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

Net Interest Revenue

Revenue on interest-earning assets is affected by various factors, such as the composition of assets, prevailing interest rates and spreads at the time of origination or purchase, changes in interest rates on cash and cash equivalents, floating-rate securities and loans, and changes in prepayment levels for mortgage-backed and other asset-backed securities and loans. Schwab establishes the rates paid on client-related liabilities, and management expects that it will generally adjust the rates paid on these liabilities at some fraction of any movement in short-term rates. Interest expense on long-term debt, FHLB borrowings, other short-term

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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)

borrowings, and other funding sources is impacted by market interest rates at the time of borrowing and changes in interest rates on floating-rate liabilities. See also Risk Management – Market Risk.

The Federal Reserve maintained the upper bound of the target overnight rate at 5.50% through most of 2024 before reducing the rate by 50 basis points during the third quarter of 2024 and another 50 basis points across two cuts during the fourth quarter of 2024. During the first quarter of 2025, the Federal Reserve maintained the upper bound of the target overnight rate at 4.50%.

Schwab’s average interest-earning assets in the first quarter of 2025 were lower compared with the same period in 2024; however, client demand for margin and bank lending continued to be strong during the first quarter of 2025, even as clients reduced leverage amid market volatility late in the first quarter. Margin and bank loan balances increased by 23% and 16%, respectively, from March 31, 2024 to the end of the first quarter of 2025. Following further deceleration in the pace of clients’ reallocation of cash from sweep products to higher-yielding investment solutions in 2024, client activity in the first quarter of 2025 reflected normalized cash behavior, inclusive of organic growth, seasonality, and investor sentiment against a backdrop of increased market volatility. Bank sweep deposits and payables to brokerage clients increased by a total of $11.5 billion, or 4%, from March 31, 2024 to the end of the first quarter of 2025. Principal and interest payments on AFS and HTM securities supported a further reduction in bank supplemental funding of $11.8 billion, or 24%, during the first quarter of 2025. Since March 31, 2024, the Company has reduced bank supplemental funding by $32.7 billion, or 46%.

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


	2025						2024
Three Months Ended March 31,	Average Balance		Interest Revenue/ Expense		Average Yield/Rate		Average Balance		Interest Revenue/ Expense		Average Yield/Rate
Interest-earning assets
Cash and cash equivalents	$	30,483	$	328	4.31	%	$	33,791	$	454	5.31	%
Cash and investments segregated	38,611		412		4.27	%	29,297		388		5.24	%

Receivables from brokerage clients	83,137		1,382		6.65	%	63,804		1,260		7.81	%
Available for sale securities (1)	84,590		433		2.05	%	111,867		594		2.12	%
Held to maturity securities (1)	144,401		622		1.72	%	157,410		690		1.75	%
Bank loans	46,043		493		4.32	%	40,529		440		4.36	%
Total interest-earning assets	427,265		3,670		3.44	%	436,698		3,826		3.48	%
Securities lending revenue			60						76
Other interest revenue			27						39
Total interest-earning assets	$	427,265	$	3,757	3.52	%	$	436,698	$	3,941	3.59	%
Funding sources
Bank deposits	$	245,719	$	436	0.72	%	$	274,368	$	921	1.35	%
Payables to brokers, dealers, and clearing organizations (2)	14,177		137		3.88	%	5,513		55		3.96	%
Payables to brokerage clients	90,173		51		0.23	%	68,343		73		0.43	%
Other short-term borrowings	6,695		82		4.96	%	7,385		103		5.61	%
Federal Home Loan Bank borrowings	10,725		133		4.94	%	24,857		330		5.27	%
Long-term debt	22,281		212		3.81	%	25,000		224		3.59	%
Total interest-bearing liabilities (2)	389,770		1,051		1.09	%	405,466		1,706		1.69	%
Non-interest-bearing funding sources (2)	37,495						31,232

Other interest expense			—						2
Total funding sources	$	427,265	$	1,051	0.99	%	$	436,698	$	1,708	1.57	%
Net interest revenue			$	2,706	2.53	%			$	2,233	2.02	%

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

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

Schwab money market funds$621,474 $418 0.27 %$499,887 $336 0.27 %Schwab equity and bond funds, ETFs, and CTFs658,588 122 0.08 %539,661 107 0.08 %

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

359,696 222 0.25 %314,576 209 0.27 %

Other third-party mutual funds and ETFs

623,647 103 0.07 %605,625 106 0.07 %

Total mutual funds, ETFs, and CTFs (1)

$2,263,405 $865 0.15 %$1,959,749 $758 0.16 %

Managed investing solutions (1)

Fee-based$590,483 $569 0.39 %$506,133 $503 0.40 %Non-fee-based120,442 — — 106,032 — — Total managed investing solutions$710,925 $569 0.32 %$612,165 $503 0.33 %

Other balance-based fees (2)

841,555 77 0.04 %719,447 69 0.04 %

Other (3)

19 18 Total asset management and administration fees$1,530 $1,348

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

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

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

Asset management and administration fees increased by $182 million, or 14%, in the first quarter of 2025 compared to the same period in 2024. This increase was primarily a result of continued growth in Schwab money market funds amid the ongoing elevated interest rate environment. The increase in asset management and administration fees in the first quarter of 2025 was also due to growth in fee-based managed investing solutions and Mutual Fund OneSource®. These increases reflected the Company’s asset gathering and net inflows into managed investing solutions, as well as year-over-year equity market appreciation, which more than offset equity market declines experienced in the first quarter of 2025.

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THE CHARLES SCHWAB CORPORATION

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

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

The following table presents 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% and 48% of the asset management and administration fees earned in the first quarter of 2025 and 2024, respectively:


	Schwab Money Market Funds				Schwab Equity and Bond Funds, ETFs, and CTFs				Mutual Fund OneSource® and Other NTF funds
Three Months Ended March 31,	2025		2024		2025		2024		2025		2024
Balance at beginning of period	$	596,531	$	476,409	$	627,166	$	506,149	$	347,798	$	306,222
Net inflows (outflows)	38,477		30,940		9,088		7,719		(7,046)		(4,161)
Net market gains (losses) and other	6,524		8,329		(11,030)		35,022		(472)		27,115
Balance at end of period	$	641,532	$	515,678	$	625,224	$	548,890	$	340,280	$	329,176

Expenses excluding interest increased by $202 million, or 7%, in the first quarter of 2025 compared to the same period in 2024. Adjusted total expenses, which excludes acquisition and integration-related costs, amortization of acquired intangible assets, and restructuring costs, increased 8% in the first quarter of 2025 compared to the same period 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 first quarter of 2025.

Total compensation and benefits expense increased in the first quarter of 2025 compared to the same period in 2024, primarily due to annual merit increases and higher incentive compensation. In the first quarter of 2024, compensation and benefits included a $31 million benefit due to a change in estimated restructuring costs, and also acquisition and integration-related costs of $17 million.

Professional services expense increased in the first quarter of 2025 compared to the same period in 2024, reflecting increased utilization of technology and other professional services to support overall growth of the business. Professional services included acquisition and integration-related costs of $17 million in the first quarter of 2024.

Occupancy and equipment expense increased in the first quarter of 2025 compared to the same period in 2024, reflecting higher building expenses and technology equipment and software costs related to growth of the business. Occupancy and equipment included restructuring costs of $2 million in the first quarter of 2024.

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

Communications expense increased in the first quarter of 2025 compared to the same period in 2024, primarily as a result of higher exchange quotation services expenses.

Depreciation and amortization expense decreased in the first quarter of 2025 compared to the same period 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).

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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)

Amortization of acquired intangible assets remained consistent in the first quarter of 2025 with the same period in 2024.

Regulatory fees and assessments decreased in the first quarter of 2025 compared to the same period in 2024. The decrease in the first quarter 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, compared to the first quarter of 2024.

Other expense increased in the first quarter of 2025 compared to the same period in 2024, primarily due to higher industry fees. Industry fees increased primarily due to higher SEC fee rates in effect during the first quarter of 2025 compared to the first quarter of 2024 and an increase in trading volumes. Subsequent to March 31, 2025, the SEC announced that effective May 14, 2025, it would decrease 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 after the effective date, resulting in no impact to net income.

Capital expenditures were $156 million and $122 million in the first quarter of 2025 and 2024, respectively. Capital expenditures increased in the first quarter of 2025 compared to the same period in 2024, primarily due to higher investment in purchased software 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 $546 million and $436 million for the first quarter of 2025 and 2024, respectively, resulting in effective tax rates of 22.2% and 24.2%, respectively. The decrease in the effective tax rate in the first quarter 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 the first quarter of 2025, an increase in equity compensation tax deduction benefits, and a decrease in non-deductible FDIC deposit insurance assessments.

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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 March 31,	Percent Change		2025		2024		Percent Change		2025		2024		Percent Change		2025		2024
Net Revenues
Net interest revenue	22	%	$	2,158	$	1,766	17	%	$	548	$	467	21	%	$	2,706	$	2,233
Asset management and administration fees	14	%	1,114		975		12	%	416		373		14	%	1,530		1,348
Trading revenue	12	%	805		717		3	%	103		100		11	%	908		817
Bank deposit account fees	35	%	191		141		29	%	54		42		34	%	245		183
Other	28	%	177		138		57	%	33		21		32	%	210		159
Total net revenues	19	%	4,445		3,737		15	%	1,154		1,003		18	%	5,599		4,740
Expenses Excluding Interest
Compensation and benefits	8	%	$	1,285	$	1,189	11	%	$	387	$	349	9	%	$	1,672	$	1,538
Professional services	10	%	214		194		17	%	55		47		12	%	269		241
Occupancy and equipment	4	%	215		206		—		59		59		3	%	274		265
Advertising and market development	3	%	64		62		23	%	32		26		9	%	96		88
Communications	14	%	113		99		(5)	%	40		42		9	%	153		141
Depreciation and amortization	(11)	%	165		186		24	%	52		42		(5)	%	217		228
Amortization of acquired intangible assets	(18)	%	106		129		N/M		24		1		—		130		130
Regulatory fees and assessments	(26)	%	70		94		(39)	%	19		31		(29)	%	89		125
Other	29	%	202		156		40	%	42		30		31	%	244		186
Total expenses excluding interest	5	%	2,434		2,315		13	%	710		627		7	%	3,144		2,942
Income before taxes on income	41	%	$	2,011	$	1,422	18	%	$	444	$	376	37	%	$	2,455	$	1,798

Net new client assets (in billions) (2)	85	%	$	69.5	$	37.6	24	%	$	62.9	$	50.6	50	%	$	132.4	$	88.2

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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)

Long-Term Borrowings

The Company’s long-term debt is primarily comprised of Senior Notes and totaled $21.5 billion and $22.4 billion at March 31, 2025 and December 31, 2024, respectively.

The following table provides information about our Senior Notes outstanding at March 31, 2025:

March 31, 2025

Par
Outstanding

Maturity

Weighted Average

Interest Rate (1)

Moody’s

Standard
& Poor’s

Fitch

CSC Senior Notes

21,287

2025 - 2034

3.67%

A-

Ameritrade Holding Senior Notes

163

2025 - 2029

3.38%

A-

—

(1) Weighted average interest rates presented here exclude the impact of derivatives. See Note 11 for information on the Company’s hedging of Senior Notes.

New Debt Issuances

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

(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 at March 31, 2025 remained consistent with year-end 2024, ending the first quarter of 2025 at 9.9%. CSB’s Tier 1 Leverage Ratio increased from 11.6% at year-end 2024, ending the first quarter of 2025 at 12.1% primarily as a result of lower total assets as well as net income during the quarter.

In light of the Federal Reserve’s 2023 regulatory capital rule proposal, which, among other things, would require the Company to include AOCI in regulatory capital (see Part II – Item 7 – Current Regulatory and Other Developments in the 2024 Form 10-K), the Company has developed an adjusted Tier 1 Leverage Ratio, which is a non-GAAP financial measure that includes AOCI in the ratio. The primary component of AOCI for Schwab is unrealized gains and losses on our AFS investment securities portfolio and on securities transferred from AFS to the HTM category.

The Company maintains a long-term operating objective for its consolidated adjusted Tier 1 Leverage Ratio of 6.75% - 7.00%. As of March 31, 2025, our adjusted Tier 1 Leverage Ratio, which includes AOCI in the ratio, was 7.1% for CSC (consolidated) and 8.2% for CSB (see Non-GAAP Financial Measures for further details and a reconciliation of such measures to GAAP reported results). The Company is continuing to accrete capital organically, and will continue to manage its capital as described above 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.

IDA Agreement

Certain brokerage client deposits are swept off-balance sheet to the TD Depository Institutions pursuant to the 2023 IDA agreement. During the first three months of 2025, Schwab did not move IDA balances to its balance sheet. The Company’s overall capital management strategy includes supporting migration of IDA balances in future periods as available pursuant to the terms of the 2023 IDA agreement. The Company’s ability to migrate these balances to its balance sheet is dependent upon multiple factors including having sufficient capital levels to sustain these incremental deposits. See Item 1 – Note 10 for further information on the 2023 IDA agreement.

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THE CHARLES SCHWAB CORPORATION

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

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

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 three months of 2025 and 2024 are as follows:


	2025				2024
Three Months Ended March 31,	Cash Paid		Per Share Amount		Cash Paid		Per Share Amount
Common and Nonvoting Common Stock (1)	$	492	$	.27	$	459	$	.25
Preferred Stock:
Series D (2)	11		14.88		11		14.88

(1) There were no acquisition and integration-related costs for the three months ended March 31, 2025. Acquisition and integration-related costs for the three months ended March 31, 2024 primarily consist of $17 million of compensation and benefits and $17 million of professional services.

(2) There were no restructuring costs for the three months ended March 31, 2025. Restructuring costs for the three months ended March 31, 2024 reflect a benefit due to a change in estimate of $31 million in compensation and benefits, partially offset by $2 million of occupancy and equipment expense and $1 million of other expense.


	Three Months Ended March 31,
	2025				2024
	Amount		Diluted EPS		Amount		Diluted EPS
Net income available to common stockholders (GAAP), Earnings per common share — diluted (GAAP)	$	1,796	$	.99	$	1,251	$	.68
Amortization of acquired intangible assets	130		.07		130		.07
Acquisition and integration-related costs	—		—		38		.02
Restructuring costs	—		—		(28)		(.01)
Income tax effects (1)	(31)		(.02)		(33)		(.02)
Adjusted net income available to common stockholders (non-GAAP), Adjusted diluted EPS (non-GAAP)	$	1,895	$	1.04	$	1,358	$	.74

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


	Three Months Ended March 31,
	2025			2024
Return on average common stockholders’ equity (GAAP)	18		%	15		%
Average common stockholders’ equity	$	39,752		$	32,493
Less: Average goodwill	(11,951)			(11,951)
Less: Average acquired intangible assets — net	(7,679)			(8,196)
Plus: Average deferred tax liabilities related to goodwill and acquired intangible assets — net	1,709			1,759
Average tangible common equity	$	21,831		$	14,105
Adjusted net income available to common stockholders (1)	$	1,895		$	1,358
Return on tangible common equity (non-GAAP)	35		%	39		%

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THE CHARLES SCHWAB CORPORATION

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.

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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)


	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.

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THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(In Millions)

(Unaudited)


	Three Months Ended March 31,
	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
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.

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THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Balance Sheets

(In Millions, Except Per Share and Share Amounts)

(Unaudited)


	March 31, 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 March 31, 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 $ at March 31, 2025 and $ at December 31, 2024; including assets pledged of $ and $, respectively)
Held to maturity securities (including assets pledged of $ at March 31, 2025 and $ at December 31, 2024)
Bank loans — net
Equipment, office facilities, and property — net
Goodwill
Acquired intangible assets — net
Other assets
Total assets	$	$
Liabilities and Stockholders’ Equity
Bank deposits	$	$
Payables to brokers, dealers, and clearing organizations
Payables to brokerage clients
Accrued expenses and other liabilities
Other short-term borrowings
Federal Home Loan Bank borrowings
Long-term debt
Total liabilities
Stockholders’ equity:
Preferred stock — $ par value per share; aggregate liquidation preference of $ at March 31, 2025 and December 31, 2024
Common stock — billion shares authorized; $ par value per share; and shares issued at March 31, 2025 and December 31, 2024, respectively
Nonvoting common stock — million shares authorized; $ par value per share; shares issued at March 31, 2025 and shares issued at December 31, 2024
Additional paid-in capital
Retained earnings
Treasury stock, at cost — and shares at March 31, 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.

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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 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 March 31, 2024

()

Balance at December 31, 2024

()

Net income

—

Other comprehensive income (loss), net of tax

—

Dividends declared on preferred stock

—

()

—

()

Dividends declared on common stock — $

per share

—

()

—

()

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 March 31, 2025

()

See Notes to Condensed Consolidated Financial Statements.

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THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Cash Flows (1)

(in Millions)

(Unaudited)


	Three Months Ended March 31,
	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	()	()
Dividends paid	()	()
Proceeds from stock options exercised
Repurchase of nonvoting common stock	()
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.

- 30 -

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Cash Flows (1)

(in Millions)

(Unaudited)

Continued from previous page.


	Three Months Ended March 31,
	2025	2024
Supplemental Cash Flow Information
Non-cash investing activity:
Changes in accrued equipment, office facilities, and property purchases	$	$	()
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	$	$

	March 31, 2025	March 31, 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.

- 31 -

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 three months of 2025.

- 32 -

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 March 31, 2025 and December 31, 2024, respectively.

The Company had net contract assets of $ million and $ million at March 31, 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.

- 33 -

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 to clearing organizations Payables for securities failed to receive

Payables to brokers, dealers, and clearing organizations

$ $

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

- 34 -

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 March 31, 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 March 31, 2025 and December 31, 2024, respectively.

(2) Approximately % and % of asset-backed securities held as of March 31, 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 March 31, 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 March 31, 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 March 31, 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 March 31, 2025.

At March 31, 2025, our banking subsidiaries had pledged HTM securities as collateral under repurchase agreements with external financial institutions. HTM securities pledged were U.S. agency mortgage-backed securities with an aggregate amortized cost of $ billion. Securities pledged as collateral under these repurchase agreements may be sold, repledged, or otherwise used by the counterparties. See Notes 9 and 12 for additional information on these repurchase agreements.

- 35 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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 (1)

Corporate debt securities

Asset-backed securities (1)

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

Total (2)

$ $ $ $ $ $

December 31, 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 March 31, 2025 and December 31, 2024, respectively.

At March 31, 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 three months ended March 31, 2025 and the year ended December 31, 2024. of the Company’s AFS securities held as of March 31, 2025 and December 31, 2024 had an allowance for credit losses. All HTM securities as of March 31, 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 March 31, 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 three months ended March 31, 2025, or for the year ended December 31, 2024.

- 36 -

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 on the Company’s derivatives.

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

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

Total amortized cost (1)

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

(1) For purposes of this table, the amortized cost of AFS securities excludes the unallocated PLM fair value hedge basis adjustments of $ million at March 31, 2025.

$ Gross realized gains Gross realized losses

)))

Consistent with Schwab’s loan charge-off policy for pledged asset lines (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 March 31, 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 March 31, 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 moderating inflation in the first quarter of 2025, but continued to face tight monetary policy and geopolitical unrest amid a backdrop of elevated uncertainty around the economic impact of trade policy. Management’s macroeconomic outlook reflects sustained current benchmark lending rates, with unemployment remaining relatively flat and modest home price appreciation. Though higher mortgage rates are softening demand and reducing borrower

- 38 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

million and $ million at March 31, 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 March 31, 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).

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

- 39 -

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.

- 40 -

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 March 31, 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 March 31, 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.

- 41 -

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 of HELOCs converted to amortizing loans during the three months ended March 31, 2025.

At March 31, 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 March 31, 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. 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.

- 42 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Time certificates of deposit (1)

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

(1) Time certificates of deposit consist of brokered CDs. The weighted-average interest rates on outstanding time certificates of deposit at March 31, 2025 and December 31, 2024 were % and %, respectively. As of March 31, 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 March 31, 2025 mature between April 2025 and November 2025.

- 43 -

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 Total Ameritrade Holding Senior Notes Finance lease liabilities Unamortized premium — net Debt issuance costs()()

Fair value hedging basis adjustments (5)

()Total long-term debt$ $

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

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

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

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

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

- 44 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

2026 2027 2028 2029 Thereafter Total maturities Unamortized premium — net Debt issuance costs()

Fair value hedging basis adjustments (1)

Total long-term debt$

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

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

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

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

Our banking subsidiaries have access to funding through the Federal Reserve discount window. Amounts available are dependent upon the value of certain investment securities that are pledged as collateral. As of March 31, 2025 and December 31, 2024, our collateral pledged provided total borrowing capacity of $ billion and $ billion, respectively, of which amounts were outstanding at the end of either period.

CSC has the ability to issue up to $ billion of commercial paper notes with maturities of up to days. There was $ million gross par value before discount of $ million outstanding at March 31, 2025, and amounts outstanding at December 31, 2024. CSC and CS&Co also have access to unsecured uncommitted lines of credit with external banks with total borrowing capacity of $ billion; amounts were outstanding as of March 31, 2025 or December 31, 2024.

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

Other short-term borrowings Total$

- 45 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

10.

million and $ million during the first quarter of 2025 and 2024, respectively. CSB purchased HELOCs with commitments of $ million and $ million during the first quarter of 2025 and 2024, respectively.

$ Commitments to purchase First Mortgage loans Total$ $

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

The Company also provides guarantees to securities clearing houses and exchanges under standard membership agreements, which require members to guarantee the performance of other members. Under the agreements, if another member becomes unable to satisfy its obligations to the clearing houses and exchanges, other members would be required to meet shortfalls. The Company’s liability under these arrangements is not quantifiable and may exceed the amounts it has posted as collateral. The Company also engages third-party firms to clear clients’ futures and options on futures transactions and to facilitate clients’ foreign exchange trading, and has agreed to indemnify these firms for any losses that they may incur from the client transactions introduced to them by the Company. The potential requirement for the Company to make payments under these arrangements is remote. Accordingly, liability has been recognized for these guarantees and indemnifications.

IDA agreement: The 2023 IDA agreement with the TD Depository Institutions specifies responsibilities, including certain contingent obligations, of the Company. Pursuant to the 2023 IDA agreement, uninvested cash within eligible brokerage client accounts is swept off-balance sheet to deposit accounts at the TD Depository Institutions. Schwab provides recordkeeping and support services to the TD Depository Institutions with respect to the deposit accounts for which Schwab receives an aggregate monthly fee. Under the 2023 IDA agreement, the service fee on client cash deposits held at the TD Depository Institutions is 15 basis points. The Company’s ability to migrate these balances to its balance sheet is dependent on multiple factors including having sufficient capital levels to sustain these incremental deposits and certain binding limitations specified in the 2023 IDA agreement. During the first three months of 2025, Schwab did move IDA balances to its balance sheet.

The 2023 IDA agreement extended the agreement term to sweep balances to the TD Depository Institutions through July 1, 2034, and requires that Schwab maintain minimum and maximum IDA balances as follows:

•Through September 10, 2025, Schwab must maintain minimum balances above the total of then-outstanding unmatured fixed-rate obligation amounts, with a maximum of $ billion above this total amount. During this period, withdrawals of IDA balances by Schwab are generally permitted only to the extent of withdrawals initiated by Schwab customers, with limited exceptions, except to the extent necessary for Schwab to maintain balances below the applicable maximum.

•After September 10, 2025, withdrawals of IDA balances are permitted at Schwab’s discretion, subject to an obligation to maintain IDA balances above a minimum of $ billion, with a maximum of $ billion.

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

As of March 31, 2025, the total ending IDA balance was $ billion, of which $ billion was fixed-rate obligation amounts and $ billion was floating-rate obligation amounts. As of December 31, 2024, the total ending IDA balance was $ billion, of which $ billion was fixed-rate obligation amounts and $ billion was floating-rate obligation amounts.

- 46 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

11.

- 47 -

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 $ billion at March 31, 2025 and December 31, 2024, respectively, that were designated as fair value hedges of interest rate risk. The notional amount is the basis upon which the pay-fixed/receive-float and receive-fixed/pay-float payments are determined; however, the amount is not exchanged.

Fair Values of Derivative Instruments

$ $ $

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

(2) Includes reductions related to variation margin settlements. Settlements on derivative positions cleared through CCPs are reflected as reductions to the associated derivative asset and liability balances. As of March 31, 2025, there was a $ million reduction of derivative assets and a $ million reduction of derivative liabilities related to variation margin settlements. As of December 31, 2024, there was a $ million reduction of derivative assets and a $ million reduction of derivative liabilities related to variation margin settlements.

Effects of Fair Value Hedge Accounting

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

(1) Includes the amortized cost basis of closed portfolios of AFS securities used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period. At March 31, 2025 and December 31, 2024, the amortized cost basis of the closed portfolios used in these hedging relationships was $ billion and $ billion, respectively, of which $ billion was designated in a portfolio layer hedging relationship at both March 31, 2025 and December 31, 2024. The cumulative basis adjustments associated with these hedging relationships were a reduction of the amortized cost basis of the closed portfolios of $ million and $ million at March 31, 2025 and December 31, 2024, respectively.

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

The table below presents the effect of the Company’s interest rate swaps on the condensed consolidated statements of income:


	Location and Amount of Gain (Loss) Recognized in Income
	Interest Revenue			Interest Expense
Three Months Ended March 31,	2025	2024		2025		2024
Gain (loss) on fair value hedging relationships:
Hedged items	$	$	()	$	()	$
Derivatives designated as hedging instruments (1)	()

(1) Interest revenue excludes net income (expense) from periodic interest accruals and receipts (payments) of $ million and $ million for the three months ended March 31, 2025 and 2024, respectively. Interest expense excludes net income (expense) from periodic interest accruals and receipts (payments) of $() million for the three months ended March 31, 2025.

- 48 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

12.

million and $ million at March 31, 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, the 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.

- 49 -

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 March 31, 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. Amounts were less than $ thousand as of December 31, 2024.

(5) At March 31, 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 March 31, 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 March 31, 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 March 31, 2025 and December 31, 2024.

- 50 -

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 March 31, 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

- 51 -

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 March 31, 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 Interest rate swaps Total other assets Total assets$ $ $ $ Accrued expenses and other liabilities:Interest rate swaps$ $ $ $ Other Total accrued expenses and other liabilities Total liabilities$ $ $ $

- 52 -

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$ $ $ $

- 53 -

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

- 54 -

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. The share repurchase authorization does not have an expiration date and as of March 31, 2025, approximately $ billion remained on the authorization. There were repurchases of CSC’s common stock during the three months ended March 31, 2024.

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

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 March 31, 2025, the Company has remaining nonvoting common stock outstanding.

- 55 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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

M LIBOR (4)

Series G (2)

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

-Year Treasury

Series H (3)

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

-Year Treasury

Series I (2)

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

-Year Treasury

Series K (2)

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

-Year Treasury

%Total preferred
stock $ $

(1) Represented by depositary shares.

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

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

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

N/A Not applicable.

$ $ $

Series F (2)

Series G (1)

Series H (1)

Series I (1)

Series J (1)

Series K (1)

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

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

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

Held to maturity securities:

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

Other (1)

()Balance at March 31, 2024$()Balance at December 31, 2024$()Available for sale securities:

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

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

Held to maturity securities:

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

Other (1)

Balance at March 31, 2025$()

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

As of March 31, 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.

16.

remaining nonvoting common stock outstanding and accordingly, dividends were paid on nonvoting common stock during the three months ended March 31, 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.

- 57 -

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 for the three months ended March 31, 2025.

As of March 31, 2024, the Company had voting and nonvoting common stock outstanding. The computations of basic and diluted EPS for the two classes for the three months ended March 31, 2024 are as follows:


	Three Months Ended March 31,
	2024
	Common Stock	Nonvoting Common Stock
Basic earnings per share:
Numerator
Net income	$	$
Preferred stock dividends and other (1)	()	()
Net income available to common stockholders	$	$
Denominator
Weighted-average common shares outstanding — basic
Basic earnings per share	$	$
Diluted earnings per share:
Numerator
Net 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:	$	$
Denominator
Weighted-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 for the three months ended March 31, 2024.

- 58 -

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 March 31, 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 March 31, 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 March 31, 2025, CSB is considered well capitalized (the highest category) under its respective regulatory capital rules. There are no conditions or events since March 31, 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 March 31, 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 March 31, 2025, CSPB and Trust Bank are considered well capitalized under their respective regulatory capital rules.

- 59 -

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 March 31, 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.

- 60 -

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$ $ $ $ $ $

(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 first quarter of 2025, and prior-year amounts have been recast to reflect this new basis of segmentation.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures: The management of the Company, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of March 31, 2025. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2025.

Changes in internal control over financial reporting: No change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) was identified during the quarter ended March 31, 2025, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

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

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THE CHARLES SCHWAB CORPORATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

On July 27, 2022, CSC publicly announced that its Board of Directors authorized the repurchase of up to $15.0 billion of common stock. The authorization does not have an expiration date. See also Part I – Item 1 – Note 14.

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


Month	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Publicly Announced Program
January:
Share repurchase program	—	$	—	—	$	8,723
Employee transactions (1)	10	$	74.11	N/A	N/A
February:
Share repurchase program	19,235	$	77.98	19,235	$	7,223
Employee transactions (1)	8	$	83.00	N/A	N/A
March:
Share repurchase program	—	$	—	—	$	7,223
Employee transactions (1)	1,133	$	79.04	N/A	N/A
Total:
Share repurchase program	19,235	$	77.98	19,235	$	7,223
Employee transactions (1)	1,151	$	79.03	N/A	N/A

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

N/A Not applicable.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended March 31, 2025, no director or officer of the Company or a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement as defined in Item 408 of Regulation S-K.

- 62 -

THE CHARLES SCHWAB CORPORATION

Item 6. Exhibits

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


Exhibit Number	Exhibit
10.435	Repurchase Agreement , dated February 9, 2025, between The Charles Schwab Corporation and TD Group US Holdings LLC, filed as Exhibit 10.1 to the Registrant’s From 8-K , dated February 12, 2025, and incorporated herein by reference.

31.1	Certification Pursuant to Rule 13a-14(a)/15d-14(a), As Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.

31.2	Certification Pursuant to Rule 13a-14(a)/15d-14(a), As Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.

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

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

101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.	(2)

101.SCH	Inline XBRL Taxonomy Extension Schema	(2)

101.CAL	Inline XBRL Taxonomy Extension Calculation	(2)

101.DEF	Inline XBRL Extension Definition	(2)

101.LAB	Inline XBRL Taxonomy Extension Label	(2)

101.PRE	Inline XBRL Taxonomy Extension Presentation	(2)

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

(1)	Furnished as an exhibit to this Quarterly Report on Form 10-Q.



(2)	Attached as Exhibit 101 to this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 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.

- 63 -

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:	May 9, 2025	/s/ Michael Verdeschi
		Michael Verdeschi
		Managing Director and Chief Financial Officer

- 64 -

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

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