What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-25 compared with 2025-02-26 · 399 added, 580 removed, 1986 unchanged (33% of the section changed)

18 unchanged sentences

Commitments and Contingencies

Exit and Other Related Liabilities

Derivative Instruments and Hedging Activities

9 unchanged sentences

The Charles Schwab Corporation – Parent Company Only Financial Statements

Subsequent Events

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

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Diluted $ 4.65 $ 2.99 $ 2.54

(1) No fee waivers were recognized for the years ended December 31, 2024 and 2023.

Includes fee waivers of $ 57 million for the year ended December 31, 2022.

(2) The Company has voting and nonvoting common stock outstanding.

As the participation rights, including dividend and liquidation rights, are identical between the voting and nonvoting stock classes, basic and diluted earnings per share are the same for each class.

See Notes 20 and 26 for additional information.

(1) For additional information on earnings per common shares outstanding for both voting and nonvoting stock, see Notes 19 and 25.

See Notes to Consolidated Financial Statements.

6 unchanged sentences

Change in net unrealized gain (loss) on available for sale securities:

Net unrealized gain (loss) excluding transfers to held to maturity 1,940 3,539 ( 29,100 )

Reclassification of net unrealized loss transferred to held to maturity — — 18,228

Net unrealized gain (loss) 2,763 1,940 3,539

Other reclassifications included in other revenue 79 40 61

Change in net unrealized gain (loss) on held to maturity securities:

Reclassification of net unrealized loss transferred from available for sale — — ( 18,228 )

Amortization of amounts previously recorded upon transfer to held to maturity

from available for sale 2,187 2,279 2,474

Change in net unrealized gain (loss) on derivatives designated as cash flow

hedging instruments:

Net unrealized gain (loss) ( 17 ) — —

Reclassifications included in interest revenue 66 — —

Other ( 8 ) ( 1 ) ( 35 )

34 unchanged sentences

Federal Home Loan Bank borrowings

16,700 26,400

Long-term debt 22,199 22,428

2 unchanged sentences

Preferred stock — $ .01 par value per share;

aggregate liquidation preference of $ 9,329

at December 31, 2024 and 2023

aggregate liquidation preference of $ 6,871 and $ 9,329

at December 31, 2025 and 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 December 31, 2025 and 2024

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$ .01 par value per share;

50,893,695 shares issued at December 31, 2024 and 2023

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

Additional paid-in capital 27,996 27,639

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Total liabilities and stockholders’ equity $ 490,995 $ 479,843

(1) Certain prior year amounts have been reclassified to conform to the current year presentation.

See Note 1 for additional information.

See Notes to Consolidated Financial Statements.

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Other comprehensive income (loss), net of tax — — — — — — — — 4,490 4,490

Issuance of preferred stock, net 740 — — — — — — — — 740

Redemption of preferred stock ( 988 ) — — — — — ( 12 ) — — ( 1,000 )

Redemption and repurchase of preferred stock, inclusive of tax ( 515 ) — — — — — 44 — — ( 471 )

Dividends declared on preferred stock — — — — — — ( 438 ) — — ( 438 )

1 unchanged sentence

— — — — — — ( 1,838 ) — — ( 1,838 )

Repurchase of common stock — — — — — — — ( 2,435 ) — ( 2,435 )

Repurchase of nonvoting common stock — 15 — ( 15 ) — — — ( 1,000 ) — ( 1,000 )

Conversion of nonvoting common stock to

common stock — 13 — ( 13 ) — — — — — —

Repurchase of common stock, inclusive of tax — — — — — — — ( 2,866 ) — ( 2,866 )

Stock option exercises and other — — — — — ( 145 ) — 194 — 49

4 unchanged sentences

Other comprehensive income (loss), net of tax — — — — — — — — 3,283 3,283

Redemption and repurchase of preferred stock,

inclusive of tax ( 515 ) — — — — — 44 — — ( 471 )

Dividends declared on preferred stock — — — — — — ( 437 ) — — ( 437 )

1 unchanged sentence

— — — — — — ( 1,838 ) — — ( 1,838 )

Repurchase of common stock, inclusive of tax — — — — — — — ( 2,866 ) — ( 2,866 )

Stock option exercises and other — — — — — ( 123 ) — 207 — 84

4 unchanged sentences

Other comprehensive income (loss), net of tax — — — — — — — — 3,865 3,865

Redemption and repurchase of preferred stock,

inclusive of tax — — — — — — — — — —

Issuance of preferred stock, net — — — — — — — — — —

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

Dividends declared on preferred stock — — — — — — ( 371 ) — — ( 371 )

1 unchanged sentence

— — — — — — ( 1,958 ) — — ( 1,958 )

Repurchase of common stock, inclusive of tax — — — — — — — ( 5,902 ) — ( 5,902 )

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 — — — — — ( 74 ) — 230 — 156

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Principal payments on available for sale securities 22,958 25,589 36,508

Purchases of held to maturity securities ( 1,083 ) — —

Principal payments on held to maturity securities 15,262 14,721 15,461

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Repurchases of common stock and nonvoting common stock ( 7,346 ) — ( 2,842 )

Issuance of preferred stock, net — — 740

Redemption and repurchase of preferred stock ( 2,458 ) — ( 467 )

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Non-cash investing activity:

Securities transferred from available for sale to held to maturity, at fair value $ — $ — $ 188,555

Changes in accrued equipment, office facilities, and property purchases $ 54 $ ( 13 ) $ 104

Non-cash financing activity:

Common stock repurchased during the period but settled after period end $ — $ — $ 40

Other Supplemental Cash Flow Information

Cash paid during the period for:

Cash paid during the year for:

Interest $ 4,557 $ 6,655 $ 5,623

Income taxes $ 1,491 $ 1,620 $ 2,130

Amounts included in the measurement of lease liabilities $ 246 $ 260 $ 255

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statement of cash flows $ 69,661 $ 65,514 $ 74,473

(1) Certain prior year amounts have been reclassified to conform to the current year presentation.

See Note 1 for additional information.

(1) For more information on the nature of restrictions on restricted cash and cash equivalents, see Note 23.

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(CSIM), the investment advisor for Schwab’s proprietary mutual funds (Schwab Funds ® ) and for Schwab’s exchange-traded funds (Schwab ETFs).

In May 2024, the Company completed the final client account conversions to CS&Co from the Ameritrade broker-dealers, TD Ameritrade, Inc.

and TD Ameritrade Clearing, Inc.

Accordingly, these entities are no longer principal business subsidiaries.

See Note 16 for additional information regarding the Company’s integration of Ameritrade.

Schwab’s securities broker-dealer has over 380 domestic branch offices in 48 states and the District of Columbia, as well as locations in Puerto Rico, the United Kingdom, Hong Kong, and Singapore.

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Certain estimates relate to taxes on income and legal and regulatory reserves.

Reclassifications:

Certain prior period amounts have been reclassified to conform to the current period presentation.

Beginning in 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 consolidated statements of cash flows and related notes also impacted.

Principles of Consolidation

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Investments in entities in which Schwab does not have a controlling financial interest are accounted for under the equity method of accounting when we have the ability to exercise significant influence over operating and financing decisions of the entity or by accounting policy for investments in certain types of limited liability entities.

Investments in entities for which Schwab does not apply the equity method are generally carried at cost and adjusted for impairment and observable price changes of the identical or similar investments of the same issuer (adjusted cost method), except for certain investments in qualified affordable

All equity method, adjusted cost method, and proportional amortization method investments are included in other assets on the consolidated balance sheets.

THE CHARLES SCHWAB CORPORATION

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

housing projects which are accounted for under the proportional amortization method.

All equity method, adjusted cost method, and proportional amortization method investments are included in other assets on the consolidated balance sheets.

Summary of Significant Accounting Policies

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and bank loans.

Fees earned and incurred on securities borrowing and lending activities, which are conducted by the Company’s broker-dealer subsidiary on assets held in client brokerage accounts, are also included in interest revenue and expense.

Interest revenue and expense also include interest received or paid on resale and repurchase agreements, respectively, and fees earned and incurred on securities borrowing and lending activities.

Asset management and administration fees

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Mutual fund and ETF service fees are charged for investment management, shareholder, and administration services provided to Schwab Funds ® and Schwab ETFs, as well as recordkeeping, shareholder, and administration services provided to third-party funds.

Managed investing solutions (formerly referred to as advice solutions) fees are charged for brokerage and asset management services provided to managed investing solutions clients.

Managed investing solutions fees are charged for brokerage and asset management services provided to managed investing solutions clients.

Both mutual fund and ETF service fees and managed investing solutions fees are earned and recognized over time.

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Other revenue

Other revenue includes industry fees (formerly referred to as exchange processing fees), service fees, the provision for credit losses on bank loans, and other gains and losses from the sale of assets.

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

Generally, the most significant portion of other revenue is industry fees, which are comprised of fees the Company’s broker-dealer subsidiary charges clients to offset the fees imposed on us by third parties.

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Schwab considers all highly liquid investments that mature in three months or less from the time of acquisition and that are not segregated and on deposit for regulatory purposes to be cash and cash equivalents.

Cash and cash equivalents include money market funds, deposits with banks, certificates of deposit, commercial paper, and U.S.

Treasury securities.

Cash and cash equivalents include money market funds, deposits with banks, certificates of deposit, commercial paper, U.S.

Treasury securities, and resale agreements.

See Resale and repurchase agreements below in this Note 2 for further information on the resale agreements.

Cash and cash equivalents also include balances that our banking subsidiaries maintain at the Federal Reserve.

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Investment securities

Investment securities include debt securities which are classified based on management’s intention on the date of purchase and recorded on the balance sheet as of the trade date.

Debt securities not held for trading purposes, for which the Company does not have the positive intent and ability to hold to maturity, are classified as AFS.

AFS investment securities are recorded at fair value and unrealized gains and losses, other than losses related to credit factors, are reported, net of taxes, in AOCI included in stockholders’ equity.

HTM investment securities are recorded at amortized cost, net of any allowance for credit losses, based on the Company’s positive intent and ability to hold these securities to maturity.

Debt securities for which the Company has the positive intent and ability to hold to maturity are classified as HTM.

HTM investment securities are recorded at amortized cost, net of any allowance for credit losses.

Realized gains and losses from sales of AFS investment securities are determined using the specific-identification method and are included in other revenue.

1 unchanged sentence

Where applicable, prepayments are accounted for as they occur (i.e., prepayments are not estimated).

Accrued interest receivable for AFS and HTM investment securities is included in other assets in the Company’s consolidated balance sheets.

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

Accrued interest receivable for AFS and HTM investment securities is included in other assets in the Company’s consolidated balance sheets.

An AFS investment security is impaired if the fair value of the security is less than its amortized cost basis.

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Resale and repurchase agreements are accounted for as collateralized financing transactions with a receivable or payable recorded at their contractual amounts plus accrued interest.

Schwab’s resale agreements are typically collateralized by U.S.

government and agency securities and the receivable is included in cash and investments segregated and on deposit for regulatory purposes in the consolidated balance sheets.

Securities received under resale agreements are not recorded on the consolidated balance sheets.

Securities transferred to counterparties under repurchase agreements continue to be recognized on the Company’s consolidated balance sheets in the respective financial statement line item and at the respective measurement basis.

Payables for repurchase agreements are included in short-term borrowings on the consolidated balance sheets.

The Company monitors its collateral requirements under these agreements daily and collateral is adjusted to ensure full collateralization.

Interest received or paid is recorded in interest revenue or interest expense, respectively.

Schwab’s resale agreements are typically collateralized by U.S.

government and agency securities.

Receivables for resale agreements segregated for the exclusive benefit of clients are included in cash and investments segregated and on deposit for regulatory purposes in the consolidated balance sheets.

Receivables for resale agreements not segregated and on deposit for regulatory purposes are included in either cash and cash equivalents or other assets in the consolidated balance sheets based on their maturity at inception.

Schwab applies the practical expedient based on collateral maintenance provisions in estimating an allowance for credit losses for resale agreements.

Securities borrowed and securities loaned

Securities borrowing and lending transactions are accounted for as collateralized financing transactions.

Securities borrowed transactions typically require Schwab to deliver cash to the lender in exchange for securities;

the receivables from these

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

transactions are included in receivables from brokers, dealers, and clearing organizations on the consolidated balance sheets.

Payables for repurchase agreements entered by our broker-dealer subsidiary are included in payables to brokers, dealers, and clearing organizations on the consolidated balance sheets.

Payables for repurchase agreements entered by Schwab’s banking subsidiaries are included in short-term borrowings on the consolidated balance sheets.

The Company monitors its collateral requirements under resale and repurchase agreements daily and collateral is adjusted to ensure full collateralization.

Interest received or paid is recorded in interest revenue or interest expense, respectively.

Securities borrowed and securities loaned

Securities borrowing and lending transactions are accounted for as collateralized financing transactions.

Securities borrowed transactions typically require Schwab to deliver cash to the lender in exchange for securities;

the receivables from these transactions are included in receivables from brokers, dealers, and clearing organizations on the consolidated balance sheets.

For securities loaned, Schwab typically receives collateral in the form of cash in an amount equal to or greater than the market value of securities loaned;

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The bank loan portfolio includes three portfolio segments:

residential real estate, PALs, and other loans.

residential real estate, pledged asset lines (PALs), and other loans.

We use these segments when developing and documenting our methodology for determining the allowance for credit losses.

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Expected credit losses are estimated using a loan-level model that projects each loan’s behavior over its term based on forecasted voluntary housing turnover, the rates of refinancing, delinquency transition rates, and severity of loss.

The model takes into account the current relevant risk indicators, including each loan’s term and structure, current delinquency status, and the estimated current LTV ratio, as well as borrower FICO scores and current key interest rates including U.S.

The model takes into account the current relevant risk indicators, including each loan’s term and structure, current delinquency status, and the estimated refreshed LTV ratio, as well as borrower FICO scores and current key interest rates including U.S.

Treasury, SOFR, Prime, and mortgage rates.

The more significant variables in the model include delinquency roll rates, housing prices, interest rates, and the unemployment rate.

The more significant variables in the model include delinquency roll rates, housing prices, interest

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

rates, and the unemployment rate.

Delinquency roll rates (i.e., the rates at which loans transition through delinquency stages and ultimately result in a loss) are estimated from our historical loss experience over a full economic cycle.

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

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

Management also estimates a liability for expected credit losses on the Company’s commitments to extend credit related to unused HELOCs and commitments to purchase First Mortgages.

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Impairment charges are recorded in other expenses.

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

Goodwill is not amortized but is tested for impairment annually or whenever indications of impairment exist.

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A qualitative assessment considers macroeconomic and other industry-specific factors, such as trends in short-term and long-term interest rates and the ability to access capital, and Company specific factors such as market capitalization in excess of net assets, trends in revenue generating activities, and merger or acquisition activity.

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

If the Company elects to bypass qualitatively assessing goodwill, or it is not more likely than not that the fair value of a reporting unit exceeds its carrying value, management estimates the fair values of each of the Company’s reporting units (defined as the Company’s businesses for which financial information is available and reviewed regularly by management) and compares it to their carrying values.

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We have not elected the practical expedient for equipment leases and account for lease and non-lease components separately for that class of leases.

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

As the rates implicit in our leases are not readily determinable, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

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Once the Company has committed to a plan to abandon the lease, the amortization period of the ROU asset is shortened to the abandonment date.

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

Advertising and market development

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Where it applies to these costs, the Company’s accounting policy is to expense when incurred.

Schwab provides for income taxes on all transactions that have been recognized in the consolidated financial statements.

Schwab records income taxes on all transactions that have been recognized in the consolidated financial statements.

Accordingly, deferred tax assets are adjusted to reflect the tax rates at which future taxable amounts will likely be settled or realized.

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Alternatively, when quantitative effectiveness assessments are required, the Company uses regression analysis.

The assessment of effectiveness may exclude changes in fair value of the derivative associated with time value.

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

For the Company’s fair value hedges of interest rate risk, the gain or loss on the derivatives and the changes in fair values of the hedged assets and liabilities attributable to benchmark interest rates (basis adjustments) are both recorded in interest revenue or interest expense on the consolidated statements of income.

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Certain fair value hedges may be designated under the portfolio layer method (PLM) of hedge accounting, which allows the Company to hedge the interest rate risk of prepayable and non-prepayable financial assets by designating a stated amount of a closed portfolio that is expected to be outstanding for the designated hedge period (a hedged layer) as the hedged item.

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

hedging relationship may include multiple hedged layers.

A PLM hedging relationship may include multiple hedged layers.

If at any point during the hedge period the aggregate amount of the hedged layers exceeds the amount of the closed portfolio (i.e., a breach of the hedged layer(s) has occurred) or is expected to exceed the amount of the closed portfolio at a future date during the hedge period (i.e., a breach of the hedged layer is anticipated), the PLM hedging relationship must be fully or partially terminated to cure the breach or anticipated breach.

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Amounts reported in AOCI for cash flow hedges of interest rate risk on recognized financial assets and liabilities are reclassified into interest revenue or interest expense as interest payments are accrued or made.

Any amounts excluded from the assessment of effectiveness are recorded in AOCI and reclassified into interest revenue or interest expense by using a systematic and rational method over the life of the hedging instrument.

If the hedging relationship is terminated and it becomes probable that the transactions that were hedged will not occur, the gain or loss on the derivative recorded in AOCI prior to termination is reclassified into interest revenue or interest expense immediately.

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• Level 1 inputs are quoted prices in active markets as of the measurement date for identical assets or liabilities that the Company has the ability to access.

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

• Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

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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.

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 derivatives, and certain accrued expenses and other liabilities.

The Company uses the market approach to determine the fair value of assets and liabilities.

THE CHARLES SCHWAB CORPORATION

Notes to Consolidated Financial Statements

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

available, the Company uses quoted prices in active markets to measure 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.

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The repurchase liabilities are included in accrued expenses and other liabilities on the consolidated balance sheet.

The fair values of interest rate swaps are based on market observable interest rate yield curves.

The fair values of interest rate derivatives are based on market observable interest rate yield curves.

Fair value measurements are priced considering the coupon rate of the fixed leg of the contract and the variable coupon rate on the floating leg of the contract.

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The Company validates its valuations with counterparty quotations from central counterparty (CCP) clearing houses.

See Note 17 for additional information on the Company’s interest rate swaps.

See Note 16 for additional information on the Company’s interest rate derivatives.

THE CHARLES SCHWAB CORPORATION

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Effects on the Financial Statements or Other Significant Matters

Accounting Standards Update (ASU) 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures”

Requires annual and interim disclosure of significant segment expenses that are provided to the chief operating decision maker (CODM) and included in segment profit or loss.

Also requires disclosure of the CODM’s title and position and how the CODM uses reported segment profit or loss information in assessing segment performance and allocating resources.

All required segment disclosures will be presented both on an interim and annual basis.

Adoption requires retrospective application as of the earliest comparative period presented in the financial statements.

January 1, 2024 (applied to the annual financial statements for 2024 and interim periods thereafter)

Accounting Standards Update (ASU) 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”

Expands 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, with early adoption permitted.

January 1, 2025 (applies to the annual financial statements for 2025 and interim periods thereafter)

The Company adopted this guidance on January 1, 2025 on a retrospective basis for all periods presented within these 2025 annual financial statements.

The impact of adoption was the additional segment disclosures included in Note 25.

The impact of adoption was the additional tax disclosures included in Note 22.

New Accounting Standards Not Yet Adopted

Standard Description Required Date of Adoption Effects on the Financial Statements or Other Significant Matters

ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” Expands 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, with early adoption permitted.

January 1, 2025 (applies to the annual financial statements for 2025 and interim periods thereafter)

The Company does not expect this guidance will have a material impact on its financial statements or related disclosures.

ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

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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 The Company is evaluating the impact of this guidance on its financial statements.

ASU 2025-09, “Derivatives and Hedging (Topic 815) Hedge Accounting Improvements

Clarifies certain aspects of the guidance on hedge accounting and addresses several incremental hedge accounting issues arising from the global reference rate reform.

Adoption should be applied on a prospective basis for all hedging relationships and may be elected for hedging relationships that exist as of the date of adoption.

Upon adoption, entities will be permitted to modify certain critical terms of certain hedging relationships without dedesignating the hedge.

January 1, 2027 The Company is evaluating the impact of this guidance on its financial statements.

THE CHARLES SCHWAB CORPORATION

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Receivables from brokerage clients (1)

5,700 5,420 4,793

Available for sale securities 1,538 2,166 2,987

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Payables to brokers, dealers, and clearing organizations ( 701 ) ( 372 ) ( 147 )

( 372 ) ( 147 ) ( 48 )

Payables to brokerage clients (1)

Other short-term borrowings

( 244 ) ( 272 ) ( 271 )

Other short-term borrowings ( 324 ) ( 504 ) ( 375 )

Federal Home Loan Bank borrowings ( 356 ) ( 1,245 ) ( 1,810 )

( 1,245 ) ( 1,810 ) ( 106 )

Long-term debt ( 836 ) ( 846 ) ( 715 )

Other interest expense (1)

( 108 ) ( 2 ) ( 3 )

Interest expense ( 3,754 ) ( 6,393 ) ( 6,684 )

3 unchanged sentences

Managed investing solutions 2,440 2,129 1,868

2,129 1,868 1,854

Other 401 366 325

8 unchanged sentences

Total net revenues $ 23,921 $ 19,606 $ 18,837

(1) Beginning in 2024, this line item includes interest expense related to securities loaned.

Prior period amounts have been reclassified to reflect this change.

See Note 1 for additional information.

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

(1) Beginning in the fourth quarter of 2025, interest revenue and interest expense from client margin loans and short credits related to certain client long/short strategies from which the Company earns a fixed net yield are presented in other interest revenue and other interest expense.

Interest revenue and interest expense amounts related to these client strategies were previously presented in receivables from brokerage clients and payables to brokerage clients, respectively, and full-year 2025 amounts have been reclassified to conform to the new presentation.

Prior-year amounts were not impacted by this change.

For additional discussion of contract balances, see Note 10.

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December 31, 2025 2024

Receivables from clearing organizations $ 1,670 $ 1,645

Securities borrowed $ 4,797 $ 695

Receivables from clearing organizations 2,327 1,670

Receivables for securities failed to deliver 42 40

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Deposits for securities loaned $ 25,131 $ 13,068

Other payables to broker-dealers 302 37

Payables to clearing organizations 115 127

Payables for securities failed to receive 91 104

Other payables to broker-dealers 37 866

Broker-dealer repurchase agreements 50 —

Payables to brokers, dealers, and clearing organizations $ 25,689 $ 13,336

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

See Note 17 for additional information regarding securities lending and borrowing activities, and repurchase agreements.

Receivables from and Payables to Brokerage Clients

Receivables from and payables to brokerage clients are detailed below:

December 31, 2024 2023

Margin loans $ 83,815 $ 62,582

Other brokerage receivables 1,559 6,085

Receivables from brokerage clients — net (1)

$ 85,374 $ 68,667

Interest-bearing payables $ 91,158 $ 67,675

Non-interest-bearing payables 10,401 17,111

Payables to brokerage clients $ 101,559 $ 84,786

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

At December 31, 2024, approximately 16 % of CS&Co’s total client accounts were located in California.

As of December 31, 2023, approximately 17 % of CS&Co and TD Ameritrade, Inc.

client accounts were located in California.

Receivables from brokerage clients were $ 104.7 billion and $ 85.4 billion at December 31, 2025 and 2024, respectively, and are primarily comprised of margin loans, net of related client cash, short sale proceeds, and other client payables.

At December 31, 2025 and 2024, margin loans totaled $ 112.3 billion and $ 83.8 billion, respectively.

The allowance for credit losses for receivables from brokerage clients and related activity was immaterial as of December 31, 2025 and 2024.

Payables to brokerage clients were $ 116.3 billion and $ 101.6 billion at December 31, 2025 and 2024, respectively, and are primarily comprised of Schwab One ® payables, net of related client margin loans and other client receivables.

At December 31, 2025 and 2024, Schwab One payables totaled $ 104.5 billion and $ 91.2 billion, respectively.

At December 31, 2025 and 2024, approximately 16 % of CS&Co’s total client accounts were located in California.

THE CHARLES SCHWAB CORPORATION

14 unchanged sentences

state and municipal securities 595 — 34 561

Foreign government agency securities 533 — 6 527

Non-agency commercial mortgage-backed securities 120 — 7 113

Other 21 — 2 19

Unallocated portfolio layer method fair value basis adjustments (3)

( 47 ) — ( 47 ) —

Unallocated PLM fair value basis adjustments (3)

Total available for sale securities (4)

2 unchanged sentences

agency mortgage-backed securities $ 133,563 $ 1,732 $ 9,646 $ 125,649

Treasury securities 406 — — 406

Total held to maturity securities $ 133,969 $ 1,732 $ 9,646 $ 126,055

7 unchanged sentences

6,106 — 196 5,910

Foreign government agency securities 1,035 — 33 1,002

state and municipal securities 603 — 54 549

Foreign government agency securities 533 — 6 527

Non-agency commercial mortgage-backed securities

Certificates of deposit 100 — — 100

Other 21 — 3 18

Unallocated portfolio layer method fair value basis adjustments (3)

Unallocated PLM fair value basis adjustments (3)

( 47 ) — ( 47 ) —

4 unchanged sentences

Total held to maturity securities $ 146,453 $ 146 $ 13,994 $ 132,605

(1) As of December 31, 2024 and 2023, approximately 35 % and 36 %, respectively, of the total AFS corporate debt securities were issued by institutions in the financial services industry.

(2) Approximately 62 % and 61 % of asset-backed securities held as of December 31, 2024 and 2023, respectively, were Federal Family Education Loan Program Asset-Backed Securities.

Asset-backed securities collateralized by credit card receivables represented approximately 25 % and 24 % of the asset-backed securities held as of December 31, 2024 and 2023, respectively.

(1) As of December 31, 2025, approximately 28 % and 27 % of the total AFS corporate debt securities were issued by institutions in the information technology and consumer staples industries, respectively.

As of December 31, 2024, approximately 35 %, 18 %, and 16 % of the total AFS corporate debt securities were issued by institutions in the financial services, consumer staples, and information technology industries, respectively.

(2) As of December 31, 2025, approximately 70 % and 21 % of the total AFS asset-backed securities were collateralized by Federal Family Education Loan Program asset-backed securities and credit card receivables, respectively.

As of December 31, 2024, approximately 62 % and 25 % of total AFS in asset-backed securities were collateralized by Federal Family Education Loan Program asset-backed securities and credit card receivables, respectively.

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

See Notes 2 and 16 for more information on PLM hedge accounting.

(4) Included in cash and cash equivalents on the consolidated balance sheets, but excluded from this table, is $ 2.0 billion of AFS U.S.

Treasury securities as of December 31, 2025 ( none as of December 31, 2024).

These holdings have maturities of three months or less at the time of acquisition, and an aggregate market value equal to amortized cost.

The weighted-average yield of these securities is 3.17 % at December 31, 2025.

At December 31, 2025, our banking subsidiaries had pledged investment securities with a fair value of $ 59.7 billion (collateral value of $ 55.6 billion) as collateral to secure borrowing capacity on secured credit facilities with the FHLB (see Note 13).

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The fair value and collateral value of these pledged securities was $ 1.6 billion at December 31, 2025.

At December 31, 2024, our banking subsidiaries had pledged HTM securities as collateral under repurchase agreements with external financial institutions.

HTM securities pledged were U.S.

agency mortgage-backed securities with an aggregate amortized cost of $ 5.9 billion.

Securities pledged as collateral under these repurchase agreements may be sold, repledged, or otherwise used by the counterparties.

See Notes 2, 13, and 18 for additional information on these repurchase agreements.

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

At December 31, 2025, our banking subsidiaries had pledged HTM securities as collateral under repurchase agreements with external financial institutions.

HTM securities pledged were U.S.

agency mortgage-backed securities with an aggregate amortized cost of $ 1.3 billion, all of which may be sold, repledged, or otherwise used by the counterparties.

See Notes 2, 13, and 17 for additional information on these repurchase agreements.

At December 31, 2025, the Company had pledged AFS securities consisting of U.S.

19 unchanged sentences

state and municipal securities 27 2 534 32 561 34

Foreign government agency securities — — 527 6 527 6

Non-agency commercial mortgage-backed securities — — 113 7 113 7

6 unchanged sentences

Treasury securities (1)

243 — 12,727 471 12,970 471

Corporate debt securities — — 9,579 587 9,579 587

1 unchanged sentence

12 — 5,888 196 5,900 196

Foreign government agency securities — — 1,002 33 1,002 33

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

1 unchanged sentence

$ 255 $ — $ 81,230 $ 6,758 $ 81,485 $ 6,758

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

(1) Amounts of unrealized losses less than 12 months 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 $ 2 million and $( 47 ) million at December 31, 2025 and 2024, respectively.

7 unchanged sentences

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

All HTM securities as of December 31, 2024 and 2023 were U.S.

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

HTM securities as of December 31, 2025 were U.S.

agency mortgage-backed securities and U.S.

Treasury securities, and as of December 31, 2024 all HTM securities were U.S.

agency mortgage-backed securities.

At both December 31, 2025 and 2024, HTM securities had no allowance for credit losses because expected nonpayment of the amortized cost basis is zero.

The Company had $ 386 million and $ 455 million of accrued interest for AFS and HTM securities as of December 31, 2025 and 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 consolidated balance sheets.

There were no writeoffs of accrued interest receivable on AFS and HTM securities during the years ended December 31, 2024 or 2023.

These amounts are excluded from the amortized cost basis and fair market value of AFS and HTM securities

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

and included in other assets on the consolidated balance sheets.

There were no writeoffs of accrued interest receivable on AFS and HTM securities during the years ended December 31, 2025 or 2024.

The following table presents the Company’s estimated effective duration, which reflects anticipated future payments, by category at December 31, 2025:

1 unchanged sentence

AFS investment securities portfolio 2.4

AFS and HTM investment securities portfolio 3.9

AFS and HTM investment securities portfolios 3.9

Estimated effective duration, inclusive of derivatives (1) :

AFS investment securities portfolio 2.0

AFS and HTM investment securities portfolio 3.7

(1) See Note 17 for additional discussion on the Company’s derivatives.

AFS and HTM investment securities portfolios 3.7

(1) See Note 16 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.

12 unchanged sentences

state and municipal securities 5 266 279 11 561

Foreign government agency securities 527 — — — 527

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

7 unchanged sentences

agency mortgage-backed securities $ 467 $ 23,555 $ 23,792 $ 77,835 $ 125,649

Treasury securities — 406 — — 406

Total fair value $ 467 $ 23,961 $ 23,792 $ 77,835 $ 126,055

44 unchanged sentences

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

Bank-loan related nonperforming assets consisted of the nonaccrual loans presented here and loan modifications to borrowers experiencing financial difficulty were not material at both December 31, 2025 and 2024.

At December 31, 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 13).

15 unchanged sentences

As discussed in Note 2, the Company charges off any unsecured PAL balances no later than 90 days past due.

As of December 31, 2024, substantially all PALs are also subject to the collateral maintenance practical expedient under ASC 326 Financial Instruments — Credit Losses .

All PALs were fully collateralized by securities with fair values in excess of borrowings as of December 31, 2024 and 2023, and no allowance for credit losses for PALs as of those dates was required.

As of December 31, 2025, substantially all PALs are also subject to the collateral maintenance practical expedient under ASC 326

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

economy continued to face tight monetary policy and geopolitical unrest.

Amid slower hiring and moderating inflation, the Federal Reserve lowered the federal funds target overnight rate by 100 basis points in the second half of 2024.

Management’s macroeconomic outlook reflects sustained current benchmark lending rates, with unemployment remaining relatively flat and modest home price appreciation.

Though higher mortgage rates are softening demand and reducing borrower 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 and have improved in recent quarters.

As a result of these factors, we decreased projected loss rates at December 31, 2024, as compared to December 31, 2023.

Bank loan-related nonperforming assets consisted of nonaccrual loans of $ 35 million and $ 15 million at December 31, 2024 and 2023, respectively.

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

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

At both December 31, 2024 and 2023, loan modifications to borrowers experiencing financial difficulty were not material.

Financial Instruments — Credit Losses .

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

economy saw lower hiring, minor home price declines, and a modest inflation gain at the end of the fourth quarter of 2025, while continuing to face 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 slight near-term home price depreciation.

Though higher mortgage rates are easing demand and reducing borrower affordability, we expect constrained housing supply to keep home prices relatively stable.

As a result of these factors, we modestly increased projected loss rates at December 31, 2025, as compared to December 31, 2024, even as credit quality metrics in the Company’s bank loans portfolio continue to be strong.

Credit Quality

2 unchanged sentences

• Borrower FICO scores at origination (Origination FICO);

• Updated borrower FICO scores (Updated FICO);

• Refreshed borrower FICO scores (Refreshed FICO);

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

• Estimated Current LTV ratios (Estimated Current LTV).

• Estimated Refreshed LTV ratios (Estimated Refreshed LTV).

Borrowers’ FICO scores are provided by an independent third-party credit reporting service and are generally updated quarterly.

The Origination LTV and Estimated Current LTV for a HELOC include any first lien mortgage outstanding on the same property at the time of the HELOC’s origination.

The Estimated Current LTV for each loan is updated on a monthly basis by reference to a home price appreciation index.

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

The Origination LTV and Estimated Refreshed LTV for a HELOC include any first lien mortgage outstanding on the same property at the time of the HELOC’s origination.

The Estimated Refreshed LTV for each loan is updated on a monthly basis by reference to a home price appreciation index.

THE CHARLES SCHWAB CORPORATION

1 unchanged sentence

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

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

First Mortgages Amortized Cost Basis by Origination Year

11 unchanged sentences

Total $ 6,029 $ 2,823 $ 1,796 $ 5,239 $ 10,149 $ 4,448 $ 30,484 $ 312 $ 115 $ 427

Refreshed FICO

<620 $ 8 $ 4 $ 3 $ 36 $ 32 $ 23 $ 106 $ 3 $ 3 $ 6

3 unchanged sentences

Total $ 6,029 $ 2,823 $ 1,796 $ 5,239 $ 10,149 $ 4,448 $ 30,484 $ 312 $ 115 $ 427

Estimated Current LTV (1)

≤70% $ 2,402 $ 1,660 $ 4,942 $ 10,747 $ 3,672 $ 1,385 $ 24,808 $ 285 $ 136 $ 421

Estimated Refreshed LTV (1)

≤70% $ 3,877 $ 1,989 $ 1,450 $ 4,696 $ 10,046 $ 4,437 $ 26,495 $ 310 $ 115 $ 425

22 unchanged sentences

Total $ 3,589 $ 2,148 $ 5,654 $ 10,917 $ 5,081 $ 27,389 $ 288 $ 136 $ 424

Refreshed FICO

<620 $ — $ 3 $ 25 $ 15 $ 21 $ 64 $ 1 $ 5 $ 6

3 unchanged sentences

Total $ 3,589 $ 2,148 $ 5,654 $ 10,917 $ 5,081 $ 27,389 $ 288 $ 136 $ 424

Estimated Current LTV (1)

Estimated Refreshed LTV (1)

≤70% $ 2,402 $ 1,660 $ 4,942 $ 10,747 $ 5,057 $ 24,808 $ 285 $ 136 $ 421

42 unchanged sentences

Total equipment, office facilities, and property — net $ 3,091 $ 3,338

As a result of its Ameritrade integration and restructuring efforts, the Company recognized impairment losses on fixed assets of $ 47 million during the year ended December 31, 2023.

As a result of its Ameritrade integration and restructuring efforts, the Company recognized impairment losses of fixed assets of $ 47 million during the year ended December 31, 2023.

These losses are included in other expense on the consolidated statements of income.

1 unchanged sentence

The fair value of the asset group was not material at December 31, 2023.

See Note 16 for additional information regarding the Company’s exit costs related to its Ameritrade integration and restructuring activities.

Goodwill and Acquired Intangible Assets

4 unchanged sentences

Goodwill acquired and other changes during the period (1)

114 ( 114 ) —

December 31, 2024 $ 8,083 $ 3,868 $ 11,951

Goodwill acquired and other changes during the period

114 ( 114 ) —

December 31, 2025 $ 8,083 $ 3,868 $ 11,951

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

(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.

Related goodwill amounts were transferred from the Advisor Services segment to the Investor Services segment.

22 unchanged sentences

The above schedule excludes indefinite-lived intangible assets of $ 93 million.

The components of other assets are as follows:

The components of other assets are detailed below:

December 31, 2025 2024

Deferred tax assets — net $ 3,527 $ 4,300

Other investments (1)

Other securities owned at fair value (1)

$ 3,162 $ 2,543

Other investments (2)

Receivables — interest, dividends, and other 2,068 1,952

Deferred tax assets — net 1,969 3,527

Customer contract receivables (3)

Operating lease ROU assets 705 591

Income taxes receivable 593 255

Capitalized contract costs 578 487

1 unchanged sentence

Total other assets $ 13,628 $ 14,031

(1) Includes fractional shares held in client brokerage accounts.

Corresponding client repurchase liabilities in an equal amount for these client-held fractional shares are included in accrued expenses and other liabilities on the consolidated balance sheet.

What changed 10-K

Item 8. Financial Statements and Supplementary Data