Item 1. Condensed Consolidated Financial Statements

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Item 1. Condensed Consolidated Financial Statements

THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Income

(In Millions, Except Per Share Amounts)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Net Revenues
Interest revenue	$	3,787	$	3,817	$	7,544	$	7,758
Interest expense	(965)		(1,659)		(2,016)		(3,367)
Net interest revenue	2,822		2,158		5,528		4,391
Asset management and administration fees	1,570		1,383		3,100		2,731
Trading revenue	952		777		1,860		1,594
Bank deposit account fees	247		153		492		336
Other	260		219		470		378


Total net revenues	5,851		4,690		11,450		9,430
Expenses Excluding Interest
Compensation and benefits	1,536		1,450		3,208		2,988
Professional services	291		259		560		500
Occupancy and equipment	270		248		544		513
Advertising and market development	108		107		204		195
Communications	176		172		329		313
Depreciation and amortization	215		233		432		461
Amortization of acquired intangible assets	128		129		258		259
Regulatory fees and assessments	77		96		166		221
Other	247		249		491		435
Total expenses excluding interest	3,048		2,943		6,192		5,885
Income before taxes on income	2,803		1,747		5,258		3,545
Taxes on income	677		415		1,223		851
Net Income	2,126		1,332		4,035		2,694
Preferred stock dividends and other	149		121		262		232
Net Income Available to Common Stockholders	$	1,977	$	1,211	$	3,773	$	2,462
Weighted-Average Common Shares Outstanding:
Basic	1,817		1,828		1,819		1,827
Diluted	1,822		1,834		1,825		1,832

Earnings Per Common Shares Outstanding (1):
Basic	$	1.09	$	.66	$	2.07	$	1.35
Diluted	$	1.08	$	.66	$	2.07	$	1.34

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

See Notes to Condensed Consolidated Financial Statements.

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THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(In Millions)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Net income	$	2,126	$	1,332	$	4,035	$	2,694
Other comprehensive income (loss), before tax:
Change in net unrealized gain (loss) on available for sale securities:
Net unrealized gain (loss)	617		234		1,678		373

Other reclassifications included in other revenue	30		10		40		20
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	561		583		1,099		1,147
Change in net unrealized gain (loss) on derivatives designated as cash flow hedging instruments:
Net unrealized gain (loss)	(15)		—		(15)		—
Reclassifications included in interest revenue	17		—		17		—
Other	5		(2)		6		(10)
Other comprehensive income (loss), before tax	1,215		825		2,825		1,530
Income tax effect	(185)		(185)		(568)		(335)
Other comprehensive income (loss), net of tax	1,030		640		2,257		1,195
Comprehensive Income (Loss)	$	3,156	$	1,972	$	6,292	$	3,889

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)


	June 30, 2025		December 31, 2024
Assets
Cash and cash equivalents	$	32,195	$	42,083
Cash and investments segregated and on deposit for regulatory purposes (including resale agreements of $19,557 and $10,075 at June 30, 2025 and December 31, 2024, respectively)	45,568		38,221
Receivables from brokers, dealers, and clearing organizations	4,304		2,440
Receivables from brokerage clients — net	82,785		85,374
Available for sale securities (amortized cost of $72,604 and $89,704 at June 30, 2025 and December 31, 2024, respectively; including assets pledged of $225 and $378, respectively)	67,612		82,994
Held to maturity securities (including assets pledged of $5,160 and $5,920 at June 30, 2025 and December 31, 2024, respectively)	139,684		146,453
Bank loans — net	50,405		45,215
Equipment, office facilities, and property — net	3,197		3,338
Goodwill	11,951		11,951
Acquired intangible assets — net	7,487		7,743
Other assets	13,748		14,031
Total assets	$	458,936	$	479,843
Liabilities and Stockholders’ Equity
Bank deposits	$	233,058	$	259,121
Payables to brokers, dealers, and clearing organizations	18,584		13,336
Payables to brokerage clients	109,355		101,559
Accrued expenses and other liabilities	10,808		12,325
Other short-term borrowings	8,472		5,999
Federal Home Loan Bank borrowings	9,000		16,700
Long-term debt	20,208		22,428
Total liabilities	409,485		431,468
Stockholders’ equity:
Preferred stock — $.01 par value per share; aggregate liquidation preference of $6,871 and $9,329 at June 30, 2025 and December 31, 2024, respectively	6,763		9,191
Common stock — 3 billion shares authorized; $.01 par value per share; 2,074,188,875 and 2,023,295,180 shares issued at June 30, 2025 and December 31, 2024, respectively	21		20
Nonvoting common stock — 300 million shares authorized; $.01 par value per share; no shares issued at June 30, 2025 and 50,893,695 shares issued at December 31, 2024	—		1
Additional paid-in capital	27,813		27,639
Retained earnings	40,374		37,568
Treasury stock, at cost — 259,743,035 and 242,977,194 shares at June 30, 2025 and December 31, 2024, respectively	(12,929)		(11,196)
Accumulated other comprehensive income (loss)	(12,591)		(14,848)
Total stockholders’ equity	49,451		48,375
Total liabilities and stockholders’ equity	$	458,936	$	479,843

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
	Shares		Amount	Shares		Amount
Balance at March 31, 2024	$	9,191	2,023	$	20	51	$	1	$	27,358	$	34,701	$	(11,283)	$	(17,576)	$	42,412
Net income	—		—	—		—	—		—		1,332		—		—		1,332
Other comprehensive income (loss), net of tax	—		—	—		—	—		—		—		—		640		640



Dividends declared on preferred stock	—		—	—		—	—		—		(115)		—		—		(115)
Dividends declared on common stock — $.25 per share	—		—	—		—	—		—		(460)		—		—		(460)



Stock option exercises and other	—		—	—		—	—		4		—		17		—		21
Share-based compensation	—		—	—		—	—		65		—		—		—		65
Other	—		—	—		—	—		43		—		15		—		58
Balance at June 30, 2024	$	9,191	2,023	$	20	51	$	1	$	27,470	$	35,458	$	(11,251)	$	(16,936)	$	43,953

Balance at March 31, 2025	$	9,191	2,074	$	21	—	$	—	$	27,664	$	38,882	$	(12,626)	$	(13,621)	$	49,511
Net income	—		—	—		—	—		—		2,126		—		—		2,126
Other comprehensive income (loss), net of tax	—		—	—		—	—		—		—		—		1,030		1,030

Redemption of preferred stock	(2,428)		—	—		—	—		—		(30)		—		—		(2,458)

Dividends declared on preferred stock	—		—	—		—	—		—		(115)		—		—		(115)
Dividends declared on common stock — $.27 per share	—		—	—		—	—		—		(493)		—		—		(493)
Repurchase of common stock, inclusive of tax	—		—	—		—	—		—		—		(353)		—		(353)


Stock option exercises and other	—		—	—		—	—		34		—		36		—		70
Share-based compensation	—		—	—		—	—		65		—		—		—		65
Other	—		—	—		—	—		50		4		14		—		68
Balance at June 30, 2025	$	6,763	2,074	$	21	—	$	—	$	27,813	$	40,374	$	(12,929)	$	(12,591)	$	49,451


															Accumulated Other Comprehensive Income (Loss)
	Preferred Stock		Common Stock			Nonvoting Common Stock			Additional Paid-in Capital		Retained Earnings		Treasury Stock, at cost		Total
	Shares		Amount	Shares		Amount
Balance at December 31, 2023	$	9,191	2,023	$	20	51	$	1	$	27,330	$	33,901	$	(11,354)	$	(18,131)	$	40,958
Net income	—		—	—		—	—		—		2,694		—		—		2,694
Other comprehensive income (loss), net of tax	—		—	—		—	—		—		—		—		1,195		1,195



Dividends declared on preferred stock	—		—	—		—	—		—		(218)		—		—		(218)
Dividends declared on common stock — $.50 per share	—		—	—		—	—		—		(919)		—		—		(919)



Stock option exercises and other	—		—	—		—	—		(116)		—		159		—		43
Share-based compensation	—		—	—		—	—		190		—		—		—		190
Other	—		—	—		—	—		66		—		(56)		—		10
Balance at June 30, 2024	$	9,191	2,023	$	20	51	$	1	$	27,470	$	35,458	$	(11,251)	$	(16,936)	$	43,953

Balance at December 31, 2024	$	9,191	2,023	$	20	51	$	1	$	27,639	$	37,568	$	(11,196)	$	(14,848)	$	48,375
Net income	—		—	—		—	—		—		4,035		—		—		4,035
Other comprehensive income (loss), net of tax	—		—	—		—	—		—		—		—		2,257		2,257

Redemption of preferred stock	(2,428)		—	—		—	—		—		(30)		—		—		(2,458)

Dividends declared on preferred stock	—		—	—		—	—		—		(218)		—		—		(218)
Dividends declared on common stock — $.54 per share	—		—	—		—	—		—		(985)		—		—		(985)
Repurchase of common stock, inclusive of tax	—		—	—		—	—		—		—		(353)		—		(353)
Repurchase of nonvoting common stock, inclusive of tax	—		19	—		(19)	—		—		—		(1,512)		—		(1,512)
Conversion of nonvoting common stock to common stock	—		32	1		(32)	(1)		—		—		—		—		—
Stock option exercises and other	—		—	—		—	—		(89)		—		198		—		109
Share-based compensation	—		—	—		—	—		181		—		—		—		181
Other	—		—	—		—	—		82		4		(66)		—		20
Balance at June 30, 2025	$	6,763	2,074	$	21	—	$	—	$	27,813	$	40,374	$	(12,929)	$	(12,591)	$	49,451

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)


	Six Months Ended June 30,
	2025		2024
Cash Flows from Operating Activities
Net income	$	4,035	$	2,694
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Share-based compensation	198		202
Depreciation and amortization	432		461
Amortization of acquired intangible assets	258		259
Provision (benefit) for deferred income taxes	(40)		(109)
Premium amortization, net, on available for sale and held to maturity securities	351		416
Other	319		238
Net change in:
Investments segregated and on deposit for regulatory purposes	(7,403)		728
Receivables from brokers, dealers, and clearing organizations	(1,855)		78
Receivables from brokerage clients	2,551		(4,188)
Other assets	(665)		613
Payables to brokers, dealers, and clearing organizations	5,247		(798)
Payables to brokerage clients	7,796		(4,820)
Accrued expenses and other liabilities	(1,688)		(1,375)
Net cash provided by (used for) operating activities	9,536		(5,601)
Cash Flows from Investing Activities
Purchases of available for sale securities	(1,887)		(1,258)
Proceeds from sales of available for sale securities	4,205		2,043
Principal payments on available for sale securities	14,893		13,344
Purchases of held to maturity securities	(429)		—
Principal payments on held to maturity securities	8,047		7,135
Net change in bank loans	(5,230)		(1,755)

Purchases of equipment, office facilities, and property	(245)		(238)
Purchases of FHLB stock	(317)		(474)
Proceeds from sales of FHLB stock	644		620
Purchases of Federal Reserve stock	(9)		(107)
Proceeds from sales of Federal Reserve stock	4		—
Other investing activities	(130)		(129)
Net cash provided by (used for) investing activities	19,546		19,181
Cash Flows from Financing Activities
Net change in bank deposits	(26,063)		(37,533)
Proceeds from FHLB borrowings	8,000		12,201
Repayments of FHLB borrowings	(15,700)		(14,201)
Proceeds from other short-term borrowings	20,359		10,866
Repayments of other short-term borrowings	(17,906)		(7,423)

Repayments of long-term debt	(2,237)		(3,670)


Redemption of preferred stock	(2,458)		—
Repurchases of common stock and nonvoting common stock	(1,833)		—
Dividends paid	(1,203)		(1,137)
Proceeds from stock options exercised	109		43
Other financing activities	(95)		(84)
Net cash provided by (used for) financing activities	(39,027)		(40,938)
Increase (Decrease) in Cash and Cash Equivalents, including Amounts Restricted	(9,945)		(27,358)
Cash and Cash Equivalents, including Amounts Restricted at Beginning of Year	65,514		74,473
Cash and Cash Equivalents, including Amounts Restricted at End of Period	$	55,569	$	47,115

Continued on following page.

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THE CHARLES SCHWAB CORPORATION

Condensed Consolidated Statements of Cash Flows (1)

(in Millions)

(Unaudited)

Continued from previous page.


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




Changes in accrued equipment, office facilities, and property purchases	$	47	$	(24)
Non-cash financing activity:

Common stock repurchased during the period but settled after period end	$	17	$	—

Other Supplemental Cash Flow Information:
Cash paid during the period for:
Interest	$	2,497	$	3,568
Income taxes	$	818	$	1,067
Amounts included in the measurement of lease liabilities	$	127	$	125
Leased assets obtained in exchange for new operating lease liabilities	$	55	$	110


	June 30, 2025		June 30, 2024
Reconciliation of cash, cash equivalents and amounts reported within the balance sheet (2)
Cash and cash equivalents	$	32,195	$	25,350
Restricted cash and cash equivalents amounts included in cash and investments segregated and on deposit for regulatory purposes	23,374		21,765
Total cash and cash equivalents, including amounts restricted shown in the statement of cash flows	$	55,569	$	47,115

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

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

See Notes to Condensed Consolidated Financial Statements.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

1. Introduction and Basis of Presentation

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

Principal business subsidiaries of CSC include the following:

Charles Schwab & Co., Inc. (CS&Co), incorporated in 1971, a securities broker-dealer;
Charles Schwab Bank, SSB (CSB), our principal banking entity; and
Charles Schwab Investment Management, Inc. (CSIM), the investment advisor for Schwab’s proprietary mutual funds (Schwab Funds®) and for Schwab’s exchange-traded funds (Schwab ETFs).

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

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

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

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

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

2. New Accounting Standards

Adoption of New Accounting Standards


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

New Accounting Standards Not Yet Adopted


Standard			Description			Required Date of Adoption			Effects on the Financial Statements or Other Significant Matters
ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”			Requires additional disclosures about certain expenses including, but not limited to, employee compensation, depreciation, amortization of intangible assets, and selling expenses. Also requires annual disclosure of how selling expenses are defined. Adoption allows retrospective or prospective application, with early adoption permitted.			January 1, 2027 (applies to the annual financial statements for 2027 and interim periods thereafter)			The Company is evaluating the impact of this guidance on its financial statement disclosures.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

3. Revenue Recognition

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Net interest revenue
Cash and cash equivalents	$	305	$	382	$	633	$	836
Cash and investments segregated	506		281		918		669
Receivables from brokerage clients	1,332		1,351		2,714		2,611
Available for sale securities	405		555		838		1,149
Held to maturity securities	602		658		1,224		1,348
Bank loans	518		460		1,011		900
Securities lending revenue	96		95		156		171
Other interest revenue	23		35		50		74
Interest revenue	3,787		3,817		7,544		7,758
Bank deposits	(326)		(840)		(762)		(1,761)
Payables to brokers, dealers, and clearing organizations (1)	(167)		(57)		(304)		(112)
Payables to brokerage clients	(69)		(77)		(120)		(150)
Other short-term borrowings	(87)		(129)		(169)		(232)
Federal Home Loan Bank borrowings	(110)		(348)		(243)		(678)
Long-term debt	(206)		(208)		(418)		(432)

Other interest expense	—		—		—		(2)
Interest expense	(965)		(1,659)		(2,016)		(3,367)
Net interest revenue	2,822		2,158		5,528		4,391
Asset management and administration fees
Mutual funds, ETFs, and CTFs	884		785		1,749		1,543
Managed investing solutions	589		510		1,158		1,013
Other	97		88		193		175
Asset management and administration fees	1,570		1,383		3,100		2,731
Trading revenue
Commissions	431		383		862		796
Order flow revenue	466		357		909		709
Principal transactions	55		37		89		89
Trading revenue	952		777		1,860		1,594
Bank deposit account fees	247		153		492		336
Other	260		219		470		378

Total net revenues	$	5,851	$	4,690	$	11,450	$	9,430

(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 $754 million and $694 million at June 30, 2025 and December 31, 2024, respectively.

The Company had net contract assets of $205 million and $216 million at June 30, 2025 and December 31, 2024, respectively, related to the buy down of fixed-rate obligation amounts pursuant to the 2023 IDA agreement. These amounts are included in other assets on the condensed consolidated balance sheets and are amortized on a straight-line basis over the remaining contractual term as a reduction to bank deposit account fee revenue. For additional discussion of the 2023 IDA agreement, see Note 10.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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

4. Receivables from and Payables to Brokers, Dealers, and Clearing Organizations

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


	June 30, 2025		December 31, 2024
Receivables
Receivables from clearing organizations	$	2,602	$	1,670
Securities borrowed	1,620		695
Receivables for securities failed to deliver	50		40
Other receivables from broker-dealers	32		35
Receivables from brokers, dealers, and clearing organizations	$	4,304	$	2,440
Payables
Deposits for securities loaned	$	17,638	$	13,068
Other payables to broker-dealers	627		37
Payables for securities failed to receive	175		104
Payables to clearing organizations	144		127
Payables to brokers, dealers, and clearing organizations	$	18,584	$	13,336

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

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

5. Investment Securities

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


June 30, 2025	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for sale securities
U.S. agency mortgage-backed securities	$	50,282	$	—	$	3,992	$	46,290
U.S. Treasury securities	9,674		1		284		9,391
Corporate debt securities (1)	6,717		—		476		6,241
Asset-backed securities (2)	4,852		1		179		4,674
U.S. state and municipal securities	599		—		42		557
Foreign government agency securities	329		—		—		329
Non-agency commercial mortgage-backed securities	121		—		10		111


Other	21		—		2		19
Unallocated portfolio layer method fair value basis adjustments (3)	9		—		9		—
Total available for sale securities	$	72,604	$	2	$	4,994	$	67,612
Held to maturity securities
U.S. agency mortgage-backed securities	$	139,684	$	1,442	$	11,125	$	130,001









Total held to maturity securities	$	139,684	$	1,442	$	11,125	$	130,001

December 31, 2024
Available for sale securities
U.S. agency mortgage-backed securities	$	57,262	$	—	$	5,429	$	51,833
U.S. Treasury securities	14,939		1		471		14,469
Corporate debt securities (1)	10,166		—		587		9,579
Asset-backed securities (2)	6,106		—		196		5,910
U.S. state and municipal securities	603		—		54		549
Foreign government agency securities	533		—		6		527

Non-agency commercial mortgage-backed securities	121		—		12		109


Other	21		—		3		18
Unallocated portfolio layer method fair value basis adjustments (3)	(47)		—		(47)		—
Total available for sale securities	$	89,704	$	1	$	6,711	$	82,994
Held to maturity securities
U.S. agency mortgage-backed securities	$	146,453	$	146	$	13,994	$	132,605
Total held to maturity securities	$	146,453	$	146	$	13,994	$	132,605

(1) As of June 30, 2025 and December 31, 2024, approximately 26% and 35%, respectively, of the total AFS in corporate debt securities were issued by institutions in the financial services industry. Approximately 21% and 16% of the holdings of these securities were issued by institutions in the information technology industry as of June 30, 2025 and December 31, 2024, respectively. Approximately 20% and 18% of the holdings of these securities were issued by companies in the consumer staples industry as of June 30, 2025 and December 31, 2024, respectively.

(2) Approximately 74% and 62% of asset-backed securities held as of June 30, 2025 and December 31, 2024, respectively, were Federal Family Education Loan Program Asset-Backed Securities. Asset-backed securities collateralized by credit card receivables represented approximately 19% and 25% of the asset-backed securities held as of June 30, 2025 and December 31, 2024, respectively.

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

At June 30, 2025, our banking subsidiaries had pledged investment securities with a fair value of $61.3 billion (collateral value of $56.9 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 $31.1 billion (collateral value of $29.9 billion) as collateral for this facility at June 30, 2025. The Company also pledges investment securities issued by federal agencies to secure certain trust deposits. The fair value and collateral value of these pledged securities was $1.7 billion at June 30, 2025.

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

- 38 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

amortized cost of $6.2 billion, of which $5.2 billion may be sold, repledged, or otherwise used by the counterparties. See Notes 9 and 12 for additional information on these repurchase agreements.

At June 30, 2025, the Company had pledged AFS securities consisting of U.S. Treasury securities with an aggregate fair value of $225 million as initial margin on interest rate swaps (see Notes 11 and 12). All of Schwab’s interest rate swaps are cleared through central counterparty (CCP) clearing houses which require the Company to post initial margin as collateral against potential losses. Initial margin is posted through futures commission merchants (FCM) which serve as the intermediary between the CCPs and Schwab. The FCM agreements governing our swaps allow for securities pledged as initial margin to be sold, repledged, or otherwise used by the FCM.

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


	Less than 12 months				12 months or longer				Total
June 30, 2025	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for sale securities
U.S. agency mortgage-backed securities (1)	$	1	$	—	$	46,254	$	3,992	$	46,255	$	3,992
U.S. Treasury securities	2,024		1		6,994		283		9,018		284
Corporate debt securities	—		—		6,241		476		6,241		476
Asset-backed securities	119		1		4,324		178		4,443		179
U.S. state and municipal securities	27		3		530		39		557		42

Non-agency commercial mortgage-backed securities	—		—		111		10		111		10


Other	—		—		19		2		19		2
Total (2)	$	2,171	$	5	$	64,473	$	4,980	$	66,644	$	4,985


December 31, 2024
Available for sale securities
U.S. agency mortgage-backed securities	$	—	$	—	$	51,833	$	5,429	$	51,833	$	5,429
U.S. Treasury securities (1)	243		—		12,727		471		12,970		471
Corporate debt securities	—		—		9,579		587		9,579		587
Asset-backed securities (1)	12		—		5,888		196		5,900		196
U.S. state and municipal securities	—		—		549		54		549		54
Foreign government agency securities	—		—		527		6		527		6

Non-agency commercial mortgage-backed securities	—		—		109		12		109		12
Other	—		—		18		3		18		3
Total (2)	$	255	$	—	$	81,230	$	6,758	$	81,485	$	6,758

(1) Unrealized losses less than 12 months amounts were less than $500 thousand.

(2) For purposes of this table, unrealized losses on AFS securities excludes the unallocated PLM fair value hedge basis adjustments of $9 million and $(47) million at June 30, 2025 and December 31, 2024, respectively.

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

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

The Company had $388 million and $455 million of accrued interest for AFS and HTM securities as of June 30, 2025 and December 31, 2024, respectively. These amounts are excluded from the amortized cost basis and fair market value of AFS and HTM securities and included in other assets on the condensed consolidated balance sheets. There were no writeoffs of accrued interest receivable on AFS and HTM securities during the six months ended June 30, 2025, or for the year ended December 31, 2024.

- 39 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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


			In years
Estimated effective duration, exclusive of derivatives:
AFS investment securities portfolio			2.5
AFS and HTM investment securities portfolio			4.0
Estimated effective duration, inclusive of derivatives (1):
AFS investment securities portfolio			2.0
AFS and HTM investment securities portfolio			3.8

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

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

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


June 30, 2025	Within 1 year		After 1 year through 5 years		After 5 years through 10 years		After 10 years		Total
Available for sale securities
U.S. agency mortgage-backed securities	$	348	$	8,449	$	10,857	$	26,636	$	46,290
U.S. Treasury securities	4,811		4,580		—		—		9,391
Corporate debt securities	1,531		3,589		1,121		—		6,241
Asset-backed securities	135		490		953		3,096		4,674
U.S. state and municipal securities	2		221		324		10		557
Foreign government agency securities	329		—		—		—		329

Non-agency commercial mortgage-backed securities	—		—		—		111		111


Other	—		—		—		19		19
Total fair value	$	7,156	$	17,329	$	13,255	$	29,872	$	67,612
Total amortized cost (1)	$	7,226	$	18,351	$	14,338	$	32,680	$	72,595

Held to maturity securities
U.S. agency mortgage-backed securities	$	390	$	16,952	$	28,376	$	84,283	$	130,001









Total fair value	$	390	$	16,952	$	28,376	$	84,283	$	130,001
Total amortized cost	$	394	$	17,507	$	29,655	$	92,128	$	139,684

(1) For purposes of this table, the amortized cost of AFS securities excludes the unallocated PLM fair value hedge basis adjustments of $9 million at June 30, 2025.

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


	Three Months Ended June 30,				Six Months Ended June 30,

	2025		2024			2025		2024
Proceeds	$	2,584	$	854		$	4,205	$	2,043
Gross realized gains	—		—			—		—
Gross realized losses	30		10			40		20

- 40 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

6. Bank Loans and Related Allowance for Credit Losses

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


June 30, 2025	Current		30-59 days past due		60-89 days past due		>90 days past due and other nonaccrual loans (3)		Total past due and other nonaccrual loans		Total loans		Allowance for credit losses		Total bank loans – net
Residential real estate:
First Mortgages (1,2)	$	28,470	$	32	$	7	$	33	$	72	$	28,542	$	15	$	28,527
HELOCs (1,2)	420		1		—		2		3		423		1		422
Total residential real estate	28,890		33		7		35		75		28,965		16		28,949
Pledged asset lines	21,006		30		1		1		32		21,038		—		21,038
Other	423		—		—		1		1		424		6		418
Total bank loans	$	50,319	$	63	$	8	$	37	$	108	$	50,427	$	22	$	50,405

December 31, 2024
Residential real estate:
First Mortgages (1,2)	$	27,321	$	37	$	6	$	25	$	68	$	27,389	$	14	$	27,375
HELOCs (1,2)	421		—		—		3		3		424		1		423
Total residential real estate	27,742		37		6		28		71		27,813		15		27,798
Pledged asset lines	17,010		8		—		6		14		17,024		—		17,024
Other	398		—		—		1		1		399		6		393
Total bank loans	$	45,150	$	45	$	6	$	35	$	86	$	45,236	$	21	$	45,215

(1) First Mortgages and HELOCs include unamortized premiums and discounts and direct origination costs of $120 million and $112 million at June 30, 2025 and December 31, 2024, respectively.

(2) At both June 30, 2025 and December 31, 2024, 42% of the First Mortgage and HELOC portfolios were concentrated in California. These loans have performed in a manner consistent with the portfolio as a whole.

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

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

- 41 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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


	First Mortgages		HELOCs		Total residential real estate		Pledged asset lines		Other		Total
Balance at March 31, 2024	$	27	$	1	$	28	$	—	$	4	$	32
Charge-offs	—		—		—		—		—		—
Recoveries	—		—		—		—		—		—
Provision for credit losses	(13)		—		(13)		—		1		(12)
Balance at June 30, 2024	$	14	$	1	$	15	$	—	$	5	$	20

Balance at March 31, 2025	$	14	$	1	$	15	$	—	$	6	$	21
Charge-offs	—		—		—		—		—		—
Recoveries	—		—		—		—		—		—
Provision for credit losses	1		—		1		—		—		1
Balance at June 30, 2025	$	15	$	1	$	16	$	—	$	6	$	22

Balance at December 31, 2023	$	32	$	2	$	34	$	—	$	4	$	38
Charge-offs	—		—		—		—		—		—
Recoveries	—		—		—		—		—		—
Provision for credit losses	(18)		(1)		(19)		—		1		(18)
Balance at June 30, 2024	$	14	$	1	$	15	$	—	$	5	$	20

Balance at December 31, 2024	$	14	$	1	$	15	$	—	$	6	$	21
Charge-offs	—		—		—		—		—		—
Recoveries	—		—		—		—		—		—
Provision for credit losses	1		—		1		—		—		1
Balance at June 30, 2025	$	15	$	1	$	16	$	—	$	6	$	22

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

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

Bank loan-related nonperforming assets consisted of nonaccrual loans of $37 million and $35 million at June 30, 2025 and December 31, 2024, respectively. Nonaccrual loans include nonaccrual troubled debt restructurings recorded prior to the adoption of ASU 2022-02, “Financial Instruments — Credit Losses: Troubled Debt Restructurings and Vintage Disclosures” on January 1, 2023. At both June 30, 2025 and December 31, 2024, loan modifications to borrowers experiencing financial difficulty were not material.

Credit Quality

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

Year of origination;
Borrower Fair Isaac Corporation (FICO) scores at origination (Origination FICO);
Updated borrower FICO scores (Updated FICO);
Loan-to-value (LTV) ratios at origination (Origination LTV); and
Estimated Current LTV ratios (Estimated Current LTV).

- 42 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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

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


	First Mortgages Amortized Cost Basis by Origination Year
June 30, 2025	2025			2024			2023			2022			2021			pre-2021			Total First Mortgages			Revolving HELOCs amortized cost basis			HELOCs converted to term loans			Total HELOCs
Origination FICO
<620	$	—		$	1		$	—		$	3		$	1		$	1		$	6		$	—		$	—		$	—
620 – 679	16			23			4			25			29			24			121			—			1			1
680 – 739	215			332			234			695			1,056			533			3,065			49			27			76
≥740	2,305			2,916			1,744			4,737			9,456			4,192			25,350			248			98			346
Total	$	2,536		$	3,272		$	1,982		$	5,460		$	10,542		$	4,750		$	28,542		$	297		$	126		$	423
Origination LTV
≤70%	$	1,714		$	2,248		$	1,337		$	4,057		$	9,158		$	3,886		$	22,400		$	279		$	88		$	367
>70% – ≤90%	822			1,024			645			1,403			1,384			863			6,141			18			37			55
>90% – ≤100%	—			—			—			—			—			1			1			—			1			1
Total	$	2,536		$	3,272		$	1,982		$	5,460		$	10,542		$	4,750		$	28,542		$	297		$	126		$	423
Updated FICO
<620	$	1		$	1		$	5		$	20		$	20		$	23		$	70		$	2		$	4		$	6
620 – 679	23			37			26			70			97			64			317			6			5			11
680 – 739	231			271			183			503			807			401			2,396			49			23			72
≥740	2,281			2,963			1,768			4,867			9,618			4,262			25,759			240			94			334
Total	$	2,536		$	3,272		$	1,982		$	5,460		$	10,542		$	4,750		$	28,542		$	297		$	126		$	423
Estimated Current LTV (1)
≤70%	$	1,704		$	2,357		$	1,658		$	4,942		$	10,442		$	4,735		$	25,838		$	294		$	126		$	420
>70% – ≤90%	831			915			324			508			99			13			2,690			3			—			3
>90% – ≤100%	1			—			—			10			1			2			14			—			—			—

Total	$	2,536		$	3,272		$	1,982		$	5,460		$	10,542		$	4,750		$	28,542		$	297		$	126		$	423
Gross charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Percent of Loans on Nonaccrual Status	0.01		%	0.05		%	0.22		%	0.09		%	0.09		%	0.26		%	0.12		%	0.11		%	1.72		%	0.47		%

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

- 43 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)


	First Mortgages Amortized Cost Basis by Origination Year
December 31, 2024	2024			2023			2022			2021			pre-2021			Total First Mortgages			Revolving HELOCs amortized cost basis			HELOCs converted to term loans			Total HELOCs
Origination FICO
<620	$	1		$	—		$	2		$	1		$	2		$	6		$	—		$	—		$	—
620 – 679	24			4			26			29			28			111			—			1			1
680 – 739	361			249			724			1,091			576			3,001			47			30			77
≥740	3,203			1,895			4,902			9,796			4,475			24,271			241			105			346
Total	$	3,589		$	2,148		$	5,654		$	10,917		$	5,081		$	27,389		$	288		$	136		$	424
Origination LTV
≤70%	$	2,471		$	1,445		$	4,197		$	9,479		$	4,159		$	21,751		$	267		$	95		$	362
>70% – ≤90%	1,118			703			1,457			1,438			920			5,636			21			40			61
>90% – ≤100%	—			—			—			—			2			2			—			1			1
Total	$	3,589		$	2,148		$	5,654		$	10,917		$	5,081		$	27,389		$	288		$	136		$	424
Updated FICO
<620	$	—		$	3		$	25		$	15		$	21		$	64		$	1		$	5		$	6
620 – 679	34			31			74			97			74			310			6			7			13
680 – 739	339			191			574			871			435			2,410			48			24			72
≥740	3,216			1,923			4,981			9,934			4,551			24,605			233			100			333
Total	$	3,589		$	2,148		$	5,654		$	10,917		$	5,081		$	27,389		$	288		$	136		$	424
Estimated Current LTV (1)
≤70%	$	2,402		$	1,660		$	4,942		$	10,747		$	5,057		$	24,808		$	285		$	136		$	421
>70% – ≤90%	1,187			487			693			166			20			2,553			3			—			3
>90% – ≤100%	—			1			17			3			4			25			—			—			—
>100%	—			—			2			1			—			3			—			—			—
Total	$	3,589		$	2,148		$	5,654		$	10,917		$	5,081		$	27,389		$	288		$	136		$	424
Gross charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Percent of Loans on Nonaccrual Status	0.01		%	0.12		%	0.16		%	0.04		%	0.18		%	0.09		%	0.07		%	2.33		%	0.71		%

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

At June 30, 2025, $24.2 billion of First Mortgage loans had adjustable interest rates. Substantially all of these mortgages have initial fixed interest rates for three to ten years and interest rates that typically adjust every six to twelve months pursuant to the terms of the loan thereafter. Approximately 25% of the balance of these mortgages consisted of loans with interest-only payment terms. The interest rates on approximately 76% of the balance of these interest-only loans are not scheduled to reset for three or more years.

At June 30, 2025 and December 31, 2024, Schwab had $193 million and $171 million, respectively, of accrued interest on bank loans, which is excluded from the amortized cost basis of bank loans and included in other assets on the condensed consolidated balance sheets.

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

- 44 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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


June 30, 2025	Balance
Converted to an amortizing loan by period end (1)	$	126
Within 1 year	15
> 1 year – 3 years	38
> 3 years – 5 years	41
> 5 years	203
Total	$	423

(1) Includes $5 million and $9 million of HELOCs converted to amortizing loans during the three and six months ended June 30, 2025, respectively.

At June 30, 2025, $332 million of the HELOC portfolio was secured by second liens on the associated properties. Second lien mortgage loans typically possess a higher degree of credit risk given the subordination to the first lien holder in the event of default. In addition to the credit monitoring activities described previously, Schwab also monitors credit risk by reviewing the delinquency status of the first lien loan on the associated property. At June 30, 2025, the borrowers on approximately 62% of HELOC loan balances outstanding only paid the minimum amount due.

7. Variable Interest Entities

As of June 30, 2025 and December 31, 2024, substantially all of Schwab’s involvement with variable interest entities (VIEs) is through CSB’s Community Reinvestment Act (CRA) related investments and most of these are related to Low-Income Housing Tax Credit (LIHTC) investments. As part of CSB’s community reinvestment initiatives, CSB invests in funds that make equity investments in multifamily affordable housing properties and receives tax credits and other tax benefits for these investments. During the three months ended June 30, 2025 and 2024, CSB recorded amortization of $47 million and $38 million, respectively, and recognized tax credits and other tax benefits of $65 million and $49 million, respectively, associated with these investments. During the six months ended June 30, 2025 and 2024, CSB recorded amortization of $94 million and $80 million, respectively, and recognized tax credits and other tax benefits of $126 million and $102 million, respectively, associated with these investments. The amortization, as well as the tax credits and other tax benefits, are included in taxes on income on the condensed consolidated statements of income. Tax credits and other tax benefits are reflected as cash flows from operating activities on the condensed consolidated statements of cash flows.

Aggregate assets, liabilities, and maximum exposure to loss

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


	June 30, 2025						December 31, 2024
	Aggregate assets		Aggregate liabilities		Maximum exposure to loss		Aggregate assets		Aggregate liabilities		Maximum exposure to loss
LIHTC investments (1)	$	1,845	$	991	$	1,845	$	1,729	$	947	$	1,729
Other investments (2)	249		—		343		224		—		340
Total	$	2,094	$	991	$	2,188	$	1,953	$	947	$	2,069

(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.

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

- 45 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

8. Bank Deposits

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


	June 30, 2025		December 31, 2024
Interest-bearing deposits:
Deposits swept from brokerage accounts	$	200,291	$	210,575
Checking	15,079		15,593
Time certificates of deposit (1)	12,720		27,701
Savings and other	3,678		4,015
Total interest-bearing deposits	231,768		257,884
Non-interest-bearing deposits	1,290		1,237
Total bank deposits	$	233,058	$	259,121

(1) Time certificates of deposit consist of brokered CDs. The weighted-average interest rates on outstanding time certificates of deposit at June 30, 2025 and December 31, 2024 were 4.32% and 4.90%, respectively. As of June 30, 2025 and December 31, 2024, there were no time deposits that were in excess of FDIC insurance limits or otherwise uninsured.

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

9. Borrowings

CSC Senior Notes

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

Ameritrade Holding Senior Notes

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

- 46 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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


	Date of Issuance	Principal Amount Outstanding
	June 30, 2025	December 31, 2024
CSC Fixed-rate Senior Notes:






3.000% due March 10, 2025	03/10/15	$	—	$	375
4.200% due March 24, 2025	03/24/20	—		600
3.625% due April 1, 2025	09/24/21	—		418
3.850% due May 21, 2025	05/22/18	—		750
3.450% due February 13, 2026	11/13/15	350		350
0.900% due March 11, 2026	12/11/20	1,250		1,250
1.150% due May 13, 2026	05/13/21	1,000		1,000
5.875% due August 24, 2026	08/24/23	1,000		1,000
3.200% due March 2, 2027	03/02/17	650		650
2.450% due March 3, 2027	03/03/22	1,500		1,500
3.300% due April 1, 2027	09/24/21	744		744
3.200% due January 25, 2028	12/07/17	700		700
2.000% due March 20, 2028	03/18/21	1,250		1,250
4.000% due February 1, 2029	10/31/18	600		600
3.250% due May 22, 2029	05/22/19	600		600
2.750% due October 1, 2029	09/24/21	475		475
4.625% due March 22, 2030	03/24/20	500		500
1.650% due March 11, 2031	12/11/20	750		750
2.300% due May 13, 2031	05/13/21	750		750
1.950% due December 1, 2031	08/26/21	850		850
2.900% due March 3, 2032	03/03/22	1,000		1,000
CSC Floating-rate Senior Notes:


SOFR + 0.520% due May 13, 2026	05/13/21	500		500
SOFR + 1.050% due March 3, 2027	03/03/22	500		500
CSC Fixed-to-Floating rate Senior Notes:
5.643% due May 19, 2029 (1)	05/19/23	1,200		1,200
6.196% due November 17, 2029 (2)	11/17/23	1,300		1,300
5.853% due May 19, 2034 (3)	05/19/23	1,300		1,300
6.136% due August 24, 2034 (4)	08/24/23	1,350		1,350
Total CSC Senior Notes		20,119		22,262
Ameritrade Holding Fixed-rate Senior Notes:


3.625% due April 1, 2025	10/22/14	—		82
3.300% due April 1, 2027	04/27/17	56		56
2.750% due October 1, 2029	08/16/19	25		25


Total Ameritrade Holding Senior Notes		81		163
Finance lease liabilities		37		49
Unamortized premium — net		42		54
Debt issuance costs		(80)		(93)
Fair value hedging basis adjustments (5)		9		(7)
Total long-term debt		$	20,208	$	22,428

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

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

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

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

(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.

- 47 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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


	Maturities
2025	$	12
2026	4,112
2027	3,463
2028	1,950
2029	4,200
Thereafter	6,500
Total maturities	20,237
Unamortized premium — net	42
Debt issuance costs	(80)
Fair value hedging basis adjustments (1)	9
Total long-term debt	$	20,208

(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 $9.0 billion and $16.7 billion outstanding under these facilities as of June 30, 2025 and December 31, 2024, respectively, and these borrowings had a weighted-average interest rate of 4.40% and 5.11%, respectively. As of June 30, 2025 and December 31, 2024, the collateral pledged provided additional borrowing capacity of $67.3 billion and $59.8 billion, respectively.

Other short-term borrowings: Total other short-term borrowings outstanding at June 30, 2025 and December 31, 2024 were $8.5 billion and $6.0 billion, respectively, and had a weighted-average interest rate of 4.49% and 5.21%, respectively. Additional information regarding our other short-term borrowings facilities is described below.

The Company may engage with external financial institutions and the FICC in repurchase agreements collateralized by investment securities as another source of short-term liquidity. The Company had $6.0 billion and $5.5 billion outstanding pursuant to such repurchase agreements at June 30, 2025 and December 31, 2024, respectively. Repurchase agreements outstanding at June 30, 2025 mature between July 2025 and October 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 June 30, 2025 and December 31, 2024, our collateral pledged provided total borrowing capacity of $29.9 billion and $30.5 billion, respectively, of which no amounts were outstanding at the end of either period.

CSC has the ability to issue up to $5.0 billion of commercial paper notes with maturities of up to 270 days. There was $2.0 billion gross par value before discount of $19 million outstanding at June 30, 2025, and no amounts outstanding at December 31, 2024. CSC and CS&Co also have access to unsecured uncommitted lines of credit with external banks with total borrowing capacity of $1.7 billion; no amounts were outstanding as of June 30, 2025 or December 31, 2024.

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

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


	2025
FHLB borrowings	$	9,000
Other short-term borrowings	8,472
Total	$	17,472

- 48 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

10. Commitments and Contingencies

Loan portfolio: CSB provides a co-branded loan origination program for CSB clients (the Program) with Rocket Mortgage, LLC. Pursuant to the Program, Rocket Mortgage, LLC originates and services First Mortgages and HELOCs for CSB clients. Under the Program, CSB purchases certain First Mortgages and HELOCs that are originated by Rocket Mortgage, LLC. CSB purchased First Mortgages of $1.7 billion and $851 million during the second quarter of 2025 and 2024, respectively, and $2.7 billion and $1.5 billion during the first six months of 2025 and 2024, respectively. CSB purchased HELOCs with commitments of $79 million and $47 million during the second quarter of 2025 and 2024, respectively, and $129 million and $83 million during the first six months of 2025 and 2024, respectively.

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


	June 30, 2025		December 31, 2024
Commitments to extend credit related to unused HELOCs and other lines of credit	$	1,840	$	1,895
Commitments to purchase First Mortgage loans	959		511
Total	$	2,799	$	2,406

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

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

IDA agreement: The 2023 IDA agreement with the TD Depository Institutions specifies responsibilities, including certain contingent obligations, of the Company. Pursuant to the 2023 IDA agreement, uninvested cash within eligible brokerage client accounts is swept off-balance sheet to deposit accounts at the TD Depository Institutions. Schwab provides recordkeeping and support services to the TD Depository Institutions with respect to the deposit accounts for which Schwab receives an aggregate monthly fee. Under the 2023 IDA agreement, the service fee on client cash deposits held at the TD Depository Institutions is 15 basis points. The Company’s ability to migrate these balances to its balance sheet is dependent on multiple factors including having sufficient capital levels to sustain these incremental deposits and certain binding limitations specified in the 2023 IDA agreement. During the first six months of 2025, Schwab did not move insured deposit account balances (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 $30 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 $60 billion, with a maximum of $90 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.

- 49 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

As of June 30, 2025, the total ending IDA balance was $82.2 billion, of which $63.7 billion was fixed-rate obligation amounts and $18.5 billion was floating-rate obligation amounts. As of December 31, 2024, the total ending IDA balance was $87.6 billion, of which $66.6 billion was fixed-rate obligation amounts and $21.0 billion was floating-rate obligation amounts.

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

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

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

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

11. Derivative Instruments and Hedging Activities

Risk Management Objective of Using Derivatives

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

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

Fair Value Hedges of Interest Rate Risk

The Company is exposed to changes in the fair value of its fixed-rate AFS securities and Senior Notes, as well as its fixed-to-floating rate Senior Notes during the fixed-rate period, due to changes in benchmark interest rates. The Company uses cleared

- 50 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

interest rate swaps to manage its exposure to changes in fair value of these instruments attributable to changes in the designated benchmark interest rate. Cleared interest rate swaps designated as fair value hedges of AFS securities involve the payment of fixed-rate amounts to a CCP in exchange for the Company receiving floating-rate payments over the life of the agreements. Cleared interest rate swaps designated as fair value hedges of Senior Notes involve the receipt of fixed-rate amounts from a CCP in exchange for the Company’s floating-rate payments over the life of the agreements.

The Company had outstanding interest rate swaps with aggregate notional amounts of $32.6 billion and $30.9 billion at June 30, 2025 and December 31, 2024, respectively, that were designated as fair value hedges of interest rate risk. The notional amount is the basis upon which the pay-fixed/receive-float and receive-fixed/pay-float payments are determined; however, the amount is not exchanged.

Cash Flow Hedges of Interest Rate Risk

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

The Company had outstanding interest rate swaps with aggregate notional amounts of $10.0 billion at June 30, 2025 that were designated as cash flow hedges of interest rate risk.

Fair Values of Derivative Instruments

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


	June 30, 2025				December 31, 2024
	Assets		Liabilities		Assets		Liabilities
Interest rate swaps (1,2)	$	—	$	1	$	—	$	—

(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. Derivative assets as of June 30, 2025 and derivative assets and liabilities as of December 31, 2024 were less than $500 thousand.

(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 June 30, 2025, there was a $28 million reduction of derivative assets and a $130 million reduction of derivative liabilities related to variation margin settlements. As of December 31, 2024, there was a $295 million reduction of derivative assets and a $10 million reduction of derivative liabilities related to variation margin settlements.

Effects of Fair Value Hedge Accounting

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


	Carrying Amount of the Hedged Assets/(Liabilities)				Cumulative Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets and Liabilities
	June 30, 2025		December 31, 2024		June 30, 2025		December 31, 2024
Line item in which the hedged item is included:
Available for sale securities (1,2)	$	14,027	$	15,686	$	115	$	(292)
Long-term debt	$	(18,741)	$	(14,908)	$	(9)	$	7

(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 June 30, 2025 and December 31, 2024, the amortized cost basis of the closed portfolios used in these hedging relationships was $2.7 billion and $2.5 billion, respectively, of which $2.1 billion and $2.0 billion was designated in a portfolio layer hedging relationship at June 30, 2025 and December 31, 2024, respectively. The cumulative basis adjustments associated with these hedging relationships were an increase of $9 million and a reduction of $47 million of the amortized cost basis of the closed portfolios at June 30, 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 $150 million at June 30, 2025 and $2 million at 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.

- 51 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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


	Location and Amount of Gain (Loss) Recognized in Income
	Interest Revenue				Interest Expense
Three Months Ended June 30,	2025		2024		2025		2024
Gain (loss) on fair value hedging relationships:
Hedged items	$	94	$	(40)	$	9	$	—
Derivatives designated as hedging instruments (1)	(94)		38		(9)		—

Six Months Ended June 30,	2025		2024		2025		2024
Gain (loss) on fair value hedging relationships:
Hedged items	$	255	$	(197)	$	(16)	$	—
Derivatives designated as hedging instruments (1)	(255)		195		18		—

(1) Interest revenue excludes net income (expense) from periodic interest accruals and receipts (payments) of $14 million and $32 million for the three and six months ended June 30, 2025, respectively, and $13 million and $16 million for the three and six months ended June 30, 2024, respectively. Interest expense excludes net income (expense) from periodic interest accruals and receipts (payments) of $(14) million and $(24) million, respectively, for the three and six months ended June 30, 2025. We began designating swaps as fair value hedges of Senior Notes in the fourth quarter of 2024. As such, there was no impact to interest expense from periodic interest accruals and receipts (payments) for the three and six months ended June 30, 2024.

Effects of Cash Flow Hedge Accounting

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


	Three and Six Months Ended
	June 30, 2025
Gain (loss) recognized in other comprehensive income (1)	$	(15)
Gain (loss) reclassified from AOCI to interest revenue	(17)

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

For the twelve months following June 30, 2025, the Company estimates that an additional $28 million will be reclassified from AOCI as a reduction to interest revenue.

12. Financial Instruments Subject to Off-Balance Sheet Credit Risk

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

Securities lending: Schwab loans brokerage client securities temporarily to other broker-dealers and clearing houses in connection with its securities lending activities and receives cash as collateral for the securities loaned. Increases in security prices may cause the fair value of the securities loaned to exceed the amount of cash received as collateral. In the event a counterparty to these transactions does not return the loaned securities or provide additional cash collateral, we may be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy our client obligations. Schwab mitigates this risk by requiring credit approvals for counterparties, monitoring the fair value of securities loaned, and requiring additional cash as collateral when necessary. In addition, most of our securities lending transactions are through a program with a clearing organization, which guarantees the return of cash to us. We also borrow securities from other broker-dealers to fulfill short sales by brokerage clients and deliver cash to the lender in exchange for the securities. The fair value of these borrowed securities

- 52 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

was $1.6 billion and $674 million at June 30, 2025 and December 31, 2024, respectively. Our securities lending transactions are subject to enforceable master netting arrangements with other broker-dealers; however, we do not net securities lending transactions. Therefore, amounts related to securities loaned and securities borrowed are presented gross in the condensed consolidated balance sheets.

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

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

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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


	Gross Assets/ Liabilities		Gross Amounts Offset in the Condensed Consolidated Balance Sheets		Net Amounts Presented in the Condensed Consolidated Balance Sheets		Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets					Net Amount
			Counterparty Offsetting		Collateral
June 30, 2025
Assets
Resale agreements (1)	$	19,557	$	—	$	19,557	$	—	$	(19,557)	(2)	$	—
Securities borrowed (3)	1,620		—		1,620		(1,501)		(119)			—
Interest rate swaps (4)	—		—		—		—		—		(5)	—
Total	$	21,177	$	—	$	21,177	$	(1,501)	$	(19,676)		$	—
Liabilities

Repurchase agreements (6)	$	5,992	$	—	$	5,992	$	—	$	(5,992)		$	—
Securities loaned (7)	17,638		—		17,638		(1,501)		(15,710)			427
Secured short-term borrowings (8)	500		—		500		—		(500)			—
Interest rate swaps (4)	1		—		1		—		(1)		(5)	—
Total	$	24,131	$	—	$	24,131	$	(1,501)	$	(22,203)		$	427

December 31, 2024
Assets
Resale agreements (1)	$	10,075	$	—	$	10,075	$	—	$	(10,075)	(2)	$	—
Securities borrowed (3)	695		—		695		(617)		(77)			1
Interest rate swaps (4)	—		—		—		—		—		(5)	—
Total	$	10,770	$	—	$	10,770	$	(617)	$	(10,152)		$	1
Liabilities
Repurchase agreements (6)	$	5,499	$	—	$	5,499	$	—	$	(5,499)		$	—
Securities loaned (7)	13,068		—		13,068		(617)		(11,795)			656
Secured short-term borrowings (8)	500		—		500		—		(500)			—
Interest rate swaps (4)	—		—		—		—		—		(5)	—
Total	$	19,067	$	—	$	19,067	$	(617)	$	(17,794)		$	656

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

(2) Actual collateral was greater than or equal to the value of the related assets. At June 30, 2025 and December 31, 2024, the fair value of collateral received in connection with resale agreements that are available to be repledged or sold was $20.0 billion and $10.3 billion, respectively.

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

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

(5) At June 30, 2025 and December 31, 2024, the fair value of initial margin pledged as collateral related to interest rate swaps was $225 million and $378 million, respectively. See Notes 5 and 11 for additional information.

(6) Included in other short-term borrowings in the condensed consolidated balance sheets. Actual collateral value was greater than or equal to the value of the related liabilities. At June 30, 2025 and December 31, 2024, the fair value of collateral pledged in connection with repurchase agreements was $6.3 billion and $5.9 billion, respectively. See Note 9 for additional information.

(7) Included in payables to brokers, dealers, and clearing organizations in the condensed consolidated balance sheets. Securities loaned are predominantly comprised of equity securities held in client brokerage accounts. At June 30, 2025, $13.4 billion of securities loaned had overnight and continuous remaining contractual maturities and $4.2 billion of securities loaned had contractual maturities of 18 - 95 days. At December 31, 2024, $8.8 billion of securities loaned had overnight and continuous remaining contractual maturities and $4.3 billion of securities loaned had contractual maturities of 35 - 95 days. The cash collateral received from counterparties under securities lending transactions was equal to or greater than the market value of the securities loaned at June 30, 2025 and December 31, 2024.

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

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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


	June 30, 2025		December 31, 2024
Fair value of client securities available to be pledged	$	115,551	$	116,258
Fair value of securities pledged for:
Fulfillment of requirements with the Options Clearing Corporation (1)	$	30,463	$	24,011
Fulfillment of client short sales	8,820		5,179
Securities lending to other broker-dealers	16,855		12,282
Collateral for secured short-term borrowings	565		618
Total collateral pledged to third parties	$	56,703	$	42,090

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 $324 million and $105 million at June 30, 2025 and December 31, 2024, respectively.

(1) Securities pledged to fulfill client margin requirements for open option contracts established with the Options Clearing Corporation.

13. Fair Values of Assets and Liabilities

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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

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

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

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

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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

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

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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


June 30, 2025	Level 1		Level 2		Level 3		Balance at Fair Value
Cash equivalents:
Money market funds	$	12,921	$	—	$	—	$	12,921


Total cash equivalents	12,921		—		—		12,921
Investments segregated and on deposit for regulatory purposes:
U.S. government securities	—		23,576		—		23,576

Total investments segregated and on deposit for regulatory purposes	—		23,576		—		23,576
Available for sale securities:
U.S. agency mortgage-backed securities	—		46,290		—		46,290
U.S. Treasury securities	—		9,391		—		9,391
Corporate debt securities	—		6,241		—		6,241
Asset-backed securities	—		4,674		—		4,674
U.S. state and municipal securities	—		557		—		557
Foreign government agency securities	—		329		—		329
Non-agency commercial mortgage-backed securities	—		111		—		111



Other	—		19		—		19
Total available for sale securities	—		67,612		—		67,612
Other assets:
Other securities owned:
Equity, corporate debt, and other securities	1,486		80		—		1,566
Mutual funds and ETFs	1,102		—		—		1,102
State and municipal debt obligations	—		41		—		41
U.S. government securities	—		19		—		19
Total other securities owned	2,588		140		—		2,728

Total other assets	2,588		140		—		2,728
Total assets	$	15,509	$	91,328	$	—	$	106,837
Accrued expenses and other liabilities:
Interest rate swaps	$	—	$	1	$	—	$	1
Other	2,388		34		—		2,422
Total accrued expenses and other liabilities	2,388		35		—		2,423
Total liabilities	$	2,388	$	35	$	—	$	2,423

- 56 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)


December 31, 2024	Level 1		Level 2		Level 3		Balance at Fair Value
Cash equivalents:
Money market funds	$	11,005	$	—	$	—	$	11,005

Total cash equivalents	11,005		—		—		11,005
Investments segregated and on deposit for regulatory purposes:
U.S. government securities	—		25,740		—		25,740

Total investments segregated and on deposit for regulatory purposes	—		25,740		—		25,740
Available for sale securities:
U.S. agency mortgage-backed securities	—		51,833		—		51,833
U.S. Treasury securities	—		14,469		—		14,469
Corporate debt securities	—		9,579		—		9,579
Asset-backed securities	—		5,910		—		5,910
U.S. state and municipal securities	—		549		—		549
Foreign government agency securities	—		527		—		527
Non-agency commercial mortgage-backed securities	—		109		—		109


Other	—		18		—		18
Total available for sale securities	—		82,994		—		82,994
Other assets:
Other securities owned:
Equity, corporate debt, and other securities	1,395		73		—		1,468
Mutual funds and ETFs	1,019		—		—		1,019
State and municipal debt obligations	—		38		—		38
U.S. government securities	—		18		—		18
Total other securities owned	2,414		129		—		2,543
Total other assets	2,414		129		—		2,543
Total assets	$	13,419	$	108,863	$	—	$	122,282
Accrued expenses and other liabilities:
Other	$	2,161	$	37	$	—	$	2,198
Total accrued expenses and other liabilities	2,161		37		—		2,198
Total liabilities	$	2,161	$	37	$	—	$	2,198

- 57 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Fair Value of Other Financial Instruments

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


June 30, 2025	Carrying Amount		Level 1		Level 2		Level 3		Balance at Fair Value
Assets
Cash and cash equivalents	$	19,274	$	19,274	$	—	$	—	$	19,274
Cash and investments segregated and on deposit for regulatory purposes	21,899		2,429		19,470		—		21,899
Receivables from brokers, dealers, and clearing organizations	4,304		—		4,304		—		4,304
Receivables from brokerage clients — net	82,724		—		82,724		—		82,724
Held to maturity securities:
U.S. agency mortgage-backed securities	139,684		—		130,001		—		130,001









Total held to maturity securities	139,684		—		130,001		—		130,001
Bank loans — net:
First Mortgages	28,527		—		26,234		—		26,234
HELOCs	422		—		443		—		443
Pledged asset lines	21,038		—		21,038		—		21,038
Other	418		—		418		—		418
Total bank loans — net	50,405		—		48,133		—		48,133
Other assets	1,067		—		1,067		—		1,067

Liabilities
Bank deposits	$	233,058	$	—	$	233,058	$	—	$	233,058
Payables to brokers, dealers, and clearing organizations	18,584		—		18,584		—		18,584
Payables to brokerage clients	109,355		—		109,355		—		109,355
Accrued expenses and other liabilities	1,346		—		1,346		—		1,346
Other short-term borrowings	8,472		—		8,472		—		8,472
Federal Home Loan Bank borrowings	9,000		—		9,000		—		9,000
Long-term debt	20,171		—		19,859		—		19,859

- 58 -

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)


December 31, 2024	Carrying Amount		Level 1		Level 2		Level 3		Balance at Fair Value
Assets
Cash and cash equivalents	$	31,078	$	31,078	$	—	$	—	$	31,078
Cash and investments segregated and on deposit for regulatory purposes	12,416		2,401		10,015		—		12,416
Receivables from brokers, dealers, and clearing organizations	2,440		—		2,440		—		2,440
Receivables from brokerage clients — net	85,343		—		85,343		—		85,343
Held to maturity securities:
U.S. agency mortgage-backed securities	146,453		—		132,605		—		132,605








Total held to maturity securities	146,453		—		132,605		—		132,605
Bank loans — net:
First Mortgages	27,375		—		24,336		—		24,336
HELOCs	423		—		441		—		441
Pledged asset lines	17,024		—		17,024		—		17,024
Other	393		—		393		—		393
Total bank loans — net	45,215		—		42,194		—		42,194
Other assets	1,405		—		1,405		—		1,405

Liabilities
Bank deposits	$	259,121	$	—	$	259,121	$	—	$	259,121
Payables to brokers, dealers, and clearing organizations	13,336		—		13,336		—		13,336
Payables to brokerage clients	101,559		—		101,559		—		101,559
Accrued expenses and other liabilities	1,076		—		1,076		—		1,076
Other short-term borrowings	5,999		—		5,999		—		5,999
Federal Home Loan Bank borrowings	16,700		—		16,700		—		16,700
Long-term debt	22,379		—		21,621		—		21,621

14. Stockholders’ Equity

Common and Nonvoting Common Stock

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

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

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

CSC repurchased an additional 3.9 million shares of its common stock for $351 million during the three months ended June 30, 2025. These shares were purchased under CSC’s $15.0 billion share repurchase authorization and as of June 30, 2025, approximately $6.9 billion remained on the authorization. Subsequent to June 30, 2025, on July 24, 2025, CSC publicly announced that its Board of Directors terminated the existing share repurchase authorization and replaced it with a new authorization to repurchase up to $20.0 billion of common stock. The new share repurchase authorization does not have an expiration date.

There were no repurchases of CSC’s common stock during the three and six months ended June 30, 2024.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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.

Preferred Stock

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

There were no redemptions of CSC’s preferred stock during the three and six months ended June 30, 2024.

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


			Liquidation Preference Per Share							Dividend Rate in Effect at June 30, 2025		Earliest Redemption Date	Date at Which Dividend Rate Resets or Becomes Floating	Reset / Floating-Rate	Margin Over Reset / Floating-Rate
	Shares Issued and Outstanding (in ones) at		Carrying Value at
	June 30, 2025 (1)	December 31, 2024 (1)	June 30, 2025		December 31, 2024		Issue Date
Fixed-rate:
Series D	750,000	750,000	$	1,000	$	728	$	728	03/07/16	5.95	%	06/01/21	N/A	N/A	N/A
Series J	600,000	600,000	1,000		584		584		03/30/21	4.450	%	06/01/26	N/A	N/A	N/A
Fixed-to-floating rate/Fixed-rate reset:
Series F	4,884	4,884	100,000		481		481		10/31/17	5.000	%	12/01/27	12/01/27	3M LIBOR (5)	2.575	%
Series G (2)	—	24,580	—		—		2,428		04/30/20	—		—	—	—	—
Series H (3)	22,267	22,267	100,000		2,200		2,200		12/11/20	4.000	%	12/01/30	12/01/30	10-Year Treasury	3.079	%
Series I (4)	20,554	20,554	100,000		2,030		2,030		03/18/21	4.000	%	06/01/26	06/01/26	5-Year Treasury	3.168	%
Series K (4)	7,500	7,500	100,000		740		740		03/04/22	5.000	%	06/01/27	06/01/27	5-Year Treasury	3.256	%
Total preferred stock	1,405,205	1,429,785			$	6,763	$	9,191

(1) Represented by depositary shares.

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

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

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

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

N/A Not applicable.

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


	Three Months Ended June 30,								Six Months Ended June 30,
	2025				2024				2025				2024
	Total Declared		Per Share Amount		Total Declared		Per Share Amount		Total Declared		Per Share Amount		Total Declared		Per Share Amount

Series D (1)	$	11.1	$	14.88	$	11.1	$	14.88	$	22.3	$	29.76	$	22.3	$	29.76

Series F (2)	12.2		2,500.00		12.2		2,500.00		12.2		2,500.00		12.2		2,500.00
Series G (3)	33.0		1,343.75		33.0		1,343.75		66.0		2,687.50		66.0		2,687.50
Series H (1)	22.2		1,000.00		22.2		1,000.00		44.5		2,000.00		44.5		2,000.00
Series I (1)	20.6		1,000.00		20.6		1,000.00		41.2		2,000.00		41.2		2,000.00
Series J (1)	6.7		11.13		6.7		11.13		13.4		22.26		13.4		22.26
Series K (1)	9.5		1,250.00		9.5		1,250.00		18.8		2,500.00		18.8		2,500.00
Total	$	115.3			$	115.3			$	218.4			$	218.4

(1) Dividends paid quarterly.

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

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

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

15. Accumulated Other Comprehensive Income

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


	Total AOCI
Balance at March 31, 2024	$	(17,576)
Available for sale securities:
Net unrealized gain (loss), net of tax expense (benefit) of $51	183
Other reclassifications included in other revenue, net of tax expense (benefit) of $3	7
Held to maturity securities:
Amortization of amounts previously recorded upon transfer from available for sale, net of tax expense (benefit) of $131	452
Other (1)	(2)
Balance at June 30, 2024	$	(16,936)

Balance at March 31, 2025	$	(13,621)
Available for sale securities:
Net unrealized gain (loss), net of tax expense (benefit) of $116	501
Other reclassifications included in other revenue, net of tax expense (benefit) of $8	22
Held to maturity securities:
Amortization of amounts previously recorded upon transfer from available for sale, net of tax expense (benefit) of $61	500
Derivatives designated as cash flow hedging instruments:
Net unrealized gain (loss), net of tax expense (benefit) of $(4)	(11)
Reclassifications included in interest revenue, net of tax expense (benefit) of $4	13
Other (1)	5
Balance at June 30, 2025	$	(12,591)

Balance at December 31, 2023	$	(18,131)
Available for sale securities:
Net unrealized gain (loss), net of tax expense (benefit) of $77	296

Other reclassifications included in other revenue, net of tax expense (benefit) of $5	15
Held to maturity securities:

Amortization of amounts previously recorded upon transfer from available for sale, net of tax expense (benefit) of $253	894
Other (1)	(10)
Balance at June 30, 2024	$	(16,936)

Balance at December 31, 2024	$	(14,848)
Available for sale securities:
Net unrealized gain (loss), net of tax expense (benefit) of $369	1,309

Other reclassifications included in other revenue, net of tax expense (benefit) of $10	30
Held to maturity securities:

Amortization of amounts previously recorded upon transfer from available for sale, net of tax expense (benefit) of $189	910
Derivatives designated as cash flow hedging instruments:
Net unrealized gain (loss), net of tax expense (benefit) of $(4)	(11)
Reclassifications included in interest revenue, net of tax expense (benefit) of $4	13
Other (1)	6
Balance at June 30, 2025	$	(12,591)

(1) Tax expense (benefit) was less than $500 thousand.

As of June 30, 2025, the total remaining unamortized loss on securities transferred from AFS to HTM included in AOCI was $8.8 billion net of tax effect ($11.7 billion pre-tax). This loss is being amortized over the remaining lives of the securities, offsetting amortization of the securities’ premiums or discounts, and resulting in no impact to net income.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

16. Earnings Per Common Share

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

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

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


	Three Months Ended June 30,						Six Months Ended June 30,
	2025						2025
	Common Stock		Nonvoting Common Stock		Consolidated Common Stock		Common Stock		Nonvoting Common Stock		Consolidated Common Stock
Basic earnings per share:
Numerator
Net income	$	2,126	$	—	$	2,126	$	4,017	$	18	$	4,035
Preferred stock dividends and other (1)	(149)		—		(149)		(261)		(1)		(262)
Net income available to common stockholders	$	1,977	$	—	$	1,977	$	3,756	$	17	$	3,773
Denominator
Weighted-average common shares outstanding — basic	1,817		—		1,817		1,807		51		1,819
Basic earnings per share	$	1.09	$	—	$	1.09	$	2.07	$	.33	$	2.07
Diluted earnings per share:
Numerator
Net income available to common stockholders	$	1,977	$	—	$	1,977	$	3,756	$	17	$	3,773
Reallocation of net income available to common stockholders as a result of conversion of nonvoting to voting shares	—		—		—		17		—		—
Allocation of net income available to common stockholders:	$	1,977	$	—	$	1,977	$	3,773	$	17	$	3,773
Denominator
Weighted-average common shares outstanding — basic	1,817		—		1,817		1,807		51		1,819
Conversion of nonvoting shares to voting shares	—		—		—		12		—		—
Common stock equivalent shares related to stock incentive plans	5		—		5		6		—		6
Weighted-average common shares outstanding — diluted (2)	1,822		—		1,822		1,825		51		1,825
Diluted earnings per share	$	1.08	$	—	$	1.08	$	2.07	$	.33	$	2.07

(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 9 million and 13 million for the three and six months ended June 30, 2025, respectively.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2024				2024
	Common Stock		Nonvoting Common Stock		Common Stock		Nonvoting Common Stock
Basic earnings per share:
Numerator
Net income	$	1,295	$	37	$	2,619	$	75
Preferred stock dividends and other (1)	(118)		(3)		(226)		(6)
Net income available to common stockholders	$	1,177	$	34	$	2,393	$	69
Denominator
Weighted-average common shares outstanding — basic	1,777		51		1,776		51
Basic earnings per share	$	.66	$	.66	$	1.35	$	1.35
Diluted earnings per share:
Numerator
Net income available to common stockholders	$	1,177	$	34	$	2,393	$	69
Reallocation of net income available to common stockholders as a result of conversion of nonvoting to voting shares	34		—		69		—
Allocation of net income available to common stockholders:	$	1,211	$	34	$	2,462	$	69
Denominator
Weighted-average common shares outstanding — basic	1,777		51		1,776		51
Conversion of nonvoting shares to voting shares	51		—		51		—
Common stock equivalent shares related to stock incentive plans	6		—		5		—
Weighted-average common shares outstanding — diluted (2)	1,834		51		1,832		51
Diluted earnings per share	$	.66	$	.66	$	1.34	$	1.34

(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 13 million and 18 million for the three and six months ended June 30, 2024, respectively.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

17. Regulatory Requirements

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


	Actual				Minimum to be Well Capitalized				Minimum Capital Requirement
June 30, 2025	Amount		Ratio		Amount		Ratio		Amount		Ratio (1)
CSC
Common Equity Tier 1 Risk-Based Capital	$	37,504	33.0	%	N/A				$	5,116	4.5	%
Tier 1 Risk-Based Capital	44,267		38.9	%	N/A				6,822		6.0	%
Total Risk-Based Capital	44,297		39.0	%	N/A				9,096		8.0	%
Tier 1 Leverage	44,267		9.8	%	N/A				18,053		4.0	%
Supplementary Leverage Ratio	44,267		9.7	%	N/A				13,634		3.0	%
CSB
Common Equity Tier 1 Risk-Based Capital	$	32,114	42.0	%	$	4,972	6.5	%	$	3,442	4.5	%
Tier 1 Risk-Based Capital	32,114		42.0	%	6,120		8.0	%	4,590		6.0	%
Total Risk-Based Capital	32,137		42.0	%	7,650		10.0	%	6,120		8.0	%
Tier 1 Leverage	32,114		12.2	%	13,205		5.0	%	10,564		4.0	%





Supplementary Leverage Ratio	32,114		12.1	%	N/A				7,991		3.0	%

December 31, 2024
CSC
Common Equity Tier 1 Risk-Based Capital	$	35,995	31.7	%	N/A				$	5,114	4.5	%
Tier 1 Risk-Based Capital	45,186		39.8	%	N/A				6,819		6.0	%
Total Risk-Based Capital	45,218		39.8	%	N/A				9,092		8.0	%
Tier 1 Leverage	45,186		9.9	%	N/A				18,325		4.0	%
Supplementary Leverage Ratio	45,186		9.8	%	N/A				13,836		3.0	%
CSB
Common Equity Tier 1 Risk-Based Capital	$	32,584	41.7	%	$	5,079	6.5	%	$	3,516	4.5	%
Tier 1 Risk-Based Capital	32,584		41.7	%	6,251		8.0	%	4,688		6.0	%
Total Risk-Based Capital	32,606		41.7	%	7,813		10.0	%	6,251		8.0	%
Tier 1 Leverage	32,584		11.6	%	14,035		5.0	%	11,228		4.0	%
Supplementary Leverage Ratio	32,584		11.5	%	N/A				8,479		3.0	%

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

N/A Not applicable.

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

CSC’s other banking subsidiaries are Charles Schwab Premier Bank, SSB (CSPB) and Charles Schwab Trust Bank (Trust Bank). CSPB is a Texas-chartered state savings bank that provides banking and custody services, and Trust Bank is a Nevada state-chartered savings bank that provides trust and custody services. At June 30, 2025, the balance sheets of CSPB and Trust Bank consisted primarily of investment securities, and the entities held total assets of $24.4 billion and $9.7 billion, respectively. Based on their regulatory capital ratios, at June 30, 2025, CSPB and Trust Bank are considered well capitalized under their respective regulatory capital rules.

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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


	June 30, 2025		December 31, 2024
CS&Co
Net capital	$	12,043	$	11,112
Minimum dollar requirement	0.250		0.250
2% of aggregate debit balances	2,155		2,049
Net capital in excess of required net capital	9,888		9,063

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

18. Segment Information

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

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

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

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THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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


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

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

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

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THE CHARLES SCHWAB CORPORATION

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