SCHWAB CHARLES CORP - Quarter Report: 2025 June (Form 10-Q)

Schwab money market funds$644,811 $442 0.27%$523,665 $357 0.27%Schwab equity and bond funds, ETFs, and CTFs661,793 122 0.07%565,848 112 0.08%

Mutual Fund OneSource® and other no-transaction-fee (NTF) funds (1)

350,487 218 0.25%338,198 214 0.25%

Other third-party mutual funds and ETFs (1)

603,509 102 0.07%600,902 102 0.07%

Total mutual funds, ETFs, and CTFs (2)

$2,260,600 $884 0.16%$2,028,613 $785 0.16%

Managed investing solutions (2)

Fee-based$595,203 $589 0.40%$525,689 $510 0.39%Non-fee-based120,726 — —110,234 — —Total managed investing solutions$715,929 $589 0.33%$635,923 $510 0.32%

Other balance-based fees (3)

846,552 75 0.04%763,750 69 0.04%

Other (4)

22 19 Total asset management and administration fees$1,570 $1,383 Six Months Ended June 30,Schwab money market funds$633,143 $860 0.27%$511,776 $693 0.27%Schwab equity and bond funds, ETFs, and CTFs660,191 244 0.07%552,755 219 0.08%

Mutual Fund OneSource and other NTF funds (1)

355,092 440 0.25%326,387 423 0.26%

Other third-party mutual funds and ETFs (1)

613,576 205 0.07%603,263 208 0.07%

Total mutual funds, ETFs, and CTFs (2)

$2,262,002 $1,749 0.16%$1,994,181 $1,543 0.16%

Managed investing solutions (2)

Fee-based$592,843 $1,158 0.39%$515,911 $1,013 0.39%Non-fee-based120,584 — — 108,133 — —Total managed investing solutions$713,427 $1,158 0.33%$624,044 $1,013 0.33%

Other balance-based fees (3)

844,053 152 0.04%741,599 138 0.04%

Other (4)

41 37 Total asset management and administration fees$3,100 $2,731

(1) The second quarter and first six months of 2025 include transfers from other third-party mutual funds and ETFs to Mutual Fund OneSource® and other NTF funds.

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

(3) Includes various asset-related fees, such as trust fees, 401(k) recordkeeping fees, and mutual fund clearing fees and other service fees.

(4) Includes miscellaneous service and transaction fees relating to mutual funds and ETFs that are not balance-based.

Asset management and administration fees increased by $187 million, or 14%, and $369 million, or 14%, in the second quarter and first six months of 2025, respectively, compared to the same periods in 2024. These increases were primarily a result of continued growth in Schwab money market funds amid the ongoing elevated interest rate environment. These increases were also due to growth in fee-based managed investing solutions, Schwab equity and bond funds, ETFs, and CTFs, and Mutual Fund OneSource®, reflecting the Company’s asset gathering and net inflows into managed investing solutions, as well as year-over-year equity market appreciation.

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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 a roll forward of client assets for the Schwab money market funds, Schwab equity and bond funds, ETFs, and CTFs, and Mutual Fund OneSource® and other NTF funds. These funds generated 50% of the asset management and administration fees earned in both the second quarter and first six months of 2025, compared with 49% in both the second quarter and first six months of 2024:


	Schwab Money Market Funds				Schwab Equity and Bond Funds, ETFs, and CTFs				Mutual Fund OneSource® and Other NTF funds
Three Months Ended June 30,	2025		2024		2025		2024		2025		2024
Balance at beginning of period	$	641,532	$	515,678	$	625,224	$	548,890	$	340,280	$	329,176
Net inflows (outflows)	5,433		11,295		16,115		8,794		(7,804)		(6,863)
Net market gains (losses) and other (1)	6,508		6,613		48,016		6,318		121,443		22,500
Balance at end of period	$	653,473	$	533,586	$	689,355	$	564,002	$	453,919	$	344,813

Six Months Ended June 30,
Balance at beginning of period	$	596,531	$	476,409	$	627,166	$	506,149	$	347,798	$	306,222
Net inflows (outflows)	43,910		42,235		25,203		16,513		(14,850)		(11,024)
Net market gains (losses) and other (1)	13,032		14,942		36,986		41,340		120,971		49,615
Balance at end of period	$	653,473	$	533,586	$	689,355	$	564,002	$	453,919	$	344,813

(1) Includes $63.3 billion of transfers from other third-party mutual funds and ETFs to Mutual Fund OneSource® and other NTF Funds for the three and six months ended June 30, 2025.

Trading Revenue

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


	Three Months Ended June 30,				Percent Change		Six Months Ended June 30,				Percent Change
	2025		2024				2025		2024
Commissions	$	431	$	383	13	%	$	862	$	796	8	%
Order flow revenue
Options	268		248		8	%	538		490		10	%
Equities	198		109		82	%	371		219		69	%
Total order flow revenue	466		357		31	%	909		709		28	%
Principal transactions	55		37		49	%	89		89		—
Total trading revenue	$	952	$	777	23	%	$	1,860	$	1,594	17	%


	Three Months Ended June 30,						Percent Change		Six Months Ended June 30,						Percent Change
	2025			2024					2025			2024
DATs (in thousands)	7,571			5,486			38	%	7,482			5,718			31	%
Product as a percentage of DATs
Equities	54		%	52		%			55		%	52		%
Derivatives	20		%	22		%			20		%	22		%
ETFs	20		%	18		%			19		%	18		%
Mutual funds	5		%	6		%			5		%	6		%
Fixed income	1		%	2		%			1		%	2		%

Number of trading days	62.0			63.0			(2)	%	122.0			124.0			(2)	%
Revenue per trade (1)	$	2.03		$	2.25		(10)	%	$	2.04		$	2.25		(9)	%

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

Trading revenue increased $175 million, or 23%, and $266 million, or 17%, in the second quarter and first six months of 2025, respectively, compared to the same periods in 2024, primarily driven by an increase in order flow revenue reflecting higher volume.

Commission revenue increased during the second quarter and first six months of 2025 compared to the same periods of 2024 due to higher volume, partially offset by changes in the mix of client trading activity. Principal transactions revenue increased

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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)

during the second quarter of 2025 compared to the same period in 2024, reflecting changes to the fair value of securities positions held to facilitate client activity and cash and investments segregated for regulatory purposes, and remained consistent during the first six months of 2025 compared to the same period in 2024.

Bank Deposit Account Fees

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

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


	Three Months Ended June 30,						Percent Change		Six Months Ended June 30,						Percent Change
	2025			2024					2025			2024
Bank deposit account fees	$	247		$	153		61	%	$	492		$	336		46	%
Average bank deposit account balances (BDA balances)	$	82,265		$	87,016		(5)	%	$	83,220		$	89,938		(7)	%
Average net yield	1.19		%	0.70		%			1.18		%	0.74		%
Percentage of average BDA balances designated as:
Fixed-rate balances	78		%	88		%			78		%	88		%
Floating-rate balances	22		%	12		%			22		%	12		%

Bank deposit account fees increased $94 million, or 61%, and $156 million, or 46%, in the second quarter and first six months of 2025, respectively, compared to the same periods in 2024, primarily due to a decrease in the amount paid to clients as a result of lower interest rates, partially offset by lower average BDA balances. The decrease in average BDA balances in the second quarter and first six months of 2025 compared to the same periods in 2024 was primarily due to client cash allocation decisions in 2024 in response to elevated short-term market interest rates through most of 2024.

Average net yield increased in the second quarter and first six months of 2025 compared to the same periods in 2024 due to an increase in the average amount of floating-rate BDA balances, which was partially offset by a decrease in the average net yields on fixed-rate and floating-rate BDA balances. The percentages of BDA balances designated as fixed-rate and floating-rate obligation amounts as of June 30, 2025 were 78% and 22%, respectively.

Other Revenue

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

Other revenue increased $41 million, or 19%, and $92 million, or 24%, in the second quarter and first six months of 2025, respectively, compared to the same periods in 2024. These increases were primarily due to higher industry fees and a gain from the sale of an equity investment. Industry fees increased in the second quarter of 2025 primarily due to higher DATs, partially offset by lower average SEC fee rates in effect compared to the same period in 2024. Industry fees increased in the first six months of 2025 primarily due to higher average SEC fee rates in effect compared to the same period in 2024. Effective May 14, 2025, the SEC decreased the fee rate applicable to most securities transactions to zero from the rate in effect since May 22, 2024. This change will result in lower industry fees in other revenue and a corresponding decrease in other expense, resulting in no impact to net income.

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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)

Total Expenses Excluding Interest

The following table presents a comparison of expenses excluding interest:


	Three Months Ended June 30,						Percent Change		Six Months Ended June 30,						Percent Change
	2025			2024					2025			2024
Compensation and benefits
Salaries and wages	$	927		$	886		5	%	$	1,850		$	1,740		6	%
Incentive compensation	351			329			7	%	763			716			7	%
Employee benefits and other	258			235			10	%	595			532			12	%
Total compensation and benefits	$	1,536		$	1,450		6	%	$	3,208		$	2,988		7	%
Professional services	291			259			12	%	560			500			12	%
Occupancy and equipment	270			248			9	%	544			513			6	%
Advertising and market development	108			107			1	%	204			195			5	%
Communications	176			172			2	%	329			313			5	%
Depreciation and amortization	215			233			(8)	%	432			461			(6)	%
Amortization of acquired intangible assets	128			129			(1)	%	258			259			—
Regulatory fees and assessments	77			96			(20)	%	166			221			(25)	%
Other	247			249			(1)	%	491			435			13	%
Total expenses excluding interest	$	3,048		$	2,943		4	%	$	6,192		$	5,885		5	%
Expenses as a percentage of total net revenues
Compensation and benefits	26		%	31		%			28		%	32		%
Advertising and market development	2		%	2		%			2		%	2		%
Full-time equivalent employees (in thousands)
At quarter end	32.6			32.3			1	%
Average	32.3			32.3			—		32.2			32.5			(1)	%

Expenses excluding interest increased $105 million, or 4%, and $307 million, or 5%, in the second quarter and first six months of 2025, respectively, compared to the same periods in 2024. Adjusted total expenses, which excludes acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs, increased 5% and 7% in the second quarter and first six months of 2025, respectively, compared to the same periods in 2024. See Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results. There were no acquisition and integration-related costs or restructuring costs in the second quarter and first six months of 2025.

Total compensation and benefits expense increased in the second quarter and first six months of 2025 compared to the same periods in 2024, primarily due to annual merit increases, higher incentive compensation, and higher other employee-related costs. Compensation and benefits included a $3 million and $34 million benefit in the second quarter and first six months of 2024, respectively, due to a change in estimated restructuring costs. Compensation and benefits also included acquisition and integration-related costs of $18 million and $35 million in the second quarter and first six months of 2024, respectively.

Professional services expense increased in the second quarter and first six months of 2025 compared to the same periods in 2024, reflecting overall growth of business and increased utilization of technology and other professional services. Professional services included acquisition and integration-related costs of $12 million and $29 million in the second quarter and first six months of 2024, respectively.

Occupancy and equipment expense increased in the second quarter and first six months of 2025 compared to the same periods in 2024, primarily driven by higher technology equipment and software costs related to growth of the business and a benefit related to property taxes reflected in the second quarter of 2024. Occupancy and equipment included restructuring costs of $1 million and $3 million in the second quarter and first six months of 2024, respectively.

Advertising and market development expense increased slightly in the second quarter and first six months of 2025 compared to the same period in 2024, primarily due to higher client promotional spending.

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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)

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

Depreciation and amortization expense decreased in the second quarter and first six months of 2025 compared to the same periods in 2024, primarily due to finance lease terminations in 2024 and lower depreciation on equipment due to abandonment of certain data centers in 2024 related to the integration of Ameritrade Holding LLC (Ameritrade Holding) and its consolidated subsidiaries (collectively, Ameritrade). Depreciation and amortization expense included acquisition and integration-related costs of $5 million in the second quarter and first six months of 2024.

Amortization of acquired intangible assets remained consistent in the second quarter and first six months of 2025 compared to the same periods in 2024.

Regulatory fees and assessments decreased in the second quarter and first six months of 2025 compared to the same periods in 2024. The decrease in the second quarter of 2025 was primarily due to lower FDIC deposit insurance assessments. The decrease in the first six months of 2025 was primarily due to a $25 million incremental FDIC special assessment in the first quarter of 2024 and lower FDIC deposit insurance assessments, reflecting a decrease in brokered CDs and a lower assessment base.

Other expense was largely consistent in the second quarter and increased in the first six months of 2025 compared to the same periods in 2024. The year-over-year change in the second quarter of 2025 was due to several offsetting items, including a charge recognized in the second quarter of 2024 for the SEC’s industry-wide review of off-channel communications, and certain higher costs in 2025 related to growth of the business and increased client trading volume, including higher industry fees. The increase in the first six months of 2025 from the same period in 2024 reflected higher industry fees due to increased trading volume and higher average SEC fee rates. Effective May 14, 2025, the SEC decreased the fee rate applicable to most securities transactions to zero from the rate in effect since May 22, 2024. This change will result in lower industry fees in other expense and a corresponding decrease in other revenue, resulting in no impact to net income. Other expense included restructuring costs of $12 million and $13 million in the second quarter and first six months of 2024, respectively.

Capital expenditures were $136 million and $92 million in the second quarter of 2025 and 2024, respectively, and $292 million and $214 million in the first six months of 2025 and 2024, respectively. Capital expenditures increased in the second quarter and first six months of 2025 compared to the same periods in 2024, primarily due to higher investment in purchased software, information technology and telecommunications equipment, and buildings, partially offset by lower internally developed software. We continue to anticipate capital expenditures for full-year 2025 will be approximately 3-5% of total net revenues.

Taxes on Income

Taxes on income were $677 million and $415 million for the second quarter of 2025 and 2024, respectively, resulting in effective tax rates of 24.2% and 23.8%, respectively. Taxes on income were $1.2 billion and $851 million for the first six months of 2025 and 2024, respectively, resulting in tax rates of 23.3% and 24.0%, respectively. The increase in the effective tax rate in the second quarter of 2025 compared to the same period in 2024 was primarily due to an increase in the state tax rate, partially offset by the recognition of certain tax credits, a decrease in non-deductible FDIC deposit insurance assessments, and the reversal of tax reserves due to the resolution of certain state tax matters during the second quarter of 2025. The decrease in the effective tax rate in the first six months of 2025 compared to the same period in 2024 was primarily due to the reversal of tax reserves due to the resolution of certain state tax matters during 2025, a decrease in non-deductible FDIC deposit insurance assessments, an increase in equity compensation tax deduction benefits, and the recognition of certain tax credits, partially offset by an increase in the state tax rate.

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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)

Segment Information

Financial information for our segments is presented in the following table (1):


	Investor Services						Advisor Services						Total
Three Months Ended June 30,	Percent Change		2025		2024		Percent Change		2025		2024		Percent Change		2025		2024
Net Revenues
Net interest revenue	29	%	$	2,244	$	1,736	37	%	$	578	$	422	31	%	$	2,822	$	2,158
Asset management and administration fees	14	%	1,144		1,001		12	%	426		382		14	%	1,570		1,383
Trading revenue	24	%	852		688		12	%	100		89		23	%	952		777
Bank deposit account fees	63	%	194		119		56	%	53		34		61	%	247		153
Other	17	%	201		172		26	%	59		47		19	%	260		219
Total net revenues	25	%	4,635		3,716		25	%	1,216		974		25	%	5,851		4,690
Expenses Excluding Interest
Compensation and benefits	6	%	$	1,191	$	1,122	5	%	$	345	$	328	6	%	$	1,536	$	1,450
Professional services	12	%	231		206		13	%	60		53		12	%	291		259
Occupancy and equipment	10	%	212		193		5	%	58		55		9	%	270		248
Advertising and market development	—		70		70		3	%	38		37		1	%	108		107
Communications	1	%	120		119		6	%	56		53		2	%	176		172
Depreciation and amortization	(12)	%	162		185		10	%	53		48		(8)	%	215		233
Amortization of acquired intangible assets	(1)	%	104		105		—		24		24		(1)	%	128		129
Regulatory fees and assessments	(18)	%	62		76		(25)	%	15		20		(20)	%	77		96
Other	1	%	209		206		(12)	%	38		43		(1)	%	247		249
Total expenses excluding interest	3	%	2,361		2,282		4	%	687		661		4	%	3,048		2,943
Income before taxes on income	59	%	$	2,274	$	1,434	69	%	$	529	$	313	60	%	$	2,803	$	1,747

Net New Client Assets (in billions) (2)	(22)	%	$	31.2	$	40.1	24	%	$	42.4	$	34.1	(1)	%	$	73.6	$	74.2

Six Months Ended June 30,
Net Revenues
Net interest revenue	26	%	$	4,402	$	3,502	27	%	$	1,126	$	889	26	%	$	5,528	$	4,391
Asset management and administration fees	14	%	2,258		1,976		12	%	842		755		14	%	3,100		2,731
Trading revenue	18	%	1,657		1,405		7	%	203		189		17	%	1,860		1,594
Bank deposit account fees	48	%	385		260		41	%	107		76		46	%	492		336
Other	22	%	378		310		35	%	92		68		24	%	470		378
Total net revenues	22	%	9,080		7,453		20	%	2,370		1,977		21	%	11,450		9,430
Expenses Excluding Interest
Compensation and benefits	7	%	$	2,476	$	2,311	8	%	$	732	$	677	7	%	$	3,208	$	2,988
Professional services	11	%	445		400		15	%	115		100		12	%	560		500
Occupancy and equipment	7	%	427		399		3	%	117		114		6	%	544		513
Advertising and market development	2	%	134		132		11	%	70		63		5	%	204		195
Communications	7	%	233		218		1	%	96		95		5	%	329		313
Depreciation and amortization	(12)	%	327		371		17	%	105		90		(6)	%	432		461
Amortization of acquired intangible assets	(10)	%	210		234		92	%	48		25		—		258		259
Regulatory fees and assessments	(22)	%	132		170		(33)	%	34		51		(25)	%	166		221
Other	14	%	411		362		10	%	80		73		13	%	491		435
Total expenses excluding interest	4	%	4,795		$	4,597	8	%	1,397		$	1,288	5	%	6,192		5,885
Income before taxes on income	50	%	$	4,285	$	2,856	41	%	$	973	$	689	48	%	$	5,258	$	3,545

Net New Client Assets (in billions) (2)	30	%	$	100.7	$	77.7	24	%	$	105.3	$	84.7	27	%	$	206.0	$	162.4

(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 the second quarter and six months ended June 30, 2025, and prior-year amounts have been recast to reflect this new basis of segmentation.

(2) In the second quarter and first six months of 2025, Investor Services includes net outflows of $6.7 billion and $12.0 billion, respectively, from off-platform brokered CDs issued by CSB. In the second quarter and first six months of 2024, Investor Services includes net inflows of $2.7 billion and net outflows of $4.7 billion, respectively, from off-platform brokered CDs issued by CSB. Also in the second quarter and first six months of 2024, Investor Services includes an inflow of $10.3 billion from a mutual fund clearing services client.

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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)

Segment Net Revenues

Investor Services and Advisor Services total net revenues increased by 25% for both segments, in the second quarter of 2025, and increased by 22% and 20%, respectively, in the first six months of 2025, compared to the same periods in 2024. Schwab’s net revenues increased similarly for both segments in the second quarter and first six months of 2025 compared to the same periods in 2024. Net interest revenue increased primarily due to continued paydowns of bank supplemental funding, lower average rates paid on funding sources, and growth of bank lending, partially offset by lower yields on interest-earning assets. Asset management and administration fees increased primarily as a result of higher balances in money market funds, Schwab equity and bond funds, ETFs, and CTFs, and Mutual Fund OneSource®, and, additionally for Investor Services, managed investing solutions. Trading revenue increased primarily due to higher order flow revenue and commission revenue due primarily to higher volume, and, in the second quarter, higher principal transactions revenue. Bank deposit account fees increased primarily due to improved net yields partially offset by lower average BDA balances. Other revenue increased primarily due to higher industry fees and a recognized gain on an equity investment in the second quarter of 2025.

Segment Expenses Excluding Interest

Investor Services and Advisor Services total expenses excluding interest increased by 3% and 4%, respectively, in the second quarter of 2025, and increased by 4% and 8%, respectively, in the first six months of 2025 compared to the same periods in 2024. Most expenses changed similarly in the two segments in the second quarter and first six months of 2025 compared to the same periods in 2024. Compensation and benefits expense increased primarily due to annual merit increases, higher incentive compensation, and higher employee-related costs. Professional services expense increased due to overall growth of business and increased utilization of technology and other professional services. Occupancy and equipment expense increased primarily due to higher technology equipment and software costs related to growth of the business and a property tax benefit reflected in the second quarter of 2024. Regulatory fees and assessments decreased for both segments during the second quarter and first six months of 2025 compared to the same periods in 2024, primarily due to lower FDIC fees. Additionally, during the first six months of 2025, regulatory fees and assessments decreased due to a $25 million incremental FDIC special assessment in the first quarter of 2024.

RISK MANAGEMENT

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

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

Market Risk

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

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

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

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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)

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

Net Interest Revenue Simulation

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

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

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

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

- 18 -

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

The following table assumes a statically-sized balance sheet with simulated changes to net interest revenue over the next 12 months beginning June 30, 2025 and December 31, 2024 of a gradual increase or decrease in market interest rates relative to prevailing market rates at the end of each reporting period:


	June 30, 2025	December 31, 2024
Increase of 200 basis points	7.8%	8.6%
Increase of 100 basis points	4.1%	4.6%
Increase of 50 basis points	2.2%	2.5%
Decrease of 50 basis points	(2.0)%	(2.3)%
Decrease of 100 basis points	(4.0)%	(4.6)%
Decrease of 200 basis points	(7.9)%	(9.3)%

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

Effective Duration

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

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


	June 30, 2025	June 30, 2024
	In years
Estimated effective duration, exclusive of derivatives:
Consolidated total assets	2.1	2.4
AFS investment securities portfolio	2.5	2.3
AFS and HTM investment securities portfolio	4.0	3.9
Pledged asset lines (1)	0.1	—
Long-term debt CSC Senior Notes	3.1	3.6
Estimated effective duration, inclusive of derivatives (2):
Consolidated total assets	2.1	2.4
AFS investment securities portfolio	2.0	2.1
AFS and HTM investment securities portfolio	3.8	3.8
Pledged asset lines (1)	0.8	—
Long-term debt CSC Senior Notes	2.4	3.6

(1) The duration of PALs was less than 0.1 years at June 30, 2024.

(2) See Item 1 – Note 11 for additional discussion of the Company’s derivatives.

AFS and HTM securities comprised approximately 45% and 55% of the Company’s consolidated total assets as of June 30, 2025 and 2024, respectively. The estimated effective duration of the remaining balance sheet assets in aggregate was less than one year as of both June 30, 2025 and 2024.

Economic Value of Equity Simulation

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

- 19 -

THE CHARLES SCHWAB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

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

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

Bank Deposit Account Fees Simulation

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

Liquidity Risk

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

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

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

Funding Sources

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

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

Our clients’ bank deposits and brokerage cash balances primarily originate from our 37.5 million active brokerage accounts. More than 80% of our bank deposits qualified for FDIC insurance as of June 30, 2025. Our clients’ allocation of cash held on

- 20 -

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 balance sheet as bank deposits or payables to brokerage clients is sensitive to interest rate levels, with clients typically increasing their utilization of investment cash solutions, such as purchased money market funds and certain fixed income products when those yields are higher than those of cash sweep features.

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

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


Description	Borrower	Outstanding		Available			Maturity of Amounts Outstanding	Weighted-Average Interest Rate on Amounts Outstanding
FHLB secured credit facilities	Banking subsidiaries	$	9,000	$	67,255	(1)	July 2025 - October 2025	4.40%
Federal Reserve discount window	Banking subsidiaries	—		29,863		(1)	N/A	—
Repurchase agreements	Banking subsidiaries, CSC	5,991		—		(2)	July 2025 - October 2025	4.45%
Unsecured uncommitted lines of credit with various external banks	CSC, CS&Co	—		1,692			N/A	—
Unsecured commercial paper	CSC	2,000		3,000		(3)	July 2025 - November 2025	4.52%
Secured uncommitted lines of credit with various external banks	CS&Co	500		—		(4)	July 2025	4.84%


	Average for the Three Months Ended
	June 30, 2025			March 31, 2025
ASF	$	198,858		$	200,301
RSF	150,945			153,808
NSFR	132		%	130		%

Long-Term Borrowings

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

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

June 30, 2025

Par
Outstanding

Maturity

Weighted Average

Interest Rate (1)

Moody’s

Standard
& Poor’s

Fitch

CSC Senior Notes

20,119

2026 - 2034

3.66%

A-

Ameritrade Holding Senior Notes

2027 - 2029

3.13%

A-

—

(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 decreased to 9.8% at June 30, 2025 from 9.9% at both March 31, 2025 and year-end 2024. This decrease during the second quarter of 2025 was primarily due to the redemption of Series G preferred stock for $2.5 billion, partially offset by lower total Company assets and also the benefit of net income earned in the second quarter and first six months of 2025. Total balance sheet assets decreased $4.0 billion, or 1%, during the second quarter of 2025. CSB’s Tier 1 Leverage Ratio increased from 12.1% at March 31, 2025 and 11.6% at year-end 2024, ending the second quarter of 2025 at 12.2%, primarily as a result of lower total assets as well as net income during the second quarter and first six months of 2025.

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

- 24 -

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 Company maintains a long-term operating objective for its consolidated adjusted Tier 1 Leverage Ratio of 6.75% - 7.00%. As of June 30, 2025, our adjusted Tier 1 Leverage Ratio was 7.2% for CSC (consolidated) and 8.4% for CSB (see Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results).

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

Dividends

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

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


	2025				2024
Six Months Ended June 30,	Cash Paid		Per Share Amount		Cash Paid		Per Share Amount
Common and Nonvoting Common Stock (1)	$	985	$	.54	$	919	$	.50
Preferred Stock:

Series D (2)	22		29.76		22		29.76

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

- 28 -

Part I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Income

(In Millions, Except Per Share Amounts)

(Unaudited)


	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Net Revenues
Interest revenue	$	$	$	$
Interest expense	()	()	()	()
Net interest revenue
Asset management and administration fees
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 (1):
Basic	$	$	$	$
Diluted	$	$	$	$

(1)

See Notes to Condensed Consolidated Financial Statements.

- 29 -

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(In Millions)

(Unaudited)


	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Net income	$	$	$	$
Other comprehensive income (loss), before tax:
Change in net unrealized gain (loss) on available for sale securities:
Net unrealized gain (loss)

Other reclassifications included in other revenue
Change in net unrealized gain (loss) on held to maturity securities:

Amortization of amounts previously recorded upon transfer to held to maturity from available for sale
Change in net unrealized gain (loss) on derivatives designated as cash flow hedging instruments:
Net unrealized gain (loss)	()		()
Reclassifications included in interest revenue
Other		()		()
Other comprehensive income (loss), before tax
Income tax effect	()	()	()	()
Other comprehensive income (loss), net of tax
Comprehensive Income (Loss)	$	$	$	$

See Notes to Condensed Consolidated Financial Statements.

- 30 -

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Balance Sheets

(In Millions, Except Per Share and Share Amounts)

(Unaudited)


	June 30, 2025	December 31, 2024
Assets
Cash and cash equivalents	$	$
Cash and investments segregated and on deposit for regulatory purposes (including resale agreements of $ and $ at June 30, 2025 and December 31, 2024, respectively)
Receivables from brokers, dealers, and clearing organizations
Receivables from brokerage clients — net
Available for sale securities (amortized cost of $ and $ at June 30, 2025 and December 31, 2024, respectively; including assets pledged of $ and $, respectively)
Held to maturity securities (including assets pledged of $ and $ at June 30, 2025 and December 31, 2024, 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 $ and $ at June 30, 2025 and December 31, 2024, respectively
Common stock — billion shares authorized; $ par value per share; and shares issued at June 30, 2025 and December 31, 2024, respectively
Nonvoting common stock — million shares authorized; $ par value per share; shares issued at June 30, 2025 and shares issued at December 31, 2024
Additional paid-in capital
Retained earnings
Treasury stock, at cost — and shares at June 30, 2025 and December 31, 2024, respectively	()	()
Accumulated other comprehensive income (loss)	()	()
Total stockholders’ equity
Total liabilities and stockholders’ equity	$	$

See Notes to Condensed Consolidated Financial Statements.

- 31 -

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Stockholders’ Equity

(In Millions)

(Unaudited)

Accumulated Other Comprehensive Income (Loss)

Preferred Stock

Common Stock

Nonvoting
Common Stock

Additional Paid-in Capital

Retained Earnings

Treasury Stock,
at cost

Total

Amount

Balance at March 31, 2024

()

Net income

—

Other comprehensive income (loss), net of tax

—

Dividends declared on preferred stock

—

()

—

()

Dividends declared on common stock — $

per share

—

()

—

()

Stock option exercises and other

—

Share-based compensation

—

Other

—

Balance at June 30, 2024

()

Balance at March 31, 2025

()

Net income

—

Other comprehensive income (loss), net of tax

—

Redemption of preferred stock

()

—

()

—

()

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 June 30, 2025

()

Accumulated Other Comprehensive Income (Loss)

Preferred Stock

Common Stock

Nonvoting
Common Stock

Additional Paid-in Capital

Retained Earnings

Treasury Stock,
at cost

Total

Amount

Balance at December 31, 2023

()

Net income

—

Other comprehensive income (loss), net of tax

—

Dividends declared on preferred stock

—

()

—

()

Dividends declared on common stock — $

per share

—

()

—

()

Stock option exercises and other

—

()

—

Share-based compensation

—

Other

—

()

—

Balance at June 30, 2024

()

Balance at December 31, 2024

()

Net income

—

Other comprehensive income (loss), net of tax

—

Redemption of preferred stock

()

—

()

—

()

Dividends declared on preferred stock

—

()

—

()

Dividends declared on common stock — $

per share

—

()

—

()

Repurchase of common stock, inclusive of tax

—

()

—

()

Repurchase of nonvoting common stock, inclusive of tax

—

()

—

()

—

()

Conversion of nonvoting common stock to common stock

—

()

—

Stock option exercises and other

—

()

—

Share-based compensation

—

Other

—

()

—

Balance at June 30, 2025

()

See Notes to Condensed Consolidated Financial Statements.

- 32 -

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Cash Flows (1)

(in Millions)

(Unaudited)


	Six Months Ended June 30,
	2025	2024
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
Purchases of held to maturity 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	()	()
Repayments of long-term debt	()	()
Redemption of preferred stock	()
Repurchases of common stock and nonvoting common 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 Period	$	$

Continued on following page.

- 33 -

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Cash Flows (1)

(in Millions)

(Unaudited)

Continued from previous page.


	Six Months Ended June 30,
	2025	2024
Supplemental Cash Flow Information
Non-cash investing activity:
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	$	$

	June 30, 2025	June 30, 2024
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	$	$

(1)

(2)

See Notes to Condensed Consolidated Financial Statements.

- 34 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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

- 35 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

$ $ $ 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 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 the fourth quarter of 2024, this line item includes interest expense related to securities loaned. Prior period amounts have been reclassified to reflect this change. See Note 1 for additional information.

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

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

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

- 36 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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

Receivables from brokers, dealers, and clearing organizations

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

Payables to brokers, dealers, and clearing organizations

$ $

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

- 37 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

$ $ $ 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 securities U.S. agency mortgage-backed securities$ $ $ $ Total held to maturity securities$ $ $ $ December 31, 2024Available for sale securitiesU.S. agency mortgage-backed securities$ $ $ $ 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$ $ $ $

(1) As of June 30, 2025 and December 31, 2024, approximately % and %, respectively, of the total AFS in corporate debt securities were issued by institutions in the financial services industry. Approximately % and % of the holdings of these securities were issued by institutions in the information technology industry as of June 30, 2025 and December 31, 2024, respectively. Approximately % and % of the holdings of these securities were issued by companies in the consumer staples industry as of June 30, 2025 and December 31, 2024, respectively.

(2) Approximately % and % of asset-backed securities held as of June 30, 2025 and December 31, 2024, respectively, were Federal Family Education Loan Program Asset-Backed Securities. Asset-backed securities collateralized by credit card receivables represented approximately % and % of the asset-backed securities held as of June 30, 2025 and December 31, 2024, respectively.

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

At June 30, 2025, 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 9). Our banking subsidiaries also pledge investment securities as collateral to secure borrowing capacity at the Federal Reserve discount window, and had pledged securities with a fair value of $ billion (collateral value of $ billion) as collateral for this facility at June 30, 2025. The Company also pledges investment securities issued by federal agencies to secure certain trust deposits. The fair value and collateral value of these pledged securities was $ billion at June 30, 2025.

At June 30, 2025, our banking subsidiaries had pledged HTM securities as collateral under repurchase agreements with external financial institutions and the FICC. HTM securities pledged were U.S. agency mortgage-backed securities with an aggregate

- 38 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

billion, of which $ billion may be sold, repledged, or otherwise used by the counterparties. See Notes 9 and 12 for additional information on these repurchase agreements.

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

$ $ $ $ $

U.S. Treasury securities

Corporate debt securities

Asset-backed securities

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

Total (2)

$ $ $ $ $ $

December 31, 2024

Available for sale securities

U.S. agency mortgage-backed securities

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)

(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 June 30, 2025 and December 31, 2024, respectively.

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

For a description of management’s quarterly evaluation of AFS securities in unrealized loss positions, see Item 8 – Note 2 in the 2024 Form 10-K. amounts were recognized as credit loss expense and securities were written down to fair value through earnings for the six months ended June 30, 2025 and the year ended December 31, 2024. of the Company’s AFS securities held as of June 30, 2025 and December 31, 2024 had an allowance for credit losses. All HTM securities as of June 30, 2025 and December 31, 2024 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 June 30, 2025 and December 31, 2024, respectively. These amounts are excluded from the amortized cost basis and fair market value of AFS and HTM securities and included in other assets on the condensed consolidated balance sheets. There were writeoffs of accrued interest receivable on AFS and HTM securities during the six months ended June 30, 2025, or for the year ended December 31, 2024.

- 39 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

AFS and HTM investment securities portfolio

Estimated effective duration, inclusive of derivatives (1):

AFS investment securities portfolio

AFS and HTM investment securities portfolio

(1) See Note 11 for additional discussion of the Company’s derivatives.

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

$ $ $ $ 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)

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

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

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

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

Credit Quality

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

•Year of origination;

•Borrower Fair Isaac Corporation (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).

- 42 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

$ $ $ $ $ $ $ $ $ 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% 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.

- 43 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

$ $ $ $ $ $ $ $ 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 June 30, 2025, $ 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 June 30, 2025 and December 31, 2024, 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 condensed consolidated balance sheets.

The HELOC product has a 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 amortizing loan. The interest rate during the initial draw period and the amortizing period is a floating-rate based on the prime rate plus a margin.

- 44 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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

(1) Includes $ million and $ million of HELOCs converted to amortizing loans during the three and six months ended June 30, 2025, respectively.

At June 30, 2025, $ 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 June 30, 2025, the borrowers on approximately % of HELOC loan balances outstanding only paid the minimum amount due.

million and $ million, respectively, and recognized tax credits and other tax benefits of $ million and $ million, respectively, associated with these investments. During the six months ended June 30, 2025 and 2024, CSB recorded amortization of $ million and $ million, respectively, and recognized tax credits and other tax benefits of $ 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 on the condensed consolidated statements of income. Tax credits and other tax benefits are reflected as cash flows from operating activities on the condensed consolidated statements of cash flows.

Aggregate assets, liabilities, and maximum exposure to loss

$ $ $ $ $

Other investments (2)

Total$ $ $ $ $ $

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

- 45 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

$ Checking

Time certificates of deposit (1)

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 June 30, 2025 and December 31, 2024 were % and %, respectively. As of June 30, 2025 and December 31, 2024, there were time deposits that were in excess of FDIC insurance limits or otherwise uninsured.

Time certificates of deposit outstanding at June 30, 2025 mature between July 2025 and December 2025.

- 46 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

% due March 10, 202503/10/15$ $

% 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 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, 2025

10/22/14

% due April 1, 2027

04/27/17

% due October 1, 2029

08/16/19

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

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

12.

- 52 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

billion and $ million at June 30, 2025 and December 31, 2024, respectively. Our securities lending transactions are subject to enforceable master netting arrangements with other broker-dealers; however, we do not net securities lending transactions. Therefore, amounts related to securities loaned and securities borrowed are presented gross in the condensed consolidated balance sheets.

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

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

- 53 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

$ $ $ $()

(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, 2024 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 condensed consolidated balance sheets.

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

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

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

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

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

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

- 54 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

$ Fair value of 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 at June 30, 2025 and December 31, 2024, respectively.

13.

independent third-party pricing sources for such assets recorded at fair value.

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

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

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

- 55 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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

Assets and Liabilities Measured at Fair Value on a Recurring Basis

$ $ $ 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:Interest rate swaps$ $ $ $ Other Total accrued expenses and other liabilities Total liabilities$ $ $ $

- 56 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

$ $ $ 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$ $ $ $

- 57 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

$ $ $ $ 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

- 58 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

14.

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

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

Through the completion of the secondary offering and the Company’s repurchase of nonvoting common stock, TD Bank disposed of all of its common shares of CSC and as of February 12, 2025, the Company had remaining nonvoting common stock outstanding.

CSC repurchased an additional million shares of its common stock for $ million during the three months ended June 30, 2025. These shares were purchased under CSC’s $ billion share repurchase authorization and as of June 30, 2025, approximately $ billion remained on the authorization. Subsequent to June 30, 2025, on July 24, 2025, CSC publicly announced that its Board of Directors terminated the existing share repurchase authorization and replaced it with a new authorization to repurchase up to $ billion of common stock. The new share repurchase authorization does not have an expiration date.

There were repurchases of CSC’s common stock during the three and six months ended June 30, 2024.

- 59 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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

There were redemptions of CSC’s preferred stock during the three and six months ended June 30, 2024.

$ $ $ 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 (5)

Series G (2)

04/30/20 —— —

Series H (3)

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

-Year Treasury

Series I (4)

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

-Year Treasury

Series K (4)

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

-Year Treasury

%Total preferred
stock $ $

(1) Represented by depositary shares.

(2) Series G was redeemed on June 2, 2025.

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

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

(5) 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.

$ $ $ $ $ $ $

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

Derivatives designated as cash flow hedging instruments:

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

()

Reclassifications included in interest revenue, net of tax expense (benefit) of $

Other (1)

Balance at June 30, 2025$()

(1) Tax expense (benefit) was less than $ thousand.

As of June 30, 2025, 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.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

16.

remaining nonvoting common stock outstanding and accordingly, dividends were paid on nonvoting common stock during the six months ended June 30, 2025.

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

$ $ $ $ $

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 and million for the three and six months ended June 30, 2025, respectively.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

$ $ $

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 and million for the three and six months ended June 30, 2024, respectively.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

17.

%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, 2024 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 June 30, 2025, CSC was subject to a stress capital buffer of 2.5%. In addition, CSB is required to maintain a capital conservation buffer of 2.5%. CSC and CSB are also required to maintain a countercyclical capital buffer above the regulatory minimum risk-based capital ratios, which was zero for both periods presented. If a buffer falls below the minimum requirement, CSC and CSB would be subject to increasingly strict limits on capital distributions and discretionary bonus payments to executive officers. At June 30, 2025, the minimum capital ratio requirements for both CSC and CSB, inclusive of their respective buffers, were 7.0%, 8.5%, and 10.5% for Common Equity Tier 1 Risk-Based Capital, Tier 1 Risk-Based Capital, and Total Risk-Based Capital, respectively.

N/A Not applicable.

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

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

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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

18.

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

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

The CODMs evaluate the performance of the segments on a pre-tax basis and use income before taxes on income to allocate resources, including employees and capital, to the segments during the annual budgeting process. The CODMs consider budget-to-actual variances on a monthly basis when making decisions about allocating resources to the segments throughout the year. Segment assets and liabilities are not used for evaluating segment performance or in deciding how to allocate resources to segments. There are revenues from transactions between the segments.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

$ $ $ $ $ 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$ $ $ $ $ $ Six Months Ended June 30,Net RevenuesNet interest revenue$ $ $ $ $ $ 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$ $ $ $ $ $ (2)

Attached as Exhibit 101 to this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2025 are the following materials formatted in Inline XBRL (Extensible Business Reporting Language) (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Stockholders’ Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.

- 69 -

THE CHARLES SCHWAB CORPORATION

SIGNATURE

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


		THE CHARLES SCHWAB CORPORATION
		(Registrant)



Date:	August 8, 2025	/s/ Michael Verdeschi
		Michael Verdeschi
		Managing Director and Chief Financial Officer

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SCHWAB CHARLES CORP - Quarter Report: 2025 June (Form 10-Q)

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