What changed in this filing

/stocks — the workspaceLOADING

Item 3. Quantitative and Qualitative Disclosures About Market Risk

2025-11-07 compared with 2025-08-08 · 214 added, 198 removed, 1402 unchanged (23% of the section changed)

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

35 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

20 unchanged sentences

(In Millions, Except Per Share and Share Amounts)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Cash and cash equivalents $ 30,572 $ 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)

agreements of $ 22,245 and $ 10,075 at September 30, 2025 and December 31, 2024,

respectively)

47,754 38,221

1 unchanged sentence

Receivables from brokerage clients — net 93,788 85,374

Available for sale securities (amortized cost of $ 72,604 and $ 89,704 at June 30, 2025 and

Available for sale securities (amortized cost of $ 66,698 and $ 89,704 at September 30, 2025 and

December 31, 2024, respectively;

1 unchanged sentence

62,308 82,994

Held to maturity securities (including assets pledged of $ 5,160 and $ 5,920 at June 30, 2025 and

December 31, 2024, respectively)

Held to maturity securities (including assets pledged of $ 2,047 and $ 5,920 at

September 30, 2025 and December 31, 2024, respectively)

136,693 146,453

17 unchanged sentences

aggregate liquidation preference of $ 6,871 and

$ 9,329 at June 30, 2025 and December 31, 2024, respectively

$ 9,329 at September 30, 2025 and December 31, 2024, respectively

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,

2,074,188,875 and

2,023,295,180 shares issued at September 30, 2025 and December 31, 2024, respectively

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

no shares issued at September 30, 2025 and 50,893,695 shares issued at December 31, 2024

Additional paid-in capital 27,910 27,639

Retained earnings 42,170 37,568

Treasury stock, at cost — 259,743,035 and 242,977,194 shares at June 30, 2025

Treasury stock, at cost — 287,497,378 and 242,977,194 shares at September 30, 2025

and December 31, 2024, respectively

12 unchanged sentences

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

Balance at June 30, 2024 $ 9,191 2,023 $ 20 51 $ 1 $ 27,470 $ 35,458 $ ( 11,251 ) $ ( 16,936 ) $ 43,953

Net income — — — — — — 1,408 — — 1,408

6 unchanged sentences

Other — — — — — 25 — 5 — 30

Balance at September 30, 2024 $ 9,191 2,023 $ 20 51 $ 1 $ 27,548 $ 36,303 $ ( 11,230 ) $ ( 14,618 ) $ 47,215

Balance at June 30, 2025 $ 6,763 2,074 $ 21 — $ — $ 27,813 $ 40,374 $ ( 12,929 ) $ ( 12,591 ) $ 49,451

Balance at March 31, 2025 $ 9,191 2,074 $ 21 — $ — $ 27,664 $ 38,882 $ ( 12,626 ) $ ( 13,621 ) $ 49,511

Net income — — — — — — 2,358 — — 2,358

Other comprehensive income (loss), net of tax — — — — — — — — 793 793

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

Dividends declared on preferred stock — — — — — — ( 70 ) — — ( 70 )

5 unchanged sentences

Other — — — — — 28 — 5 — 33

Balance at June 30, 2025 $ 6,763 2,074 $ 21 — $ — $ 27,813 $ 40,374 $ ( 12,929 ) $ ( 12,591 ) $ 49,451

Balance at September 30, 2025 $ 6,763 2,074 $ 21 — $ — $ 27,910 $ 42,170 $ ( 15,682 ) $ ( 11,798 ) $ 49,384

Accumulated Other Comprehensive Income (Loss)

12 unchanged sentences

Other — — — — — 91 — ( 51 ) — 40

Balance at June 30, 2024 $ 9,191 2,023 $ 20 51 $ 1 $ 27,470 $ 35,458 $ ( 11,251 ) $ ( 16,936 ) $ 43,953

Balance at September 30, 2024 $ 9,191 2,023 $ 20 51 $ 1 $ 27,548 $ 36,303 $ ( 11,230 ) $ ( 14,618 ) $ 47,215

Balance at December 31, 2024 $ 9,191 2,023 $ 20 51 $ 1 $ 27,639 $ 37,568 $ ( 11,196 ) $ ( 14,848 ) $ 48,375

11 unchanged sentences

Other — — — — — 110 4 ( 61 ) — 53

Balance at June 30, 2025 $ 6,763 2,074 $ 21 — $ — $ 27,813 $ 40,374 $ ( 12,929 ) $ ( 12,591 ) $ 49,451

Balance at September 30, 2025 $ 6,763 2,074 $ 21 — $ — $ 27,910 $ 42,170 $ ( 15,682 ) $ ( 11,798 ) $ 49,384

See Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(in Millions)

Six Months Ended

Nine Months Ended

September 30,

Cash Flows from Operating Activities

51 unchanged sentences

Continued from previous page.

Six Months Ended

Nine Months Ended

September 30,

Supplemental Cash Flow Information

9 unchanged sentences

Leased assets obtained in exchange for new operating lease liabilities $ 239 $ 126

June 30, 2025 June 30, 2024

September 30, 2025 September 30, 2024

Reconciliation of cash, cash equivalents and amounts reported within the balance sheet (2)

32 unchanged sentences

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.

There have been no significant changes to these accounting policies during the first nine months of 2025.

New Accounting Standards

2 unchanged sentences

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.

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.

1 unchanged sentence

This guidance will be reflected in the annual financial statements for 2025.

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

New Accounting Standards Not Yet Adopted

5 unchanged sentences

January 1, 2027 (applies to the annual financial statements for 2027 and interim periods thereafter) The Company is evaluating the impact of this guidance on its financial statement disclosures.

ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software” Removes references to prescriptive and sequential software development stages.

Requires an entity to begin capitalizing software costs when both of the following occur:

1) management has authorized and committed to funding the software project, and 2) it is probable that the project will be completed and the software will be used to perform the function intended.

Adoption allows retrospective, prospective, or modified transition application, with early adoption permitted.

January 1, 2028 (applies to the annual financial statements and interim periods within those annual reporting periods) The Company is evaluating the impact of this guidance on its financial statements.

THE CHARLES SCHWAB CORPORATION

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

40 unchanged sentences

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.

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

The Company had net contract assets of $ 199 million and $ 216 million at September 30, 2025 and December 31, 2024, respectively, related to the buy down of fixed-rate obligation amounts pursuant to the 2023 IDA agreement.

These amounts are included in other assets on the condensed consolidated balance sheets and are amortized on a straight-line basis over the remaining contractual term as a reduction to bank deposit account fee revenue.

8 unchanged sentences

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

June 30, 2025 December 31, 2024

Receivables from clearing organizations $ 2,602 $ 1,670

September 30, 2025 December 31, 2024

Securities borrowed $ 2,342 $ 695

Receivables from clearing organizations 2,313 1,670

Receivables for securities failed to deliver 45 40

1 unchanged sentence

Receivables from brokers, dealers, and clearing organizations $ 4,728 $ 2,440

$ 4,304 $ 2,440

Deposits for securities loaned $ 21,690 $ 13,068

Other payables to broker-dealers 627 37

Payables for securities failed to receive 262 104

Other payables to broker-dealers 240 37

Payables to clearing organizations 215 127

Payables to brokers, dealers, and clearing organizations $ 22,407 $ 13,336

$ 18,584 $ 13,336

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

4 unchanged sentences

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

September 30, 2025 Amortized

Available for sale securities

6 unchanged sentences

state and municipal securities 597 — 35 562

Foreign government agency securities 329 — — 329

Non-agency commercial mortgage-backed securities 121 — 8 113

Other 21 — 2 19

Unallocated portfolio layer method fair value basis adjustments (3)

Unallocated portfolio layer method (PLM) fair value basis adjustments (3)

Total available for sale securities $ 66,698 $ 3 $ 4,393 $ 62,308

14 unchanged sentences

Other 21 — 3 18

Unallocated portfolio layer method fair value basis adjustments (3)

Unallocated PLM fair value basis adjustments (3)

( 47 ) — ( 47 ) —

3 unchanged sentences

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.

(1) As of September 30, 2025 and December 31, 2024, approximately 15 % and 35 %, respectively, of the total AFS in corporate debt securities were issued by institutions in the financial services industry.

Approximately 25 % and 16 % of the holdings of these securities were issued by institutions in the information technology industry as of September 30, 2025 and December 31, 2024, respectively.

Approximately 24 % and 18 % of the holdings of these securities were issued by companies in the consumer staples industry as of September 30, 2025 and December 31, 2024, respectively.

(2) Approximately 71 % and 62 % of asset-backed securities held as of September 30, 2025 and December 31, 2024, respectively, were Federal Family Education Loan Program Asset-Backed Securities.

Asset-backed securities collateralized by credit card receivables represented approximately 21 % and 25 % of the asset-backed securities held as of September 30, 2025 and December 31, 2024, respectively.

(3) This represents the amount of PLM fair value hedge basis adjustments related to AFS securities hedged in a closed portfolio.

See Note 11 for more information on PLM hedge accounting.

At 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.

At September 30, 2025, our banking subsidiaries had pledged investment securities with a fair value of $ 60.7 billion (collateral value of $ 56.3 billion) as collateral to secure borrowing capacity on secured credit facilities with the FHLB (see Note 9).

Our banking subsidiaries also pledge investment securities as collateral to secure borrowing capacity at the Federal Reserve discount window, and had pledged securities with a fair value of $ 30.8 billion (collateral value of $ 29.7 billion) as collateral for this facility at September 30, 2025.

The Company also pledges investment securities issued by federal agencies to secure certain trust deposits.

The fair value and collateral value of these pledged securities was $ 1.7 billion at 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.

The fair value and collateral value of these pledged securities was $ 1.7 billion at September 30, 2025.

At September 30, 2025, our banking subsidiaries had pledged HTM securities as collateral under repurchase agreements with external financial institutions and the FICC.

HTM securities pledged were U.S.

agency mortgage-backed securities with an aggregate

agency mortgage-backed securities with an aggregate amortized cost of $ 4.1 billion, of which $ 2.0 billion may be sold, repledged, or otherwise used by the counterparties.

See Notes 9 and 12 for additional information on these repurchase agreements.

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

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.

At September 30, 2025, the Company had pledged AFS securities consisting of U.S.

Treasury securities with an aggregate fair value of $ 311 million as initial margin on interest rate swaps (see Notes 11 and 12).

4 unchanged sentences

Less than 12 months 12 months or longer Total

June 30, 2025 Fair

September 30, 2025 Fair

Value Unrealized

28 unchanged sentences

(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.

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

At September 30, 2025, substantially all rated securities in the investment portfolios were investment grade.

agency mortgage-backed securities do not have explicit credit ratings;

3 unchanged sentences

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.

No amounts were recognized as credit loss expense and no securities were written down to fair value through earnings for the nine months ended September 30, 2025 and the year ended December 31, 2024.

None of the Company’s AFS securities held as of September 30, 2025 and December 31, 2024 had an allowance for credit losses.

All HTM securities as of September 30, 2025 and December 31, 2024 were U.S.

agency mortgage-backed securities and therefore had no allowance for credit losses because expected nonpayment of the amortized cost basis is zero.

The Company had $ 388 million and $ 455 million of accrued interest for AFS and HTM securities as of June 30, 2025 and December 31, 2024, respectively.

The Company had $ 372 million and $ 455 million of accrued interest for AFS and HTM securities as of September 30, 2025 and December 31, 2024, respectively.

These amounts are excluded from the amortized cost basis and fair market value of AFS and HTM securities and included in other assets on the condensed consolidated balance sheets.

There were no writeoffs of accrued interest receivable on AFS and HTM securities during the six months ended June 30, 2025, or for the year ended December 31, 2024.

There were no writeoffs of accrued interest receivable on AFS and HTM securities during the nine months ended September 30, 2025, or for the year ended December 31, 2024.

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

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

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

Estimated effective duration, exclusive of derivatives:

8 unchanged sentences

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

June 30, 2025 Within

September 30, 2025 Within

1 year After 1 year

8 unchanged sentences

state and municipal securities 2 231 318 11 562

Foreign government agency securities 329 — — — 329

Non-agency commercial mortgage-backed securities — — — 113 113

7 unchanged sentences

Total amortized cost $ 592 $ 20,357 $ 27,439 $ 88,305 $ 136,693

(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.

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

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

7 unchanged sentences

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

September 30, 2025 Current 30-59 days

past due 60-89 days

22 unchanged sentences

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.

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

(2) At September 30, 2025 and December 31, 2024, 41 % and 42 %, respectively, of the First Mortgage and HELOC portfolios were concentrated in California.

These loans have performed in a manner consistent with the portfolio as a whole.

(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).

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

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

THE CHARLES SCHWAB CORPORATION

3 unchanged sentences

First Mortgages HELOCs Total residential real estate Pledged asset lines Other Total

Balance at March 31, 2024 $ 27 $ 1 $ 28 $ — $ 4 $ 32

Balance at June 30, 2024 $ 14 $ 1 $ 15 $ — $ 5 $ 20

Charge-offs — — — — — —

1 unchanged sentence

Provision for credit losses — — — — — —

Balance at September 30, 2024 $ 14 $ 1 $ 15 $ — $ 5 $ 20

Balance at June 30, 2025 $ 15 $ 1 $ 16 $ — $ 6 $ 22

Balance at March 31, 2025 $ 14 $ 1 $ 15 $ — $ 6 $ 21

Charge-offs — — — — — —

1 unchanged sentence

Provision for credit losses — — — — — —

Balance at June 30, 2025 $ 15 $ 1 $ 16 $ — $ 6 $ 22

Balance at September 30, 2025 $ 15 $ 1 $ 16 $ — $ 6 $ 22

Balance at December 31, 2023 $ 32 $ 2 $ 34 $ — $ 4 $ 38

2 unchanged sentences

Provision for credit losses ( 18 ) ( 1 ) ( 19 ) — 1 ( 18 )

Balance at June 30, 2024 $ 14 $ 1 $ 15 $ — $ 5 $ 20

Balance at September 30, 2024 $ 14 $ 1 $ 15 $ — $ 5 $ 20

Balance at December 31, 2024 $ 14 $ 1 $ 15 $ — $ 6 $ 21

2 unchanged sentences

Provision for credit losses 1 — 1 — — 1

Balance at June 30, 2025 $ 15 $ 1 $ 16 $ — $ 6 $ 22

Balance at September 30, 2025 $ 15 $ 1 $ 16 $ — $ 6 $ 22

Consistent with Schwab’s loan charge-off policy for PALs as disclosed in Item 8 – Note 2 of the 2024 Form 10-K, the Company charges off any unsecured balances no later than 90 days past due.

As of 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.

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.

As of September 30, 2025, substantially all PALs are also subject to the collateral maintenance practical expedient under ASC 326 Financial Instruments — Credit Losses .

All PALs were fully collateralized by securities with fair values in excess of borrowings as of September 30, 2025 and December 31, 2024, and no allowance for credit losses for PALs as of those dates was required.

economy saw lower hiring, a modest inflation gain at the end of the third quarter of 2025, and continued to face a moderately restrictive monetary policy and geopolitical unrest amid a backdrop of elevated uncertainty relating to economic impacts of emerging trade policy.

Management’s macroeconomic outlook reflects sustained current benchmark lending rates, with a softening labor market and modest home price appreciation.

1 unchanged sentence

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.

As a result of these factors, we held projected loss rates constant at September 30, 2025, as compared to December 31, 2024.

Bank loan-related nonperforming assets consisted of nonaccrual loans of $ 40 million and $ 35 million at September 30, 2025 and December 31, 2024, respectively.

Nonaccrual loans include nonaccrual troubled debt restructurings recorded prior to the adoption of ASU 2022-02, “ Financial Instruments — Credit Losses :

Troubled Debt Restructurings and Vintage Disclosures” on January 1, 2023.

At both June 30, 2025 and December 31, 2024, loan modifications to borrowers experiencing financial difficulty were not material.

At both September 30, 2025 and December 31, 2024, loan modifications to borrowers experiencing financial difficulty were not material.

Credit Quality

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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

September 30, 2025 2025 2024 2023 2022 2021 pre-2021 Total First Mortgages Revolving HELOCs amortized cost basis HELOCs converted to term loans Total HELOCs

Origination FICO

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(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.

At September 30, 2025, $ 25.1 billion of First Mortgage loans had adjustable interest rates.

Substantially all of these mortgages have initial fixed interest rates for three to ten years and interest rates that typically adjust every six to twelve months pursuant to the terms of the loan thereafter.

1 unchanged sentence

The interest rates on approximately 71 % of the balance of these interest-only loans are not scheduled to reset for three or more years.

At 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.

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

The HELOC product has a 30-year loan term with an initial draw period of ten years from the date of origination.

5 unchanged sentences

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

June 30, 2025 Balance

September 30, 2025 Balance

Converted to an amortizing loan by period end (1)

3 unchanged sentences

> 5 years 200

(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.

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

At September 30, 2025, $ 328 million of the HELOC portfolio was secured by second liens on the associated properties.

Second lien mortgage loans typically possess a higher degree of credit risk given the subordination to the first lien holder in the event of default.

In addition to the credit monitoring activities described previously, Schwab also monitors credit risk by reviewing the delinquency status of the first lien loan on the associated property.

At June 30, 2025, the borrowers on approximately 62 % of HELOC loan balances outstanding only paid the minimum amount due.

At September 30, 2025, the borrowers on approximately 64 % of HELOC loan balances outstanding only paid the minimum amount due.

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 of September 30, 2025 and December 31, 2024, substantially all of Schwab’s involvement with variable interest entities (VIEs) is through CSB’s Community Reinvestment Act (CRA) related investments and most of these are related to Low-Income Housing Tax Credit (LIHTC) investments.

As part of CSB’s community reinvestment initiatives, CSB invests in funds that make equity investments in multifamily affordable housing properties and receives tax credits and other tax benefits for these investments.

During the three months ended 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.

During the three months ended September 30, 2025 and 2024, CSB recorded amortization of $ 48 million and $ 37 million, respectively, and recognized tax credits and other tax benefits of $ 62 million and $ 48 million, respectively, associated with these investments.

During the nine months ended September 30, 2025 and 2024, CSB recorded amortization of $ 142 million and $ 117 million, respectively, and recognized tax credits and other tax benefits of $ 188 million and $ 150 million, respectively, associated with these investments.

The amortization, as well as the tax credits and other tax benefits, are included in taxes on income on the condensed consolidated statements of income.

2 unchanged sentences

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

September 30, 2025 December 31, 2024

assets Aggregate

13 unchanged sentences

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.

During the nine months ended September 30, 2025 and year ended December 31, 2024, Schwab did not provide or intend to provide financial or other support to the VIEs that it was not contractually required to provide.

THE CHARLES SCHWAB CORPORATION

3 unchanged sentences

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

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Interest-bearing deposits:

2 unchanged sentences

Time certificates of deposit (1)

12,720 27,701

Savings and other 3,569 4,015

3 unchanged sentences

(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.

The weighted-average interest rates on outstanding time certificates of deposit at September 30, 2025 and December 31, 2024 were 4.21 % and 4.90 %, respectively.

As of September 30, 2025 and December 31, 2024, there were no time deposits that were in excess of FDIC insurance limits or otherwise uninsured.

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

CSC Senior Notes

10 unchanged sentences

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

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

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

Date of Issuance Principal Amount Outstanding

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

CSC Fixed-rate Senior Notes:

82 unchanged sentences

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

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

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

Thereafter 6,500

9 unchanged sentences

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.

There was $ 850 million and $ 16.7 billion outstanding under these facilities as of September 30, 2025 and December 31, 2024, respectively, and these borrowings had a weighted-average interest rate of 4.11 % and 5.11 %, respectively.

As of September 30, 2025 and December 31, 2024, the collateral pledged provided additional borrowing capacity of $ 75.3 billion and $ 59.8 billion, respectively.

Other short-term borrowings :

Total other short-term borrowings outstanding at 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.

Total other short-term borrowings outstanding at September 30, 2025 and December 31, 2024 were $ 6.5 billion and $ 6.0 billion, respectively, and had a weighted-average interest rate of 4.48 % and 5.21 %, respectively.

Additional information regarding our other short-term borrowings facilities is described below.

The Company may engage with external financial institutions and the FICC in repurchase agreements collateralized by investment securities as another source of short-term liquidity.

The Company had $ 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.

The Company had $ 4.0 billion and $ 5.5 billion outstanding pursuant to such repurchase agreements at September 30, 2025 and December 31, 2024, respectively.

Repurchase agreements outstanding at September 30, 2025 mature between October 2025 and November 2025.

Our banking subsidiaries have access to funding through the Federal Reserve discount window.

Amounts available are dependent upon the value of certain investment securities that are pledged as collateral.

As of 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.

As of September 30, 2025 and December 31, 2024, our collateral pledged provided total borrowing capacity of $ 29.7 billion and $ 30.5 billion, respectively, of which no amounts were outstanding at the end of either period.

CSC has the ability to issue up to $ 5.0 billion of commercial paper notes with maturities of up to 270 days.

There was $ 2.0 billion gross par value before discount of $ 19 million outstanding at June 30, 2025, and no amounts outstanding at December 31, 2024.

There was $ 800 million gross par value before discount of $ 4 million outstanding at September 30, 2025, and no amounts outstanding at December 31, 2024.

CSC and CS&Co also have access to unsecured uncommitted lines of credit with external banks with total borrowing capacity of $ 1.7 billion;

no amounts were outstanding as of 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:

no amounts were outstanding as of September 30, 2025 or December 31, 2024.

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

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

2025 2026 Total

FHLB borrowings $ — $ 850 $ 850

9 unchanged sentences

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.

CSB purchased First Mortgages of $ 1.7 billion and $ 1.1 billion during the third quarter of 2025 and 2024, respectively, and $ 4.4 billion and $ 2.6 billion during the first nine months of 2025 and 2024, respectively.

CSB purchased HELOCs with commitments of $ 52 million and $ 38 million during the third quarter of 2025 and 2024, respectively, and $ 181 million and $ 121 million during the first nine months of 2025 and 2024, respectively.

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

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Commitments to extend credit related to unused HELOCs and other lines of credit $ 1,819 $ 1,895

19 unchanged sentences

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.

The 2023 IDA agreement extends the term to sweep balances to the TD Depository Institutions through July 1, 2034, and requires that Schwab maintain certain minimum and maximum insured deposit account balances (IDA balances).

Pursuant to the terms of the agreement, after September 10, 2025, withdrawals of IDA balances are permitted at Schwab’s discretion, subject to an obligation to maintain IDA balances above a minimum of $ 60 billion, with a maximum of $ 90 billion.

In accordance with the agreement, in September 2025, Schwab moved $ 3.0 billion of IDA balances to its balance sheet.

Designation of deposit balances for investment in fixed- or floating-rate instruments under the 2023 IDA agreement is at Schwab’s sole discretion with certain limitations on the amount of fixed-rate obligation amounts.

If IDA balances decline below the required IDA balance minimum as described above, Schwab would be required to make a nonperformance payment to the TD Depository Institutions pursuant to the terms of the 2023 IDA agreement.

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

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

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

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 :

33 unchanged sentences

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

The Company uses cleared interest rate swaps to manage its exposure to changes in fair value of these instruments attributable to changes in the designated benchmark interest rate.

Cleared interest rate swaps designated as fair value hedges of AFS securities involve the payment of fixed-rate amounts to a CCP in exchange for the Company receiving floating-rate payments over the life of the agreements.

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

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 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 Company had outstanding interest rate swaps with aggregate notional amounts of $ 40.8 billion and $ 30.9 billion at September 30, 2025 and December 31, 2024, respectively, that were designated as fair value hedges of interest rate risk.

The notional amount is the basis upon which the pay-fixed/receive-float and receive-fixed/pay-float payments are determined;

4 unchanged sentences

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.

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

Fair Values of Derivative Instruments

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

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Assets Liabilities Assets Liabilities

2 unchanged sentences

(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.

Derivative assets and liabilities as of September 30, 2025 and 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 September 30, 2025, there was a $ 69 million reduction of derivative assets and a $ 139 million reduction of derivative liabilities related to variation margin settlements.

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

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

Effects of Fair Value Hedge Accounting

4 unchanged sentences

Assets and Liabilities

June 30, 2025 December 31, 2024 June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024 September 30, 2025 December 31, 2024

Line item in which the hedged item is included:

2 unchanged sentences

Long-term debt (3)

$ ( 18,733 ) $ ( 14,908 ) $ — $ 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.

At September 30, 2025 and December 31, 2024, the amortized cost basis of the closed portfolios used in these hedging relationships was $ 2.6 billion and $ 2.5 billion, respectively, of which $ 2.1 billion and $ 2.0 billion was designated in a portfolio layer hedging relationship at September 30, 2025 and December 31, 2024, respectively.

The cumulative basis adjustments associated with these hedging relationships were an increase of $ 8 million and a reduction of $ 47 million of the amortized cost basis of the closed portfolios at September 30, 2025 and December 31, 2024, respectively.

(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.

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

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

(3) Excludes the carrying amount and fair value hedging adjustment of long-term debt for which hedge accounting has been discontinued.

The cumulative amount of fair value hedging adjustments remaining for long-term debt was an increase of the carrying amount of $ 5 million at September 30, 2025, which is recorded in long-term debt on the condensed consolidated balance sheets and amortized to interest expense over the lives of the borrowings.

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

2 unchanged sentences

Interest Expense

Three Months Ended June 30, 2025 2024 2025 2024

Three Months Ended September 30, 2025 2024 2025 2024

Gain (loss) on fair value hedging relationships:

2 unchanged sentences

3 ( 214 ) ( 4 ) —

Six Months Ended June 30, 2025 2024 2025 2024

Nine Months Ended September 30, 2025 2024 2025 2024

Gain (loss) on fair value hedging relationships:

2 unchanged sentences

( 252 ) ( 19 ) 14 —

(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.

(1) Interest revenue excludes net income (expense) from periodic interest accruals and receipts (payments) of $ 2 million and $ 34 million for the three and nine months ended September 30, 2025, respectively, and $ 20 million and $ 36 million for the three and nine months ended September 30, 2024, respectively.

Interest expense excludes net income (expense) from periodic interest accruals and receipts (payments) of $( 20 ) million and $( 44 ) million, respectively, for the three and nine months ended September 30, 2025.

We began designating swaps as fair value hedges of Senior Notes in the fourth quarter of 2024.

As such, there was no impact to interest expense from periodic interest accruals and receipts (payments) for the three and six months ended June 30, 2024.

As such, there was no impact to interest expense from periodic interest accruals and receipts (payments) for the three and nine months ended September 30, 2024.

Effects of Cash Flow Hedge Accounting

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

Three and Six Months Ended

June 30, 2025

Three Months Ended Nine Months Ended

September 30, 2025 September 30, 2025

Gain (loss) recognized in other comprehensive income (1)

1 unchanged sentence

(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.

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

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

Financial Instruments Subject to Off-Balance Sheet Credit Risk

5 unchanged sentences

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.

Schwab’s resale agreements as of September 30, 2025 and December 31, 2024 were not subject to master netting arrangements.

Securities lending :

5 unchanged sentences

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

THE CHARLES SCHWAB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

was $ 1.6 billion and $ 674 million at June 30, 2025 and December 31, 2024, respectively.

The fair value of these borrowed securities was $ 2.3 billion and $ 674 million at September 30, 2025 and December 31, 2024, respectively.

Our securities lending transactions are subject to enforceable master netting arrangements with other broker-dealers;

30 unchanged sentences

Offsetting Collateral

June 30, 2025

September 30, 2025

Resale agreements (1)

33 unchanged sentences

(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.

At September 30, 2025 and December 31, 2024, the fair value of collateral received in connection with resale agreements that are available to be repledged or sold was $ 22.7 billion and $ 10.3 billion, respectively.

(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.

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

(5) At September 30, 2025 and December 31, 2024, the fair value of initial margin pledged as collateral related to interest rate swaps was $ 311 million and $ 378 million, respectively.

See Notes 5 and 11 for additional information.

1 unchanged sentence

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.

At September 30, 2025 and December 31, 2024, the fair value of collateral pledged in connection with repurchase agreements was $ 4.2 billion and $ 5.9 billion, respectively.

See Note 9 for additional information.

1 unchanged sentence

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 September 30, 2025, $ 18.7 billion of securities loaned had overnight and continuous remaining contractual maturities and $ 3.0 billion of securities loaned had contractual maturities of 35 - 95 days.

At December 31, 2024, $ 8.8 billion of securities loaned had overnight and continuous remaining contractual maturities and $ 4.3 billion of securities loaned had contractual maturities of 35 - 95 days.

The cash collateral received from counterparties under securities lending transactions was equal to or greater than the market value of the securities loaned at June 30, 2025 and December 31, 2024.

The cash collateral received from counterparties under securities lending transactions was equal to or greater than the market value of the securities loaned at September 30, 2025 and December 31, 2024.

(8) Included in other short-term borrowings in the condensed consolidated balance sheets.

6 unchanged sentences

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

September 30, 2025 December 31, 2024

Fair value of client securities available to be pledged $ 134,727 $ 116,258

7 unchanged sentences

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.

The fair value of fully-paid client securities available and pledged was $ 237 million and $ 105 million at September 30, 2025 and December 31, 2024, respectively.

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

35 unchanged sentences

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.

The Company did not adjust prices received from the primary independent third-party pricing service at September 30, 2025 or December 31, 2024.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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

June 30, 2025 Level 1 Level 2 Level 3 Balance at

September 30, 2025 Level 1 Level 2 Level 3 Balance at

Cash equivalents:

10 unchanged sentences

state and municipal securities — 562 — 562

Foreign government agency securities — 329 — 329

Non-agency commercial mortgage-backed securities — 113 — 113

11 unchanged sentences

Accrued expenses and other liabilities:

Interest rate swaps $ — $ 1 $ — $ 1

Other $ 2,647 $ 35 $ — $ 2,682

39 unchanged sentences

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

June 30, 2025 Carrying

September 30, 2025 Carrying

Amount Level 1 Level 2 Level 3 Balance at

58 unchanged sentences

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.

These shares were purchased under CSC’s $ 15.0 billion share repurchase authorization.

On July 24, 2025, CSC publicly announced that its Board of Directors terminated the $ 15.0 billion share repurchase authorization and replaced it with a new authorization to repurchase up to $ 20.0 billion of common stock.

The new share repurchase authorization does not have an expiration date.

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

During the three months ended September 30, 2025, CSC repurchased 28.9 million shares of its common stock under the new authorization for $ 2.7 billion.

As of September 30, 2025 approximately $ 17.3 billion remained on the new authorization.

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

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.

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

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

The tax is recorded as part of the cost basis of the treasury stock repurchased, resulting in no impact to the condensed consolidated statements of income.

Preferred Stock

2 unchanged sentences

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.

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

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

Liquidation Preference Per Share Dividend Rate in Effect at June 30, 2025 Earliest Redemption Date Date at Which Dividend Rate Resets or Becomes Floating Reset / Floating-Rate

Liquidation Preference Per Share Dividend Rate in Effect at September 30, 2025 Earliest Redemption Date Date at Which Dividend Rate Resets or Becomes Floating Reset / Floating-Rate

Margin Over Reset / Floating-Rate

Shares Issued and Outstanding (in ones) at Carrying Value at

June 30, 2025 (1)

September 30, 2025 (1)

December 31, 2024 (1)

June 30, 2025 December 31, 2024 Issue Date

September 30, 2025 December 31, 2024 Issue Date

Series D 750,000 750,000 $ 1,000 $ 728 $ 728 03/07/16 5.95 % 06/01/21 N/A N/A N/A

15 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

22 unchanged sentences

AOCI balances and the components of other comprehensive income (loss) are as follows:

Balance at March 31, 2024 $ ( 17,576 )

Balance at June 30, 2024 $ ( 16,936 )

Available for sale securities:

3 unchanged sentences

Amortization of amounts previously recorded upon transfer from available for sale, net of tax expense (benefit) of $ 134

Balance at September 30, 2024 $ ( 14,618 )

Balance at June 30, 2025 $ ( 12,591 )

Balance at March 31, 2025 $ ( 13,621 )

Available for sale securities:

6 unchanged sentences

Reclassifications included in interest revenue, net of tax expense (benefit) of $ 7

Balance at June 30, 2025 $ ( 12,591 )

Balance at September 30, 2025 $ ( 11,798 )

Balance at December 31, 2023 $ ( 18,131 )

4 unchanged sentences

Amortization of amounts previously recorded upon transfer from available for sale, net of tax expense (benefit) of $ 387

Balance at June 30, 2024 $ ( 16,936 )

Balance at September 30, 2024 $ ( 14,618 )

Balance at December 31, 2024 $ ( 14,848 )

7 unchanged sentences

Reclassifications included in interest revenue, net of tax expense (benefit) of $ 11

Balance at June 30, 2025 $ ( 12,591 )

Balance at September 30, 2025 $ ( 11,798 )

(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).

As of September 30, 2025, the total remaining unamortized loss on securities transferred from AFS to HTM included in AOCI was $ 8.5 billion net of tax effect ($ 11.1 billion pre-tax).

This loss is being amortized over the remaining lives of the securities, offsetting amortization of the securities’ premiums or discounts, and resulting in no impact to net income.

4 unchanged sentences

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.

As of February 12, 2025, the Company had no remaining nonvoting common stock outstanding and accordingly, no dividends were paid on nonvoting common stock during the nine months ended September 30, 2025.

For the computations of basic and diluted EPS, undistributed net income of the Company was allocated on a proportionate basis to the voting and nonvoting common stock, as the distribution rights of the two classes were identical.

1 unchanged sentence

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:

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Stock Nonvoting

25 unchanged sentences

(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.

(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 nine months ended September 30, 2025, respectively.

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

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:

As of September 30, 2024, the Company had voting and nonvoting common stock outstanding.

The computations of basic and diluted EPS for the two classes for the three and nine months ended September 30, 2024 are as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Stock Nonvoting

21 unchanged sentences

(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.

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

THE CHARLES SCHWAB CORPORATION

2 unchanged sentences

Regulatory Requirements

At June 30, 2025, CSC and its banking subsidiaries met all of their respective capital requirements.

At September 30, 2025, CSC and its banking subsidiaries met all of their respective capital requirements.

Regulatory capital and ratios for CSC (consolidated) and CSB are as follows:

1 unchanged sentence

Well Capitalized Minimum Capital Requirement

June 30, 2025 Amount Ratio Amount Ratio Amount Ratio (1)

September 30, 2025 Amount Ratio Amount Ratio Amount Ratio (1)

Common Equity Tier 1 Risk-Based Capital $ 36,728 32.8 % N/A $ 5,035 4.5 %

20 unchanged sentences

(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%.

As of September 30, 2025, CSC was subject to a stress capital buffer of 2.5%.

In addition, CSB is required to maintain a capital conservation buffer of 2.5%.

1 unchanged sentence

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.

At September 30, 2025, the minimum capital ratio requirements for both CSC and CSB, inclusive of their respective buffers, were 7.0%, 8.5%, and 10.5% for Common Equity Tier 1 Risk-Based Capital, Tier 1 Risk-Based Capital, and Total Risk-Based Capital, respectively.

N/A Not applicable.

Based on its regulatory capital ratios at 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.

Based on its regulatory capital ratios at September 30, 2025, CSB is considered well capitalized (the highest category) under its respective regulatory capital rules.

There are no conditions or events since September 30, 2025 that management believes have changed CSB’s capital category.

CSC’s other banking subsidiaries are Charles Schwab Premier Bank, SSB (CSPB) and Charles Schwab Trust Bank (Trust Bank).

CSPB is a Texas-chartered state savings bank that provides banking and custody services, and Trust Bank is a Nevada state-chartered savings bank that provides trust and custody services.

At 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.

At September 30, 2025, the balance sheets of CSPB and Trust Bank consisted primarily of investment securities, and the entities held total assets of $ 25.1 billion and $ 9.7 billion, respectively.

Based on their regulatory capital ratios, at September 30, 2025, CSPB and Trust Bank are considered well capitalized under their respective regulatory capital rules.

THE CHARLES SCHWAB CORPORATION

2 unchanged sentences

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

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Net capital $ 11,977 $ 11,112

2 unchanged sentences

Net capital in excess of required net capital 9,410 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.

Pursuant to the SEC’s Customer Protection Rule and other applicable regulations, Schwab had cash and investments segregated for the exclusive benefit of clients at September 30, 2025.

The SEC’s Customer Protection Rule requires broker-dealers to segregate client fully-paid securities and cash balances not collateralizing margin positions and not swept to money market funds or bank deposit accounts.

19 unchanged sentences

Investor Services Advisor Services Total

Three Months Ended June 30, 2025 2024 2025 2024 2025 2024

Three Months Ended September 30, 2025 2024 2025 2024 2025 2024

Net interest revenue $ 2,424 $ 1,777 $ 626 $ 445 $ 3,050 $ 2,222

16 unchanged sentences

Income before taxes on income $ 2,456 $ 1,533 $ 565 $ 309 $ 3,021 $ 1,842

Six Months Ended June 30,

Nine Months Ended September 30,

Net interest revenue $ 6,826 $ 5,279 $ 1,752 $ 1,334 $ 8,578 $ 6,613

17 unchanged sentences

(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.

Accordingly, amounts related to the Retirement Business Services business unit are included within Investor Services for the third quarter and nine months ended September 30, 2025, and prior-year amounts have been recast to reflect this new basis of segmentation.

Subsequent Events

On November 6, 2025, Schwab announced that it has entered into a definitive agreement to acquire Forge Global Holdings, Inc.

(Forge), operator of a leading private market platform and trading marketplace, in a transaction valued at approximately $ 660 million.

The Company anticipates that incorporating Forge’s private markets capabilities will enhance Schwab’s ability to meet the evolving needs of investors across our growing client base.

The transaction is expected to close in the first half of 2026, subject to customary closing conditions, including approval by Forge’s stockholders and regulatory approvals.

THE CHARLES SCHWAB CORPORATION

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk