Activities	102
Note 18.	Financial Instruments Subject to Off-Balance Sheet Credit Risk	104
Note 19.	Fair Values of Assets and Liabilities	106
Note 20.	Stockholders’ Equity	109
Note 21.	Accumulated Other Comprehensive Income	111
Note 22.	Employee Incentive, Retirement, Deferred Compensation, and Career Achievement Plans	112
Note 23.	Taxes on Income	114
Note 24.	Regulatory Requirements	116
Note 25.	Segment Information	117
Note 26.	Earnings Per Common Share	118
Note 27.	The Charles Schwab Corporation – Parent Company Only Financial Statements	120
Note 28.	Subsequent Events	121
Report of Independent Registered Public Accounting Firm (PCAOB ID No. )		122
Management’s Report on Internal Control Over Financial Reporting		124

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THE CHARLES SCHWAB CORPORATION

Consolidated Statements of Income

(In Millions, Except Per Share Amounts)

Year Ended December 31,

2024

2023

2022

Net Revenues

Interest revenue

Interest expense

()

Net interest revenue

Asset management and administration fees (1)

Trading revenue

Bank deposit account fees

Other

Total net revenues

Expenses Excluding Interest

Compensation and benefits

Professional services

Occupancy and equipment

Advertising and market development

Communications

Depreciation and amortization

Amortization of acquired intangible assets

Regulatory fees and assessments

Other

Total expenses excluding interest

Income before taxes on income

Taxes on income

Net Income

Preferred stock dividends and other

Net Income Available to Common Stockholders

Weighted-Average Common Shares Outstanding:

Basic

Diluted

Earnings Per Common Shares Outstanding (2):

Basic

Diluted

fee waivers were recognized for the years ended December 31, 2024 and 2023. Includes fee waivers of $ million for the year ended December 31, 2022.

See Notes to Consolidated Financial Statements.

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THE CHARLES SCHWAB CORPORATION


Consolidated Statements of Comprehensive Income
(In Millions)

Year Ended December 31,	2024	2023	2022
Net income	$	$	$
Other comprehensive income (loss), before tax:
Change in net unrealized gain (loss) on available for sale securities:
Net unrealized gain (loss) excluding transfers to held to maturity			()
Reclassification of net unrealized loss transferred to held to maturity
Other reclassifications included in other revenue
Change in net unrealized gain (loss) on held to maturity securities:
Reclassification of net unrealized loss transferred from available for sale			()
Amortization of amounts previously recorded upon transfer to held to maturity from available for sale
Other	()	()
Other comprehensive income (loss), before tax			()
Income tax effect	()	()
Other comprehensive income (loss), net of tax			()
Comprehensive Income (Loss)	$	$	$	()

See Notes to Consolidated Financial Statements.

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THE CHARLES SCHWAB CORPORATION


Consolidated Balance Sheets (1)
(In Millions, Except Per Share and Share Amounts)

December 31,	2024	2023
Assets
Cash and cash equivalents	$	$
Cash and investments segregated and on deposit for regulatory purposes (including resale agreements of $ and $ at December 31, 2024 and 2023, respectively)
Receivables from brokers, dealers, and clearing organizations
Receivables from brokerage clients — net
Available for sale securities (amortized cost of $ and $ at December 31, 2024 and 2023, respectively; including assets pledged of $ and $, respectively)
Held to maturity securities (including assets pledged of $ and $ at December 31, 2024 and 2023, respectively)
Bank loans — net
Equipment, office facilities, and property — net
Goodwill
Acquired intangible assets — net
Other assets
Total assets	$	$
Liabilities and Stockholders’ Equity
Bank deposits	$	$
Payables to brokers, dealers, and clearing organizations
Payables to brokerage clients
Accrued expenses and other liabilities
Other short-term borrowings
Federal Home Loan Bank borrowings
Long-term debt
Total liabilities
Stockholders’ equity:
Preferred stock — $ par value per share; aggregate liquidation preference of $ at December 31, 2024 and 2023
Common stock — billion shares authorized; $ par value per share; shares issued at December 31, 2024 and 2023
Nonvoting common stock — million shares authorized; $ par value per share; shares issued at December 31, 2024 and 2023
Additional paid-in capital
Retained earnings
Treasury stock, at cost — and shares at December 31, 2024 and 2023, respectively	()	()
Accumulated other comprehensive income (loss)	()	()
Total stockholders’ equity
Total liabilities and stockholders’ equity	$	$

See Notes to Consolidated Financial Statements.

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THE CHARLES SCHWAB CORPORATION

Consolidated Statements of Stockholders’ Equity

(In Millions)

Nonvoting
Common Stock

Additional
Paid-In
Capital

Accumulated Other Comprehensive Income (Loss)

Preferred
Stock

Common Stock

Retained
Earnings

Treasury Stock,
at cost

Amount

Total

Balance at December 31, 2021

()

Net income

—

Other comprehensive income (loss), net of tax

—

()

Issuance of preferred stock, net

—

Redemption of preferred stock

()

—

()

—

()

Dividends declared on preferred stock

—

()

—

()

Dividends declared on common stock — $

per share

—

()

—

()

Repurchase of common stock

—

()

—

()

Repurchase of nonvoting common stock

—

()

—

()

—

()

Conversion of nonvoting common stock to
common stock

—

()

—

Stock option exercises and other

—

()

—

Share-based compensation

—

Other

—

()

—

Balance at December 31, 2022

()

Net income

—

Other comprehensive income (loss), net of tax

—

Redemption and repurchase of preferred stock,
inclusive of tax

()

—

()

Dividends declared on preferred stock

—

()

—

()

Dividends declared on common stock — $

per share

—

()

—

()

Repurchase of common stock, inclusive of tax

—

()

—

()

Stock option exercises and other

—

()

—

Share-based compensation

—

Other

—

()

—

Balance at December 31, 2023

()

Net income

—

Other comprehensive income (loss), net of tax

—

Redemption and repurchase of preferred stock,
inclusive of tax

—

Issuance of preferred stock, net

—

Dividends declared on preferred stock

—

()

—

()

Dividends declared on common stock — $

per share

—

()

—

()

Stock option exercises and other

—

()

—

Share-based compensation

—

Other

—

()

—

Balance at December 31, 2024

()

See Notes to Consolidated Financial Statements.

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THE CHARLES SCHWAB CORPORATION


Consolidated Statements of Cash Flows (1)
(In Millions)

Year Ended December 31,	2024	2023	2022
Cash Flows from Operating Activities
Net income	$	$	$
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Share-based compensation
Depreciation and amortization
Amortization of acquired intangible assets
Provision (benefit) for deferred income taxes	()	()	()
Premium amortization, net, on available for sale and held to maturity securities
Other
Net change in:
Investments segregated and on deposit for regulatory purposes	()		()
Receivables from brokers, dealers, and clearing organizations		()
Receivables from brokerage clients	()	()
Other assets		()	()
Payables to brokers, dealers, and clearing organizations			()
Payables to brokerage clients		()	()
Accrued expenses and other liabilities			()
Net cash provided by (used for) operating activities
Cash Flows from Investing Activities
Purchases of available for sale securities	()	()	()
Proceeds from sales of available for sale securities
Principal payments on available for sale securities

Principal payments on held to maturity securities
Net change in bank loans	()		()

Purchases of equipment, office facilities, and property	()	()	()
Purchases of FHLB stock	()	()	()
Proceeds from sales of FHLB stock
Purchases of Federal Reserve stock	()	()	()
Proceeds from sales of Federal Reserve stock
Other investing activities	()	()	()
Net cash provided by (used for) investing activities
Cash Flows from Financing Activities
Net change in bank deposits	()	()	()


Proceeds from FHLB borrowings
Repayments of FHLB borrowings	()	()	()
Proceeds from other short-term borrowings
Repayments of other short-term borrowings	()	()	()
Issuances of long-term debt
Repayments of long-term debt	()	()	()
Repurchases of common stock and nonvoting common stock		()	()
Issuance of preferred stock, net
Redemption and repurchase of preferred stock		()	()
Dividends paid	()	()	()
Proceeds from stock options exercised
Other financing activities	()	()	()
Net cash provided by (used for) financing activities	()	()	()
Increase (Decrease) in Cash and Cash Equivalents, including Amounts Restricted	()		()
Cash and Cash Equivalents, including Amounts Restricted at Beginning of Year
Cash and Cash Equivalents, including Amounts Restricted at End of Year	$	$	$

Continued on following page.

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THE CHARLES SCHWAB CORPORATION

Continued from previous page.


Year Ended December 31,	2024		2023	2022
Supplemental Cash Flow Information
Non-cash investing activity:

Securities transferred from available for sale to held to maturity, at fair value	$		$	$

Changes in accrued equipment, office facilities, and property purchases	$	()	$	$	()

Non-cash financing activity:

Common stock repurchased during the period but settled after period end	$		$	$
Other Supplemental Cash Flow Information
Cash paid during the period for:
Interest	$		$	$
Income taxes	$		$	$
Amounts included in the measurement of lease liabilities	$		$	$
Leased assets obtained in exchange for new operating lease liabilities	$		$	$
Leased assets obtained in exchange for new finance lease liabilities	$		$	$


December 31,	2024	2023	2022
Reconciliation of cash, cash equivalents and amounts reported within the balance sheet (2)
Cash and cash equivalents	$	$	$
Restricted cash and cash equivalents amounts included in cash and investments segregated and on deposit for regulatory purposes
Total cash and cash equivalents, including amounts restricted shown in the statement of cash flows	$	$	$

See Notes to Consolidated Financial Statements.

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THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

domestic branch offices in states and the District of Columbia, as well as locations in Puerto Rico, the United Kingdom, Hong Kong, and Singapore.

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

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THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

- 71 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

- 72 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

- 73 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

portfolio segments: residential real estate, PALs, and other loans. We use these segments when developing and documenting our methodology for determining the allowance for credit losses. The residential real estate portfolio segment is divided into classes of financing receivables for purposes of monitoring and assessing credit risk: First Mortgages and HELOCs.

Schwab records an allowance for credit losses through a charge to provision for credit losses, included in other revenue, based on our estimate of current expected credit losses for the existing portfolio. We review the allowance for credit losses quarterly, taking into consideration current economic conditions, reasonable and supportable forecasts, the composition of the existing loan portfolio, past loss experience, and any other risks inherent in the portfolio to ensure that the allowance for credit losses is maintained at an appropriate level.

Substantially all PALs are collateralized by marketable securities with liquid markets. Credit lines are over-collateralized and borrowers are required to maintain collateral at specified levels at all times. The required collateral levels are determined based on the type of security pledged. Additionally, collateral market value is monitored on a daily basis and a borrower’s credit line may be reduced or collateral may be liquidated if the collateral is in danger of falling below specified levels. As such, the credit loss inherent within this portfolio is limited. Schwab applies the practical expedient based on collateral maintenance provisions in estimating an allowance for credit losses for PALs.

The methodology to establish an allowance for credit losses for the residential real estate portfolio segment utilizes statistical models that estimate prepayments, defaults, and expected losses for this portfolio segment based on predicted behavior of individual loans within the segment. The methodology also evaluates concentrations in the classes of financing receivables, including loan products within those classes, year of origination, and geographical distribution of collateral.

Expected credit losses are estimated using a loan-level model that projects each loan’s behavior over its term based on forecasted voluntary housing turnover, the rates of refinancing, delinquency transition rates, and severity of loss. The model takes into account the current relevant risk indicators, including each loan’s term and structure, current delinquency status, and the estimated current LTV ratio, as well as borrower FICO scores and current key interest rates including U.S. Treasury, SOFR, Prime, and mortgage rates. The more significant variables in the model include delinquency roll rates, housing prices, interest rates, and the unemployment rate. Delinquency roll rates (i.e., the rates at which loans transition through delinquency stages and ultimately result in a loss) are estimated from our historical loss experience over a full economic cycle. Loss severity (i.e., loss given default) estimates are based on forecasted net equity associated with each loan and property, as well as loss experience and market trends, both current and forecasted. Housing price trends are derived from historical home price indices and econometric forecasts of future home values. Factors affecting the home price index include housing inventory, unemployment, interest rates, and inflation expectations. Mortgage rates are estimated based on forecasted spread, while the rest of the interest rates used by the model are projected based on the forward rates. The unemployment rate forecast is typically based on the recent consensus of regularly published economic surveys. Linear interpolation is applied to revert to long-term trends after the reasonable and supportable forecast period.

The methodology described above results in loss factors that are applied to the amortized cost basis of loans, exclusive of accrued interest receivable, to determine the allowance for credit losses for First Mortgages and HELOCs.

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THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

to yearsBuildings yearsBuilding and land improvements yearsSoftware

to years (1)

Leasehold improvementsLesser of useful life or lease term

(1) Amortized over contractual term if shorter than the estimated useful life.

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THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

- 76 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

- 77 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

- 78 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

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 consolidated balance sheets (see Other securities owned and securities sold but not yet purchased above in this Note 2 for the treatment of client-held fractional shares). 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 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 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 consolidated balance sheet.

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 contract. Valuation is based on both spot and forward rates on the swap yield curve. The Company validates its valuations with counterparty quotations from central counterparty (CCP) clearing houses. See Note 17 for additional information on the Company’s interest rate swaps.

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THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

- 80 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

$ $ Cash and investments segregated Receivables from brokerage clients Available for sale securities Held to maturity securities Bank loans Securities lending revenue Other interest revenue Interest revenue Bank deposits()()()

Payables to brokers, dealers, and clearing organizations (1)

()()()Payables to brokerage clients()()()

Other short-term borrowings

()()()

Federal Home Loan Bank borrowings

()()()Long-term debt()()()Other interest expense()() Interest expense()()()Net interest revenue Asset management and administration feesMutual funds, ETFs, and CTFs

Managed investing solutions (2)

Other Asset management and administration fees Trading revenueCommissions Order flow revenue Principal transactions Trading revenue Bank deposit account fees Other Total net revenues$ $ $

(1) Beginning in 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.

(2) Managed investing solutions was formerly referred to as “Advice solutions”.

For additional discussion of contract balances, see Note 10. For a summary of revenue provided by our reportable segments, see Note 25. The recognition of revenue is not impacted by the operating segment in which revenue is generated.

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THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

$ Securities borrowed Receivables for securities failed to deliver Other receivables from broker-dealers

Receivables from brokers, dealers, and clearing organizations

$ $ PayablesDeposits for securities loaned$ $ Payables to clearing organizations Payables for securities failed to receive Other payables to broker-dealers Payables to brokers, dealers, and clearing organizations$ $

See Note 18 for additional information regarding securities lending and borrowing activities.

$ Other brokerage receivables

Receivables from brokerage clients — net (1)

$ $ Payables Interest-bearing payables$ $ Non-interest-bearing payables Payables to brokerage clients$ $

(1) The allowance for credit losses for receivables from brokerage clients and related activity was immaterial for all periods presented.

% of CS&Co’s total client accounts were located in California. As of December 31, 2023, approximately % of CS&Co and TD Ameritrade, Inc. client accounts were located in California.

- 82 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

$ $ $ U.S. Treasury securities

Corporate debt securities (1)

Asset-backed securities (2)

U.S. state and municipal securities Foreign government agency securities Non-agency commercial mortgage-backed securities Other

Unallocated portfolio layer method fair value basis adjustments (3)

() ()—

Total available for sale securities

$ $ $ $ Held to maturity securitiesU.S. agency mortgage-backed securities$ $ $ $ Total held to maturity securities$ $ $ $ December 31, 2023Available for sale securitiesU.S. agency mortgage-backed securities$ $ $ $ U.S. Treasury securities

Corporate debt securities (1)

Asset-backed securities (2)

Foreign government agency securities U.S. state and municipal securities

Non-agency commercial mortgage-backed securities

Certificates of deposit Other

Unallocated portfolio layer method fair value basis adjustments (3)

() ()—

Total available for sale securities

$ $ $ $ Held to maturity securitiesU.S. agency mortgage-backed securities$ $ $ $ Total held to maturity securities$ $ $ $

(1) As of December 31, 2024 and 2023, approximately % and %, respectively, of the total AFS corporate debt securities were issued by institutions in the financial services industry.

(2) Approximately % and % of asset-backed securities held as of December 31, 2024 and 2023, respectively, were Federal Family Education Loan Program Asset-Backed Securities. Asset-backed securities collateralized by credit card receivables represented approximately % and % of the asset-backed securities held as of December 31, 2024 and 2023, respectively.

(3) This represents the amount of PLM fair value hedge basis adjustments related to AFS securities hedged in a closed portfolio. See Notes 2 and 17 for more information on PLM hedge accounting.

At December 31, 2024, our banking subsidiaries had pledged investment securities with a fair value of $ billion (collateral value of $ billion) as collateral to secure borrowing capacity on secured credit facilities with the FHLB (see Note 13). 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 $ billion (collateral value of $ billion) as collateral for this facility at December 31, 2024. 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 $ billion at December 31, 2024.

At December 31, 2024, our banking subsidiaries had pledged HTM securities as collateral under repurchase agreements with external financial institutions. HTM securities pledged were U.S. agency mortgage-backed securities with an aggregate amortized cost of $ billion. Securities pledged as collateral under these repurchase agreements may be sold, repledged, or otherwise used by the counterparties. See Notes 2, 13, and 18 for additional information on these repurchase agreements.

- 83 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

million as initial margin on interest rate swaps (see Notes 17 and 18). All of Schwab’s interest rate swaps are cleared through CCPs which require the Company to post initial margin as collateral against potential losses. Initial margin is posted through FCMs 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.

$ $ $ $ $

U.S. Treasury securities (1)

Corporate debt securities

Asset-backed securities (1)

U.S. state and municipal securities Foreign government agency securities Non-agency commercial mortgage-backed securities Other

Total (2)

$ $ $ $ $ $ December 31, 2023Available for sale securities

U.S. agency mortgage-backed securities (1)

$ $ $ $ $ $ U.S. Treasury securities Corporate debt securities

Asset-backed securities (1)

Foreign government agency securities U.S. state and municipal securities Non-agency commercial mortgage-backed securities Other

Total (2)

$ $ $ $ $ $

(1) Unrealized losses less than 12 months amounts were less than $ thousand.

(2) For purposes of this table, unrealized losses on AFS securities excludes the unallocated PLM fair value hedge basis adjustments of $ million and $ million at December 31, 2024 and 2023, respectively.

At December 31, 2024, 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 Note 2. amounts were recognized as credit loss expense and securities were written down to fair value through earnings for the years ended December 31, 2024 and 2023. of the Company’s AFS securities held as of December 31, 2024 and 2023 had an allowance for credit losses. All HTM securities as of December 31, 2024 and 2023 were U.S. agency mortgage-backed securities and therefore had allowance for credit losses because expected nonpayment of the amortized cost basis is zero.

The Company had $ million and $ million of accrued interest for AFS and HTM securities as of December 31, 2024 and 2023, 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 consolidated balance sheets. There were writeoffs of accrued interest receivable on AFS and HTM securities during the years ended December 31, 2024 or 2023.

- 84 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

AFS and HTM investment securities portfolio

Estimated effective duration, inclusive of derivatives (1):

AFS investment securities portfolioAFS and HTM investment securities portfolio
(1) See Note 17 for additional discussion on 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.

$ $ $ $ U.S. Treasury securities Corporate debt securities Asset-backed securities U.S. state and municipal securities Foreign government agency securities Non-agency commercial mortgage-backed securities Other Total fair value$ $ $ $ $

Total amortized cost (1)

$ $ $ $ $

Weighted-average yield (2)

% % % % %Held to maturity securities U.S. agency mortgage-backed securities $ $ $ $ $ Total fair value$ $ $ $ $ Total amortized cost$ $ $ $ $

Weighted-average yield (2)

% % % % %

(1) For purposes of this table, the amortized cost of AFS securities excludes the unallocated PLM fair value hedge basis adjustments of $ million at December 31, 2024.

(2) The weighted-average yield is computed using the amortized cost at December 31, 2024.

$ $ Gross realized gains Gross realized losses

- 85 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

$ $ $ $ $ $ $

HELOCs (1,2)

Total residential real estate Pledged asset lines Other Total bank loans$ $ $ $ $ $ $ $ December 31, 2023 Residential real estate:

First Mortgages (1,2)

$ $ $ $ $ $ $ $

HELOCs (1,2)

Total residential real estate Pledged asset lines Other Total bank loans$ $ $ $ $ $ $ $

(1) First Mortgages and HELOCs include unamortized premiums and discounts and direct origination costs of $ million and $ million at December 31, 2024 and 2023, respectively.

(2) At December 31, 2024 and 2023, % and %, 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.

(3) There were loans accruing interest that were contractually 90 days or more past due at December 31, 2024 or 2023.

At December 31, 2024, 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 13).

$ $ $ $ $ Charge-offs () ()Recoveries Provision for credit losses Balance at December 31, 2022$ $ $ $ $ $ Charge-offs Recoveries Provision for credit losses()()() ()Balance at December 31, 2023$ $ $ $ $ $ Charge-offs Recoveries Provision for credit losses()()() ()Balance at December 31, 2024$ $ $ $ $ $

As discussed in Note 2, the Company charges off any unsecured PAL balances no later than 90 days past due. As of December 31, 2024, 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 December 31, 2024 and 2023, and no allowance for credit losses for PALs as of those dates was required.

- 86 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

million and $ million at December 31, 2024 and 2023, 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 December 31, 2024 and 2023, 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:

•Year of origination;

•Borrower FICO scores at origination (Origination FICO);

•Updated borrower FICO scores (Updated FICO);

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

•Estimated Current LTV ratios (Estimated Current LTV).

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.

- 87 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

$ $ $ $ $ $ $ $ $ 620 – 679 680 – 739 ≥740 Total$ $ $ $ $ $ $ $ $ $ Origination LTV≤70%$ $ $ $ $ $ $ $ $ $ >70% – ≤90% >90% – ≤100% Total$ $ $ $ $ $ $ $ $ $ Updated FICO<620$ $ $ $ $ $ $ $ $ $ 620 – 679 680 – 739 ≥740 Total$ $ $ $ $ $ $ $ $ $

Estimated Current LTV (1)

≤70%$ $ $ $ $ $ $ $ $ $ >70% – ≤90% >90% – ≤100% >100% Total$ $ $ $ $ $ $ $ $ $ Gross charge-offs$ $ $ $ $ $ $ $ $ $ Percent of Loans on
Nonaccrual Status % % % % % % % % % %

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

- 88 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

$ $ $ $ $ $ $ $ 620 – 679 680 – 739 ≥740 Total$ $ $ $ $ $ $ $ $ Origination LTV≤70%$ $ $ $ $ $ $ $ $ >70% – ≤90% >90% – ≤100% Total$ $ $ $ $ $ $ $ $ Updated FICO<620$ $ $ $ $ $ $ $ $ 620 – 679 680 – 739 ≥740 Total$ $ $ $ $ $ $ $ $

Estimated Current LTV (1)

≤70%$ $ $ $ $ $ $ $ $ >70% – ≤90% >90% – ≤100% >100% Total$ $ $ $ $ $ $ $ $ Gross charge-offs$ $ $ $ $ $ $ $ $ Percent of Loans on
Nonaccrual Status % % % % % % % % %

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

At December 31, 2024, $ billion of First Mortgage loans had adjustable interest rates. Substantially all of these mortgages have initial fixed interest rates for three to and interest rates that typically adjust every six to pursuant to the terms of the loan thereafter. Approximately % of the balance of these mortgages consisted of loans with interest-only payment terms. The interest rates on approximately % of the balance of these interest-only loans are not scheduled to reset for three or more years.

At December 31, 2024 and 2023, Schwab had $ million and $ 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 consolidated balance sheets.

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

- 89 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

Within 1 year > 1 year – 3 years > 3 years – 5 years > 5 years Total$

(1) Includes $ million of HELOCs converted to amortizing loans during the year ended December 31, 2024.

At December 31, 2024, $ 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 December 31, 2024, the borrowers on approximately % of HELOC loan balances outstanding only paid the minimum amount due.

$ Buildings Information technology and telecommunications equipment Leasehold improvements Land Construction in progress Other Total equipment, office facilities, and property Accumulated depreciation and amortization()()Total equipment, office facilities, and property — net$ $

As a result of its Ameritrade integration and restructuring efforts, the Company recognized impairment losses on fixed assets of $ million during the year ended December 31, 2023. These losses are included in other expense on the consolidated statements of income. For the purpose of measuring impairment loss, the fair value of the asset group was determined using a discounted cash flow analysis. The fair value of the asset group was not material at December 31, 2023. See Note 16 for additional information regarding the Company’s exit costs related to its Ameritrade integration and restructuring activities.

$ $ Goodwill acquired and other changes during the period December 31, 2023$ $ $

Goodwill acquired and other changes during the period (1)

() December 31, 2024$ $ $

(1) In the fourth quarter of 2024, the Retirement Business Services business unit was transferred from the Advisor Services segment to the Investor Services segment. Related goodwill amounts were transferred from the Advisor Services segment to the Investor Services segment.

We performed an assessment of each of the Company’s reporting units as of our annual testing date. Based on this analysis, we concluded that goodwill was not impaired. There were no indicators that goodwill was impaired after our annual testing date. Schwab did recognize any goodwill impairment in any of the years presented.

- 90 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

$()$ $ $()$ Technology () () Trade names () () Total acquired intangible assets$ $()$ $ $()$

2026 2027 2028 2029 Thereafter Total $

million.

10.

Other investments (1)

Other securities owned at fair value (2)

Receivables — interest, dividends, and other

Customer contract receivables (3)

Operating lease ROU assets Capitalized contract costs Contract assets — net

Other

Total other assets$ $

(1) Includes LIHTC investments and certain other CRA-related investments (see Note 11). This item also includes investments in FHLB stock of $ million and $ billion at December 31, 2024 and 2023, respectively, which are required to be held as a condition of borrowing with the FHLB (see Note 13) and can only be sold to the issuer at its par value. Any cash dividends received from investments in FHLB stock are recognized as interest revenue in the consolidated statements of income. Other investments also includes investments in Federal Reserve stock of $ million and $ million at December 31, 2024 and 2023, respectively; these holdings are a condition of CSB, CSPB, and Trust Bank’s membership with the Federal Reserve.

(2) Includes fractional shares held in client brokerage accounts. Corresponding repurchase liabilities in an equal amount for these client-held fractional shares are included in accrued expenses and other liabilities on the consolidated balance sheet. See also Notes 2 and 19.

(3) Represents receivables from contracts with customers within the scope of ASC 606.

Capitalized contract costs

Capitalized contract costs relate to incremental costs of obtaining a contract with a customer, including sales commissions paid to employees for obtaining contracts with clients, and are presented in the table above. These costs are amortized to expense on a straight-line basis over a period that is consistent with how the related revenue is recognized. Amortization expense related to capitalized contract costs was $ million, $ million, and $ million during the years ended December 31, 2024, 2023, and 2022, respectively, which was recorded in compensation and benefits expense on the consolidated statements of income.

Contract assets

Contract assets relate to the buy down of fixed-rate obligation amounts pursuant to the 2023 IDA agreement, and are presented in the table above. These assets 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 15.

- 91 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

11.

million, $ million, and $ million, respectively, and recognized tax credits and other tax benefits of $ million, $ million, and $ million, respectively, associated with these investments. The amortization, as well as the tax credits and other tax benefits, are included in taxes on income. Tax credits and other tax benefits are reflected as cash flows from operating activities on the consolidated statements of cash flows.

Aggregate assets, liabilities, and maximum exposure to loss

$ $ $ $ $

Other investments (2)

Total$ $ $ $ $ $

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

(2) 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 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 years ended December 31, 2024, 2023, and 2022, Schwab did not provide or intend to provide financial or other support to the VIEs that it was not contractually required to provide.

12.

Time certificates of deposit (1)

Checking Savings and other Total interest-bearing deposits Non-interest-bearing deposits Total bank deposits$ $

(1) Time certificates of deposit consist of brokered CDs. The weighted-average interest rates on outstanding time certificates of deposit at December 31, 2024 and 2023 were % and %, respectively. As of December 31, 2024 and 2023, there were time deposits that were in excess of FDIC insurance limits or otherwise uninsured.

Time certificates of deposit outstanding at December 31, 2024 mature between January 2025 and November 2025.

- 92 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

13.

- 93 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

% due February 1, 202410/31/18$ $

% due March 18, 2024

03/18/21

% due April 1, 2024

09/24/21

% due March 10, 2025

03/10/15

% due March 24, 2025

03/24/20

% due April 1, 2025

09/24/21

% due May 21, 2025

05/22/18

% due February 13, 2026

11/13/15

% due March 11, 2026

12/11/20

% due May 13, 2026

05/13/21

% due August 24, 2026

08/24/23

% due March 2, 2027

03/02/17

% due March 3, 2027

03/03/22

% due April 1, 2027

09/24/21

% due January 25, 2028

12/07/17

% due March 20, 2028

03/18/21

% due February 1, 2029

10/31/18

% due May 22, 2029

05/22/19

% due October 1, 2029

09/24/21

% due March 22, 2030

03/24/20

% due March 11, 2031

12/11/20

% due May 13, 2031

05/13/21

% due December 1, 2031

08/26/21

% due March 3, 2032

03/03/22 CSC Floating-rate Senior Notes:

SOFR + % due March 18, 2024

03/18/21

SOFR + % due May 13, 2026

05/13/21

SOFR + % due March 3, 2027

03/03/22 CSC Fixed-to-Floating rate Senior Notes:

% due May 19, 2029 (1)

05/19/23

% due November 17, 2029 (2)

11/17/23

% due May 19, 2034 (3)

05/19/23

% due August 24, 2034 (4)

08/24/23 Total CSC Senior Notes Ameritrade Holding Fixed-rate Senior Notes:

% due April 1, 2024

11/01/18

% due April 1, 2025

10/22/14

% due April 1, 2027

04/27/17

% due October 1, 2029

08/16/19 )) )) $ $

(1) Costs related to facility closures. These costs, which are primarily comprised of impairment and accelerated amortization of ROU assets and accelerated depreciation of fixed assets, relate to the impact of abandoning leased and other properties. Impairment charges are included in other expense, while accelerated amortization of ROU assets and accelerated depreciation of fixed assets are included in occupancy and equipment and depreciation expense, respectively, on the consolidated statements of income.

Other

When significant progress had been made in the integration of Ameritrade, the Company undertook incremental actions beginning in 2023 to streamline its operations to prepare for post-integration, including through position eliminations and decreasing its real estate footprint. In order to achieve anticipated cost savings through these actions, the Company incurred total exit and related costs, primarily related to employee compensation and benefits and facility exit costs, of $ million inclusive of costs recognized through December 31, 2024. During each of the years ended December 31, 2024 and 2023, the Company recognized $ million and $ million of restructuring-related exit costs, respectively. In addition to ASC 420, certain of the costs associated with these activities were accounted for in accordance with ASC 360, ASC 712, ASC 718, and ASC 842. Actions under the plan have been completed and there are no remaining exit and other related liabilities as of December 31, 2024.

$ $ $

(1) Costs related to facility closures. These costs, which are primarily comprised of impairment and accelerated amortization of ROU assets and impairment of fixed assets, relate to the impact of abandoning leased and other properties. Impairment charges are included in other expense, while accelerated amortization of ROU assets are included in occupancy and equipment on the consolidated statements of income.

The following table summarizes the restructuring exit and other related costs recognized in expense from initiation of the plan through December 31, 2024:

Investor Services

Advisor Services

Employee Compensation and Benefits

Facility Exit Costs (1)

Investor Services Total

Employee Compensation and Benefits

Facility Exit Costs (1)

Advisor Services Total

Total

Compensation and benefits

Occupancy and equipment

Professional services

Other

Total

In the fourth quarter of 2024, the Retirement Business Services business unit was transferred from the Advisor Services segment to the Investor Services segment. See Note 25 for more information. The impact of the transfer on integration-related and restructuring-related exit costs was not material and prior-year amounts in the relevant tables above have not been recast.

17.

- 102 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

billion and $ billion at December 31, 2024 and 2023, 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.

Fair Values of Derivative Instruments

$ $ $

(1) Derivative assets are included in other assets and derivative liabilities are included in accrued expenses and other liabilities on the consolidated balance sheets. Amounts were less than $ thousand as of December 31, 2024 and 2023.

(2) 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 December 31, 2024, there was a $ million reduction of derivative assets and a $ million reduction of derivative liabilities related to variation margin settlements. At December 31, 2023, there was an $ million reduction of derivative assets and a $ million reduction of derivative liabilities related to variation margin settlements.

Effects of Fair Value Hedge Accounting

$ $()$()Long-term debt()

(1) 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 December 31, 2024 and 2023, the amortized cost basis of the closed portfolios used in these hedging relationships was $ billion and $ billion, respectively, of which $ billion and $ billion, respectively, was designated in a portfolio layer hedging relationship. The cumulative basis adjustments associated with these hedging relationships were a reduction of the amortized cost basis of the closed portfolios of $ million and $ million at December 31, 2024 and 2023, respectively.

(2) 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 $ million at December 31, 2024, which is recorded in AFS securities on the consolidated balance sheets and amortized to interest revenue as a yield adjustment over the lives of the securities. At December 31, 2023, the cumulative amount of fair value hedging adjustments remaining for these securities was a reduction of less than $ thousand.

- 103 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

)$()$ $

Derivatives designated as hedging instruments (1)

()

(1) Interest revenue excludes net income (expense) from periodic interest accruals and receipts (payments) of $ million and $ million for the years ended December 31, 2024 and 2023, respectively.

18.

million and $ billion at December 31, 2024 and 2023, 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, the securities loaned and securities borrowed are presented gross in the consolidated balance sheets.

Repurchase agreements: Schwab enters into collateralized repurchase agreements with external financial institutions 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 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 consolidated balance sheets. See Note 17 for additional information on the Company’s interest rate swaps.

- 104 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

$ $ $ $()

(2)

Securities borrowed (3)

()()

Interest rate swaps (4)

(5)

Total$ $ $ $()$()$ Liabilities

Repurchase agreements (6)

$ $ $ $ $()$

Securities loaned (7)

()()

Secured short-term borrowings (8)

()

Interest rate swaps (4)

(5)

Total$ $ $ $()$()$ December 31, 2023 Assets

Resale agreements (1)

$ $ $ $ $()

(2)

Securities borrowed (3)

()()

Interest rate swaps (4)

(5)

Total$ $ $ $()$()$ Liabilities

Repurchase agreements (6)

$ $ $ $ $()$

Securities loaned (7)

()()

Secured short-term borrowings (8)

()

Interest rate swaps (4)

(5)

Total$ $ $ $()$()$

(1) Included in cash and investments segregated and on deposit for regulatory purposes in the consolidated balance sheets.

(2) Actual collateral was greater than or equal to the value of the related assets. At December 31, 2024 and 2023, the fair value of collateral received in connection with resale agreements that are available to be repledged or sold was $ billion and $ billion, respectively.

(3) Included in receivables from brokers, dealers, and clearing organizations in the consolidated balance sheets.

(4) Derivative assets are included in other assets and derivative liabilities are included in accrued expenses and other liabilities in the consolidated balance sheets. Amounts were less than $ thousand as of December 31, 2024 and 2023.

(5) At December 31, 2024 and 2023, the fair value of initial margin pledged as collateral related to interest rate swaps was $ million and $ million, respectively. See Notes 6 and 17 for additional information.

(6) Included in other short-term borrowings in the consolidated balance sheets. Actual collateral value was greater than or equal to the value of the related liabilities. At December 31, 2024 and 2023, the fair value of collateral pledged in connection with repurchase agreements was $ billion and $ billion, respectively. See Note 13 for additional information.

(7) Included in payables to brokers, dealers, and clearing organizations in the consolidated balance sheets. Securities loaned are predominantly comprised of equity securities held in client brokerage accounts. At December 31, 2024, $ billion of securities loaned had overnight and continuous remaining contractual maturities and $ billion of securities loaned had contractual maturities of - days. At December 31, 2023, remaining contractual maturities of securities loaned were predominantly overnight and continuous. The cash collateral received from counterparties under securities lending transactions was equal to or greater than the market value of the securities loaned at December 31, 2024 and 2023.

(8) Included in other short-term borrowings in the consolidated balance sheets. See below for collateral pledged and Note 13 for additional information.

Client trade settlement: Schwab is obligated to settle transactions with brokers and other financial institutions even if our clients fail to meet their obligations to us. Clients are required to complete their transactions on settlement date, generally one business day after the trade date. If clients do not fulfill their contractual obligations, we may incur losses. We have established procedures to reduce this risk by requiring deposits from clients in excess of amounts prescribed by regulatory requirements for certain types of trades, and therefore the potential to make payments under these client transactions is remote. Accordingly, no liability has been recognized for these transactions.

- 105 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

$ Fair value of securities pledged for:

Fulfillment of requirements with the Options Clearing Corporation (1)

$ $ Fulfillment of client short sales Securities lending to other broker-dealers Collateral for secured short-term borrowings Total collateral pledged to third parties$ $

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 $ million and $ million as of December 31, 2024 and 2023, respectively.

19.

$ $ $ Total cash equivalents Investments segregated and on deposit for regulatory purposes:U.S. government securities Total investments segregated and on deposit for regulatory purposes Available for sale securities:U.S. agency mortgage-backed securities U.S. Treasury securities Corporate debt securities Asset-backed securities U.S. state and municipal securities Foreign government agency securities Non-agency commercial mortgage-backed securities Other Total available for sale securities Other assets:Other securities owned:Equity, corporate debt, and other securities Mutual funds and ETFs State and municipal debt obligations U.S. government securities Total other securities owned Total other assets Total assets$ $ $ $ Accrued expenses and other liabilities:Other$ $ $ $ Total accrued expenses and other liabilities Total liabilities$ $ $ $

- 106 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

$ $ $ Total cash equivalents Investments segregated and on deposit for regulatory purposes:U.S. government securities Total investments segregated and on deposit for regulatory purposes Available for sale securities:U.S. agency mortgage-backed securities U.S. Treasury securities Corporate debt securities Asset-backed securities Foreign government agency securities U.S. state and municipal securities Non-agency commercial mortgage-backed securities Certificates of deposit Other Total available for sale securities Other assets:Other securities owned:Equity, corporate debt, and other securities Mutual funds and ETFs State and municipal debt obligations U.S. government securities Total other securities owned Total other assets Total assets$ $ $ $ Accrued expenses and other liabilities:Other$ $ $ $ Total accrued expenses and other liabilities Total liabilities$ $ $ $

- 107 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

$ $ $ $ Cash and investments segregated and on deposit for regulatory purposes Receivables from brokers, dealers, and clearing organizations Receivables from brokerage clients — net Held to maturity securities:U.S. agency mortgage-backed securities Total held to maturity securities Bank loans — net: First Mortgages HELOCs Pledged asset lines Other Total bank loans — net Other assets LiabilitiesBank deposits$ $ $ $ $ Payables to brokers, dealers, and clearing organizations Payables to brokerage clients Accrued expenses and other liabilities Other short-term borrowings Federal Home Loan Bank borrowings Long-term debt

December 31, 2023

Carrying
Amount

Level 1

Level 2

Level 3

Balance at
Fair Value

Assets

Cash and cash equivalents

Cash and investments segregated and on deposit for regulatory purposes

Receivables from brokers, dealers, and clearing organizations

Receivables from brokerage clients — net

Held to maturity securities:

U.S. agency mortgage-backed securities

Total held to maturity securities

Bank loans — net:

First Mortgages

HELOCs

Pledged asset lines

Other

Total bank loans — net

Other assets

Liabilities

Bank deposits

Payables to brokers, dealers, and clearing organizations

Payables to brokerage clients

Accrued expenses and other liabilities

Other short-term borrowings

Federal Home Loan Bank borrowings

Long-term debt

- 108 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

20.

issue common shares through external offerings during the years ended December 31, 2024, 2023, or 2022.

In conjunction with its acquisition of Ameritrade in 2020, the Company issued shares of a nonvoting class of CSC common stock to TD Bank and its affiliates. Each share of nonvoting common stock has identical rights to common stock, including liquidation and dividend rights, except that holders of nonvoting common stock have no voting rights other than over matters that significantly and adversely affect the rights or preferences of the nonvoting common stock, or as required by applicable law. Holders of nonvoting common stock are restricted from transferring shares except for permitted inside or outside transfers, as defined in the Company’s certificate of incorporation. Shares of nonvoting common stock transferred in a permitted outside transfer are automatically converted to shares of common stock.

On August 1, 2022, an affiliate of TD Bank executed a permitted outside transfer of million shares of CSC nonvoting common stock, upon which the shares of nonvoting common stock automatically converted to shares of common stock. Following this transfer and CSC’s repurchase of nonvoting common stock described below, TD Bank and its affiliates held approximately million shares of nonvoting common stock as of December 31, 2023 and December 31, 2024.

Share Repurchase Program

On July 27, 2022, CSC publicly announced that its Board of Directors approved a share repurchase authorization to repurchase up to $ billion of common stock, replacing the previous and now terminated share repurchase authorization of up to $ billion of common stock. The share repurchase authorization does not have an expiration date.

On August 1, 2022, CSC purchased, directly from an affiliate of TD Bank, million shares of nonvoting common stock for a total of $ billion, or approximately $ per share. The shares of nonvoting common stock automatically converted into common stock and were purchased under CSC’s share repurchase authorization. The purchase price paid by CSC was equal to the lowest price per share that the affiliate of TD Bank received in a contemporaneous share sale facilitated by a third-party market maker, which resulted in a purchase price lower than the closing price on August 1, 2022. CSC repurchased an additional million shares of its common stock under the authorization for $ billion during the year ended December 31, 2022.

CSC repurchased million shares of its common stock for $ billion during the year ended December 31, 2023. There were repurchases of CSC’s common stock during the year ended December 31, 2024. As of December 31, 2024, approximately $ billion remained on the new authorization.

Share repurchases, net of issuances, are subject to a nondeductible excise tax which was recognized as a direct and incremental cost associated with these transactions.

Subsequent to December 31, 2024, TD Bank and its affiliates sold all remaining common and nonvoting common stock holdings through a secondary public offering and a direct repurchase. See Note 28 for additional information regarding the secondary offering and repurchase.

Preferred Stock

On March 4, 2022, the Company issued and sold depositary shares, each representing a 1/100th ownership interest in a share of % fixed-rate reset non-cumulative perpetual preferred stock, Series K, $ par value, with a liquidation preference of $ per share (equivalent of $ per depositary share). The net proceeds of the offering were $ million, after deducting the underwriting discount and offering expenses.

On December 1, 2022, the Company redeemed all of the outstanding shares of its fixed-to-floating rate non-cumulative perpetual preferred stock, Series E, and the corresponding depositary shares, each representing a 1/100th interest in a share of the Series E preferred stock. The depositary shares were redeemed at a redemption price of $ per depositary share for a total of $ million.

- 109 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

depositary shares representing interests in Series F preferred stock for $ million, depositary shares representing interests in Series G preferred stock for $ million, depositary shares representing interests in Series H preferred stock for $ million, and depositary shares representing interests in Series I preferred stock for $ million on the open market. The repurchase prices are inclusive of $ million of dividends accrued by the stockholders as of the repurchase date. The share repurchases, net of issuances, are subject to a nondeductible excise tax which was recognized as a direct and incremental cost associated with these transactions.

There were repurchases of CSC’s preferred stock during the year ended December 31, 2024.

CSC was authorized to issue shares of preferred stock, $ par value, at December 31, 2024 and 2023.

$ $ $ 03/07/16 %06/01/21N/AN/AN/ASeries J 03/30/21 %06/01/26N/AN/AN/AFixed-to-floating rate/Fixed-rate reset:Series F 10/31/17 %12/01/2712/01/27

M LIBOR (4)

Series G (2)

04/30/20 %06/01/2506/01/25

-Year Treasury

Series H (3)

12/11/20 %12/01/3012/01/30

-Year Treasury

Series I (2)

03/18/21 %06/01/2606/01/26

-Year Treasury

Series K (2)

03/04/22 %06/01/2706/01/27

-Year Treasury

%Total preferred
stock $ $ (1) Represented by depositary shares.

(2) The dividend rate for Series G, Series I, and Series K resets on each anniversary from the first reset date.

(3) The dividend rate for Series H resets on each anniversary from the first reset date.

(4) 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.

Other reclassifications included in other revenue, net of tax expense (benefit) of $

Held to maturity securities:

Amortization of amounts previously recorded upon transfer from available for sale, net of tax expense (benefit) of $

Other, net of tax expense (benefit) of $()

()Balance at December 31, 2023$()Available for sale securities:

Net unrealized gain (loss), net of tax expense (benefit) of $

Other reclassifications included in other revenue, net of tax expense (benefit) of $

Held to maturity securities:

Amortization of amounts previously recorded upon transfer from available for sale, net of tax expense (benefit) of $

Other, net of tax expense (benefit) of $

()Balance at December 31, 2024$()

As of December 31, 2024, the total remaining unamortized loss on securities transferred from AFS to HTM included in AOCI was $ billion net of tax effect ($ 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.

- 111 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

22.

$ $ Stock option expense Employee stock purchase plan expense Total share-based compensation expense$ $ $

Income tax benefit on share-based compensation expense (1)

$()$()$()

million, $ million, and $ million in 2024, 2023, and 2022, respectively.

The Company issues shares for stock options and restricted stock units from treasury stock. On May 17, 2022, stockholders approved the 2022 Stock Incentive Plan which, among other things, increased the number of shares of common stock available for issuance to million, plus up to million shares from outstanding awards from predecessor stock incentive plans that expire, are forfeited or cancelled, or that are reacquired by the Company after May 17, 2022. At December 31, 2024, the Company was authorized to grant up to million common shares under its existing stock incentive plans. Additionally, at December 31, 2024, the Company had million shares reserved for future issuance under its employee stock purchase plan.

As of December 31, 2024, there was $ million of total unrecognized compensation cost related to outstanding stock options and restricted stock units, which is expected to be recognized through 2028 with a remaining weighted-average service period of years for stock options, years for restricted stock units without performance conditions, and years for performance-based restricted stock units.

Stock Option Plan

Options are granted for the purchase of shares of common stock at an exercise price not less than market value on the date of grant, and expire from the date of grant. Options generally vest annually over a one- to period from the date of grant.

$ $ Granted Exercised()

Forfeited (1)

Expired (1)

Outstanding at December 31, 2024 $ $ Vested and expected to vest at December 31, 2024 $ $ Vested and exercisable at December 31, 2024 $ $

(1) Number of options was less than thousand.

The aggregate intrinsic value in the table above represents the difference between CSC’s closing stock price and the exercise price of each in-the-money option on the last trading day of the period presented.

- 112 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

$ $ Cash received from options exercised Tax benefit realized on options exercised Aggregate intrinsic value of options exercised

We use an option pricing model to estimate the fair value of options granted. The model takes into account the contractual term of the stock option, expected volatility, dividend yield, and the risk-free interest rate. Expected volatility is based on the implied volatility of publicly-traded options on CSC’s stock. Dividend yield is based on the average historical CSC dividend yield. The risk-free interest rate is based on the yield of a U.S. Treasury zero-coupon issue with a remaining term similar to the contractual term of the option. We use historical option exercise data, which includes employee termination data, to estimate the probability of future option exercises.

% % %Weighted-average expected volatility % % %Weighted-average risk-free interest rate % % %Expected life (in years)

Restricted Stock Units

Restricted stock units are awards that entitle the holder to receive shares of CSC’s common stock following a vesting period and are restricted from transfer or sale until vested. Restricted stock units without performance conditions generally vest annually over a one- to period, while performance-based restricted stock units generally cliff vest over a period and also require the Company to achieve certain financial or other measures prior to vesting. The fair value of restricted stock units is based on the market price of the Company’s stock on the date of grant. The fair value of the restricted stock units that vested during each of the years 2024, 2023, and 2022 was $ million, $ million, and $ million, respectively.

(1) Amounts are included in other assets on the consolidated balance sheets at December 31, 2024 and 2023.

% % %State income taxes, net of federal tax benefit Research and development credits()() Other()()()Effective income tax rate % % %

$ Additions for tax positions related to the current year Additions for tax positions related to prior years Reductions for tax positions related to prior years()()Reductions due to lapse of statute of limitations()()Reductions for settlements with tax authorities()()Balance at end of year$ $

Unrecognized tax benefits totaled $ million and $ million as of December 31, 2024 and 2023, respectively, $ million and $ million of which if recognized, would affect the annual effective tax rate.

Interest and penalties were accrued related to unrecognized tax benefits in tax expense. At December 31, 2024 and 2023, we had accrued approximately $ million and $ million, respectively, for the payment of interest and penalties.

- 115 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

24.

%N/A $ %Tier 1 Risk-Based Capital %N/A %Total Risk-Based Capital %N/A %Tier 1 Leverage %N/A %Supplementary Leverage Ratio %N/A %CSB Common Equity Tier 1 Risk-Based Capital$ %$ %$ %Tier 1 Risk-Based Capital % % %Total Risk-Based Capital % % %Tier 1 Leverage % % %Supplementary Leverage Ratio %N/A %December 31, 2023 CSC Common Equity Tier 1 Risk-Based Capital$ %N/A $ %Tier 1 Risk-Based Capital %N/A %Total Risk-Based Capital %N/A %Tier 1 Leverage %N/A %Supplementary Leverage Ratio %N/A %CSB Common Equity Tier 1 Risk-Based Capital$ %$ %$ %Tier 1 Risk-Based Capital % % %Total Risk-Based Capital % % %Tier 1 Leverage % % %

Supplementary Leverage Ratio

%N/A %

(1) 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 December 31, 2024, 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 December 31, 2024, 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.

- 116 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

billion and $ billion, respectively, and Trust Bank held total assets of $ billion and $ billion, respectively. Based on their regulatory capital ratios at December 31, 2024 and 2023, CSPB and Trust Bank are considered well capitalized under their respective regulatory capital rules.

As a securities broker-dealer, CS&Co is subject to the SEC’s Uniform Net Capital Rule. CS&Co computes net capital under the alternative method permitted by the Uniform Net Capital Rule, which requires the maintenance of minimum net capital, as defined, of the greater of 2% of aggregate debit balances arising from client transactions or a minimum dollar requirement, which is based on the type of business conducted by the broker-dealer. Under the alternative method, a broker-dealer may not repay subordinated borrowings, pay cash dividends, or make any unsecured advances or loans if such payment would result in a net capital amount of less than 5% of aggregate debit balances or less than 120% of its minimum dollar requirement.

$ Minimum dollar requirement 2% of aggregate debit balances Net capital in excess of required net capital

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 December 31, 2024. 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, whereas cash and investments required to be segregated and on deposit for regulatory purposes at December 31, 2024 for CS&Co totaled $ billion. As of January 3, 2025, CS&Co had deposited $ billion of cash into its segregated reserve accounts. Cash and investments required to be segregated and on deposit for regulatory purposes at December 31, 2023 for CS&Co totaled $ billion. 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 consolidated statements of cash flows.

Following the completion of the final client account conversions to CS&Co from the Ameritrade broker-dealers in May 2024, TD Ameritrade, Inc. and TDAC subsequently submitted Uniform Requests for Broker-Dealer Withdrawal (BDW) to terminate their registration as broker-dealers with the SEC, the Financial Industry Regulatory Authority, Inc. (FINRA), and other applicable regulatory organizations. As of December 31, 2024, TD Ameritrade, Inc. and TDAC were no longer registered as broker-dealers with the SEC and FINRA and were not subject to the Uniform Net Capital Rule.

25.

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, 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 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 Note 2. 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.

- 117 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

revenues from transactions between the segments.

$ $ $ $ $ $ $ $ Asset management and administration fees Trading revenue Bank deposit account fees Other Total net revenues Expenses Excluding InterestCompensation and benefits Professional services Occupancy and equipment Advertising and market development Communications Depreciation and amortization Amortization of acquired intangible assets Regulatory fees and assessments Other Total expenses excluding interest Income before taxes on income$ $ $ $ $ $ $ $ $ Capital expenditures$ $ $ $ $ $ $ $ $

(1) 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 full-year 2024, and prior-year amounts have been recast to reflect this new basis of segmentation.

26.

classes. Diluted earnings per share is calculated using the treasury stock method for outstanding stock options and non-vested restricted stock units and the if-converted method for nonvoting common stock. The if-converted method assumes conversion of all nonvoting common stock to common stock.

- 118 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

$ $ $ $ $

Preferred stock dividends and other (1)

()()()()()()Net income available to common stockholders$ $ $ $ $ $ DenominatorWeighted-average common shares outstanding — basic      Basic earnings per share$ $ $ $ $ $ Diluted earnings per share:NumeratorNet income available to common stockholders$ $ $ $ $ $ Reallocation of net income available to common
  stockholders as a result of conversion of nonvoting to
  voting shares      Allocation of net income available to common
  stockholders:$ $ $ $ $ $ DenominatorWeighted-average common shares outstanding — basic      Conversion of nonvoting shares to voting shares      Common stock equivalent shares related to stock incentive
  plans

Weighted-average common shares outstanding —

diluted (2)

Diluted earnings per share$ $ $ $ $ $

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

(2) Antidilutive stock options and restricted stock units excluded from the calculation of diluted EPS totaled million, million, and million in 2024, 2023, and 2022, respectively.

- 119 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

27.

$ $ Interest expense()()()Net interest expense()()()Other revenue ()Expenses Excluding Interest:Professional services()()()Regulatory fees and assessments()()()Compensation and benefits()()()Other expenses excluding interest()()()Loss before income tax benefit and equity in net income of subsidiaries()()()Income tax benefit (expense) Loss before equity in net income of subsidiaries()()()Equity in net income of subsidiaries: Equity in undistributed net income (distributions in excess of net income) of subsidiaries ()Dividends from bank subsidiaries Dividends from non-bank subsidiaries Net Income

Preferred stock dividends and other (1)

Net Income Available to Common Stockholders$ $ $

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

$ Receivables from subsidiaries Available for sale securities Loans to non-bank subsidiaries Investment in non-bank subsidiaries Investment in bank subsidiaries Other assets Total assets$ $ Liabilities and Stockholders’ Equity Accrued expenses and other liabilities$ $ Payables to subsidiaries Long-term debt Total liabilities Stockholders’ equity Total liabilities and stockholders’ equity$ $

- 120 -

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

$ $ Adjustments to reconcile net income to net cash provided by (used for) operating activities: Dividends in excess of (equity in undistributed) earnings of subsidiaries()() Other()() Net change in: Other assets()()()Accrued expenses and other liabilities ()Net cash provided by (used for) operating activities Cash Flows from Investing Activities Due from (to) subsidiaries — net () Return of (increase in) investments in subsidiaries ()()Purchases of available for sale securities()()()Proceeds from sales of available for sale securities Principal payments on available for sale securities Other investing activities()()()Net cash provided by (used for) investing activities ()()Cash Flows from Financing Activities Proceeds from short-term borrowings Repayments of short-term borrowings ()()Issuances of long-term debt Repayments of long-term debt()()()Repurchases of common stock and nonvoting common stock ()()Issuance of preferred stock, net Redemption and repurchase of preferred stock ()()Dividends paid()()()Proceeds from stock options exercised Net cash provided by (used for) financing activities()()()Increase (Decrease) in Cash and Cash Equivalents() Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year$ $ $ Supplemental Cash Flow InformationNon-cash investing and financing activity:Common stock repurchased during the period but settled after period end$ $ $

28.

million shares of the Company’s common stock and million shares of the Company’s nonvoting common stock, which automatically converted into common stock, at $ per share, for an aggregate amount of $ billion. The Company did not receive any of the proceeds from this sale.

Subsequent to 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 the remaining million shares of nonvoting common stock at a price of $ per share for an aggregate repurchase amount of $ billion. This repurchase closed on February 12, 2025, and shares of nonvoting common stock automatically converted into common stock and are now held in treasury stock, reducing the number of shares outstanding. These shares were purchased under CSC’s share repurchase authorization, which, following the repurchase, has approximately $ billion remaining.

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. As a result, and pursuant to the terms of the Company’s stockholder agreement with TD Bank (the TD Bank Stockholder Agreement) dated as of November 24, 2019, TD Bank is no longer entitled to designate members of the Board of Directors of the Company. Accordingly, as of February 12, 2025, Brian M. Levitt and Bharat B. Masrani resigned from the Company’s Board of Directors. Finally, the TD Bank Stockholder Agreement terminated in accordance with its terms.

- 121 -

THE CHARLES SCHWAB CORPORATION

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of The Charles Schwab Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of The Charles Schwab Corporation and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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THE CHARLES SCHWAB CORPORATION

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Asset Management and Administration Fees (AMAF) and Trading Revenue – Refer to Note 3 to the financial statements

Critical Audit Matter Description

Net revenues from the third-party mutual funds and managed investing solutions components of AMAF are generated through third-party mutual fund offerings, and fee-based managed investing solutions, respectively. Commissions within trading revenue are generated through fees earned for executing trades for clients in individual equities, options, and certain third-party mutual funds and exchange-traded funds (ETFs). Third-party mutual funds, managed investing solutions, and commissions are made up of a significant volume of low-dollar transactions, and use automated systems to process and record these transactions based on underlying information sourced from multiple systems and contractual terms with individual investors and third-party mutual funds.

Given that the Company’s processes to record revenue from third-party mutual funds, managed investing solutions, and commissions are highly automated and involve multiple systems and databases, auditing these revenue components was complex and challenging due to the extent of audit effort required and involvement of professionals with expertise in information technology (IT) necessary for us to identify, test, and evaluate the Company’s systems, software applications, and automated controls.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s systems to process the third-party mutual funds and managed investing solutions within AMAF, and commissions within trading revenue transactions included the following, among others:

•With the assistance of our IT specialists, we:

◦Identified the significant systems used to process third-party mutual funds, managed investing solutions, and commissions revenue transactions and, using a risk-based approach, tested the relevant general IT controls over each of these systems.

◦Performed testing of automated business controls and system interface controls (including batch processing) within the relevant third-party mutual funds, managed investing solutions, and commissions revenue streams.

◦For a sample of pricing rules, inspected configuration and ascertained that the relevant systems applied appropriate rates and calculated third-party mutual funds, managed investing solutions, and commissions revenue completely and accurately.

•We tested internal controls within the relevant third-party mutual funds, managed investing solutions, and commissions revenue business processes, including those in place to reconcile the various systems to the Company’s general ledger.

•We created data visualizations to evaluate recorded third-party mutual funds, managed investing solutions, and commissions revenue and evaluate trends in the data.

•For a sample of third-party mutual funds, managed investing solutions, and commissions revenue transactions, we performed detail transaction testing by agreeing the amounts recognized to contractual agreements and testing the mathematical accuracy of the recorded revenue.

•For a sample of accounts, we tested the accuracy and completeness of assets under management by obtaining independent pricing support and reconciling total positions to third-party statements.


/s/

February 26, 2025

We have served as the Company’s auditor since 1976.

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THE CHARLES SCHWAB CORPORATION

Management’s Report on Internal Control Over Financial Reporting

Management of The Charles Schwab Corporation, together with its subsidiaries (the Company), is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of and effected by the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of published financial statements in accordance with accounting principles generally accepted in the United States of America.

As of December 31, 2024, management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the framework established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has determined that the Company’s internal control over financial reporting was effective as of December 31, 2024.

The Company’s internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s financial statements.

The Company’s internal control over financial reporting as of December 31, 2024, has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing on the previous pages.

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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. 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 December 31, 2024. 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 December 31, 2024.

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 December 31, 2024, that has materially affected, or is reasonable likely to materially affect, the Company’s internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting and the Report of Independent Registered Public Accounting Firm are included in Item 8.

Item 9B. Other Information

trading arrangements for the sale of shares of our common stock as follows:

Plans

Action

Date

Rule 10b5-1 (1)

Non-Rule 10b5-1 (2)

Number of Securities to
be Sold

Latest

Expiration (3)

Adoption

(4)

Adoption

(5)

Adoption

(6)

(1) Intended to satisfy the affirmative defense conditions of Rule 10b5-1(c).

(2) Not intended to satisfy the affirmative defense conditions of Rule 10b5-1(c).

(3) Plans expire at the close of trading on the date presented or at such earlier date upon the completion of all trades under the plan (or the expiration of the orders relating to such trades without execution).

(4) Securities to be sold under the plan represent the aggregate of (i) up to shares of our common stock to be acquired upon the exercise of stock options; and (ii) the net after-tax number of shares of our common stock to be issued upon the settlement of performance-based restricted stock units (PBRSUs) vesting on March 1, 2025, which is based on the achievement of pre-established performance goals, and is not yet determinable. The actual number of shares that will be issued to the officer in connection with the unvested PBRSUs and sold under the trading arrangement will be net of the number of shares withheld to satisfy tax withholding obligations arising from the vesting of such PBRSUs.

(5) Securities to be sold under the plan represent the aggregate of (i) up to shares of our common stock; (ii) up to shares of our common stock to be acquired upon the exercise of stock options; and (iii) the net after-tax number of shares of our common stock to be issued upon the settlement of PBRSUs vesting on March 1, 2025, which is based on the achievement of pre-established performance goals, and is not yet determinable. The actual number of shares that will be issued to the officer in connection with the unvested PBRSUs and sold under the trading arrangement will be net of the number of shares withheld to satisfy tax withholding obligations arising from the vesting of such PBRSUs.

(6) Securities to be sold under the plan represent the aggregate of (i) up to shares of our common stock to be acquired upon the exercise of stock options; and (ii) the net after-tax number of shares of our common stock to be issued upon the settlement of PBRSUs vesting on March 1, 2025, which is based on the achievement of pre-established performance goals, and is not yet determinable. The actual number of shares that will be issued to the officer in connection with the unvested PBRSUs and sold under the trading arrangement will be net of the number of shares withheld to satisfy tax withholding obligations arising from the vesting of such PBRSUs.

Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

Not applicable.

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PART III

Item 10. Directors, Executive Officers, and Corporate Governance

The information relating to directors of CSC, CSC’s Audit Committee, Section 16 reports, and and procedures required to be furnished pursuant to this item is incorporated by reference from portions of the Company’s definitive proxy statement for its annual meeting of stockholders to be filed with the SEC pursuant to Regulation 14A by April 30, 2025 (the Proxy Statement) captioned, “Proposal One: Election of Directors,” “Board Structure and Committees,” “Delinquent Section 16(a) Reports,” and “Insider Trading Policy,” respectively.

The Company’s Code of Conduct and Business Ethics, applicable to directors and all employees, including senior financial officers, is available on the Company’s website at https://www.aboutschwab.com/governance. If the Company makes any amendments to or grants any waivers from its Code of Conduct and Business Ethics, which are required to be disclosed pursuant to the Securities Exchange Act of 1934, the Company will make such disclosures on this website.

Schwab Executive Officers of the Registrant

The following table provides certain information about each of the Company’s executive officers as of December 31, 2024.


Executive Officers of the Registrant

	Name	Age	Title
	Charles R. Schwab	87	Co-Chairman of the Board
	Walter W. Bettinger II	64	Co-Chairman of the Board
	Richard A. Wurster	51	President and Chief Executive Officer
	Jonathan S. Beatty	59	Managing Director and Head of Advisor Services
	Jonathan M. Craig	53	Managing Director and Head of Investor Services
	Peter J. Morgan III	60	Managing Director, General Counsel, and Corporate Secretary
	Nigel J. Murtagh	61	Managing Director and Chief Risk Officer
	Michael D. Verdeschi	56	Managing Director and Chief Financial Officer
	Paul V. Woolway	59	Managing Director and Chief Banking Officer

Mr. Schwab has been a director of CSC since its incorporation in 1986. He served as Chairman of the Board from 1986 to 2022 and has served as Co-Chairman of the Board since 2022. He also served as Chief Executive Officer of CSC from 1986 to 1997 and as Co-Chief Executive Officer from 1998 until 2003. He was re-appointed Chief Executive Officer in 2004 and served in that role until 2008. He served as Chairman of the Board and a director of CS&Co until 2018.

Mr. Bettinger has served as a member of the board since 2008 and as Co-Chairman of the Board since 2022. He served as Chief Executive Officer of the company from 2008 through December 2024 and served as President of the company from 2007 until 2021. He also served as Chief Operating Officer from 2007 until 2008, Executive Vice President and President – Schwab Investor Services from 2005 until 2007, Executive Vice President and Chief Operating Officer – Individual Investor Enterprise from 2004 until 2005, Executive Vice President and President – Corporate Services from 2002 until 2004, and Executive Vice President and President – Retirement Plan Services from 2000 until 2002. Mr. Bettinger joined Schwab in 1995 as part of the acquisition of The Hampton Company, which he founded in 1983.

Mr. Wurster has served as Chief Executive Officer and as a director of CSC since January 2025, and as President of the company since 2021. He previously served as Executive Vice President and Head of Schwab Asset Management Services in 2021 and Head of Schwab Asset Management Solutions from 2019 to 2021. Mr. Wurster was Chief Executive Officer of Charles Schwab Investment Management, Inc., a subsidiary of the company, from 2019 to 2021, and of Charles Schwab Investment Advisory, Inc., a subsidiary of the company, from 2018 to 2021. He was also Chief Executive Officer of ThomasPartners, Inc. and Windhaven Investment Management, Inc., subsidiaries of the company, from 2016 to 2018. He serves as a trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust, and Schwab Strategic Trust. Before joining the company, Mr. Wurster was employed at Wellington Management and at McKinsey & Company where he was a leader of the asset management practice and an Associate Principal. Mr. Wurster joined Schwab in 2016.

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THE CHARLES SCHWAB CORPORATION

Mr. Beatty has been Managing Director and Head of Advisor Services of CSC and CS&Co since 2024. Prior to that he served as Managing Director of CS&Co and Trust Bank from 2022 to 2024, Senior Vice President – Advisor Services of CS&Co from 2011 to 2022, Senior Vice President of Trust Bank from 2019 to 2022, and Senior Vice President of CSB from 2019 to 2020. Since joining the company, he has held sales and leadership positions within Advisor Services. He has been a member of the Advisor Services leadership team for more than 15 years. Mr. Beatty joined Schwab in 1997.

Mr. Craig has been Managing Director and Head of Investor Services and Marketing of CSC and CS&Co since 2022. Prior to that he served as Senior Executive Vice President of CSC and CS&Co from 2018 to 2022, Executive Vice President – Client and Marketing Solutions of CSC and CS&Co from 2017 until 2018 and Executive Vice President and Chief Marketing Officer of CSC and CS&Co from 2012 until 2018. Mr. Craig joined Schwab in 2000.

Mr. Morgan has been Managing Director of CSC and CS&Co since 2022, Executive Vice President of CSC from 2019 to 2022, and General Counsel and Corporate Secretary of CSC since 2019. He was Senior Vice President and Deputy General Counsel of CS&Co from 2009 to 2020. He has served as General Counsel of CSB since 2009, including as Managing Director and General Counsel since 2022, as Executive Vice President and General Counsel from 2019 to 2022, and as Senior Vice President and General Counsel from 2015 to 2019. Mr. Morgan joined Schwab in 1999.

Mr. Murtagh has been Managing Director and Chief Risk Officer of CSC since 2022 and was Executive Vice President and Chief Risk Officer of CSC and CS&Co from 2012 to 2022. He served as Senior Vice President and Chief Credit Officer of CS&Co from 2002 until 2012 and of CSC from 2008 until 2012 when he was also Head of Fixed Income Research for Charles Schwab Investment Management. Mr. Murtagh joined Schwab in 2000.

Mr. Verdeschi has served as Managing Director and Chief Financial Officer of CSC and CS&Co since October 2024. Prior to that he served as Managing Director and Deputy Chief Financial Officer of CSC and CS&Co from May 2024 to October 2024. Before joining the company, he spent over 30 years at Citigroup, where he was Treasurer from 2017 to October 2023. During his tenure at Citigroup, in addition to serving as Treasurer, Mr. Verdeschi held leadership positions in finance, treasury, and product with increasing levels of responsibility at the firm, including serving as Chief Investment Officer and Head of Rates Portfolio Management. Mr. Verdeschi joined Schwab in 2024.

Mr. Woolway has been President of CSB since 2010 and Chief Executive Officer of CSB since 2015, President and Chief Executive Officer of CSPB since 2017, and President and Chief Executive Officer of Trust Bank since 2018. He has been Managing Director of CSC since 2022 and Chief Banking Officer of CSC since 2023. He has spent his entire career in the financial services sector, and since 2000 he has held senior executive positions in the banking industry. Mr. Woolway joined Schwab in 2010.

Item 11. Executive Compensation

The information required to be furnished pursuant to this item is incorporated by reference from portions of the Proxy Statement captioned “Proposal Three: Advisory Approval of Named Executive Officer Compensation” and “Director Compensation.”

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required to be furnished pursuant to this item is incorporated by reference from portions of the Proxy Statement captioned “Securities Authorized for Issuance Under Equity Compensation Plans” and “Security Ownership of Certain Beneficial Owners and Management.”

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required to be furnished pursuant to this item is incorporated by reference from portions of the Proxy Statement captioned “Transactions With Related Persons” and “Director Independence.”

Item 14. Principal Accountant Fees and Services

The information required to be furnished pursuant to this item is incorporated by reference from a portion of the Proxy Statement captioned “Proposal Two: Ratification of the Selection of Independent Auditors.”

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) Documents filed as part of this Report

1. Financial Statements

The financial statements and independent auditors’ report are included in Part II – Item 8 and are listed below:

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Consolidated Balance Sheets

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

2. Financial Statement Schedules

Other financial statement schedules required pursuant to this Item are omitted because of the absence of conditions under which they are required or because the information is included in the Company’s consolidated financial statements and notes in Part II – Item 8.

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THE CHARLES SCHWAB CORPORATION

(b) Exhibits

The exhibits listed below are filed as part of this Annual Report on Form 10-K.


Exhibit Number			Exhibit
3.11			Fifth Restated Certificate of Incorporation, effective May 7, 2001, of the Registrant, filed as Exhibit 3.11 to the Registrant’s Form 10-K for the year ended December 31, 2016, and incorporated herein by reference.

3.11(i)			Amendment to Fifth Restated Certificate of Incorporation of the Registrant, effective October 6, 2020, filed as Exhibit 3.1 to the Registrant’s Form 8-K dated October 2, 2020, and incorporated herein by reference.

3.18			Certificate of Designations of 5.95% Non-Cumulative Perpetual Preferred Stock, Series D, of The Charles Schwab Corporation, filed as Exhibit 3.1 to the Registrant’s Form 8-K dated March 7, 2016, and incorporated herein by reference.

3.20			Certificate of Designations of 5.00% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series F, of The Charles Schwab Corporation, filed as Exhibit 3.1 to the Registrant’s Form 8-K dated October 31, 2017, and incorporated herein by reference.

3.21			Certificate of Designations of 5.375% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series G, of The Charles Schwab Corporation, filed as Exhibit 3.1 to the Registrant’s Form 8-K dated April 30, 2020, and incorporated herein by reference.

3.22			Certificate of Designations of 4.000% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series H, of The Charles Schwab Corporation, filed as Exhibit 3.1 to the Registrant’s Form 8-K dated December 8, 2020, and incorporated herein by reference.

3.23			Certificate of Designations of 4.000% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series I, of The Charles Schwab Corporation, filed as Exhibit 3.1 to the Registrant’s Form 8-K dated March 15, 2021, and incorporated herein by reference.

3.24			Certificate of Designations of 4.450% Non-Cumulative Perpetual Preferred Stock, Series J, of The Charles Schwab Corporation, filed as Exhibit 3.1 to the Registrant’s Form 8-K dated March 29, 2021, and incorporated herein by reference.

3.26			Certificate of Designations of 5.000% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series K, of The Charles Schwab Corporation, filed as Exhibit 3.1 to the Registrant’s Form 8-K dated March 3, 2022, and incorporated herein by reference.

3.28			Certificate of Elimination of the Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A of The Charles Schwab Corporation, filed as Exhibit 3.1 to the Registrant’s Form 8-K dated November 1, 2022, and incorporated herein by reference.

3.29			Certificate of Elimination of the 4.625% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series E of The Charles Schwab Corporation, filed as Exhibit 3.1 to the Registrant’s Form 8-K dated December 1, 2022, and incorporated herein by reference.

3.30			Amended and Restated Bylaws of The Charles Schwab Corporation, effective January 26, 2023, filed as Exhibit 3.1 to the Registrant’s Form 8-K dated January 26, 2023, and incorporated herein by reference.

4.3			Deposit Agreement, dated March 7, 2016, between the Company and Wells Fargo Bank, N.A., as Depositary (including the form of Depositary Share Receipt attached as Exhibit A thereto), filed as Exhibit 4.1 to the Registrant’s Form 8-K dated March 7, 2016, and incorporated herein by reference.

4.5			Deposit Agreement, dated October 31, 2017, between the Company and Wells Fargo Bank, N.A., as Depositary (including the form of Depositary Share Receipt attached as Exhibit A thereto), filed as Exhibit 4.1 to the Registrant’s Form 8-K dated October 31, 2017, and incorporated herein by reference.

4.6			Deposit Agreement, dated April 30, 2020, between the Company and Equiniti Trust Company, as Depositary (including the form of Depositary Share Receipt attached as Exhibit A thereto), filed as Exhibit 4.1 to the Registrant’s Form 8-K dated April 30, 2020, and incorporated herein by reference.

4.7			Deposit Agreement, dated December 11, 2020, between the Company and Equiniti Trust Company, as Depositary (including the form of Depositary Share Receipt attached as Exhibit A thereto), filed as Exhibit 4.1 to the Registrant’s Form 8-K dated December 8, 2020, and incorporated herein by reference.

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Exhibit Number	Exhibit
4.8	Deposit Agreement, dated March 18, 2021, between the Company and Equiniti Trust Company, as Depositary (including the form of Depositary Share Receipt attached as Exhibit A thereto), filed as Exhibit 4.1 to the Registrant’s Form 8-K dated March 15, 2021, and incorporated herein by reference.

4.9	Deposit Agreement, dated March 30, 2021, between the Company and Equiniti Trust Company, as Depositary (including the form of Depositary Share Receipt attached as Exhibit A thereto), filed as Exhibit 4.1 to the Registrant’s Form 8-K dated March 29, 2021, and incorporated herein by reference.

4.10	Deposit Agreement, dated March 4, 2022, between the Company and Equiniti Trust Company, as Depositary (including the form of Depositary Share Receipt attached as Exhibit A thereto), filed as Exhibit 4.1 to the Registrant’s Form 8-K dated March 3, 2022, and incorporated herein by reference.

4.11	Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.

4.12	Neither the Registrant nor its subsidiaries are parties to any instrument with respect to long-term debt for which securities authorized thereunder exceed 10% of the total assets of the Registrant and its subsidiaries on a consolidated basis. Copies of instruments with respect to long-term debt of lesser amounts will be provided to the SEC upon request.

4.13	Twenty-First Supplemental Indenture, dated as of May 19, 2023, by and between The Charles Schwab Corporation and The Bank of New York Mellon Trust Company, N.A., as Trustee, filed as Exhibit 4.78 to the Registrant’s Form 8-K dated May 19, 2023, and incorporated herein by reference.

4.14	Twenty-Second Supplemental Indenture, dated as of May 19, 2023, by and between The Charles Schwab Corporation and The Bank of New York Mellon Trust Company, N.A., as Trustee, filed as Exhibit 4.79 to the Registrant’s Form 8-K dated May 19, 2023, and incorporated herein by reference.

4.15	Twenty-Third Supplemental Indenture, dated as of August 24, 2023, by and between The Charles Schwab Corporation and The Bank of New York Mellon Trust Company, N.A., as Trustee, filed as Exhibit 4.82 to the Registrant’s F orm 8-K dated August 24, 2023, and incorporated herein by reference.

4.16	Twenty-Fourth Supplemental Indenture, dated as of November 17, 2023, by and between CSC and The Bank of New York Mellon Trust Company, N.A., as Trustee, filed as Exhibit 4.85 to the Registrant’s Form 8-K dated November 17, 2023, and incorporated herein by reference.

10.72	Restatement of Assignment and License, as amended January 25, 1988, among Charles Schwab & Co., Inc., Charles R. Schwab, and the Registrant, filed as Exhibit 10.72 to the Registrant’s Form 10-K for the year ended December 31, 2014, and incorporated herein by reference.

10.267	Form of Notice and Restricted Stock Unit Agreement for Non-Employee Directors under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II and successor plans, filed as Exhibit 10.267 to the Registrant’s Form 10-K for the year ended December 31, 2004, and incorporated herein by reference.	(2)

10.271	The Charles Schwab Corporation Directors’ Deferred Compensation Plan, as amended through December 8, 2004, filed as Exhibit 10.271 to the Registrant’s Form 10-K for the year ended December 31, 2014, and incorporated herein by reference.	(2)

10.272	The Charles Schwab Corporation Deferred Compensation Plan, as amended through December 8, 2004, filed as Exhibit 10.272 to the Registrant’s Form 10-K for the year ended December 31, 2014, and incorporated herein by reference.	(2)

10.314	Employment Agreement dated as of March 13, 2008, between the Registrant and Charles R. Schwab, filed as Exhibit 10.314 to the Registrant's Form 10-K for the year ended December 31, 2018, and incorporated herein by reference.	(2)

10.319	Form of Notice and Restricted Stock Unit Agreement for Non-Employee Directors under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II and successor plans, filed as Exhibit 10.319 to the Registrant’s Form 10-K for the year ended December 31, 2008, and incorporated herein by reference.	(2)

10.341	Form of Notice and Restricted Stock Unit Agreement for Non-Employee Directors under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II and successor plans, filed as Exhibit 10.341 to the Registrant’s Form 10-K for the year ended December 31, 2011, and incorporated herein by reference.	(2)

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Exhibit Number	Exhibit
10.358	Form of Notice and Stock Option Agreement for Non-Employee Directors under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II and successor plans, filed as Exhibit 10.358 to the Registrant’s Form 8-K dated January 24, 2013, and incorporated herein by reference.	(2)

10.359	Form of Notice and Restricted Stock Unit Agreement for Non-Employee Directors under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II and successor plans, filed as Exhibit 10.359 to the Registrant’s Form 8-K dated January 24, 2013, and incorporated herein by reference.	(2)

10.370	Form of Notice and Nonqualified Stock Option Agreement under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.370 to the Registrant’s Form 10-Q for the quarter ended September 30, 2016, and incorporated herein by reference.	(2)

10.372	Form of Notice and Retainer Stock Option Agreement for Non-Employee Directors under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.372 to the Registrant’s Form 10-Q for the quarter ended September 30, 2016, and incorporated herein by reference.	(2)

10.374	Form of Notice and Stock Option Agreement for Non-Employee Directors under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II and successor plans, filed as Exhibit 10.374 to the Registrant’s Form 10-Q for the quarter ended September 30, 2016, and incorporated herein by reference.	(2)

10.375	Form of Notice and Restricted Stock Unit Agreement for Non-Employee Directors under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II and successor plans, filed as Exhibit 10.375 to the Registrant’s Form 10-Q for the quarter ended September 30, 2016, and incorporated herein by reference.	(2)

10.379	Form of Notice and Nonqualified Stock Option Agreement under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.379 to the Registrant’s Form 10-Q for the quarter ended September 30, 2017, and incorporated herein by reference.	(2)

10.381	Form of Notice and Retainer Stock Option Agreement for Non-Employee Directors under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.381 to the Registrant’s Form 10-Q for the quarter ended September 30, 2017, and incorporated herein by reference.	(2)

10.383	Form of Notice and Stock Option Agreement for Non-Employee Directors under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II and successor plans, filed as Exhibit 10.383 to the Registrant’s Form 10-Q for the quarter ended September 30, 2017, and incorporated herein by reference.	(2)

10.384	Form of Notice and Restricted Stock Unit Agreement for Non-Employee Directors under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II and successor plans, filed as Exhibit 10.384 to the Registrant’s Form 10-Q for the quarter ended September 30, 2017, and incorporated herein by reference.	(2)

10.387	Form of Notice and Nonqualified Stock Option Agreement under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.387 to the Registrant’s Form 10-K for the year ended December 31, 2017, and incorporated herein by reference.	(2)

10.389	The Charles Schwab Corporation Corporate Executive Bonus Plan, restated to include amendments approved at the Annual Meeting of Stockholders on May 13, 2015, as amended and restated as of December 13, 2017, filed as Exhibit 10.389 to the Registrant’s Form 10-K for the year ended December 31, 2017, and incorporated herein by reference.	(2)

10.393	Form of Notice and Nonqualified Stock Option Agreement under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.393 to the Registrant’s Form 10-K for the year ended December 31, 2018, and incorporated herein by reference.	(2)

10.394	Form of Notice and Restricted Stock Unit Agreement under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.394 to the Registrant’s Form 10-K for the year ended December 31, 2018, and incorporated herein by reference.	(2)

10.396	Form of Notice and Restricted Stock Unit Agreement (no accelerating vesting for retirement) under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.396 to the Registrants’ Form 10-Q for the quarter ended June 30, 2019, and incorporated herein by reference.	(2)

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Exhibit Number	Exhibit
10.397	Form of Notice and Retainer Stock Option Agreement for Non-Employee Directors under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.397 to the Registrant’s Form 10-Q for the quarter ended September 30, 2019, and incorporated herein by reference.	(2)

10.398	Form of Notice and Retainer Restricted Stock Unit Agreement for Non-Employee Directors under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.398 to the Registrant’s Form 10-Q for the quarter ended September 30, 2019, and incorporated herein by reference.	(2)

10.399	Form of Notice and Stock Option Agreement for Non-Employee Directors under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II and successor plans, filed as Exhibit 10.399 to the Registrant’s Form 10-Q for the quarter ended September 30, 2019, and incorporated herein by reference.	(2)

10.401	Form of Notice and Restricted Stock Unit Agreement for Non-Employee Directors under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II and successor plans, filed as Exhibit 10.401 to the Registrant’s Form 10-Q for the quarter ended September 30, 2019, and incorporated herein by reference.	(2)

10.402	Form of Notice and Nonqualified Stock Option Agreement under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.402 to the Registrant’s Form 10-Q for the quarter ended September 30, 2019, and incorporated herein by reference.	(2)

10.403	Form of Notice and Restricted Stock Unit Agreement under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.403 to the Registrant’s Form 10-Q for the quarter ended September 30, 2019, and incorporated herein by reference.	(2)

10.404	Form of Notice and Restricted Stock Unit Agreement (no accelerating vesting for retirement) under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.404 to the Registrants’ Form 10-Q for the quarter ended September 30, 2019, and incorporated herein by reference.	(2)

10.406	Registration Rights Agreement by and among the Registrant, Charles R. Schwab, The Toronto-Dominion Bank, and certain other stockholders, filed as Exhibit 10.5 to the Registrant’s Form 8-K dated November 24, 2019, and incorporated herein by reference.

10.407(iv)	Second Amended and Restated Insured Deposit Account Agreement, dated May 4, 2023, by and among TD Bank USA, National Association and TD Bank, National Association, and The Charles Schwab Corporation, Charles Schwab & Co., Inc., Charles Schwab Trust Bank, TD Ameritrade, Inc., and TD Ameritrade Clearing, Inc., filed as Exhibit 10.1 to the Registrant’s Form 8-K dated May 4, 2023, and incorporated herein by reference.*

10.408	Form of Notice and Performance-Based Restricted Stock Unit Agreement under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.408 to the Registrant's Form 10-K for the year ended December 31, 2019, and incorporated herein by reference.	(2)

10.410	2013 Stock Incentive Plan, as amended and restated, filed as Exhibit 10.410 to the Registrant’s Form 8-K dated May 12, 2020, and incorporated herein by reference.	(2)

10.412	Form of Notice and Retainer Stock Option Agreement for Non-Employee Directors under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.412 to the Registrant’s Form 10-Q for the quarter ended September, 30, 2020, and incorporated herein by reference.	(2)

10.413	Form of Notice and Retainer Restricted Stock Unit Agreement for Non-Employee Directors under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.413 to the Registrant’s Form 10-Q for the quarter ended September, 30, 2020, and incorporated herein by reference.	(2)

10.414	Form of Notice and Stock Option Agreement for Non-Employee Directors under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II and successor plans, filed as Exhibit 10.414 to the Registrant’s Form 10-Q for the quarter ended September, 30, 2020, and incorporated herein by reference.	(2)

-132-

THE CHARLES SCHWAB CORPORATION


Exhibit Number	Exhibit
10.415	Form of Notice and Restricted Stock Unit Agreement for Non-Employee Directors under The Charles Schwab Corporation Directors’ Deferred Compensation Plan II and successor plans, filed as Exhibit 10.415 to the Registrant’s Form 10-Q for the quarter ended September, 30, 2020, and incorporated herein by reference.	(2)

10.423	The Charles Schwab Corporation Deferred Compensation Plan II, as amended and restated as of December 8, 2020, filed as Exhibit 10.423 to the Registrant’s Form 10-K for the year ended December 31, 2020, and incorporated herein by reference.	(2)

10.424	The Charles Schwab Severance Pay Plan, as Amended and Restated Effective June 21, 2021, filed as Exhibit 10.424 to the Registrant’s Form 10-Q for the quarter ended June 30, 2021, and incorporated herein by reference.	(2)

10.426	Form of Notice and Restricted Stock Unit Agreement under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.426 to the Registrant’s Form 10-K for the year ended December 31, 2021, and incorporated by reference.	(2)

10.427	Form of Notice and Restricted Stock Unit Agreement (no accelerating vesting for retirement) under The Charles Schwab Corporation 2013 Stock Incentive Plan and successor plans, filed as Exhibit 10.427 to the Registrant’s Form 10-K for the year ended December 31, 2021, and incorporated by reference.	(2)

10.428	Summary of Non-Employee Director Compensation, filed as Exhibit 10.428 to the Registrant’s Form 10-K for the year ended December 31, 2021, and incorporated herein by reference.	(2)

10.429	The Charles Schwab Corporation 2022 Stock Incentive Plan, filed as Exhibit 10.1 to the Registrant’s Form 8-K, dated May 17, 2022, and incorporated herein by reference.	(2)

10.431	Form of Notice and Nonqualified Stock Option Agreement under The Charles Schwab Corporation 2022 Stock Incentive Plan and successor plans , filed as Exhibit 10.431 to the R egistrant ’s Form 10-K for the year ended December 31, 2023, and incorporated by reference .	(2)

10.432	Form of Notice and Performance-Based Restricted Stock Unit Agreement under The Charles Schwab Corporation 2022 Stock Incentive Plan and successor plans , filed as Exhibit 10.43 2 to the Registrant’s Form 10-K for the year ended December 31, 2023, and incorporated by reference.	(2)

10.433	Form of Notice and Restricted Stock Unit Agreement under The Charles Schwab Corporation 2022 Stock Incentive Plan and successor plans, filed as Exhibit 10.433 to the Registrant’s Form 10-K for the year ended December 31, 2023, and incorporated by reference .	(2)

10.434	Form of Notice and Restricted Stock Unit Agreement under The Charles Schwab Corporation 2022 Stock Incentive Plan and successor plans, filed as Exhibit 10.434 to the Registrant’s Form 10-K for the year ended December 31, 2023, and incorporated by reference.	(2)

19.1	The Cha rles Schwab Co rporation Insider Trading Policy .	(1)

21.1	Subsidiaries of the Registrant.

23.1	Independent Registered Public Accounting Firm’s Consent.

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.

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.

32.1	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.	(1)

32.2	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.	(1)

97.1	The Charles Schwab Corporation Section 16 Officer Incentive Compensation Recovery Policy , filed as Exhibit 97 .1 to the Re gistrant ’s Form 10 -K for the year ended Dece mber 31, 2023, and in corporated by reference.

101.INS	Inline XBRL Instance Document	(3)

101.SCH	Inline XBRL Taxonomy Extension Schema	(3)

101.CAL	Inline XBRL Taxonomy Extension Calculation	(3)

-133-

THE CHARLES SCHWAB CORPORATION


Exhibit Number	Exhibit
101.DEF	Inline XBRL Extension Definition	(3)

101.LAB	Inline XBRL Taxonomy Extension Label	(3)

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

(1)	Furnished as an exhibit to this annual report on Form 10-K.

(2)	Management contract or compensatory plan.

(3)	Attached as Exhibit 101 to this Annual Report on Form 10-K for the annual period ended December 31, 2024, are the following materials formatted in XBRL (Extensible Business Reporting Language) (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Stockholders’ Equity, and (vi) Notes to Consolidated Financial Statements.

* Certain confidential information contained in this agreement has been omitted because it is not material and would be competitively harmful if publicly disclosed.

Item 16. Form 10-K Summary

None.

-134-

THE CHARLES SCHWAB CORPORATION

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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, on February 26, 2025.


			THE CHARLES SCHWAB CORPORATION
			(Registrant)

			BY:			/s/ Richard A. Wurster
						Richard A. Wurster,
						President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated, on February 26, 2025.


Signature / Title						Signature / Title

/s/ Richard A. Wurster						/s/ Michael D. Verdeschi
Richard A. Wurster,						Michael D. Verdeschi,
President and Chief Executive Officer and Director (principal executive officer)						Managing Director and Chief Financial Officer (principal financial and accounting officer)

/s/ Charles R. Schwab						/s/ Walter W. Bettinger II
Charles R. Schwab, Co-Chairman of the Board						Walter W. Bettinger II, Co-Chairman of the Board

/s/ John K. Adams, Jr.						/s/ Marianne C. Brown
John K. Adams, Jr., Director						Marianne C. Brown, Director

/s/ Joan T. Dea						/s/ Christopher V. Dodds
Joan T. Dea, Director						Christopher V. Dodds, Director

/s/ Stephen A. Ellis						/s/ Frank C. Herringer
Stephen A. Ellis, Director						Frank C. Herringer, Director

/s/ Gerri K. Martin-Flickinger						/s/ Todd M. Ricketts
Gerri K. Martin-Flickinger, Director						Todd M. Ricketts, Director

/s/ Charles A. Ruffel						/s/ Arun Sarin
Charles A. Ruffel, Director						Arun Sarin, Director

/s/ Carrie Schwab-Pomerantz						/s/ Paula A. Sneed
Carrie Schwab-Pomerantz, Director						Paula A. Sneed, Director

- 135 -

THE CHARLES SCHWAB CORPORATION





SUPPLEMENTAL INFORMATION





Disclosure			Page
Average Balance Sheets and Net Interest Revenue			F-2
Analysis of Changes in Net Interest Revenue			F-3
Bank Loan Portfolio			F-4
Allowance for Credit Losses on Bank Loans			F-5
Bank Deposits			F-6

F-1

THE CHARLES SCHWAB CORPORATION

Supplemental Financial Data (Unaudited)

(Dollars in Millions)

As a savings and loan holding company, the Company provides the following supplemental information pursuant to Subpart 1400 of Regulation S-K. Other information required by Subpart 1400 of Regulation S-K is presented throughout this Annual Report on Form 10-K.

1. Average Balance Sheets and Net Interest Revenue


For the Year Ended December 31,	2024						2023						2022
	Average				Average		Average				Average		Average				Average
	Balance		Interest		Rate		Balance		Interest		Rate		Balance		Interest		Rate
Assets:
Cash and cash equivalents	$	29,676	$	1,539	5.10	%	$	37,846	$	1,894	4.94	%	$	57,163	$	812	1.40	%
Cash and investments segregated	28,450		1,443		4.99	%	28,259		1,355		4.73	%	49,430		691		1.38	%

Receivables from brokerage clients	70,811		5,420		7.53	%	61,914		4,793		7.64	%	75,614		3,321		4.33	%
Available for sale securities (1)	101,659		2,166		2.12	%	137,178		2,987		2.17	%	260,392		4,139		1.58	%
Held to maturity securities (1)	152,566		2,636		1.72	%	165,634		2,872		1.73	%	112,357		1,688		1.50	%
Bank loans (2)	42,255		1,867		4.42	%	40,234		1,664		4.14	%	38,816		1,083		2.79	%
Total interest-earning assets	425,417		15,071		3.51	%	471,065		15,565		3.28	%	593,772		11,734		1.96	%
Securities lending revenue			330						419						471
Other interest revenue			136						127						22
Total interest-earning assets	425,417		15,537		3.61	%	471,065		16,111		3.39	%	593,772		12,227		2.04	%
Non-interest-earning assets (3,4)	37,643						34,695						24,962
Total assets	$	463,060					$	505,760					$	618,734

Liabilities and Stockholders’ Equity:
Bank deposits	$	256,212	$	3,152	1.23	%	$	306,505	$	3,363	1.10	%	$	424,168	$	723	0.17	%
Payables to brokers, dealers, and clearing organizations (3,5)	8,522		372		4.30	%	4,477		147		3.23	%	5,884		48		0.81	%
Payables to brokerage clients	72,776		272		0.37	%	66,842		271		0.41	%	97,825		123		0.13	%
Other short-term borrowings	9,146		504		5.51	%	7,144		375		5.25	%	2,719		48		1.75	%
Federal Home Loan Bank borrowings	23,102		1,245		5.32	%	34,821		1,810		5.14	%	2,274		106		4.59	%
Long-term debt	23,083		846		3.66	%	22,636		715		3.16	%	20,714		498		2.40	%
Total interest-bearing liabilities (5)	392,841		6,391		1.62	%	442,425		6,681		1.51	%	553,584		1,546		0.28	%

Other interest expense			2						3						(1)
Non-interest-bearing liabilities (3,5,6)	25,651						25,802						21,712
Total liabilities (7)	418,492		6,393		1.49	%	468,227		6,684		1.41	%	575,296		1,545		0.26	%
Stockholders’ equity (3)	44,568						37,533						43,438
Total liabilities and stockholders’ equity	$	463,060					$	505,760					$	618,734

Net interest revenue			$	9,144					$	9,427					$	10,682
Net yield on interest-earning assets					2.12	%					1.98	%					1.78	%

(1) Amounts have been calculated based on amortized cost.

(2) Includes average principal balances of nonaccrual loans.

(3) Average balance calculation based on month end balances.

(4) Non-interest-earning assets include equipment, office facilities, and property – net, goodwill, acquired intangible assets – net, and other assets that do not generate interest income.

(5) Beginning in 2024, payables to brokers, dealers, and clearing organizations is presented separately from non-interest-bearing liabilities 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.

(6) Non-interest-bearing liabilities consist of other liabilities that do not generate interest expense.

(7)Average rate calculation based on total funding sources.

F-2

THE CHARLES SCHWAB CORPORATION

Supplemental Financial Data (Unaudited)

(Dollars in Millions)

2. Analysis of Changes in Net Interest Revenue

An analysis of the year-to-year changes in the categories of interest revenue and interest expense resulting from changes in volume and rate is as follows:


	2024 Compared to 2023 Increase (Decrease) Due to Change in:						2023 Compared to 2022 Increase (Decrease) Due to Change in:
	Average Volume		Average Rate		Total		Average Volume		Average Rate		Total
Interest-earning assets:
Cash and cash equivalents (1)	$	(404)	$	49	$	(355)	$	(270)	$	1,352	$	1,082
Cash and investments segregated	9		79		88		(292)		956		664
Receivables from brokerage clients	680		(53)		627		(593)		2,065		1,472
Available for sale securities (2)	(771)		(50)		(821)		(1,947)		795		(1,152)
Held to maturity securities (2)	(226)		(10)		(236)		799		385		1,184
Bank loans (3)	84		119		203		40		541		581
Securities lending revenue	—		(89)		(89)		—		(52)		(52)
Other interest revenue	—		9		9		—		105		105
Total interest-earning assets	$	(628)	$	54	$	(574)	$	(2,263)	$	6,147	$	3,884
Interest-bearing sources of funds:
Bank deposits	$	(553)	$	342	$	(211)	$	(200)	$	2,840	$	2,640
Payables to brokers, dealers, and clearing organizations (4)	131		94		225		(11)		110		99
Payables to brokerage clients	24		(23)		1		(40)		188		148
Other short-term borrowings	105		24		129		77		250		327
Federal Home Loan Bank borrowings	(602)		37		(565)		1,494		210		1,704
Long-term debt	14		117		131		46		171		217

Other interest expense	—		(1)		(1)		—		4		4
Total sources on which interest is paid (4)	(881)		590		(291)		1,366		3,773		5,139
Change in net interest revenue (4)	$	253	$	(536)	$	(283)	$	(3,629)	$	2,374	$	(1,255)

Note: Changes that are not due solely to volume or rate have been allocated to rate.

(1) Includes deposits with banks and short-term investments.

(2) Amounts have been calculated based on amortized cost.

(3) Includes average principal balances of nonaccrual loans.

(4) Beginning in 2024, payables to brokers, dealers, and clearing organizations is presented separately within total sources on which interest is paid. This line item includes securities loaned and related interest expense. Prior period amounts have been reclassified to reflect this change.

F-3

THE CHARLES SCHWAB CORPORATION

Supplemental Financial Data (Unaudited)

(Dollars in Millions)

3. Bank Loan Portfolio

The maturities of the bank loan portfolio are as follows:


December 31, 2024	Within 1 year		After 1 year through 5 years		After 5 years through 15 years		After 15 years		Total
Residential real estate:
First Mortgages	$	—	$	32	$	1,215	$	26,142	$	27,389
HELOCs	—		—		94		330		424
Total residential real estate	—		32		1,309		26,472		27,813
Pledged asset lines	16,726		298		—		—		17,024
Other	7		330		59		3		399
Total	$	16,733	$	660	$	1,368	$	26,475	$	45,236

Note: Maturities in the above table are based upon the contractual terms of the loans. The maturities for HELOCs are based on 30-year loan terms, with an initial draw period of ten years, followed by a 20-year amortizing period.

The interest sensitivity of loans with contractual maturities in excess of one year is as follows:


December 31, 2024	After 1 year through 5 years		After 5 years through 15 years		After 15 years
Loans with floating or adjustable interest rates:
Residential real estate:
First Mortgages	$	—	$	39	$	22,973
HELOCs	—		94		330
Total residential real estate	—		133		23,303
Pledged asset lines	298		—		—
Other	1		—		—
Total loans with floating or adjustable interest rates	299		133		23,303
Loans with predetermined interest rates:
Residential real estate:
First Mortgages	32		1,177		3,169
HELOCs	—		—		—
Total residential real estate	32		1,177		3,169
Pledged asset lines	—		—		—
Other	329		58		3
Total loans with predetermined interest rates	361		1,235		3,172
Total	$	660	$	1,368	$	26,475

F-4

THE CHARLES SCHWAB CORPORATION

Supplemental Financial Data (Unaudited)

(Dollars in Millions)

4. Allowance for Credit Losses on Bank Loans

The following table presents several credit ratios related to the Company’s bank loans portfolio. See Part II – Item 8 – Note 7 for the values underlying these ratios:


December 31,	2024		2023
Allowance for credit losses to total year-end loans	0.05	%	0.09	%
Nonaccrual loans to total year-end loans	0.08	%	0.04	%
Allowance for credit losses to total nonaccrual year-end loans	60	%	253	%

The following table presents information regarding average loans outstanding during the period and the ratio of net charge-offs (recoveries) during the period to average loans outstanding:


Year Ended December 31,	2024			2023			2022
	Average loans		Net charge-offs (recoveries) to average loans	Average loans		Net charge-offs (recoveries) to average loans	Average loans		Net charge-offs (recoveries) to average loans
Residential real estate:
First Mortgages	$	26,531	—	$	25,748	—	$	23,639	—
HELOCs	446		—	525		—	617		(.16)	%
Total residential real estate	26,977		—	26,273		—	24,256		—
Pledged asset lines	14,924		—	13,727		—	14,360		.03	%
Other	354		—	234		—	200		—
Total	$	42,255	—	$	40,234	—	$	38,816	.01	%

The increase in the Company’s average loan portfolio in the periods presented has been driven by growth in First Mortgages and PALs, with a slight decrease in PALs in 2023. Growth in these loan types is due in large part to overall growth in Schwab’s client base and net new client assets during the periods presented. Although nonaccrual First Mortgages outstanding increased in 2024 compared to 2023, the ratios of the allowance for credit losses to year-end loans and nonaccrual loans decreased primarily due to the decrease in the allowance for credit losses resulting from a decrease in projected loss rates and improved credit quality metrics in the Company’s bank loans portfolio in recent years as discussed in Part II – Item 8 – Note 7.

The following table presents the allocation of the allowance for credit losses for bank loans and loans by category as a percentage of total bank loans:


December 31,	2024				2023
	Allowance for Credit Losses		Percent of loans to total loans		Allowance for Credit Losses		Percent of loans to total loans
Residential real estate:
First Mortgages	$	14	61	%	$	32	65	%
HELOCs	1		1	%	2		1	%
Total residential real estate	15		62	%	34		66	%
Pledged asset lines	—		38	%	—		33	%
Other	6		—		4		1	%
Total	$	21	100	%	$	38	100	%

F-5

THE CHARLES SCHWAB CORPORATION

Supplemental Financial Data (Unaudited)

(Dollars in Millions)

5. Bank Deposits

The following table presents the average amount of, and the average rate paid on, deposit categories that are in excess of ten percent of average total bank deposits:


Year Ended December 31,	2024				2023
	Amount		Rate		Amount		Rate
Analysis of average daily deposits:
Money market and other savings deposits	$	200,074	0.56	%	$	233,091	0.59	%
Time certificates of deposit	37,390		5.22	%	36,028		5.08	%
Interest-bearing demand deposits (1)	—		—		37,386		0.41	%
Total	$	237,464			$	306,505

(1) Interest-bearing demand deposits did not exceed ten percent of average total bank deposits for the year ended December 31, 2024.

As of December 31, 2024 and 2023, uninsured bank deposits totaled approximately $32.7 billion and $34.5 billion, respectively. As of December 31, 2024 and 2023, the Company’s bank deposits did not include any time deposits that were in excess of FDIC insurance limits or otherwise uninsured.

F-6

SCHWAB CHARLES CORP - Annual Report: 2024 (Form 10-K)

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